Labels

Global Labels Industry Outlook

• The global labels market size, in terms of volume, is about 60.6 billion sq. m. in 2023 and is set to grow at 3–4 percent, to reach 70 billion sq. m. by 2027

• 2023 is anticipated to be a promising year for labels market growth from increasing label demand

• Growing consumer preference for labelled products, rising demand from non-essential end-use industries, increase in e-commerce activities are the driving factors of label market in 2023

• Paper shortage, coupled with UPM Finland strike, sanctions against Russian trade, have impacted the price of label products. Label prices are anticipated to stay elevated in 2023

Labels Demand Market Outlook

• Sustainable material and innovative product features are the prime factors, which brand owners look for in engaging with suppliers

• The pandemic situation has increased the operating cost of suppliers, which led most of them to focus on cost cutting than on product innovations. Suppliers are expected to resume their label innovations spend in 2023

Global Labels Industry –Drivers

End-use Demand

• Increasing demand from major end-use segments, such as food and beverages, is forecasted to grow by about 3–4 percent annually and the pharmaceutical market is forecasted to grow at about 4–5 percent, which are set to fuel the demand for labels

Innovation

• The labels market is highly driven by innovation, which reflects the market growth. To stay competitive in the market, suppliers are coming up with innovations in facestock and printing, which will drive the demand for labels in the future

• The retail and logistics industries are increasingly focused on using barcode labels and RFID labels, respectively. This resulted in high demand for such labels, especially across developed markets

Demographics and Lifestyle

• Increase in disposable income of the middle-class people will lead to high spending on FMCG and retail sectors, which will indirectly boost the demand for labels Brand owners and FMCG

• Today, CPG and FMCG companies are utilizing a high range of labeling and packaging formats in order to meet the customers’ changing needs and enhance the brand image

Packaging Types

• Increase in serialization by pharmaceutical companies has provided an added leverage for the growth of labels in the pharmaceutical industry, as it can help secure and trace drugs throughout the supply chain, making it tamper proof

Sustainability

• The rising e-commerce activity has led to the need for more effective and sustainable packaging. This has prompted the consumers to look toward attractive and sustainable options, like liner-less labels, recyclable adhesives, and clear film labels on clear substrates

Global Labels Industry – Constraints

Impact on Environment

• Some forms of labels cannot be recycled and are not bio-degradable, hence, is a serious hazard to the environment; and with increasing focus on sustainability, it acts as a hurdle to the growth of certain types of labels, such as plastic labels

Volatility of Raw Material Prices

• Frequent fluctuation in prices of facestock, such as paper, PE, and PP, lead to uncertainty in the market

Competing in Red Ocean Waters

• The labels supply market, being highly fragmented, suppliers try to outperform their rivals to gain a larger share of the existing market by reducing the profit margins, thus leading to intensified competition

Product Substitution

• Alternative packaging options, such as sleeves and pouches, are expected to grow at 5 percent and 8 percent until 2027 and see increased applications in personal care and food sectors

• They minimize packaging cost also increase the aesthetic value of the product

Energy Price Rise

• Sanctions against Russia have increased energy prices across globe, increasing the production cost of labels

• Suppliers are not willing to take further margin cuts and are witnessed to pass on the price rise to end-use buyers

Cost Structure Analysis – Labels

• The APAC is dominated by supply from China as it exports the raw material to other neighboring APAC countries. The prices depend mostly on China’s output

• The European raw material prices increased on a monthly basis since COVID-19 outbreak. The price change was due to firm ethylene spot and contract prices, which increased prices in the spot market, which results in the slight variations in the raw material prices during the period