TLMI: Tag & Label Manufacturers Institute, Inc.
510 King St., Ste. 410
Alexandria, VA 22314
Phone (571) 645-5086
Fax (571) 645-5091
Email: [email protected]
www.tlmi.com
Cover & Design by Sarah Perkins, TLMI
Copyright © 2016 by TLMI: Tag & Label Manufacturers Institute, Inc.
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Table of ContentsI. Introduction and Methodology 1
A. Key Findings and Study Takeaways 2
B. Study Methodology 4
II. Market Size and Growth Rates 6
Exhibit II 1: The North American Labelstock Market by Format: 2015 6
Exhibit II 2: The North American Labelstock Market by Format: 2015 v. 2020 7
A. Annual Growth by Labelstock Format 8
Exhibit II 3: Projected Annual Growth by Labelstock Format to 2020 8
Exhibit II 4: Projected Annual Growth of Pressure-Sensitive Paper Labels to 2020 9
Exhibit II 5: Projected Annual Growth of Pressure-Sensitive Film Labels to 2020 10
Exhibit II 6: Projected Annual Declines of Glue Applied Labels to 2020 11
Exhibit II 7: Projected Annual Growth of Sleeve Labels to 2020 12
Exhibit II 8: Projected Annual Growth of In-Mold Labels to 2020 13
B. Release Liners and Adhesives 14
Exhibit II 9: The North American Labelstock Release Liner Market by Material Type 14
Exhibit II 10: Projected Annual Growth by Liner Material Type to 2020 15
Exhibit II 11: The North American Labelstock Adhesive Market by Material Type: 2015 16
Exhibit II 12: Projected Labelstock Adhesive Growth by Type to 2020 17
III. Labelstock Trends and the Converter Labelstock Survey Study 18
Exhibit III 1: Annual Revenue Ranges of Survey Participants 18
Exhibit III 2: Labelstock Survey Participation by Association Membership Status 19
Exhibit III 3: Total Converter Throughput by Vertical 20 Exhibit III 4: A Breakdown of Participating Converters by Markets Served 21
A. New Application Areas for Label Converters and Format Migrations 22
Exhibit III 5: New Label Format Areas Converters Have Entered Within the Last Three Years 22
Exhibit III 6: End-Use Categories Served by Converters that Recently Entered ECL Space 24
Exhibit III 7: Labeling Format Migrations in All End-Use Sectors 25
Exhibit III 8: Format Migrations in Food Labeling by Type 26
Exhibit III 9: Format Migrations in Beverage Labeling by Type 27 Exhibit III 10: Format Migrations in Personal Care Labeling by Type 28
Exhibit III 11: Format Migrations in Industrial and Household Chemicals by Labeling Type 29
Exhibit III 12: Format Migrations in Industrial Products (Non-Consumer Durables) 30
B. Brand Owner Enforcement of Pre-Set Labelstock Specifications 32
Exhibit III 17: Pre-Set Labelstock Specifications among Brand Owners and Packaging Buyers 32
C. In-house Coating of Labelstocks 34
Exhibit III 18: Percentage of Converters Coating their own Labelstocks In-house 34
Exhibit III 19: Annual Revenues of Converters Coating their own Labelstocks In-house 35
D. The Label Converter Material Supplier Dynamic 36
Exhibit III 20: Labelstock Supplier Loyalty among Converters 36
TLMI Labelstock Study 2016 1
The evolution of labelstocks has propelled the North American label printing industry into
the 21st century. The development of labeling substrates has been a constant exercise in
optimizing printability, maximizing functionality and securing the best total applied cost
solution.
Labelstock formats continue to migrate and evolve. Glue applied labeling applications are
migrating towards pressure-sensitive labeling applications, despite showing a slower pace
of migration in recent years. Pressure-sensitive applications are migrating towards sleeves
and in-mold applications. Pressure-sensitive paper labelstocks are migrating to films for
better environmental resilience, and some film applications are migrating to paper to save
costs.
At the center of this shifting dynamic is the label converter. Brand owners and packaging
buyers want to lower costs without compromising aesthetics, functionality and application
performance. Converting companies are creating entire departments with the primary
purpose of constantly qualifying thinner, ‘l ight-weight’ materials in an effort to lower costs.
Companies are looking at whether or not the facestock and liner can down-gauge; or if a
semi-permanent adhesive can replace a permanent adhesive when the extreme end of the
range is not needed? They are asking questions about the container’s structural integrity
impacted when applying thinner films at high speeds.
Both small and large converters report that economics remain the driving factor for the
development of labelstocks. While environmental practices are increasingly scrutinized, the
majority of brand owners and packaging buyers remain focused on economics rather than
waste management practices down the supply chain.
The table on the following pages provides a synopsis of the key findings and takeaways of
this study. These findings include information from interviews with North American industry
suppliers, brand owners, packaging buyers, and label converting companies. The findings
also include analysis derived from quantitative surveys sent to brand owners, packaging
buyers, and label converters located throughout the U.S. and Canada.
I. Introduction and Methodology
TLMI Labelstock Study 2016 2
Subject Finding/Takeaway
Annual Growth
Format by
Labelstock Format
Pressure-sensitive labels will make up nearly 60% of the North American label
market’s total value and the sector is projected to grow at annual rates of
.5% above GDP in 2020. Glue applied market share will continue to contract
1-2% per year and the total glue applied market is projected to represent less
than 20% of the total market’s value by 2020. Sleeve and in-mold labels will
continue to grow at rates of .5-1.5% above GDP over the next five years.
A Market of
Generalists:
Number of
Sectors and Label
Converters Served
Most label converters are generalists, printing applications for multiple end-
use sectors. For 35% of surveyed converters, one sector makes up 50% or more
of total annual revenues. For 28% of converters, the food and/or beverage
sector makes up 50% or more of total annual revenues. While both large
and small companies specialize in three end-use verticals or fewer, of the
surveyed sample 69% of companies serving three end-use verticals or fewer
have annual sales of more than $10 million and 31% have annual sales of less
than $10 million.
Entry into New
Application Areas
Nearly one in five respondents indicated that their companies have entered
the flexible packaging space within the past three years (excludes shrink
sleeves). Seventeen percent of respondents indicated their companies have
started producing shrink sleeves and/or non-shrink sleeves (wraparound
labels) within the past three years.
A. KEY FINDINGS AND STUDY TAKEAWAYS
TLMI Labelstock Study 2016 3
Subject Finding/Takeaway
Label Format
Migrations Across
End-Use Sectors
Labeling formats continue to shift from other formats as brand owners and
packaging buyers seek ways to maximize billboard space, remove costs and
optimize label resilience. The Labelstock Survey asked converters to indicate
label format migrations within each end-use category they serve. More than
60% of all respondents indicate their applications have recently migrated from
one labeling format to another.
Adhering to Pre-
set Labelstock
Specifications:
Converter
Perspective
Research indicates that for the most part label converters have control over
the recommendation and creation of new labelstock constructions. Ninety-
eight percent of converters cited that some of their customers have pre-set
material specifications in place. However, only 17% of converters indicated that
the majority of their customers demand their applications abide by a set of
established labelstock specifications.
In-house Coating of
Labelstocks
Seventeen percent of participating converters indicate they are coating their
own labelstocks in-house, either by employing a designated print station on an
existing press or a standalone system that has multiple coating and finishing
capabilities.
