Divergent Labeling technologies

Various dictionaries or even Wikipedia describe label as a piece of paper, plastic or another substrate affixed to a product giving information about it. The label has now attained a broader perspective. It has become the bridge between the end user and the producer. It can be embellished such that it becomes the sales enhancer, reaching out and tempting the end users to lift it off the shelf. It also has features that communicate with the cashiers in retail, the finance persons for accounting, the logistics department, the purchase department to fix reorder levels, facilitate ecommerce and much more. The label is also the guard for consumers, providing information of authenticity to them as also aiding the track and trace process to put a check on counterfeiting. Surely the label is a very important and  sensitive part of any product, without it the products have no value, no recognition and no safety. In earlier times it was just a piece of paper with a simple letter press printing and affixed with the help of glue to the product. Printing technologies have evolved and become advanced, moving into different tangents providing a plethora of printing options ranging from the lithography in earlier times to screen printing, offset printing, Rotogravure printing, flexo graphic printing, several types of digital printing and so on. Similarly diverse labeling technologies to affix the labels on to products have been developed, moving away from the glue applied or wet glue labels mentioned above.

The labeling technologies in use now include;

•  Pressure Sensitive Labels or Self-adhesive labels
• Wet glue or glue applied labels
• Shrink Sleeves
• In-mold labels
• Heat transfer labels
• Direct printing on product labels
• Others

Market size: The total global label market size has been estimated by various evaluators and market research companies to be around 45 to 55 billion square meters and estimated to reach 65 to 70 billion square meters by 2025 growing at a CAGR of 4-5%. Asia Pacific remains the region registering biggest growth. Pressure Sensitive Labels have emerged as the most widely used segment of the labels at 50 to 60% of all the labels used. This is followed by around 25-30% of Wet glue labels, less than 15% for Shrink Sleeves and less than 4% of IML. The constant growth in the demand for labels is fueled by the innovations in printing, converting and application technologies some of which are driven by the need for environmental concerns and sustainability imperatives.

Pressure Sensitive adhesive labels: If we look back into history of label usage in India, until the mid-1960s it was just the wet glue labels that were in use and registering continual growth in the quantum of labels in use. All labels were applied by starch or other natural gums-based adhesives. When automatic label applicators started being used to label, due to warping and slow drying issues, high solids dextrin based adhesive and synthetic resin adhesives started being used. With advent of development pressure sensitive adhesive labels in the late 1960s as stickers in sheet format the journey of these PSA labels began but it was not until the mid-1970s that the stickers started being produced as labels in roll form to be dispensed in high-speed label applicators in automated packaging lines. The ease of use, options to also use other than paper substrates, better aesthetics and ongoing developments in printing, converting and decorating technologies inline in a single pass, brought rapid growth to PSA labels usage. The continual growth has taken the market size of PSA labels way past the 50% mark of the quantity of total usage of labels. At the onset of a new millennium there was talk of the impact of the liner and label matrix waste going to landfills and at this time alternative technologies started evolving. By the second decade the environmental and sustainability became a necessity to implement and indulge in alternative labelling technologies. Linerless labels has made some headway, but it remains a PSA label technology that still has to evolve to reach acceptability by end users.

Wet glue labels: Traditionally this was the predominantly employed labelling technology but with the advent of PSA labelling, it lost a lot of ground to it. Unlike PSA labels that are applied by contact and pressure, in wet glue labels the glue is mechanically applied before application and left to dry on the moving packaging belt before going into final cartons. The need for clean room requirements and safety standards implementation in production areas of pharma and food companies, made end-users and brand owners of pharma and fmcg companies move away from wet glue labelling which required the continuous cleaning of applicators and production shop floors due to dripping adhesives attracting dust and bacteria. The growth in wet glue even though positive but is being slower than that of other technologies, it is losing the eventual market share. Presently when there is growing awareness of liner and matrix waste going to landfills impacting the environment adversely, wet glue labels application technology may undergo technical changes towards ease of use, be sustainable, cost effective without the liner and become a preferred technology. However, it is a little premature to expect a substantial change in this labelling. Major users of wet glue labeling are beer, liquor and wine producers.

