Label Demand is Growing – And Changing

“The label market is a seismograph for the economic situation in almost every industry,” says Klemens Ehrlitzer. This is because there is hardly an industry sector that is not supplied with labels, says the managing director of the Association of Self-Adhesive Label and Narrow Web Converter Manufacturers (VsKE). “When beverage sales flourish in the hot summer, label manufacturers also benefit,” Ehrlitzer says. “And when the auto industry is coughing, that hits the label business right away.”

In addition, pretty much all legal requirements in the areas of food, chemicals, or recycling also have an impact on the label industry. New information regulations, for example on energy consumption, ingredients, or materials, are driving demand for labels. New packaging regulations, such as the EU’s PPWR, could depress consumption.

Market Forecast by Ceresana

Predicting market development under such circumstances is difficult. Constance-based market research institute Ceresana has now attempted this for the second time and comes up with an average growth of the European label market – in square meters – of 1.5 percent per year until 2032. “We combine data from manufacturers with secondary data,” explains analyst Christoph Wappes. The latter include, for example, sales figures of various sectors or forecasts of inflation, which in turn has an impact on consumer spending.

Adhesive Labels More in Demand

New food information requirements, for example, or larger font sizes – “in part due to demographics” – will lead to more label space, Wappes believes. The importance of paper labels (currently at 27 percent market share) will continue to dwindle with a decline in glass and metal packaging, while versatile adhesive labels (54 percent share), which are also well suited to digital printing, will gain ground. For in-mold labels (IML), which are incorporated into plastic packaging and currently account for five percent of labels used, Ceresana predicts an above-average growth of 2.4 percent per year. “They are more expensive, but they are also higher quality and protected against damage.”

Meanwhile, the Ceresana study cannot truly map the label market. This is because it is limited to the retail sector, such as food, drugstores, or pharmaceuticals. Segments such as logistics, industrial applications, or security labels are left out. For the market as a whole, on the other hand, the analyses by Alexander Watson Associates (AWA) are regarded as an institution. According to their figures, the global label market grew by 3.8 percent to 71 billion square meters in 2021. Europe accounts for around 25 percent of this.

For 2022 to 2025, AWA has calculated that the international market will grow by 3.3 percent per year. Here, too, pressure-sensitive labels are ahead of adhesive labels. AWA currently sees above-average growth less for IML labels than for sleeve labels, at just under five percent. They are increasingly being used in the beverage and drugstore market, the analysis says, while IML labels could score points with household chemicals. The growth in self-adhesive labels is due in many cases to special applications.

How the PPWR will affect the label market remains to be seen. But the industry is alarmed. The European label recycling association Celab, for example, wants to prevent the liner material of self-adhesive labels from being legally seen as part of the packaging, but rather as a production residue. This is because label liners made of paper, PET, or PP generate a lot of waste. At the same time, the industry is pushing ahead with the development of liner-less labels.

Label manufacturer Herma, for example, is taking action in this area in a variety of ways. They are trying to keep the materials as thin as possible and have developed a new liner-less material that is activated by water alone, as well as adhesive materials with a “lighter CO2 backpack.” Although it may not be obvious at first glance, says Herma manager Milos Kojic, in the packaging industry, the label can play an important role in waste prevention and recycling.