A. KEY FINDINGS AND STUDY TAKEAWAYS
TLMI Labelstock Study 2016 4
The TLMI Labeling Adhesive and Labelstock Trends Market Study provides an analysis of
the market for label materials and adhesives in the North American marketplace. Market
forces are driving label converters and labelstock suppliers to implement supply chain
strategies that address the preferences of consumers and the priorities of brand owners
and packaging buyers. Some of these forces include:
� The light-weighting (down-gauging) of label materials.
� Converters’ adopting coating technology to manufacture their own labelstocks in-
house.
� The adoption of linerless labeling technologies.
� The impact of recycling requirements.
The TLMI Labeling Adhesive and Labelstock Trends Market Study delivers feedback and
analysis from the following primary survey groups:
� Packaging Buyers: Brand managers, packaging engineers, print production managers,
research and development managers and sourcing personnel at consumer packaged
goods companies.
� TLMI Supplier Members: Labelstock suppliers and adhesive manufacturers.
� TLMI Converter Members in North America.
� Non-TLMI Converting Companies in North America: Non-members also participated in
the surveys and qualitative interviews to ensure the survey sampling represented the
entire marketplace.
Brand owner and packaging buyer surveys asked participants to indicate label sourcing/
procurement projections for each label decoration format. Interviews with brand owners
explored migrations per end-use vertical (pressure-sensitive to shrink, pressure-sensitive
paper to pressure-sensitive film, etc.) .
B. STUDY METHODOLOGY
TLMI Labelstock Study 2016 5
B. STUDY METHODOLOGY
The study also reports on the state of the North American labelstock market by primary
type (papers, VIP papers, films, etc.) and predicts year-over-year growth per format to 2020.
The study also reports on projected growth for adhesives and liners by type.
The converter Labelstock Survey was a central part of the research process. An advisory
team was put together of label converters, labelstock suppliers and adhesive manufacturers
to ensure the analysis stemming from the converter questionnaire would offer the most
pertinent information possible. More than 130 TLMI member and non-member converting
companies completed surveys that addressed the following areas:
� Growth projections per primary labeling format.
� Entry into new application areas.
� Primary labelstock migrations per end-use vertical.
� The implementation of pre-set labelstock specifications.
� In-house coating of labelstock materials.
� Forces that prompt a change in labelstock suppliers.
TLMI Labelstock Study 2016 6
The TLMI Labeling Adhesive and Labelstock Trends Study sizes the market in two ways.
The first chart and correlating table show the total value of the market expressed as
converter sales - converter revenues for products that fall within each of the primary
format categories including pressure-sensitive, glue applied, sleeve and in-mold labels.
The remaining charts in this section show labelstock, liner and adhesive sizing by mmsi
(labelstock consumption).
Applying growth rates to labelstock, liner and adhesive types is a complex exercise that
includes using historical TLMI labelstock consumption data and formulating an algorithm
applied to projected North American GDP rates to 20201. Calculations were then checked
against annual sourcing growth projections from brand owners and packaging buyers, per
labeling format. The graph below shows North American value by labelstock format in 2015.
Exhibit II 1: The North American Labelstock Market by Format: 2015
Following the economic downturn of 2008-2009, average annual growth in the North
American labelstock market has hovered around average GDP rates over the same period.
The sleeve and in-mold sectors witnessed highest annual growth while the size of the glue
applied labeling sector had steady year-over-year contraction.
1 Projected GDP rates used were a composite of projections from the World Bank and Economist Intelligence Unit
11
packaging buyers, per labeling format. The graph below shows North
American value by labelstock format in 2015.
Exhibit II-1: The North American Labelstock Market by Format: 2015
Following the economic downturn of 2008-2009, average annual
growth in the North American labelstock market has hovered right
around average GDP rates over the same period. The sleeve and in-mold
sectors witnessed highest annual growth while the size of the glue
applied labeling sector had steady year-over-year contraction.
The table below shows 2015 market values by format against
projected values for 2020.
Exhibit II-2: The North American Labelstock Market by Format:
North American Labelstock Market Value (Converter Sales) by Format (in $ millions / 000,000 omitted)
57%23%
18%
2%
North American Labelstock MarketValue (Converter Sales) by Labeling Format: 2015
Pressure-sensitive Glue applied Sleeve In-mold
II. Market Size and Growth Rates
TLMI Labelstock Study 2016 7
The table below shows 2015 market values by format against projected values for 2020.
Exhibit II 2: The North American Labelstock Market by Format 2015 vs. 2020:
North American Labelstock Market Value (Converter Sales) by Format (in $ millions/000,000 omitted)
FORMAT 2015 VALUE 2020 VALUE
Pressure-Sensitive $7,333 $8,345
Glue Applied $2,973 $2,778
Sleeves $2,293 $2,663
In-Mold $258 $292
Total $12,857 $14,047
CAGR (2015 - 2015) 1.8%
II . Market Size and Growth Rates
TLMI Labelstock Study 2016 8
In 2020 pressure-sensitive labels will make up nearly 60% of the North American market’s
total value. The sector will grow at projected annual rates of .5% above GDP. Glue applied
label market share will continue to contract 1-2% per year and the total glue applied market
is projected to represent less than 20% of the total market’s value by 2020. Sleeve and in-
mold labels are projected to continue to grow at rates of .5-1.5% above GDP over the next
five years. The graph below indicates projected annual growth rates for each labelstock
format to 2020.
Exhibit II 3: Projected Annual Growth by Labelstock Format to 2020
Over the next five years, the North American pressure-sensitive paper market is projected
to grow at an average annual rate of 2.2%. The pressure-sensitive film market is projected to
grow at an average annual rate of 3.5%.
North American label market growth will be driven by different forces specific to each end-
use vertical. Some of these forces will be the same ones that drive growth throughout the
North American manufacturing sector, while others will include migrations away from direct
print (label-less) decoration formats to pressure-sensitive, sleeves or in-mold labels,
A. Annual Growth by Labelstock Format
13
Exhibit II-3: Projected Annual Growth by Labelstock Format to 2020
This graph shows projected annual growth rates for each
labelstock format in addition to indicating market value growth for
pressure-sensitive papers and pressure-sensitive films. Over the next
five years, the North American PS paper market is projected to grow at
an average annual rate of 2.2%. The PS film market is projected to grow
at an average annual rate of 3.5%.
North American label market growth will be driven by different
forces specific to each end-use vertical. Some of these forces will be the
same ones that drive growth throughout the North American
manufacturing sector while others will include migrations away from
direct print (label-less) decoration formats to pressure-sensitive,
sleeves or in-mold labels, Overall market growth will be driven by the
following forces:
SKU proliferation across most prime labeling sectors (food,
beverage, pharmaceuticals/nutraceuticals, personal
care/cosmetics and household chemicals)
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2016 2017 2018 2019 2020
North American Labelstock Growth (Converter Sales) by Format to 2020
PS Paper PS Film Glue-applied Sleeves In-mold
TLMI Labelstock Study 2016 9
Overall market growth will be driven by the following forces:
� SKU proliferation across most prime labeling sectors (food, beverage,
pharmaceuticals/nutraceuticals, personal care/cosmetics and household chemicals).
� Continued rise of click-and-ship retail will continue to drive non-prime VIP labeling
sectors.
� Off-shoring will continue to drive growth in the consumer durables, automotive and
industrial sectors.
� The aging population of the U.S. and Canada will continue to drive growth across the
pharmaceutical, nutraceutical and medical device sectors.
