Mid-term review by the FINAT President

At the General Assembly in Vienna, FINAT President Philippe Voet (Etivoet, Belgium) completed his first, 2-year term at the helm of the association. With a completely new team and in a revised committee setting, he is entering his second term. What have been the accomplishment in the first two years, and what are the ambitions for the coming term? Time for a quick recap.

What is your assessment of these two years as the head of FINAT?

It was an unusual handover when I took over from Chris Ellison on a virtual stage during the European Label Forum two years ago. And it has been a challenging ride coming out of the Pandemic. As the president of FINAT for the past two years, I am immensely proud of the progress and achievements we have made as an association nonetheless. During my tenure so far, we have focused on several key areas that have positively impacted our members and the industry as a whole.

First and foremost, we have prioritized fostering a strong sense of community within FINAT. By encouraging collaboration and knowledge sharing among our members, we are creating a vibrant and supportive network that facilitates growth and innovation. Additionally, we have placed a strong emphasis on advocacy and representation. We are now proactively engaging with regulatory bodies and governmental organizations to ensure that the voice of our industry is heard. By actively participating in relevant policy discussions and decision-making processes, we have been able to influence regulations and standards in a way that is beneficial to our members and the industry at large.

Overall, we have strengthened our community, advocated for our industry's interests, and facilitated technological advancements. I am proud of the progress we have made, and I firmly believe that we are well-positioned for continued success in the dynamic and evolving labels and packaging industry.

How do you look at the sector in the first 3 years of this decade?

Over the last three years, the labels and packaging label sector has undergone significant changes and experienced notable growth. Several key trends and developments have shaped the industry, and it is important to take them into account when assessing its current state.

1. Covid 19: The global Pandemic of 2020-2021 has revealed the critical importance of labels and packaging as indispensable component of the critical infrastructure in especially food and beverage as well as personal care and the medical and pharmaceutical sectors. At the same time, it has also revealed the vulnerability of globally interconnected supply chains and in this sense, it is also at the root of problems we face today as a delayed effect of the disruptions, leading to scarcity of components, energy, raw materials and labour, leading to excessive inflation and a reduction of consumer disposable incomes. The war in Ukraine has only aggravated this vulnerability and the present economic climate is very uncertain.
2. Increasing Demand for Sustainable Solutions: Sustainability has become a critical concern for both consumers and businesses. In response to this demand, the packaging label sector has witnessed a shift towards more sustainable practices. Labels made from recycled materials, biodegradable options, and eco-friendly printing technologies have gained traction, reflecting a broader industry commitment to environmental responsibility.
3. Technological Advancements: The labels and packaging industry has seen remarkable advancements in technology, revolutionizing various aspects of label production and design. Digital printing has become more accessible and efficient, allowing for faster turnaround times, customization, and cost-effectiveness. Automation and data integration have also played a significant role, enhancing productivity and accuracy in label manufacturing processes.
4. Increased Focus on Branding and Product Differentiation: With fierce competition in the market, brands have recognized the importance of effective labeling and packaging in capturing consumers' attention. Labels have evolved beyond mere product information and are now considered an integral part of branding and storytelling. Innovative label designs, unique materials, and interactive features have emerged to differentiate products and create engaging customer experiences.
5. Regulatory and Compliance Changes: The labels and packaging industry operates within a framework of regulations and compliance standards. In the past three years, we have witnessed significant updates in areas such as food safety labeling, ingredient disclosures, and traceability requirements. Presently, all eyes are on the impending revision of the Packaging and Packaging Waste Directive, which is soon to be turned into a Regulation directly applicable across the EU. Staying informed and ensuring compliance with these evolving regulations has been a priority for industry players.
6. Global Market Expansion: The labels and packaging sector has experienced growth on a global scale, driven by expanding markets and increased international trade. As a result, the industry has seen a rise in international collaboration, strategic partnerships, and cross-border investments.

Overall, the last three years have been characterized by transformative changes and opportunities within the labels and packaging sector. Adapting to sustainability demands, leveraging technological advancements, focusing on branding, staying compliant with regulations, and capitalizing on global market expansion have been key drivers for FINAT’s programmes, and our annual European Label Forum is the platform where we assemble around these topics, where we learn from each other and where we gather knowledge, information, and inspiration for the period to come.

