PFFC - June 2008 - (Page 50)

EDP address labels created.* Permanent p-s adhesives developed.* *Source: Klein, B. 1994. They Built an Industry. Lima, OH: Fairway Press. 1951 1954 A Look at the North American demonstrates the dominance of US demand—which will certainly continue—over Mexican and Canadian usage levels, although the latter two regions’ growth rates are considerably higher (see chart). Label Market Today The Mexican label market is the most rapidly growing geographical NAFTA market, enjoying growth rates at multiples of By Corey M. Reardon, AWA Alexander Watson Assoc. those within the US, albeit from a much lower base. A conservative estimate of p-s label growth in Mexico is 5%. This compares with America is the longest-established pressure-sensitive label market the US rate of 1.5%. The Canadian market is estimated to be in the world, as well as the historical “home” of the industry, but growing at around 2%. it is undergoing change across the value chain—as is the rest of Growth in North American demand for p-s labels has slowed the world—as retail competition intensiﬁes, globalization becomes signiﬁcantly from the double-digit levels recorded throughout a reality, new economies emerge, and margin and cost pressures the 1990s, but market demand remains modestly positive. The drive consolidation and rationalization. forecast CAGR for the period 2007–2012 is a low 1.2%, predicting At a macro level, the weakened US economy also is having its effect. GDP growth for the US in 2007 was 2.2%, with a slowdown a label demand of around 8,500 million MSI in 2010—a growth of 0.8% during the last quarter and with the housing and ﬁnancial of around 500 million MSI compared to 2007 levels. Underlining this slowdown are the increasing maturity of p-s labeling, high markets—and consumer conﬁdence—in decline. levels of penetration in key market segments, and high per capita New labeling technologies also tempt the end-user. Wet glue and consumption. p-s labels now face competition from direct print, sleeving, in-mold Environmental responsibility labeling, and glue-applied wrapand waste management issues around labels. Nevertheless, traditional NORTH AMERICAN PRESSURE-SENSITIVE are impacting the growth of p-s global label demand continues to grow LABEL DEMAND BY REGION–2007 labels negatively, with state and annually at 4.7% with the mature federal government legislation now markets of North America and Europe Region Estimated Label Demand (million MSI) Percent beginning to control the use and growing overall at around 2.5% each. US 6,820 85% disposal of packaging materials (see While glue-applied labels still Canada 840 10% page 54 “Serving the Environment” dominate the world, p-s labels today Mexico 400 5% and page 56 “Environmental have the competitive edge in North Total 8,060 100% Leadership Award”). Campaigns, America with 45% of the market. In Source: AWA Alexander Watson Assoc. such as those at Wal-Mart, call for the 2007 North American demand for reduction of packaging overall. p-s labels totaled 8,060 million MSI Other factors, such as the aging population, inﬂuence North (thousand square inches) with an estimated value of $6 billion and a American demand for labels. By 2009 14% of the Canadian compound annual growth rate (CAGR) of 1.4% to 2012. population will be over age 65, as will the US population by 2013. Glue-applied labels accounted for 43% of the market in The relevance of such statistics to label use lies in their positive effect 2007. Sleeving and in-mold labels accounted for 8.6% and 2% on market sectors, such as health and beauty care and pharmaceuticals respectively; other labeling technologies make up the balance. In terms of substrate, paper remains the leading global choice for as well as single-serving convenience food and beverage packs. Continuing economic expansion in regions such as Asia Paciﬁc all label facestocks, particularly for prime labels. In the p-s sector, security papers are enjoying good growth, as brand authentication is beneﬁting North American label producers. They are well positioned to exploit export opportunities for labels and packaging: continues to attract attention. For RFID, paper grades that will North American importers of goods manufactured in China and cushion and protect the chip are a developing market. throughout Asia generally specify experienced sources for their Paper facestock accounts for about 75% of the North American labels. However, quality local supply is developing fast and, in the market, with ﬁlms taking the majority of the remaining share longer term, will present a threat to North American converters. in North America as a whole and also in each of its regional markets—US, Mexico, and Canada. A regional NAFTA breakdown A LOOK continues on page 52 50 | JUNE 2008 WWW.PFFC-ONLINE.COM http://WWW.PFFC-ONLINE.COM

Table of Contents Feed for the Digital Edition of PFFC - June 2008

PFFC - June 2008 Contents First Glance Calendar of Events From the Editor Web Lines Process Management News Clips Narrow Web & Label Reporter Narrow Web & Label What’s New Products Carton & Box Reporter Carton & Box What’s New Products Paperboard Packaging Cartons/Boxes Cover: New Materials Offset Printing TLMI 75th Diamond Anniversary What’s New Products Services Directory Classified Marketplace Equipment Buyers & Sellers Advertisers Index Experience Speaks

PFFC - June 2008

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