In addition to the factors that will drive regional manufacturing growth, specific label
formats will continue to take market share away from other formats. The graph below shows
projected growth to 2020 for pressure- sensitive paper labelstocks.
Exhibit II 4: Projected Annual Growth of Pressure-Sensitive Paper Labels to 2020
Pressure-sensitive paper applications will continue to migrate to pressure-sensitive films
in the food, beverage, pharmaceutical, household chemicals, transportation and logistics
and industrial sectors. Brand owners and packaging buyers will increasingly enforce
environmental resilience, and scuff and handling resistance. Glue applied/cut and stack
A. Annual Growth by Labelstock Format
14
Continued rise of click-and-ship retail will continue to drive non-
prime VIP labeling sectors
Offshoring will continue to drive growth in the consumer
durables, automotive and industrial sectors
The aging population of the U.S. and Canada will continue to drive
growth across the pharmaceutical, nutraceutical and medical
device sectors
In addition to the factors that will drive regional manufacturing
growth, specific label formats will continue to take marketshare away
from other formats. The graph below shows projected growth to 2020
for pressure- sensitive paper labelstocks.
Exhibit II-4: Project Annual Growth of PS Paper Labels to 2020
Pressure-sensitive paper applications will continue to migrate to
pressure-sensitive films in the food, beverage, pharmaceutical,
household chemicals, transportation and logistics and industrial
sectors. Brand owners and packaging buyers will increasingly enforce
environmental resilience, and scuff and handling resistance. Glue
2.3%2.6% 2.6%
1.3%
2.4%
0.0%
1.0%
2.0%
3.0%
2016 2017 2018 2019 2020
PS Paper Label Annual Growth (mmsi) to 2020
TLMI Labelstock Study 2016 10
A. Annual Growth by Labelstock Format
labels will continue to migrate to pressure-sensitive as brand owners and packaging buyers
seek the total applied cost advantages of pressure-sensitive and move away from the OEE
(overall equipment effectiveness) challenges inherent in glue applied label application
lines.
In 2015, VIP papers represented 52% of all paper pressure-sensitive throughput in North
America. VIP papers include EDP, thermal transfer, direct thermal, laser and inkjet papers.
Pressure-sensitive film growth is projected to grow at rates of 1-1.5% above GDP and will
continue to take market share away from pressure-sensitive papers across the prime and
non-prime (including VIP) labeling sectors. The graph below shows projected growth to
2020 for pressure-sensitive film labelstocks.
Exhibit II 5: Projected Annual Growth of Pressure-Sensitive Film Labels to 2020
Pressure-sensitive film growth will continue to out pace paper. Pressure-Sensitive films
are projected to grow at annual rates of 1,5-2% above GDP over the next five years. While
pressure-sensitive film growth rates will be higher than pressure-sensitive paper overall,
there have been some prime labeling sectors that have witnessed some migration back to
pressure-sensitive papers from films. While pressure-sensitive film to paper migrations are
infrequent, the market has witnessed a small number of food, beverage and pharmaceutical
15
applied/cut and stack labels will continue to migrate to pressure-
sensitive as brand owners and packaging buyers seek the total applied
cost advantages of PS and move away from the OEE (overall equipment
effectiveness) challenges inherent in glue applied label application
lines.
In 2015, VIP papers represented 52% of all paper pressure-
sensitive throughput in North America. VIP papers include EDP, thermal
transfer, direct thermal, laser and inkjet papers.
Pressure-sensitive film growth is projected to grow at rates of 1-
1.5% above GDP and will continue to take marketshare away from
pressure-sensitive papers across the prime and non-prime (including
VIP) labeling sectors. The graph below shows projected growth to 2020
for pressure- sensitive film labelstocks.
Exhibit II-5: Project Annual Growth of PS Film Labels to 2020
3.6%3.9% 3.9%
2.6%
3.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2016 2017 2018 2019 2020
PS Film Label Annual Growth (mmsi) to 2020
TLMI Labelstock Study 2016 11
A. Annual Growth by Labelstock Format
applications moving from pressure-sensitive films back to pressure-sensitive papers. In
2015, paper labelstocks made up 75% of total pressure-sensitive label throughput, pressure-
sensitive films made up 25%.
The only labelstock market projected to contract year over year to 2020 is the glue applied
label sector. Glue applied labels will continue to migrate to pressure-sensitive paper and
pressure-sensitive film labelstocks in the food and beverage markets. The graph below
shows projected annual contraction rates to 2020 for glue applied labelstocks.
Exhibit II 6: Projected Annual Declines of Glue Applied Labels to 2020
Over the next five years, glue applied labelstocks are projected to decline at rates of 1-2%
as competing label decoration technologies continue to capture glue applied market share.
In addition to pressure-sensitive migration, glue applied label applications will also migrate
to sleeves, in-mold labels and direct print.
17
Over the next five years, glue applied labelstocks are projected to
decline at rates of 1-2% as competing label decoration technologies
continue to capture glue applied marketshare. In addition to pressure-
sensitive migration, glue applied label applications will also migrate to
sleeves, in-mold labels and direct print.
Annual growth projections for sleeves over the next five years are
higher than any other label decoration format. Pressure-sensitive films
are projected to grow at slightly higher rates, however in comparing and
contrasting growth rates between sleeves and PS overall, sleeve
consumption growth is projected to outpace pressure-sensitive.
The graph below shows projected annual growth rates to 2020 for
sleeves.
-1.4%-1.1% -1.1%
-1.8%
-1.3%
-2.0%
-1.0%
0.0%
2016 2017 2018 2019 2020
Glue Applied Label Projected Annual Declines (mmsi) to 2020
TLMI Labelstock Study 2016 12
A. Annual Growth by Labelstock Format
Annual growth projections for sleeves over the next five years are higher than any other
label decoration format. Pressure-sensitive films are projected to grow at slightly higher
rates. However in comparing and contrasting growth rates between sleeves and pressure-
sensitive overall, sleeve consumption growth is projected to out pace pressure-sensitive.
The graph below shows projected annual growth rates to 2020 for sleeves.
Exhibit II 7: Projected Annual Growth of Sleeve Labels to 2020
Projected consumption growth encompasses all sleeve technologies including heat shrink
sleeves, stretch sleeves and RFS/ROSO MD sleeves (roll-on-shrink-on-machine direction).
North American converters report that one of the most active areas of migration in the
marketplace is currently pressure-sensitive applications migrating to sleeves. The markets
that are witnessing highest pressure-sensitive to sleeve migration include food, beverage,
personal care/cosmetics, pharmaceuticals/nutraceuticals, and automotive. Sleeve
throughput growth is projected to remain .5-1% above GDP to 2020.
18
Exhibit II-7: Projected Annual Growth of Sleeve Labels to 2020
Projected consumption growth encompasses all sleeve
technologies including heat shrink sleeves, stretch sleeves and
RFS/ROSO MD sleeves (roll-on-shrink-on-machine direction). North
American converters report that one of the most active areas of
migration in the marketplace Is currently pressure-sensitive
applications migrating to sleeves.
The markets that are witnessing highest PS-to-sleeve migration
include food, beverage, personal care/cosmetics,
pharmaceuticals/nutraceuticals, and automotive. Sleeve throughput
growth is projected to remain .5-1% above GDP to 2020.
