Print Leaders Forum: International growth for labels

An excerpt from AP March 2020 Print Leaders Forum – by Tarsus Group strategic consultant Mike Fairley 

Having written about the label industry for more than 40 years, it has been particularly interesting to document the quite dramatic changes that have taken place, particularly over the last decade. During that time, the industry has undoubtedly become significantly more global in its operations – whether it’s the major materials or technology suppliers, or the growing number of big converter groups.

By closely following new global opportunities, new national and international markets, and high GDP growth countries and regions, it has been possible for the label industry to largely continue achieving an ongoing annual global growth of around four to six per cent.

Not all countries and markets have been able to benefit from this evolving global label growth. Indeed, most Western European countries and the US are forecast to drop to one to two per cent GDP growth per annum over the next five years.

Even that level of growth may be optimistic, as the EU has recently downgraded its forward growth forecasts for the main European economies to little more than one per cent or less, while Eastern Europe, which has fared much better over the past 10 to 15 years, appears to be now looking at forward growth of just two to three per cent – which is much the same as Australia and New Zealand.

There seems little doubt that trading conditions for many label converters in Western European countries and in the US over the next few years will not be easy. Pressures on brands and retailers to reduce packaging, cut back on the use of plastics, minimise waste, and look at new ways of marketing and selling more environmentally friendly produce (possibly without labels) will bring new challenges for many in the world of labels – wherever they are.

Fortunately, although most of the developed world economies have slowed, new global markets for labels have emerged, leading the major labelstock and press technology suppliers to establish manufacturing facilities outside of their traditional key homes in North America and Western Europe.

The label industry today is a totally global business which tends to follow the global (and private) brands as they expand into emerging countries and new markets.

Six out of the forecast top ten growth markets by 2024 are all in Africa. Also in the higher top 10 to 20 GDP growth markets over the next five years are many of the key Asian countries including India, Bangladesh, Philippines, and Vietnam.

But, how does the Australia and New Zealand region fit into the changing patterns of labels growth? Interestingly, although GDP growth is only around two to three per cent, both countries have an above average consumer market that loves private label products.

Good growth has been reported by research group Nielsen in retail stores and store brands as international retailers, such as Aldi, Costco, Seven & I, and Fast Retailing, move and expand in the market.

This expansion, in turn, has prompted local retailers like Woolworths and Coles to roll out and expand their own private label brands. As a consequence, retail growth in the region (nearer to four per cent rather than virtually nil or minus growth in most other developed world markets) has been more positive than many other international retail markets, while many fast-growing retail groups also regard Australia and New Zealand as a possible springboard to the lucrative Asian market.

Both factors should be encouraging for Australian and New Zealand label converters.

IMF forecasts for the year ahead generally point to a weaker than anticipated global activity, with investment and demand for consumer durables expected to be subdued. Projections for 2020 therefore show global growth at just 3.5 per cent.

Having said that, the label industry has largely grown at between one or two per cent above GDP worldwide for many years, so the long-term label industry trend of global growth of somewhere between four and six per cent perhaps still seems achievable. But that is likely to be largely attained through the world’s biggest growth markets in Asia and Africa.

The more developed label markets of Europe, North America, Australia and New Zealand will undoubtedly have their own challenges to remain competitive, with ongoing investment particularly targeted at efficiency, productivity, added value, workflow automation, waste reduction and environmental performance.

The industry has had its challenges before, but it has proven to be one of the most adaptable and technology sophisticated of all the print sectors. It may become more streamlined, more automated and more environmentally conscious – but will almost certainly survive and continue to grow worldwide.


This article was written prior to the impact of COVID-19. The digital version of AP March 2020 is available here.

And as part of AP’s 70 anniversary, we’re pulling together a list of 70 local industry pioneers – you can make your nominations here.

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