by Peter Kusnic
May 10, 2021
Although the US labels industry was negatively affected by the COVID-19 pandemic in 2020, it suffered less than many other industries. For instance, although moderate losses in demand were seen in most markets due to reduced economic activity in 2020, food – which is essential – avoided losses, while pharmaceutical, mailing, and shipping labels all saw healthy gains:
Looking ahead of 2020, the US labels market is projected to expand 3.3% per year to $20.6 billion in 2025, according to a new Freedonia Group analysis. Below are some of the key highlights of the long-term forecast.
Among label application methods, pressure sensitive labels – which accounted for 76% of demand in 2020 – are popular due to their versatility of applications, suitability for the popular no-label look, and amenability to specialization such as extended content labels (ECLs) and smart labels. Through 2025, gains for pressure sensitive labels will be supported by the:
Meanwhile, heat shrink and stretch sleeve labels are expected to expand at an above average pace and will continue to take market share from glue-applied labels. Though comparatively more expensive to produce, heat shrink and stretch sleeve labels have superior aesthetics and are seeing advancements in digital printing, which will boost demand for these labels. As a result, pressure sensitive labels will face competition from heat shrink and stretch sleeve labels, particularly in food applications.
Ongoing growth in e-commerce – which the pandemic helped to accelerate – as well as the increased need to track and trace inventory in distribution and transportation, will support healthy growth for labels in mailing and shipping labels, as well as secondary packaging. These two markets are expected to experience the largest absolute gains of any label market through 2025:
Digital printing will expand at by far the fastest pace of any label printing technology through 2025, when it is expected to be replace lithography as the second most common printing method. Growth will be boosted by demand for short print runs of customized packaging for promotions and customized marketing, which is more affordable when using digital printing.
Demand for digitally printed labels will also be supported by increased regulatory activity, particularly in the pharmaceutical market, which sometimes requires frequent changes to information presented on labels. Digital printing’s versatility and minimal prepress preparation time allows adjustments to be made cost-effectively.
While smart labels such as RFID tags and EAS labels have been around for a while – especially in retail environments for inventory tracking and loss prevention – innovations in converting and printing technologies are making these items more affordable, helping to increase their penetration in a number of markets. In the pharmaceutical market, for instance, Avery Dennison is working with Schreiner MediPharm and PragmatIC Semiconductor in December 2020 to develop a RFID label for medications that utilizes near-field communication to identify tampering, prove authenticity, and offer patients reordering information and instructions.
Temperature sensitive inks and materials are also being incorporated into smart labels to indicate whether perishable products – particularly foods – have been exposed to high temperatures during transport. Other smart labels are utilizing nanotechnology, although these applications are mainly in the development stages. For example, nanomaterials can be used in sensors that change color when spoilage or bacterial contamination is present in a food.
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About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.
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