Million-dollar Label Questions

Pressure-sensitive label price pressures and competition may be heating up, but so are lucrative opportunities in film constructions, variable information, and product branding.

By David Kucsma

The pressure-sensitive label industry is a complex market, comprised of a number of segments with unique growth drivers and growth rates. Suzanne Zaccone, president of Graphic Solutions and the Tag and Label Manufacturers Institute (TLMI), believes the growth in pressure-sensitive labeling is a reflection of the overall health of the economy, driven by new product development.

Feedback from base material suppliers and converters indicates the pressure-sensitive label marketplace grew 5 percent to 7 percent in sales dollars in 1999. The November 1998 TLMI North America Market for Pressure-Sensitive Label study forecasted a 1999 growth rate of 6.4 percent and label sales of $4.2 billion. Though this rate is less than historical double-digit growth, it does represent healthy gains.

The TLMI study forecasts the growth rate will remain around 6.4 percent over the next three years, while additional expert consensus confirms a continuation of the 5 percent to 7 percent rate seen in 1999. To cash in, label converters must keep tabs on the changing answers to key industry questions.

Which markets are hot?

Film. John Wurzburger, vice president/general manager of Fasson Roll North America's Premium Packaging & Pharmaceutical Division, says film-based labels garnered the fastest growth in 1999, with applications rising at a rate of 10 percent to 15 percent.

Gary Stover, marketing director for Technicote, finds particular film momentum in food and beverages, heath and beauty aids, and household cleaners. The growth in film label applications continues to negatively impact prime label paper sales as applications either transition from paper to film, or now start out on film materials. According to Dan O'Bryant, vice president/general manager of Fasson Roll North America's Product Identification division, prime label paper products' unit growth has been slightly positive, but price deflation has resulted in negative sales dollar growth.