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Label Production Innovation Helps Brand Owners Prosper - Vicki Strull Design
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    StrategyCreative DirectionPackaging DesignBrand Identity DesignSpeakingOther

    Label Production Innovation Helps Brand Owners Prosper

    READ THE ORIGINAL POSTING

    Labels are small in size, but they’re immense in terms of brand communication.

    In many cases, the label on the product on the shelf is the only form of visual marketing promotion that the product is ever going to receive. The label the shopper sees is more than just an eye-catching identifier: through content and imagery, it’s the product’s binding contract of quality, authenticity, and increasingly, regulatory compliance.

    Designers and converters of labels understand these mandates, and they take them as seriously as do the brand owners they serve. As the mandates have grown more complex, the label industry’s techniques for fulfilling them have become that much more sophisticated.

    Advances in both conventional and digital production have made high-end labeling available to products of all kinds, no matter how specialized the requirements or how large or small the quantities needed.

    Thriving Global Market

    The label industry thrives in the confluence of technical progress and the growth of consumer purchasing power around the world — and the economic gains converters have made in recent years show no signs of receding.

    In a report titled, “The Future of Label Printing to 2024,” the research organization Smithers Pira states that in terms of value, North America holds a 26.9% share of the current $41 billion world market for printed labels. North America accounts for 18.6% of the roughly 1.2 trillion labels (as A4 prints or equivalent) produced worldwide. Global market growth is forecast to continue through 2024 at a rate of 4.0%, reaching $49.9 billion in 2024 with nearly 1.6 trillion labels printed in that year.

    For converters, sharing in the prosperity means knowing more than just how to print and finish a good-looking label. It requires having an equally keen sense of both the creative trends and the consumer market preferences underlying the demand for the label products they offer.

    John McDowell, president of McDowell Label in Plano, Texas, compares the harmony of color, shape, and size to “a fundamental law of physics” for establishing effective branding: a “basic barometer” for determining whether or not the label is going to serve brand essence criteria.

    This kind of discrimination, he says, is what label converters should be in the business of providing. “Every day, brand owners are trying to out-graphics the competition,” he states, explaining that helping customers beat the competition with continuous brand refreshment is his company’s No. 1 goal.

    A “call for more embellishment” is what Gary Moody, owner of Premier Markings in Mississauga, Ontario, says he is hearing from brands aspiring to “do something different that someone else isn’t doing yet.” This is why he has installed offline systems for cold foiling, hot stamping, and flatbed screen printing to complement his digital printing equipment.

    Escaping ‘That Sea of Sameness’

    Creatives are in step with converters in their assessments of trends driving the label market.

    According to design and brand strategist Vicki Strull (Vicki Strull Design), the way to escape “that sea of sameness” at retail is to tell a compelling brand story that resonates with authenticity and builds trust. She says this is why, for example, label designs increasingly feature hand lettering and other “bespoke” touches that make the product seem as if it were “a little more made for you.”

    But, today’s well-informed consumers aren’t easy to sway. In product categories like health and wellness, says Taylor Getler, a business development associate at the Works Design Group agency, shoppers evaluating what they see on labels “don’t want to feel that this is just part of a marketing ploy.” They want brand-specific information, and Getler says labels are giving it to them with “pared back” designs, extra white space, and hand-drawn imagery to convey the simplicity and purity of the product.

    If the communication succeeds, says Getler, consumers won’t mind and may even like the fact that a label stylized in this way looks “a little bit imperfect, a little bit messy.”

    Aesthetic choices meet production realities when labels go to press in runs of all sizes. The downward pressure on run lengths continues, notes Dan Muenzer, president of TLMI, the principal trade association for the U.S. narrow-web industry, in a written response. He attributes it to “consumers’ desire for product variation, unique packages and flavors, along with the general SKU proliferation” arising from brand extensions and other product multipliers.

    Converters and Compliance

    Upholding regulations that govern consumer safety and health is another fact of life for label converters. In California, for example, businesses rely on label suppliers for stickers indicating their compliance with the requirements of Proposition 65, a state law that has mandated disclosing the presence of harmful chemicals since 1986.

    As Muenzer observes, “the brand owner is ultimately responsible for their labels’ compliance, but the increased activity in this area is causing the label printer to become more of an expert in regulatory label design. The label industry continues to respond to laws around compliance, nutritional facts, and environmental initiatives, to name a few.”

    Converters feel the impact of compliance in their day-to-day operations. Premier Markings customers, says Moody, “send new files constantly” both to stay in step with regulations and to keep their brands fresh. McDowell sees some brands preemptively adopting “true labeling” with content even more transparent than the rules require as a way to “skirt additional governance” by regulators and inspire consumer trust.