In-mold label growth over the next five years closely mirrors
annual growth rate projections for pressure-sensitive labelstocks
overall. Converters are currently reporting PS-to-in-mold migration in
end-use sectors where in-mold has had little exposure. These include
the consumer durables and industrial label markets and applications
such as toys, household and industrial glues, gardening products and
pet food/pet care.
3.1%3.4% 3.4%
2.1%
3.2%
0.0%
1.0%
2.0%
3.0%
4.0%
2016 2017 2018 2019 2020
Sleeve Label Projected Annual Growth (mmsi) to 2020
TLMI Labelstock Study 2016 13
A. Annual Growth by Labelstock Format
In-mold label growth over the next five years closely mirrors annual growth rate projections
for pressure-sensitive labelstocks overall. Converters are currently reporting pressure-
sensitive to in-mold migration in end-use sectors where in-mold has had little exposure.
These include the consumer durables and industrial label markets and applications such as
toys, household and industrial glues, gardening products and pet food/pet care. The graph
below shows projected annual growth rates to 2020 for in-mold labels.
Exhibit II 8: Projected Annual Growth of In-Mold Labels to 2020
19
The graph below shows projected annual growth rates to 2020 for
in-mold labels.
Exhibit II-8: Projected Annual Growth of In-Mold Labels to 2020
2.6%2.9% 2.9%
1.6%
2.7%
0.0%
1.0%
2.0%
3.0%
4.0%
2016 2017 2018 2019 2020
In-mold Label Projected Annual Growth (mmsi) to 2020
TLMI Labelstock Study 2016 14
Annual growth for labelstock release liners has averaged 2% over the past five years.
Release liners used in the labelstock sector include paper, film, and hybrid/composite liner
materials. The graph below shows release liner consumption in the North American market
broken down by material type.
Exhibit II 9: The North American Labelstock Release Liner Market by Material Type: 2015
Paper release liners make up 85% of total market consumption. Annual growth for paper
liners has averaged an estimated 1.9% over the past five years. Projected annual growth for
paper labelstock liners is .5-1% above GDP to 2020.
B. Release Liners and Adhesives
20
B. RELEASE LINERS AND ADHESIVES
Annual growth for labelstock release liners has averaged 2% over
the past five years. Release liners used in the labelstock sector include
paper, film and hybrid/composite liner materials. The graph below
shows release liner consumption in the North American market broken
down by material type.
Exhibit II-9: The North American Labelstock Release Liner Market by Material Type: 2015
Paper release liners make up 85% of total market consumption.
Annual growth for paper liners has averaged an estimated 1.9% over the
past five years. Projected annual growth for paper labelstock liners is .5-
1% above GDP to 2020.
Annual growth for film liners has averaged just over 3% over the
past five years. Projected growth for film labelstock liners is more than
twice the rate of paper liners, 1.5-2% above GDP over the next five years.
The graph on the following page shows release liner growth (in the
labelstock market) by material type to 2020.
Exhibit II-10: Projected Annual Growth by Liner Material Type to 2020
85%
14%
1%
Release Liner Consumption (mmsi) by Type: 2015
Paper Film Composite
TLMI Labelstock Study 2016 15
Annual growth for film liners has averaged just over 3% over the past five years. Projected
growth for film labelstock liners is more than twice the rate of paper liners, 1.5-2% above
GDP over the next five years. The graph below release liner growth (in the labelstock
market) by material type to 2020.
Exhibit II 10: Projected Annual Growth by Liner Material Type to 2020
21
Annual growth for composite liners will average only slightly
higher than growth rates for paper liners. Projected annual growth for
composite liners is .5-1% above GDP to 2020.
0%
1%
2%
3%
4%
5%
2016 2017 2018 2019 2020
North American Liner Growth by Material Type to 2020
Paper Liner Film Liner Composite
B. Release Liners and Adhesives
TLMI Labelstock Study 2016 16
Annual growth for labelstock adhesives has also averaged 2% over the past five years.
Labelstock adhesives categories include hot melt, aqueous, solvent and radiation-cured.
The graph below shows adhesive labelstock consumption in the North American market by
type.
Exhibit II 11: The North American Labelstock Adhesive Market by Type: 2015
Note: Radiation-cured adhesives made up less than .03% of the total North American market in
2015.
Aqueous labelstock adhesives make up 76% of the total market with annual growth rates
averaging 2.5% over the past five years. Aqueous labelstock adhesives are projected to
grow at GDP rates to 2020. Average year-over-year growth for hot melt adhesives has been
the highest, growing at an average annual rate of 1.5-2% over the past five years. Projected
annual growth for hot melt adhesives is .5-1% above GDP to 2020, driven by the increased
adoption of in-house coating systems at the converter level. Solvent labelstock adhesive
consumption has declined at an average rate of -.5% per year over the past five years.
Projected annual growth for solvent adhesives is 2.5-3% below GDP to 2020.
B. Release Liners and Adhesives
22
Annual growth for labelstock adhesives has also averaged 2%
over the past five years. Labelstock adhesives categories include hot
melt, aqueous, solvent and radiation-cured. The graph below shows
adhesive labelstock consumption in the North American market by type.
Exhibit II-11: The North American Labelstock Adhesive Market by Type: 2015
22%
76%2%
Adhesive Consumption (Labelstock mmsi)by Type: 2015
Hot melt Aqueous Solvent
TLMI Labelstock Study 2016 17
The graph below shows labelstock adhesive growth by type to 2020.
Exhibit II 12: Projected Labelstock Adhesive Growth by Type to 2020
Converter adoption of in-house coating units is on the rise. Labelstock adhesive companies
report hot-melt direct sales to large label converters (annual sales over $35 million) has
increased at double-digit rates annually over the past three years. Primary forces driving in-
house adoption of hot melt coating systems at the converter level include:
� In-house coating systems are becoming more affordable.
� Converters want more control over labelstock supplies, reporting extended back-
ordered periods for specific constructions and liner types.
� The ability to achieve cost-savings by producing their own labelstock constructions in-
house.
� The ability to print on the reverse-side of film substrates (with in-line coating stations
installed on press).
24
Converter adoption of in-house coating units is on the rise.
Labelstock adhesive companies report hot-melt direct sales to large
label converters (annual sales over $35 million) has increased at
double-digit rates annually over the past three years.
Primary forces driving in-house adoption of hot melt coating
systems at the converter level include:
In-house coating systems are becoming more affordable
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
2016 2017 2018 2019 2020
North American Adhesive Growthby Type to 2020
Hot Melt Aqueous Solvent
B. Release Liners and Adhesives
TLMI Labelstock Study 2016 18
More than 130 label converters in the U.S. and Canada took part in the Labelstock Survey.
Participants serve every major end-user vertical and represent a wide range of annual
revenues. Annual revenues for all participants totaled more than $3 billion in 2015,
representing more than 25% of the total value of the U.S. and Canadian label printing
industry. The largest multi-national converters took part in the survey in addition to label
converters with annual sales less than $5 million. The graph below breaks down the total
participant group by annual revenues.
Exhibit III 1: Annual Revenue Ranges of Labelstock Survey Participants
27
All TLMI converter members were invited to take part in the
Labelstock Survey. To ensure the results represented the greater
industry, a number of non-member converters also completed
questionnaires and participated in qualitative interviews. The chart
below shows a breakdown of member/non-member participation.
