US Labels

Report Overview

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This study analyzes the United States market for labels. In the context of this report, a label is defined as any material adhered to an object to indicate contents, pricing, ownership, directions, destinations, ratings, warnings, or other information. Decorative decalcomanias (decals) and stickers are also included.

Demand by Application Method

Demand for labels is projected to advance 3.3% per year to $20.6 billion in 2025. Pressure sensitive labels (PSLs or sometimes PSA labels) are by far the leading product type, accounting for 77% of total label value demand in 2020.

PSLs, heat-shrink and stretch sleeve, and non-shrink wraparounds will continue to expand their share of the market at the expense of more traditional label types, even in usual strongholds like wine, spirits, and specialty beverages. Mature application methods that will see below average growth include glue-applied, heat-seal, and gummed labels:

• Pressure sensitive labels 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. However, gains for PSLs will be restricted to some extent by increasingly intense competition with other label types, especially heat-shrink and in-mold labels, in primary packaging applications.
• Heat-shrink labels will grow at the fastest rate, supported in part by the aesthetic advantages of shrink sleeves in food and beverage applications.
• While in-mold labels comprise a much smaller share of the market, in-mold’s no-label look and amenability to plastic packaging is leading producers like Verstraete to enter the US in-mold market.

Pricing Trends

Label pricing is largely determined by trends in raw material costs, which can account for anywhere from 30% to 50% of the value of printed labels. Prices are also influenced by costs associated with printing, labor, energy, transportation, and regulatory and environmental compliance.

Through 2025, average label prices are forecast to rise 1.8% per year to $2.32 per square meter. Price growth will be driven by:

• expected growth in oil and gas prices relative to a low 2020 base, boosting costs for raw materials and energy
• strong paper prices, as increasing demand, boosted in part by a sharp increase in e-commerce, is met by weak paper production and falling capacity
• trends toward higher value label types, including improved graphics and added features such as radio frequency identification (RFID)

Nevertheless, price increases will remain relatively moderate due to other factors, including:

• improving printing technology, which allows finished labels to be produced at lower costs
• lightweighting of label stock, such as thinner plastic film and lighter basis weight papers

Raw Materials

Adhesives

Demand for adhesives in the production of labels is expected to rise less than 1.0% per year to 238 million pounds through 2025. Growth will be limited by the rising popularity of label types that do not use adhesives, such as heat shrink and stretch sleeve and in-mold labels. However, the ongoing dominance of pressure sensitive labels and the continued demand for paper glue-applied labels due to their low cost and nostalgic appeal will prevent losses.

Solvent-borne adhesives will continue to face increasing competition from hot melt, water-based, and radiation-cured varieties. However, continuing use of solvent adhesives will be supported by their suitability for use with plastic substrates, which are growing as a share of label demand.

Labels are evaluated by application method:

• pressure sensitive
• glue-applied
• heat-shrink and stretch sleeve
• in-mold (via blow molding, injection molding, thermoforming)
• heat transfer
• other application methods, including non-shrink wraparound, heat-seal, gummed, and foam

Demand is also segmented by stock material:

• paper (including roll-fed, sheet, and decal forms)
• plastic
  • polyethylene (e.g., low density polyethylene, linear low density polyethylene)
  • polypropylene (e.g., oriented polypropylene)
  • polyvinyl chloride
  • other plastics (e.g., acetates, synthetic papers, spunbonded polyolefins, polyimide)
• other label materials, such as foil, ceramic, and stainless steel)

Furthermore, demand is analyzed by market:

• primary packaging
  • food
  • beverages
  • pharmaceuticals
  • cosmetics and toiletries
  • other primary packaging (e.g., automotive chemicals, household cleaning chemicals, medical devices, apparel and textiles, lawn and garden production, paper and plastic products, sporting goods, tobacco, toys)
• secondary packaging (including retail, institutional, transportation, and distribution sectors)
• industrial
• mailing and shipping
• decorative
• consumer and institutional

Finally, printed label demand is analyzed by printing technology:

• flexographic
• lithographic
• digital
• screen
• gravure
• letterpress

Excluded from the study are:

• adhesive notes (e.g., 3M’s Post-it notes)
• adhesive-backed envelopes
• cloth and woven labels (e.g., garment labels)
• decorative pressure sensitive tapes
• graphic films
• EAS tags (although the labels used in conjunction with EAS tags are covered)
• label/form combinations
• labels printed directly onto containers without the use of an intervening substrate
• postage stamps issued by the US Postal Service (however, blank labels for postage meters and online purchases of postage are included)
• rigid metal labels
• tags
• unprinted shrink neckbands

Historical data for 2010, 2015, and 2020 and forecasts for 2025 and 2030 are presented in current US dollars at the manufacturers’ level (which are not adjusted to account for inflation).
 

The US labels market is projected to expand 3.3% per year to $20.6 billion in 2025, accelerating from the pace seen during the 2015-2020 period, when average annual growth was affected by a 2020 decline in label demand that resulted from the COVID-19 pandemic. Growth will be boosted by the continued focus on labels as marketing and track-and-trace tools, buoying growth for value-added label types. Though technologically advanced labels will remain pricier than standard types, their sales will also be boosted by improvements in converting and printing technologies that will make them more affordable, helping to increase their penetration in a number of markets as the price gap shrinks.

Pressure Sensitive to Remain Largest Segment; Heat Shrink Labels to Grow at Fast Pace

Pressure sensitive labels accounted for 76% of demand in 2020, and the segment is expected to remain the leader through 2025. Gains will be supported by the:

• growing popularity of specialized labels, including RFID-enabled and extended content types
• the promotion of higher value and higher performance labels such as more durable types for automotive, appliance, and electronics applications

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.

Mailing & Shipping Labels & Secondary Packaging Will Experience Largest Absolute Gains

Ongoing growth in e-commerce – which was boosted to even higher levels during the pandemic in 2020 – 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 and secondary packaging. For mailing and shipping labels, demand for labels for individually packaged items instead of bulk shipping – as well as the trend of e-commerce retailers including printed return labels with shipments – will buoy growth. Increases in retail activity will also boost demand for labels used with secondary packaging, most notably track and trace labels.

Digital Printing to Offer New Opportunities for Labels

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.