    Pass the ‘Secret Sauce’

    Technology continues to be the chief means by which converters rise to the challenges of the label market, thanks to steady advances in conventional flexographic and digital label printing systems.

    Progress in flexography “is the secret sauce for many conventional label printers,” according to Muenzer. “The crossover point for the economic advantage of digital versus conventional print continues to move as digital runs become longer and conventional runs become shorter.”

    McDowell says that at his company, which has high-definition flexo, digital, and screen printing capabilities, LED-UV curing has been “a huge game changer” for conventional production along with quick-changeover technologies, waste reduction features, and other assets that increase press productivity and uptime. In fact, he pushes back against the term “conventional” and the implication that it could mean “generic” in terms of efficiency or quality — a notion he rejects.

    “There’s nothing conventional about what we do,” he says.

    All Digital, All the Time

    At an all-digital label business like Premier Markings, perspectives are different. Moody sold labels as a broker until he acquired his first Xeikon narrow-web press six years ago — he currently has a pair of them. He outsources his long runs to a flexo shop that sends him its small-volume work in return. But he says that owing to changes in patterns of demand, the long-run orders he jobs out are down sharply — from 10 per day to one per week.

    The average run length at Premier Markings is 1,500 to 2,000 feet — about what would be expected at a shop where the printing is 100% digital. Moody says his volumes are telling him that “the conventional side is getting smaller and smaller. There is a much bigger shift to digital print.”

    According to Smithers Pira, slightly more than 10% of all labels currently are printed digitally; digital’s share is forecasted to rise to about 15% by 2024. Muenzer acknowledges the penetration, but he also points out that when label volume moves to digital output, it isn’t necessarily at the expense of conventional production.

    Work Enough to Go Around

    “The majority of the digital investments are actually with converters who are expanding their capabilities,” Muenzer explains. “As business is transferred to digital presses it tends to be replaced on their conventional presses.” The high single-digit growth that TLMI members achieved in 2018 “wasn’t driven only by digital production,” Muenzer says.

    But, in the long term, brands probably will not care very much whether the process is conventional or digital as they discover new ways to leverage the powers of communication that labels can unlock.

    Getler points out that brands now regard labeling not just as a medium for delivering information about a product, but also as a channel for telling the producer’s story and highlighting its culture and values.

    Strull sees demand rising for foiling, embossing, and other kinds of embellishment, but with a caveat: “They have to make sense with the brand story, and why they’re doing it. It can’t just be bright gold and silver for the sake of bright gold and silver.”

    Strull points out that embellishment infuses labels with what neuroscientist Dr. David Eagleman has called “endowment effects”: looks that generate a sense of ownership in shoppers, encouraging them to reach out and touch the product. She says Eagleman’s research has shown that this can clinch the sale of the item, because “when you pick it up and engage with it, you start to believe it’s yours and attach a higher value to it.”

    It’s Out There – So Go for It

    What it all means is that label converters with good brand sense will find no shortage of opportunities to exercise it on behalf of their customers.

    Moody sees strong potential in the craft brewing industry. “The craft beer guys are having so much fun out there,” he says, as they spend what they earn on making their labels even more visually appealing. Moody adds that word gets around quickly in this tightly knit community about label converters and other suppliers.

    McDowell Label is exploring augmented reality (AR) because the technology is poised, in McDowell’s opinion, to “proliferate widely across every consumer product goods category.”

    He expects AR labeling applications to “dynamically explode” in cosmetics, food, pharmaceuticals, spirits, and dietary supplements for people and pets.

    To remain competitive, every converter has to make judicious investments in production technologies that align with current and emerging trends in demand. The best decisions come from targeting customers first and technologies second, according to Muenzer, who advises converters “to strategically decide what market or niche they want to serve. Those markets will dictate the investments made.”

    With the right mix of conventional and digital capability, he says, “there isn’t anything you can’t produce both efficiently and creatively.” Muenzer also counsels investing in software to minimize inventory, shorten lead times, and seamlessly participate in e-commerce.

    Needed: ‘360° Understanding’

    “One word: automation” is how McDowell responds when asked what capability is the most important for label producers to acquire. He says that measurement through MIS drives automation at McDowell Label by minimizing touches, increasing yields, reducing waste, and creating accountability and scorecarding throughout the manufacturing process.

    This tallies with Muenzer’s view of what true competitiveness in labeling now requires.

    “One production investment won’t do it anymore,” he says. “We live in a label world that requires 360 degrees of understanding.”

    That understanding is something that no one in the label industry can afford to be without, according to McDowell. “If you’re not constantly reinvesting,” he counsels, “you’re going to be left behind. It’s an arms race, and not everybody is going to win.”