Exhibit III-2: Labelstock Survey Participation by Association Membership Status
25%20% 18% 17%
14%
6%0%
5%
10%
15%
20%
25%
30%
<$5million
$5-10million
$10-15million
$15-35million
$35-75million
>$75million
% C
on
vert
ers
Annual Revenues of Surveyed Converters
III. Labelstock Trends and the Converter Labelstock Study
TLMI Labelstock Study 2016 19
All TLMI converter members were invited to take part in the Labelstock Survey. To ensure
the results represented the greater industry, a number of non-member converters also
completed questionnaires and participated in qualitative interviews. The chart below shows
a breakdown of member/non-member participation.
Exhibit III 2: Labelstock Survey Participation by Association Membership Status
It was essential that the converters surveyed indicated the end-use sectors that they serve
and the percentage that each sector makes up of total labelstock consumption. Breaking
down the participating universe by end-use vertical allowed researchers to calculate
specific metrics and analyze trends within each category (food, beverage, chemicals,
consumer durables, industrials, etc.) . The graph on the following page breaks down total
converter throughput by end-use vertical.
28
It was essential that surveyed converters indicated the end-use
sectors they serve and the percentage each sector makes up of total
labelstock consumption. Breaking down the participating universe by
end-use vertical allowed researchers to calculate specific metrics and
analyze trends within each category (food, beverage, chemicals,
consumer durables, industrials, etc.).
The graph on the following page breaks down total converter
throughput by end-use vertical.
67%
33%
Labelstock Survey Participation
TLMI Member Converters Non-Member Converters
III. Labelstock Trends and the Converter Labelstock Study
TLMI Labelstock Study 2016 20
Exhibit III 3: Total Converter Throughput by Vertical
Note: Values do not add up to 100% due to rounding.
Labels for food and beverage applications make up more than 44% of total converter
throughput. The sampling differs from the overall market. In North America, food and
beverage make up 56% of the total market’s value. The chemicals category includes
applications for both household and industrial chemical products. The pharmaceutical
category includes nutraceutical and medical device applications.
29
Exhibit III-3: Total Converter Throughput by Vertical
5.3%
5.4%
3.9%
3.6%
9.9%
8.8%
5.2%
5.0%
4.4%
3.9%
22.4%
22.1%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Other
Industrial Prod.
Office Products
Retail
Transport/Log.
Cons. Dur/Elec.
Automotive
Chemicals
Pharma/Nut.
Personal Care/Cos.
Beverage
Food
Total Converter Throughput (msi) by End-Use Vertical
III. Labelstock Trends and the Converter Labelstock Study
TLMI Labelstock Study 2016 21
There are an estimated 2,000 label converting companies with annual sales revenues of $1
million or greater in the North American market. Out of all of the printed packaging sectors,
the label industry is the most fragmented. Consolidation will continue as established
industry players acquire smaller competitors to strengthen their market position.
As the owners of small to mid-sized companies position themselves for future acquisition,
companies often move away from being label-printing generalists to specializing in a
smaller number of end-use verticals and/or labeling formats. The graph below breaks down
surveyed participants by the number of end-use markets they serve.
Exhibit III 4: A Breakdown of Participating Converters by the Number of Markets Served
Most label converters are generalists, printing applications for multiple end-use sectors.
For 35% of surveyed converters, a single end-use vertical makes up 50% or more of total
annual revenues. For 28% of converters, the food and/or beverage sector makes up 50% or
more of total annual revenues. Both large and small companies ‘specialize’ in three end-
use verticals or fewer. However, 69% of companies serving three end-use verticals or fewer
have annual sales of more than $10 million and 31% have annual sales of less than $10
million. This indicates that ‘specializing’ is more of a large company strategy.
31
Most label converters are generalists, printing applications for
multiple end-use sectors. For 35% of surveyed converters, a single end-
use vertical makes up 50% or more of total annual revenues. For 28% of
converters, the food and/or beverage sector makes up 50% or more of
total annual revenues. Both large and small companies ‘specialize’ in
three end-use verticals or fewer. However, 69% of companies serving
three end-use verticals or fewer have annual sales of more than $10
million and 31% have annual sales of less than $10 million. This
indicates that ‘specializing’ is more of a large company strategy.
A. NEW APPLICATION AREAS FOR LABEL CONVERTERS AND FORMAT MIGRATIONS
59%
25%15% 1%
0%
10%
20%
30%
40%
50%
60%
70%
Serve >3 EUSectors
Serve 3 EUSectors
Serve 2 EUSectors
Serve 1 EUSector
% C
on
vert
ers
Number of End-Use Sectors Label Converters Serve
III. Labelstock Trends and the Converter Labelstock Study
TLMI Labelstock Study 2016 22
Historically, pressure-sensitive applications have dominated narrow web presses
throughout the U.S. and Canada. As pressure-sensitive took market share away from sheet-
fed glue applied applications, printing and converting supported substrates on in-line
presses delivered double digit year-over-year growth for decades.
Today’s label converters are positioning their products in a mature market that is becoming
increasingly becoming a commodity to brand owners and packaging buyers. Pressure-
sensitive growth hovers at, or only slightly above, annual GDP growth and converters are
seeking higher profits in non-pressure-sensitive application areas including unsupported
flexible packaging applications, sleeves, in-mold, and extended content applications. The
Labelstock Survey asked converters to indicate the new markets their companies have
entered within the past three years.
Exhibit III 5: New Label Format Areas Converters Have Entered Within the Past Three Years
Nearly one in five respondents indicated that their companies have entered the flexible
packaging space within the past three years. Shrink has long been considered a traditional
flexible packaging application, however, it was separated out as a category for the purposes
of the research. Seventeen percent of respondents indicated that their companies have
started producing shrink sleeves and/or non-shrink sleeves (wraparound labels) within the
past three years.
32
Historically, pressure-sensitive applications have dominated
narrow web presses throughout the U.S. and Canada. As pressure-
sensitive took marketshare away from sheet-fed glue applied
applications, printing and converting supported substrates on inline
presses delivered double digit year-over-year growth for decades.
Today’s label converters are positioning their products in a
mature market that is becoming increasingly commoditized in the eyes
of brand owners and printed packaging buyers. Pressure-sensitive
growth hovers at, or only slightly above, annual GDP growth and
converters are seeking higher profits in non-PS application areas
including unsupported flexible packaging applications, sleeves, in-
mold, and extended content applications. The Labelstock Survey asked
converters to indicate the new markets their companies have entered
within the past three years.
Exhibit III-5: New Label Format Areas Converters Have Entered Within the Past Three Years
Nearly one in five respondents indicated that their companies
have entered the flexible packaging space within the past three years.
Shrink has long been considered a traditional flexible packaging
application however was separated out as a category for the purposes
2%0%
17%
3%
18%
12%
6%
0%
5%
10%
15%
20%
PS Glue-applied
Sleeves In-mold FlexiblePackaging
ExtendedContent
Linerless
% C
on
vert
ers
New Label Format Areas for Converters -All End-Use Sectors
A. New Application Areas for Label Converters and Format Migrations
TLMI Labelstock Study 2016 23
Narrow web flexible packaging is one of the most significant trends occurring in the North
American label industry. The forces that are driving this trend include:
� Narrow web in-line presses are better equipped to handle thinner, unsupported
substrates while maintaining registration and optimal web temperatures.
� Growing numbers of brand owners and packaging buyers want a one-stop shop for all
of their printed packaging products (labels, flexible packaging and folding cartons).
� The flexible packaging industry is growing at rates of .5-1% above annual label industry
growth.
