RADAR #17 is out now: Labels indispensable enabler of the critical infrastructure

I am pleased to present to you the 17^th edition of the FINAT RADAR, our association’s six-monthly market monitor. As usual in the first semester, the results are based on a survey among label converters around Europe that are a member of FINAT and/or the national associations.

This edition comes at a critical moment. Six months ago when we released the previous edition, we were hopeful that the end of the pandemic was near, and that the supply chain issues we were facing in the second half of 2021 were a temporary phenomenon associated with the adjustment from the Covid crisis in 2020 to the rapid recovery a year later. This was also confirmed by the European Central Bank which claimed that inflationary tendencies would disappear in the course of the spring.

Throughout the ‘Covid Years’, our industry was in a relatively comfortable position. The Covid crisis revealed that labels are an indispensable enabler of the critical infrastructure. And when the economy got back on its feet in 2021, labels were necessary to get the goods back into the stores. Towards the back-end of the year, demand for labels and label materials may have been pushed by the prospect of raw materials shortages and inflationary tendencies. All of this resulted in growth for our industry of 7% in 2021, after nearly 4.5% in 2020.

But what a year 2022 has been so far! Firstly, the prolonged strike in the UPM paper mills added a special label and printing industry dimension to the supply chain problems that the general economy was already facing. In the months preceding Easter, FINAT has been addressing the paper shortages and their potential impact on the downstream users of labels, against a background of rising energy and raw materials prices, and growing shortages of skilled labour as workers moved on to new jobs after Covid.

Any prospects for a swift improvement of the situation were erased when Russia invaded Ukraine on 24 February.

The horrible war in Ukraine is first of all a human tragedy for the Ukrainian people, millions of whom have meanwhile fled the country, and millions more who are now displaced as their cities and villages are under attack by the neighbouring aggressor. At the European Label Forum in Baveno, we heard the emotional story by Michael Wareka of Marzek Labels about the tragedy facing the colleagues and families in their sister plant in East Ukraine. The thoughts of the European label community are with them and we fully support the Print Against War initiative that has been launched.

Time will tell, but the current cocktail of rising energy and raw materials costs, decreasing disposable income, disruptions in the labour market, a global food crisis and concessions being made to climate goals in order to have sufficient energy reserves for the winter, is blurring our vision. But on the positive side, crises like this can also be a driver of innovation on matters like sustainability, recycling, automation, digitalization and supply chain management. Many of these topics were discussed during the ELF, and it is FINAT’s firm intention to continue facilitating the flow of information, to provide education, and enable industry and cross-industry collaboration on matters that exceed individual companies’ capabilities.

This edition of the RADAR is just one of the tools. Out now, accessible to all FINAT members.

Go to the RADAR market report