Global Market Outlook on Label Substrate

Labels market is expected to experience steady demand in the following quarters with APAC being the key growth region owing to growing population density and the rapidly growing e-commerce segment. However, in North America, Wester Europe labels growth is expected to be sustained by innovations in sustainability

Global Labels Market (2017 – 2021F)

  • North America and Western Europe are fairly mature markets and expected to witness slow rise in demand in the coming years with focus on recyclability. This in turn is expected to constrain demand for labels in these regions
  • Key Growth Regions: APAC is the largest demand region contributing to 42 percent of global labels demand with China alone holding above 40 percent of this market share. MEA which currently contributes to 2 percent of global demand is expected to witness the fastest growth of 9-10 percent until 2021

PSL, SSL are expected to together hold ~65% market share by 2021 by substituting wet glue labels. Moreover with the growing trend of multipacks and product bundling in beverage, personal care segment, SSL is expected to experience increased adoption. Therefore, Industry can consider SSL in case of product bundling

Global Labelling Technology Market Share

  • PSL is the most dominant type of label holding 46% of global market share. Wet glue labels are expected to witness reduced growth in the following years and be substituted by PSL
  • Shrink sleeve labels and In-mold labelling are expected to slowly grow over the next few years with their application expanding from beverages to personal care, food sectors
  • Major End-use: Food and Beverage market is the largest market contributing to more than ~80 percent of the wet glue labels market

Labels Substrate Market Outlook – Facestock

With increasing focus on sustainable packaging, premium paper based facestock (gloss paper) is expected to continue dominating facestock type in North America and Europe. However in cost-sensitive regions of APAC, film based facestocks (PE85, PP80) are expected to witness high growth

Influence over label converters

  • Since facestock contributes to more than 60 percent of label production cost, facestock producers have high influence over label printers
  • Fully integrated players with labelstock production and printing capabilities such as CCL, Multicolor, Avery etc. will have comparatively higher influence over label converters

Global Facestock Market by Region (2017).

  • The growing demand for labels in the end-use industries of F&B and Pharmaceuticals is driving the need for facestock
  • Moreover, the high potential for growth in APAC and Eastern Europe has prompted facestock producers such as UPM Raflatac to consider capacity expansions in these regions

Labels Substrate Market Outlook – Pressure Sensitive Adhesive

Price increase of key feedstock materials such as propylene, acrylonitrile, acrylic acid and caustic soda over the last two months has led to price hikes by PSA suppliers – HB Fuller, BASF. However, their low cost contribution in production cost of label substrate (20 percent) results in a marginal impact of 1-2% on price of label substrate

  • Adhesive suppliers are fairly fragmented thereby reducing their power over label converters
  • Moreover, label converters often look to buy labelstock for producing pressure sensitive labels rather than individual label components (facestock, adhesive and release liner). Therefore adhesive suppliers influence over label printers is limited

Global Pressure Sensitive Adhesive Market by Region (2017)

  • Electronics, electrical & telecommunication industry which is expected to see the fastest growth owing to improving living standards is expected to drive the market demand
  • Water-based technology (35% market share) is the largest segment due to its eco-friendly nature