� Run size/job size contractions make it impossible to produce some flexible packaging
applications on 40-50” central impression presses profitably.
More than 50% of participating companies have entered a new application and/or format
area within the past three years. The companies that have entered the pressure-sensitive
space are companies that primarily produce cut and stack and glue applied applications.
It’s important to also note the percentage of companies that have started producing
extended text/extended content (ECL) applications. Twelve percent of respondents
indicated their companies have entered the extended content application space within the
past three years. Federal food labeling requirements are demanding labels convey higher
volumes of information to consumers, continuing to drive ECL growth across end-use
verticals.
A. New Application Areas for Label Converters and Format Migrations
TLMI Labelstock Study 2016 24
Extended content labeling is growing at the highest rates in the food, pharmaceutical/
nutraceutical and household chemical sectors. The chart below breaks down the companies
that have indicated new entry into the extended content labeling space by the end-use
categories they serve.
Exhibit III 6: End-Use Categories Served by Converters that Recently Entered Extended Content
Labeling Space
Extended content labels with a pressure-sensitive base make up the vast majority of
the total ECL market in the U.S. and Canada. In recent years however, converters have
pioneered extended content labels in both the roll-fed and cut and stack markets.
34
volumes of information to consumers, continuing to drive ECL growth
across end-use verticals.
Extended content labeling is growing at highest rates in the food,
pharmaceutical/nutraceutical and household chemical sectors. The
chart below breaks down the companies that have indicated new entry
into the extended content labeling space by the end-use categories
they serve.
Exhibit III-6: End-Use Categories Served by Converters that Recently Entered Extended Content Labeling Space
4%
4%
9%
13%
18%
22%
30%
0% 5% 10% 15% 20% 25% 30% 35%
Retail
Automotive
Personal Care
Pharma/Nut.
Chemicals
Beverage
Food
% Converters
Sectors Served by Companies Entering Extended Content Market
A. New Application Areas for Label Converters and Format Migrations
TLMI Labelstock Study 2016 25
Labeling formats continue to take market share away from other formats as brand owners
and packaging buyers seek ways to maximize billboard space, remove costs and optimize
label resilience. The Labelstock Survey asked converters to indicate label format migrations
within each end-use category they serve. The graph below breaks down the percentage of
migrations by category.
Exhibit III 7: Labeling Format Migrations in All End-Use Sectors
More than 60% of surveyed participants report migration in format in their labeling
applications. Of the converters reporting labeling format migrations, 32% report one
migration, 27% report two different migrations and 25% report three or more migrations
in format. The most reported migration is pressure-sensitive paper applications moving
to pressure-sensitive films. As brand owners and packaging buyers seek increased
environmental resilience, application durability and ‘no label look’ differentiation, pressure-
sensitive films will continue to replace pressure-sensitive papers. However, 8% of
companies reporting format migrations cited the move away from pressure-sensitive films
back to pressure-sensitive papers. Converters reporting pressure-sensitive film to paper
migrations serve the food, personal care and pharmaceutical sectors.
A. New Application Areas for Label Converters and Format Migrations
36
Exhibit III-7: Labeling Format Migrations in All End-Use Sectors
More than 60% of surveyed participants report that one or more
labeling applications have recently migrated to a different format. Of
the converters reporting labeling format migrations, 32% report one
migration, 27% report two different migrations and 25% report three or
more migrations from one labeling format to another.
The most reported migration is pressure-sensitive paper
applications moving to pressure-sensitive films. As brand owners and
packaging buyers seek increased environmental resilience, application
durability and ‘no label look’ differentiation, pressure-sensitive films
will continue to replace pressure-sensitive papers. However, 8% of
companies reporting format migrations cited the move away from PS
films to PS papers. Converters reporting PS film-to-paper
migrations serve the food, personal care and pharmaceutical sectors.
31%
8% 2%
22%26%
8% 1% 3%0%
10%
20%
30%
40%
% C
on
vert
ers
Format Migrations - All End-Use Sectors
PS P
aper to P
S Film
PS F
ilm to
PS P
aper
PS to N
on-Shrin
k Wra
paround
PS to
Shrin
k
T
hinner F
ilms
Glu
e-Applie
d to P
S
Dire
ct Prin
t
P
S to In
-Mold
TLMI Labelstock Study 2016 26
The survey asked converters to break down label format migrations by end-use sector. Half
of all respondents printing food label applications indicated recent format migrations with
39% reporting pressure-sensitive paper to pressure-sensitive film migrations followed by
17% reporting migrations of pressure-sensitive film back to pressure-sensitive paper. The
graph below breaks down format migration by type.
Exhibit III 8: Format Migrations in Food Labeling by Type
Seventeen percent of converters indicating format migrations in food applications also
report that light-weighting, the migration to thinner caliper films, is occurring. The migration
away from glue applied to pressure-sensitive remains a force in the food sector as 13% of
converters are reporting this labeling format change.
37
The survey asked converters to break down label format
migrations by end-use sector. Half of all respondents printing food label
applications indicated recent format migrations with 39% reporting PS
paper to PS film migrations followed by 17% reporting migrations of PS
film to PS paper. The graph below breaks down format migration
by type.
Exhibit III-8: Format Migrations in Food Labeling by Type
Seventeen percent of converters indicating format migrations in
food applications also report that light-weighting, the migration to
thinner caliper films, is occurring. The migration away from glue applied
to PS remains a force in the food sector as 13% of converters are
reporting this labeling format change.
The graph below breaks down format migration by type for
converters active in the beverage category.
4%
13%
17%
10%
17%
39%
0% 10% 20% 30% 40% 50%
Label to Direct Print
Glue-applied to PS
Thinner Films
PS to Shrink
PS Film to PS Paper
PS Paper to PS Film
% Converters Indicating Format Migration in Foods
Dominant Label Format Migrations - Food
A. New Application Areas for Label Converters and Format Migrations
TLMI Labelstock Study 2016 27
A. New Application Areas for Label Converters and Format Migrations
The graph below breaks down format migration by type for converters active in the
beverage category.
Exhibit III 9: Format Migrations in Beverage Labeling by Type
More than 60% of converters serving the beverage sector report migrations from one
label format to another. One in three converters producing beverage applications report
the migration away from pressure-sensitive to shrink sleeves. As beverage companies
increasingly seek new ways to achieve product marketability, products across beverage
categories are migrating from pressure-sensitive to shrink sleeve labels. Shrink sleeves are
more prevalent in beverage than any other end-use category.
38
Exhibit III-9: Format Migrations in Beverage Labeling by Type
More than 60% of converters serving the beverage sector report
migrations from one label format to another. One in three converters
producing beverage applications report the migration away from
pressure-sensitive to shrink sleeves.
As beverage companies increasingly seek new ways to achieve
product marketability, products across beverage categories are
migrating from pressure-sensitive to shrink sleeve labels. Shrink sleeves
are more prevalent in beverage than any other end-use category. The
forces that continue to drive PS-to-shrink migration in beverage include:
Product differentiation as brand owners and packaging
buyers seek more billboard space for graphics and branding
Built-in tamper evidence characteristics of a full-bodied
sleeve
2%
16%
20%
33%
5%
24%
0% 5% 10% 15% 20% 25% 30% 35%
Label to Direct Print
Glue Applied to PS
Thinner Films
PS to Shrink
PS to Non-Shrink Wraparound
PS Paper to PS Film
% Converters Indicating Format Migration in Beverages
Dominant Label Format Migrations - Beverage
TLMI Labelstock Study 2016 28
The forces that continue to drive pressure-sensitive to shrink migration in beverage include:
� Product differentiation as brand owners and packaging buyers seek more billboard
space for graphics and branding.