Shrink Sleeves: These labels are printed on a flexible shrink film that reduces in size on application of heat and conforms tightly to the shape of the container or product, creating a colorful label with 360-degree coverage. These though originated in the mid-1930s as a cap seal for milk bottles, but it was between 1961 and 1980 due to pioneering work done by Fujiseal that the shrink sleeves attained full size labels shape for commercial usage. In 1991 Mumbai Headquartered, Paper Products Limited  which is now Huhtamaki India Ltd., under license from Fuji Seal for shrink sleeves started manufacturing these in India. Heat shrinkable specially formulated PVC has been the most used polymer but now due to toxicity issues linked to PVC, usage of PE and PET have increased. The global market size for shrink sleeves estimated by many market research companies is more than 11 billion US Dollars growing at a CAGR 0f 6.5%, but the author’s opinion is that in India it is growing at over 10%. Earlier all the shrink sleeves were printed on rotogravure printing equipment which means only very large print runs were needed because the cost of heavy and wide rotogravure printing cylinders needed long setup times. All that has changed, now shrink sleeves are also printed on Flexo and digital presses making very short runs possible thereby providing an impetus to the demand of shrink sleeve labeling.

In-Mold labels (IML): Paper or film printed labels (mostly filmic) are placed inside the molds during the blow or injection molding process. After placing the label, molten plastic is injected or blown into the mold. On cooling the label is fused with the resin, takes the shape of the so molded container and becomes an integral part of it. This needs no affixing and no use of any applicators providing an extreme ease of use for the end user of products like Lube oils, Paints, Ice creams, Butter, Cooking oil, Food products, etc. These labels that debuted sometime in the late 1970s can be printed by diverse printing methods but in recent times there has been extensive use of flexographic printing for IML. The IML segment is environment friendly and sustainable. As no adhesive or release liner is in use. In fact, if the polymer of the label and the container is same family, recyclability is possible leaving no adverse impact on the environment. The growth of this segment in India again appears to be much in excess of the global estimation of 5.5%. Many container manufacturing plastic molding companies in India have started to produce their own in-mold labels in-house for captive consumption and use robotics to place the labels in the molds before the molding. Hyderabad head quartered Moldtek and Kapcones, Delhi are some of the prominent IML containers and in-mold label manufacturers in India.

Heat Transfer Labels: Heat transfer is a labelling technology originally branded as Therimage, was developed in the 1960s by Dennison manufacturing Company USA, in which only the reverse printed label  on film or paper are transferred on to containers, using heat and pressure. Only the printed image without any substrate is transferred. Dennison manufacturing Company was later acquired by Avery International Corporation and the company was renamed Avery Dennison. These labels are printed by rotogravure printing process and transferred with help of Therimage heat transfer applicators. Evolution may soon see adaption of this technology by flexo and digital label printers. Once applied, the labels are permanently adhered to the container, they are sustainable as the containers can be recycled without removing the labels. Pens and other small radius containers use this technology because a decorated image is transferred without the problem of edge lifting of label face as in self-adhesive labels, on tightly curved containers or products. The technology provides a seamless, aesthetic, “no-label” look and offers 360 degrees print visibility. In the early days of the new Millennium, Dabur’s Chyawanprash containers were printed with this technology, at that time licensed by Avery Dennison who later sold the division to MCC (Multi-Color Corporation) the global producer of labels.

Direct printing labels on product: This direct printing on products appears to soon become a disruptive technology, when evolved and ready for widespread usage it would do away with all substrates and adhesives while printing multicolor images digitally and variably directly on the packages or products. There are multiple technologies that can do the direct printing. Some of these that already exist include screen printing which has been extensively used earlier on flat surfaces and even on plastic containers but with development and need for highly decorated labels the screen printing had to take a back seat. Pad printing that uses a silicone pad to lift inked images from an etched plate and transfer them to the products is also in use but being a slow and simple printing technology, it’s use is limited to simple images. Contact printing using polymer type faces on a roller printing on cartons was in use for long but the use of  monochrome inkjet printers did not let this technology expand more. The most disruptive development that is being seen and when fully developed to find extensive usage is multi-color digital printing and embellishing directly on containers, packages and cartons. The shortcoming at this time is the cost of consumables which with increasing volumes are expected to recede. It will not be very long before we start seeing this happening extensively doing away with face papers, release papers and adhesives to a great extent.

