Primary Packaging Labels

Report Overview

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This study analyzes the United States market for primary packaging 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 primary packaging labels is projected to expand 3.1% yearly to $10.2 billion in 2025. Pressure sensitive labels, with their excellent durability and aesthetic advantages, will remain the leading segment. Their position will be boosted by their widespread use in food and beverage packaging. Heat shrink and stretch sleeve labels are expected to see solid growth as their use is expanding beyond food and beverage applications, into the cosmetics and toiletries and pharmaceutical markets.

Glue-applied labels are forecast to expand less than 1.0% yearly through 2020, with gains limited by market maturity and the ongoing shift to plastic packaging from glass, a significant substrate for glue-applied labels.

Demand by Market Sector

Primary packaging label demand is projected to increase 3.1% per year to $10.2 billion in 2025. Gains will be driven by:

• overall growth in packaging demand
• greater use of higher value labels, including plastic labels and larger, full-body labels
• growth for value-added labels incorporating higher performance inks and coatings and specialty features like tamper evidence, expanded product information, and smart capabilities

These trends will be based on efforts by product manufacturers to make their goods stand out on store shelves, as labels are important in influencing consumer purchasing decisions and as a means of refreshing a brand’s image.

However, demand will be limited to an extent by the continued growth of flexible packaging formats, especially pouches, which are typically direct printed. Direct printed flexible packaging has the greatest effect on label demand for food products, leading to below average gains in those applications.

Markets expected to post the fastest growth going forward include beverages and pharmaceuticals. While growth will be driven by a number of factors specific to these products, both segments will continue to experience a more pronounced trend away from glass or metal packaging formats to plastic types, boosting demand for higher value plastic labels.

Pharmaceuticals

Primary packaging label demand in the pharmaceutical market was $1.1 million in 2020, accounting for 13% of the primary packaging market and 6% of the overall label market. Included in product segment are security-enhanced and standard informational labels along with the package inserts that are distributed with containers of ethical and OTC medicines, dietary supplements, and nutritional preparations.

Demand for labels in the pharmaceutical market is projected to expand 4.4% per year to $1.4 billion in 2025, outpacing nearly all other primary packaging markets.

The largest share of demand for pharmaceutical labels will remain in standard pressure sensitive types. Growth for pressure sensitive labels will be enhanced by the incorporation of RFID tags and other authentication technologies such as covert markings, electronic codes, and color shifting inks.

Primary packaging markets include:

• food (e.g., meat, poultry, seafood, baked goods, produce, dairy products, candy and confections, frozen foods, grain mill products, dry foods such as pasta)
• beverages (e.g., beer, wine, spirits, carbonated soft drinks, juice and fruit drinks, milk, ready-to-drink coffee and tea, sports and energy drinks, still and sparkling water)
• pharmaceuticals – both ethical and over-the-counter
• cosmetics and toiletries (e.g., skin care, hair care, and oral care products; cosmetics; fragrances; antiperspirants and deodorants; shaving products)
• other primary packaging (e.g., automotive chemicals, household cleaning chemicals, architectural paint, medical devices, apparel and textiles, lawn and garden products, paper and plastic products, sporting goods, tobacco, toys)

Primary packaging labels are evaluated by application method:

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

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).
 

US demand for primary packaging labels is forecast to increase 3.1% annually to $10.2 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. Advances will be supported by:

• overall growth in packaging demand, both due to gains in the production of goods that are packaged as well as due to use of more or higher value packaging per product
• greater use of higher value labels, including:
  • plastic labels
  • larger, full-body labels
  • labels incorporating higher performance inks and coatings, and specialty features like tamper evidence, expanded product information, and smart capabilities

However, demand will be limited to an extent by the continued growth of flexible packaging formats, especially pouches, which are typically direct printed and therefore do not require labels.

Pressure Sensitive Types to Remain Most Used; Heat Shrink Labels to Grow at Fast Pace

Pressure sensitive labels accounted for 60% of demand in 2020 and are expected to remain the most used types, supported by their widespread use in food and beverage packaging. However, labels face heavier competition from direct printing in the food segment than in other major applications. Increasing use of flexible packaging formats that generally do not use labels, such as pouches, will continue to restrain demand for food packaging labels going forward.

Heat shrink and stretch sleeve labels are expected to see the fastest growth as their use is expanding beyond food and beverage applications into the cosmetics, toiletries, and pharmaceutical markets. Stretch sleeve and heat shrink labels are expanding their presence with OTC products at the expense of pressure sensitives, as shrink sleeves are particularly valuable in this market due to their ability to provide tamper evidence.

Beverages & Pharmaceuticals to Hold Best Opportunities Among Applications

Markets expected to post the fastest growth through 2025 include beverages and pharmaceuticals. Both segments will continue to experience a more pronounced trend away from glass or metal packaging formats to plastic types, boosting demand for higher value plastic labels:

• Gains in the beverage market will be driven by efforts to differentiate products by employing higher value materials, inks, and label types – such as shrink sleeves and clear film pressure sensitive labels for a no-label look.
• Safety and regulatory considerations will be the primary growth driver in the pharmaceutical market. For example, high-value RFID tags, specialty inks, and other enhanced security features are increasingly required in these applications to prevent drug counterfeiting and diversion.