by Sarah Schmidt
October 26, 2017
Shrink sleeve labels are booming, thanks to a trend toward packaging designs for premium foods, beverages, and consumer products that pop off store shelves. These labels are glossy, colorful, and versatile. They can conform to a variety of container shapes, and their superior graphics capabilities allow for customized branding. According to The Freedonia Group’s study Stretch & Shrink Sleeve Market in the US, the shrink label market is expected to grow at a robust 5.2% annual rate through 2021, reaching $245 million in sales.
What consumers don’t see, however, is the careful material selection behind each label, the unique properties of the plastic film that enable each eye-catching graphic.
Plastic resin technologies in the shrink sleeve market are well-established, offering a solid range of material options in terms of price and performance. Recently, however, concerns have grown over the incompatibility of current film choices with the recycling process for PET bottles, which boast some of the highest recycling rates in the country.
The most popular materials used for shrink sleeve labels – PVC and PETG – are difficult to separate from PET bottles during the recycling process. Brand owners select shrink sleeves for their 360-degree marketing potential, but full coverage often prevents sortation machines from detecting the different plastics used for labels and bottles.
If bottles and labels are processed together, PVC and PETG label flakes sink to the bottom of the washing solution with PET bottle flakes, resulting in a contaminated batch of PET.
According to a report published by the Association of Postconsumer Plastic Recyclers (APR), these disruptions add two to four cents to processing costs per pound of all recycled PET flakes, resulting in millions of dollars of losses for some PET reclaimers.
To help alleviate this cost burden, the APR has established guidelines for label manufacturers and an official Critical Guidance Recognition program to encourage the development of labels that are more compatible with PET bottle recycling systems. Label suppliers that comply with the guidelines benefit from marketing their products as sustainable, especially as beverage brand owners seek to appeal to increasingly health- and environmentally conscious consumers.
Innovations have focused on new polyolefin film structures that float during the washing stage to facilitate separation of label and bottle materials. From 2015 to 2017, three companies received APR recognition for their floatable shrink labels:
Despite the added value of eco-friendly packaging, sustainability is not the highest priority for customers. The price of producing polyolefin shrink labels remains higher than that of both PVC and PETG labels due in part to additional costs associated with running a new resin technology on existing machinery.
However, price is not as significant a consideration as performance because shrink sleeves typically market premium products. Polyolefin shrink sleeves measure up well to the high performance of PVC and PETG labels, offering:
Moreover, polyolefin films exhibit good downgauging potential. For example, Taghleef claims a reduced weight for its TDS film, offering lower material costs to offset higher processing costs.
In light of the film’s strong performance and environmental profile, it is unlikely that production costs will bar growth opportunities for polyolefin shrink sleeves for long.
Check out The Freedonia Group’s study Stretch & Shrink Film Market in the US. This study includes analysis on historical demand data and forecasts, industry trends, and industry composition and market share.
Ellen Kriz is an Industry Analyst at the Freedonia Group where she covers US polymers & packaging markets.
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