Surely, despite these technologies appearing to be disruptive yet one can safely express that all these divergent technologies will still co-exist, and some may be complementary to each other.

Written by Harveer Sahni Chairman Weldon Celloplast Limited New Delhi. October 2021

LMAI Webinar: Label printers' woes, price increases and shortage of inputs

Frequent increase in paper prices have been adversely impacting the printing and packaging industry in recent times. The print industry has been at the receiving end not just because of the price rise but also due to shortages of paper and that too at a time when demand is rising. The printers have suffered because of long lockdowns due to Covid-19 pandemic; they had hardly heaved a sigh of relief as the situation started to improve when prices began their upward movement followed by shortages or unavailability of critical inputs, adding to their operational problems. The self-adhesive label printing and converting industry is an extension of the sheetfed or unsupported web printing industry. Unfortunately, the impact of the present situation on label printers is more severe, given the complex nature of their major raw materials, the self-adhesive or pressure sensitive adhesive labelstock. Unlike the single layer substrate that paper or board is, the labelstock is a laminate with many inputs. The face materials vary from various kinds of paper substrates, films, foils, etc., then there is a range of pressure sensitive adhesives like emulsion and hotmelts in variants like permanent, removable, for low and high temperature applications that are formulated with various polymers, plasticizers, emulsifiers, and other chemicals. Lastly the release base papers and silicone formulations. All these inputs are facing price increases. Realizing the impact and seriousness of the situation, LMAI (The Label Manufacturers Association of India) initiated by the current President Rajesh Nema, organized a webinar titled "Knowledge - Accelerating Growth" on 30^th October 2021. The panelists included Saurabh Agarwal-Avery Dennison, Ajay Mehta- SMI Coated Products, Prashanth Raveendran- Seljegat Printers and Manish Desai- Mudrika labels. The webinar was moderated by Jaideep Singh Secretary LMAI and coordinated by Anurag Mohan Management committee member.

Ajay Mehta

Ajay Mehta spoke on the gravity of the situation due to rise in prices with price increases being announced by paper mills frequently despite not getting their full requirements of materials. Forward contracts are made with paper mills but those are for quantities required and mills in general, charge prices prevailing at the time of dispatch. However still, the increasing international freight rates, reduced availability of raw stocks with mills and the upswing in demand impacts adversely. While the mills give a date whereafter new enhanced prices will be applicable, but the adhesive suppliers do not even give time for price increase and announce the new price with immediate effect. Paper mills supplying release base papers are either facing shortages of pulp so have lesser materials to offer or they to recover the losses incurred during lockdowns are directing their materials to markets where the get higher value for their products. He cautioned that by modest estimates, the label industry will stand to lose over Rupees 250 Crores annually and there is no way this loss can be absorbed, they have no alternative but to pass on the price increase to the printers. They do get resistance from some quarters but there is no way to compromise on this if one has to survive and keep the company in sound health.

Manish Desai

Manish Desai of Mudrika Labels mentioned that print buyers strongly resist the price increases by expressing that there are other printers ready to supply at lower rates, however according to him they must be persistent as there is no other option. The possibility to downscale the product specification by lowering substrate grammages and adhesive coat weights to keep the prices stagnant is not the right step and will lead to inferior quality and rejections at the customer’s quality control. Moreover, since many print buyers are now mentioning the standard brand labelstock usage in labels supplied to them, printers do  not have the option to consider alternate suppliers. He suggested to the labelstock manufacturers that since they interact with print buyers to get their materials approved, they should in turn also impress upon to approve price increases in tune with raw material price escalations. It would also be prudent for labelstock manufacturers to make forward contracts with raw material suppliers such that they in turn can give some breathing time for printers to settle down with new prices. Price rise is an ongoing process in growing economies and eventually the industry settles down with it in 3-4 months, unfortunately now it is at a challenging time and too frequent. He further added that amongst their customers, with privately owned companies it is easy to get price approvals as one can deal directly with senior management and justify the need for higher prices. Contrary to this, it takes 3 to 6 months to get approval from multinational companies as they have multiple layers of management and the price approval is a long-drawn process and by the time the approval comes, the prices may already have increased some more.

