‘Still some bright spots in labelling trends’ – FINAT report
There are small signs that growth is remaining in some parts of Europe's self-adhesive label industry -principally Central, South and Eastern Europe -but it is much reduced from the heady years of 2006 and 2007.
Corey Reardon, president and chief executive officer of Amsterdam-based AWA Alexander Watson Associates, who is conducting an extremely in-depth study into buying patterns among end-users in the industry for FINAT, the self-adhesive label global trade association, said: "There is a lot of doom and gloom but within that there are some bright sports which tend to offset the overall trend of the market for softening."
His company is compiling the results of FINAT's fourth End-User Survey which will be published in the late Spring. This is the most exhaustive research ever among up to 200 brand owners across the whole range of industries using self-adhesive labels. It will help paint a revealing picture of the progress of the current world economic situation in the various regions of Europe.
All agree that there was a markedly dramatic softening of the labels' market in the fourth quarter of 2008 as many users drew on stocks in hand -a trend that has continued in the first quarter of 2009.
Over the whole of 2008 European growth was between two to three per cent -something like 5.6bn sq mtrs to 5.65bn sq mtrs -which compares to a 4.3 per cent increase in 2007 to 5.5bn sq mtrs. The slowdown in the fourth quarter put the brake on early 2008 expansion.
The greatest regression has been in Western Europe, with the UK and Scandinavia seeing particular contractions in volumes, which prompts Mr Reardon to forecast a static market in this region in 2009.
Eastern Europe is seen as the main driver in 2009, having seen growth of eight to ten per cent seen in 2008 -but in some areas of that market only up by five per cent. Mr Reardon tips Central and Southern Europe to see a zero to two per cent growth over the coming year.
There seems to be some evidence to prompt a thought that in times of recession some parts of Europe will drink itself through the recession! Mr Reardon said: "In terms of market segments, beer in the beverage area, is the driver for growth and for film labels overall with their use in premium beers.
"It is rumoured that a major European brewery is changing to non-returnable glass bottles which would facilitate the use of self-adhesive labels by reducing the need for label removal. Anther plus is the investment by breweries in new modular labellers that overcome the previous barriers to entry for self-adhesive labels," he said.
More opportunities are seen for self-adhesive labels on mineral water bottles while in wine bottling self-adhesives continue to take over from wet glue labels.
In food, comments Mr Reardon, there are ‘a number of possibilities' with self-adhesives used on shrink wrap products and flexible packaging driving some demand. "The idea of reducing costs on chilled meals by replacing the card sleeve with a self-adhesive label in the lidding is an opportunity," he forecast.
Household chemicals remain ‘a battleground' and health and beauty care will be a key sector as brand owners are taking no risks in changing from high quality labelling which enables self-adhesive to dominate.
The specialist pharmaceutical market will see ‘steady' growth of three per cent - ‘one of the highest growth areas today', Mr Reardon said.
The auto industry presents an interesting situation where the numbers of vehicles built is declining but the use of labels on each vehicle is increasing!
FINAT's End User Survey, generally seen as the ‘Bible' of the industry's trends, will be published ahead of its annual conference, being held at the Gloria Golf Resort, Antalya, Turkey between June 10 and 12.