� Built-in tamper evidence characteristics of a full-bodied sleeve.
� Clear films provide apertures through which the package’s contents can be viewed
clearly.
� Narrow web in-line press technology advancements in printing unsupported film
substrates while maintaining registration tolerance, web tension and optimal web
temperatures.
� Compatibility with full range of print processes included digital (toner-based and inkjet),
flexo and gravure.
Pressure-sensitive paper to pressure-sensitive film migration is the second most reported
migration in beverage with 24% of converters that print labels in the category reporting
paper to film migrations.
The graph below breaks down format migration by type for converters active in the personal
care category.
Exhibit III 10: Format Migrations in Personal Care Labeling by Type
Note: Values do not add up to 100% due to rounding.
A. New Application Areas for Label Converters and Format Migrations
39
Clear films provide apertures through which the package’s
contents can be viewed clearly
Narrow web inline press technology advancements in
printing unsupported film substrates while maintaining
registration tolerance, web tension and optimal web
temperatures
Compatibility with full range of print processes included
digital (toner-based and inkjet), flexo and gravure
Pressure-sensitive paper to PS film migration is the second most
reported migration in beverage with 24% of converters that print labels
in the category reporting paper-to-film migrations. The graph below
breaks down format migration by type for converters active in the
personal care category.
Exhibit III-10: Format Migrations in Personal Care Labeling by Type
36%
45%
18%
0% 10% 20% 30% 40% 50%
Thinner Films
PS to Shrink
PS Film to PS Paper
% Converters Indicating Format Migration in Personal Care
Dominant Label Format Migrations -Personal Care
TLMI Labelstock Study 2016 29
Thirty percent of converters serving the personal care sector report labeling format
migrations. Pressure-sensitive labels to shrink sleeves is the most widely reported migration
with 45% of converters indicating a portion of their pressure-sensitive personal care/
cosmetics labels has shifted to shrink sleeves.
Converters report that one of the primary forces driving shrink sleeve usage in the
personal care and cosmetics industries is the ability of shrink sleeves to fit the unique
and sometimes complex contours of personal care and cosmetics containers for products
that include lotions, powders, creams and gels. For some personal care products branding
extends to container shape and design. Shrink sleeves offer brands the ability to accent the
shape of a container and achieve further product differentiation.
Film facestocks dominate the North American personal care and cosmetics sectors. Thirty-
six percent of converters indicate that their personal care applications are moving to thinner
films. However, 18% of converters serving the personal care industry are reporting migration
away from films and back to laminated paper constructions as some packaging buyers look
to remove costs from the label decoration process.
A. New Application Areas for Label Converters and Format Migrations
TLMI Labelstock Study 2016 30
The graph below breaks down format migration by type for converters active in the
chemicals category (including both industrial and household chemicals).
Exhibit III 11: Format Migrations in Industrial and Household Chemicals Labeling by Type
More than 30% of converters serving the industrial and household chemicals sectors report
format migrations. Laminated pressure-sensitive paper applications continue to migrate to
pressure-sensitive films in this sector and 55% of surveyed converters printing chemicals
applications indicated pressure-sensitive paper to pressure-sensitive film migration.
The usage of shrink sleeves is also a growth market in household chemicals, particularly
in the laundry detergent, hand soap, trigger bottles and air freshener sectors. Converters
and brand owners in the household chemicals sector report that a driver of shrink sleeves
in this sector is the ability to use the more economical standard, opaque white resin in the
production of containers. The ability to achieve 360-degree color differentiation is available
with shrink sleeves, allowing brands to move away from more costly, custom-color resins.
A. New Application Areas for Label Converters and Format Migrations
41
Exhibit III-11: Format Migrations in Industrial and Household Chemicals Labeling by Type
More than 30% of converters serving the industrial and household
chemicals sectors report format migrations. Laminated pressure-
sensitive paper applications continue to migrate to PS films in this
sector and 55% of surveyed converters printing chemicals applications
indicated PS paper to PS film migration.
The usage of shrink sleeves is also a growth market in household
chemicals, particularly in the laundry detergent, hand soap, trigger
bottles and air freshener sectors. Converters and brand owners in the
household chemicals sector report that a driver of shrink sleeves in this
sector is the ability to use the more economical standard, opaque white
resin in the production of containers. The ability to achieve 360-degree
27%
18%
55%
0% 10% 20% 30% 40% 50% 60%
Thinner Films
PS to Shrink
PS Paper to PS Film
% Converters Indicating Format Migration in Chemicals
Dominant Label Format Migrations -Chemicals
TLMI Labelstock Study 2016 31
The graph below shows format migration by type for the industrial products category.
(Industrial products are defined as non-consumer durables.)
Exhibit III 12: Format Migrations in Industrial Products (Non-consumer Durables)
Twenty-three percent of converters that print labels for industrial products are reporting
format migrations. All migrations fall into two categories – the utilization of thinner films
and shifting from pressure-sensitive papers to pressure-sensitive films. The industrial
products category includes a wide range of labeling applications and end-use products.
Industrial product labeling includes everything from deli machine labels, to labels
found on institutional fire extinguishers, construction products and containers of non-
flammable gas. Environmental demands in this sector continue to drive the migration from
pressure-sensitive papers to film labelstocks. However, even in this sector of increasing
environmental durability, removing costs by light-weighting films remains a high priority.
A. New Application Areas for Label Converters and Format Migrations
42
color differentiation is achievable with shrink sleeves, allowing brands
to move away from costlier, custom-color resins.
The graph on the following page breaks down format migration by
type for the industrial products category. (Industrial products are
defined as non-consumer durables.)
Exhibit III-12: Format Migrations in Industrial Products (Non-consumer Durables)
Twenty-three percent of converters that print labels for industrial
products are reporting format migrations. All migrations fall into two
categories – the utilization of thinner films and shifting from pressure-
sensitive papers to pressure-sensitive films.
The industrial products category includes a wide range of
labeling applications and end-use products. Industrial product labeling
includes everything from deli machine labels, to labels found on
institutional fire extinguishers, construction products and containers of
non-flammable gasses. Environmental demands in this sector continue
to drive the migration from pressure-sensitive papers to film
labelstocks. However, even in this sector of increasing environmental
29%
57%
0% 10% 20% 30% 40% 50% 60%
PS Paper to PS Film
Thinner Films
% Converters Indicating Format Migration in Industrial
Dominant Label Format Migrations -Industrial
TLMI Labelstock Study 2016 32
As reported, the light-weighting of labelstock materials is a major trend across end-
use sectors. When it comes to light-weighting, having high level application engineering
expertise in-house benefits converters in multiple ways. The utilization of down-gauged
materials results in more labels per roll, optimizing productivity and requiring fewer roll
changes on press. Light-weighting also offers converters a way to position themselves
as better environmental stewards – reducing the volume of raw materials used in their
labelstock constructions.
A skill set in the usage and application of down-gauged materials and alternate adhesives
also offers converters a sales tool for prospects. By offering a more environmentally
friendly and lower cost construction, brand owners, retailers, distributors and contract
packagers are more likely to listen to what a potential label vendor has to say. How set
in stone, however, are label constructions at the packaging buyer level, and how much
flexibility do converters have in approaching their customers and prospects with new
construction solutions? The Labelstock Survey asked converters to indicate the number
of customers that have pre-set labelstock specifications in place. The graph below breaks
down converters’ responses.