Saurabh Agarwal

Saurabh Agarwal of Avery Dennison mentioned “'The significant increase in demand post the improvement in pandemic impact, especially in the large economies of the world, while the supply environment continuing to remain constrained has been the single biggest reason for the serious inflationary pressures. The rising oil and energy prices and the prevailing ocean freight crisis intensifies the impact and is now impacting almost every region. At Avery Dennison, all our efforts are geared to continue serving our customers in the best possible way during these volatile times, while at the same time keeping them informed of the prevailing situation.”

Prashanth Raveendran of Seljegat Printers was more focused stating that they have reached a level of success by continuously investing in the finest equipment to manufacture labels to international standards and creating innovative products. He said, not getting the appropriate and remunerative price for their products will hamper their growth and not justify their huge investments. He stressed that if some print buyers do not understand the situation and do not agree to give the right prices, unfortunately and sadly we will have to forego such orders. After all, we have to service our financial commitments.

Priyank Vasa

To get a wider view on the topic the author interacted with some more industry constituents. Priyank Vasa of Ahmedabad based Unick Fix-a-Form says, “The recent price hikes and inflation in raw materials has got us wondering how long we can sustain a healthy margin while continuing to offer the best rates and quality to our customers. Production efficiency has been impacted in the past two years because of the pandemic. Looking at the current situation, it is tough to offset increasing cost of raw materials with an improved efficiency. Labels have become a commodity, unlike older days where one could reap the benefits of developing a product for years altogether. Product  diversification could be the key which could offer a good balance between profitability and volume. Current market conditions do not offer many niche segments where business could thrive. Sustainability of the margins will take the driving seat vs the volumes. Expansion models must be feather light as nature of our industry needs repetitive investments that come with an interest burden.”

Mahendra Shah

Mahendra Shah of Renault Paper Palghar, a part of Manohar Packaging group says, “We call ourselves manufacturers of labels but technically, we are just converters without any consumer brand-value which can be encashed at a later part of our entrepreneurial tenure. Our current or past investments do not last long, due to fast changing technology. If you do not capitalize your investment in the first one thousand days, your time and energy is wasted in just recouping the investments done. Really, is this why we became entrepreneurs? Competition was always there and will remain in future, the only difference is the mindset. Now with fast evolving technologies we need to achieve the  return on our investment at a faster pace. As first-generation entrepreneurs, we took harsh calls and succeeded, with this huge price impact on our inputs now, we all need a fearless attitude to go for price increases from our customers before it is too late. We may lose some customers but with clear thoughts I am sure we can all make our business profitable and sustainable.” 

Anuj Bhargava

Anuj Bhargava of Kumar labels asserts that the price increase must be passed on and it is an imperative for survival. Another point he mentioned is that the industry is not realizing that people are a necessity in a company to work efficiently and the cost of people has dramatically increased post covid. So that cost combined with the enhanced raw material costs is a “Killer.” If label printers do not pass on the impact of the combined cost increase, then definitely it is a formula for suicide.

The PSA or self-adhesive labels industry is already at crossroads whereby evolution is leading to a lot of demand growth going off to different evolving technologies like shrink sleeves, inmold labels, wraparound labels and direct on product digital printing. Expansion in capacities coupled with commercial and other offset printers, facing pressure from the online communication, also investing in label manufacturing is bringing about intense competition and pressure on profit margins. Label manufacturing also has another challenge which is becoming a matter of concern and that is the waste management. Adhesive coated waste matrix and the release liner that form more than 50% of the laminate is either going to landfills or being incinerated. Facing pollution controls and attending to environmental concerns the printers must now invest in measures that support sustainable and environmentally safe production processes. At such a time when input prices are going up putting margins under pressure, their woes keep on escalating, prompting them to get together as an industry and ponder over workable solutions to counter the concerns that are arising. The positive side is that in a large country India with a huge young population, the growth is evident and there will be enough for all label manufacturing technologies.

Written by Harveer Sahni Chairman Weldon Celloplast Limited New Delhi November 2021

Printweek India's edited version of this article  is also available at; https://www.printweek.in/Features/label-printers%E2%80%99-woes,-price-increases-and-shortage-of-inputs-55396