Based on the outcomes of the ELF in Vienna, can share your take on the short-term outlook?

The past 12 months have been characterized by severe disruptions in the supply of self-adhesive materials and paper release liners. Due to the paper shortage, our industry and its customers were faced with severe inventory problems and excessive lead times. When the strike in Finland finished just before Easter last year, it took until the end of Q3 for label companies to fill the backlogs, but by that time also the general economic prospects in Europe had deteriorated. Because of this, Q4 2022 and Q1 2023 were characterized by destocking of label materials, and 2022 ended in an overall drop of labelstock consumption of 4.7% compared to 2021.

Fortunately, initial results from our annual FINAT RADAR converter survey (final results to be released at the beginning of July) indicate that final demand for self-adhesive labels is still holding up in spite of recessionary trends. Label demand in the food, beverages, household products, and retail sector dropped in Q1 compared to the same period a year earlier, as consumers shifted consumption patterns in response to rising inflation and shrinking disposable incomes. But the drop seemed to be lower than at the end of 2022. Q2 will confirm whether this is an early indicator of recovery, or whether recessionary tendencies will persist.

One of the strategic goals of FINAT is to increase its engagement in regulatory affairs. How are we doing in this respect?

Due to the tsunami of new EU regulations and corresponding guidelines, the role of FINAT as the ‘voice of the industry’ has increased substantially since the EU launched its Green Deal at the end of 2019. Each month, there are public EU consultations forthcoming, position papers from stakeholder organisations seeking alignment, or recyclability guidelines to be reviewed in order to correct or modify draft texts. Often with a very limited response time.

We have increased our in-house resources with the expertise of Pablo Englebienne as our Regulatory Affairs Manager, and Noel Mitchell as our freelance Technical Advisor. Both gentlemen are however dependent on the different areas of expertise represented among the various segments, and for this reason, we have reorganized our organisation’s structure. In order to activate this expertise in an agile manner, we now have a so-called Regulatory Affairs and Sustainability Core Group and a supporting wider network of experts in a permanent Working Group.

An important factor is that during the Pandemic, many of the consultation meetings were taken online and the accessibility of the EU institutions improved significantly. This practice has continued after the Covid and also helps organisations like FINAT that do not have substantial resources to have a permanent representative in Brussels.

Where are the UV-Foodsafe and CELAB Europe projects?

In recent years we have seen the growing importance of association as driver of joint sustainability initiatives. Associations can serve as vehicle at industry level to accelerate the transition to the circular economy, enhance consumer health and safety and combat climate change. Recently, the EU Commission has announced that it will broaden the ‘bandwidth’ of Competition Law for industry collaboration on sustainability. In FINAT, we have already gained substantial experience with two groundbreaking projects that have been initiated during the past 5 years.

The UV FoodSafe project is in its final stage, after two years of delay caused by Covid as physical travel was prohibited and trials had to be postponed and lab tests were delayed. Recently, final tests were performed at one of Stratus Packaging’s sites in France and we are awaiting the results of the migration tests. These outcomes will then have to be certified by an independent lab and a document/white paper will be released towards the end of the year.

As far as the liner and matrix recycling consortium CELAB-Europe is concerned, a lot has been accomplished over the past 3.5 years, as can be seen on the organisation’s website www.celab-europe.org, where we also have an interactive map listing a growing number of validated recycling solutions for spent release liner and matrix materials. But a lot still needs to be done to get the industry ready for the overall target of 75%, which is in line with the current targets for 2030 as mentioned in the draft PPWR. Whereas most of the matrix materials emerge at label manufacturers’ plants, the liners complete there function along the value chain at the factories where branded products are labelled. Our key challenge is to increase our visibility and awareness across the value chain about the value of these materials as ‘secondary raw materials’ and the solutions already available. Even if the volume of used liners materials is small compared to the total waste stream, there is a huge potential for further growth in the remainder of this decade.