Exhibit III 17: Pre-Set Labelstock Specifications among Brand Owners and Packaging Buyers
B. Brand Owner Enforcement of Pre-Set Labelstock Specifications
51
Exhibit III-17: Pre-Set Labelstock Specifications among Brand Owners and Packaging Buyers
Research indicates that for the most part label converters have
control over the recommendation and creation of new labelstock
constructions. Ninety-eight percent of converters cited that some of
their customers have pre-set material specifications in place. However,
only 17% of converters indicated that the majority of their customers
demand their applications abide by a set of established labelstock
specifications.
Since 2013, the majority of TLMI converters have reported that
their labelstock costs have remained the same. The
reports on material cost fluctuations year over year. In
the December 2015 issue of the report, 82% of TLMI converters indicated
that material costs had either decreased or stayed the same compared
to the previous year.
Although material costs continue to remain steady for the
majority of converters, labelstocks are susceptible to raw material
2%
40%
41%
17%
0% 10% 20% 30% 40% 50%
None of our customers have pre-set material specs in place
Very few of our customers havepre-set material specs in place
Some of our customers have pre-set material specs in place
The majority of our customershave pre-set material specs in
place
% Converters
Adhering to Pre-Set LabelstockSpecifications
TLMI Labelstock Study 2016 33
Research indicates that for the most part label converters have control over the
recommendation and creation of new labelstock constructions. Ninety-eight percent of
converters cited that some of their customers have pre-set material specifications in place.
However, only 17% of converters indicated that the majority of their customers demand their
applications abide by a set of established labelstock specifications.
Since 2013, the majority of TLMI converters have reported that their labelstock costs
have remained stable. The TLMI Biannual Index & Trend Report reported on material
cost fluctuations year-over year. In the December 2015 issue of the report, 82% of TLMI
converters indicated that material costs had either decreased or stayed the same compared
to the previous year.
Although material costs continue to remain stable for the majority of converters, labelstocks
are susceptible to raw material pricing fluctuations. In addition to the other factors
discussed in this section, these fluctuations will also continue to drive down-gauging
practices across end-use verticals.
B. Brand Owner Enforcement of Pre-Set Labelstock Specifications
TLMI Labelstock Study 2016 34
The research shows that converters are actively investing in in-house coating systems.
For smaller converters the investment entails the installation of a designated in-line print
station to apply adhesive. Larger converters are investing in standalone systems that can
coat, die-cut and strip matrix in one pass. The ability to control a portion of labelstock
inventory, coupled with the opportunity to match inventory with production will continue to
drive the adoption of in-house coating systems.
The Labelstock Survey asked converters to indicate if they are coating their own labelstocks
in-house. The graph below shows the percentage of companies that currently have this
capability, in addition to the percentage of companies that plan to invest in the technology
with the next one to two years.
Exhibit III 18: Percentage of Converters Coating their own Labelstocks In-house
C. In-House Coating of Labelstocks
53
Seventeen percent of participating converters indicate they are
coating their own labelstocks in-house, either by employing a
designated print station on an existing press or a standalone system
that has multiple coating and finishing capabilities. To gauge the impact
converter size has on the adoption of in-house coating; the data was
broken down by converter scale.
Exhibit III-19: Annual Revenues of Converters Coating their own Labelstocks In-house
5%
78%
17%
0% 20% 40% 60% 80% 100%
Don't coat in-house currently,plan to do so in near future
No
Yes
% Converters
Percentage of Converters Coating theirown Labelstocks In-house
36%
19%
45%
0% 10% 20% 30% 40% 50%
>$50 million annual revenues
$10-50 million annual revenues
$1-10 million annual revenues
% Converters
Annual Revenues of Converters Coating Labelstocks In-House
TLMI Labelstock Study 2016 35
Seventeen percent of participating converters indicate they are coating their own
labelstocks in-house, either by employing a designated print station on an existing press
or a standalone system that has multiple coating and finishing capabilities. To gauge the
impact converter size has on the adoption of in-house coating; the data was broken down
by converter revenues.
Exhibit III 19: Annual Revenues of Converters Coating their own Labelstocks In-house
The data indicates that scale has no impact on the adoption of in-house coating, only on the
cost of the technology employed to do it. More than 50% of participants coating their own
labelstocks in-house have annual sales revenues of more than $10 million while just under
half of participants have annual sales of less than $10 million.
C. In-House Coating of Labelstocks
53
Seventeen percent of participating converters indicate they are
coating their own labelstocks in-house, either by employing a
designated print station on an existing press or a standalone system
that has multiple coating and finishing capabilities. To gauge the impact
converter size has on the adoption of in-house coating; the data was
broken down by converter scale.
Exhibit III-19: Annual Revenues of Converters Coating their own Labelstocks In-house
5%
78%
17%
0% 20% 40% 60% 80% 100%
Don't coat in-house currently,plan to do so in near future
No
Yes
% Converters
Percentage of Converters Coating theirown Labelstocks In-house
36%
19%
45%
0% 10% 20% 30% 40% 50%
>$50 million annual revenues
$10-50 million annual revenues
$1-10 million annual revenues
% Converters
Annual Revenues of Converters Coating Labelstocks In-House
TLMI Labelstock Study 2016 36
The final questions in the Labelstock Survey asked companies about their relationships with
labelstock suppliers. Trends like increased label functionality, material l ight-weighting and
higher application performance standards have made the converter to labelstock supplier
relationship more important than ever before. Label converters report that calling on their
customers in conjunction with their labelstock suppliers is increasing. The survey asked
converters to indicate if they have made a change with their primary labelstock supplier
within the past two years. The graph below shows converters’ responses.
Exhibit III 20: Labelstock Supplier Loyalty among Converters
D. The Label Converter-Material Supplier Dynamic
55
The survey asked converters to indicate if they have made a
change with their primary labelstock supplier within the past two years.
The graph below shows converters’ responses.
Exhibit III-20: Labelstock Supplier Loyalty among Converters
Converters are loyal to their primary labelstock suppliers. Only
17% of participating converters have changed their primary material
supplier within the past two years.
When asked what prompted the change in labelstock suppliers,
converters’ responses fell into the following categories listed from most
to least cited.
Service issues (separate of lead times)
Lead times for materials/availability
Quality issues/performance
Pricing
Fitness for use criteria
Product(s) discontinued
17%
83%
Have Converters Changed their Primary Labelstock Supplier within the Past Two Years?
Yes, we have a new primary supplier
No, we are using same primary supplier
TLMI Labelstock Study 2016 37
Converters are loyal to their primary labelstock suppliers. Only 17% of participating
converters have changed their primary material supplier within the past two years. When
asked what prompted the change in labelstock suppliers, converters’ responses fell into the
following categories listed from most to least cited.
� Service issues (separate of lead times).
� Lead times for materials/availability .
� Quality issues/performance .
� Pricing .
� Fitness for use criteria.
� Product(s) discontinued .
When listing the reasons why they change labelstock suppliers, converters cited service,
lead times or availability and quality more often than pricing. Converters also report that
within the past two years the lack of availability and delayed delivery of specific labelstock
constructions has been an increasingly significant production pain point.
D. The Label Converter-Material Supplier Dynamic