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10-07-24 - Lejeune, Jules

FINAT Radar #24 depicts a volatile state in the label industry

In a week's time the 24th edition of our quarterly statistical survey, the FINAT Radar, will be ready. This edition covers the second quarter of 2024 and, apart from an extract of AWA’s Q2 data transcripts, also includes the findings from the annual label converter survey.

At the European Label Forum at the beginning of June, I had the pleasure to present a summary of the latest FINAT Labelstock Statistics (prepared by Panteia market research). This FINAT RADAR report’s analyst Anum Javed Beg of AWA gave a preliminary update of the outcomes of the Converter Survey, and Euromonitor’s Linda Lichtmess highlighted the consumer attitudes to watch in the various consumer markets. An industry panel featuring business leaders from leading global and independent converter companies and material suppliers reflected on the status along the label supply chain.

From these sessions, a picture emerges that demonstrates the volatile state in which our industry finds itself:

  • Labelstock demand: Declined by almost 26% in 2023, returning to 2013 levels due to supply chain issues and economic pressures.
  • Supply chain impact: COVID-19 disruptions and the 2022 paper mills strike contributed to significant destocking effects in 2023.
  • Market recovery: Tentative growth in Q4 2023, accelerated in Q1 2024, but demand has not fully recovered.
  • Filmic roll labelstocks: Grew to nearly 30% market share, up from under 20% in the mid-2000s.
  • Brand owners' focus: Sustainability, technology investments to streamline processes and reduce waste, and supplier diversification.
  • Converters' challenges: Raw material price increases, competition from alternative technologies, automation and digitisation was well as labour talent shortages.
  • Consumer trends: Value for money, transparency, enjoyment, AI integration, and health and wellness.
  • Industry value: Packaging industry worth $1 trillion, with labels contributing $40 billion.
  • Sustainability impact: Labels have a significant impact on sustainability and shelf impact.
  • Regulatory challenges: Environmental regulation and certification are challenging, especially for smaller companies; PPWR framework seen as a starting point.

The complete takeaways of the ELF 2024 are or will be available in written, visual and (for selected sessions) AI-generated form by our editor James Quirk, our cartoonist in residence Philip Barrett and our virtual assistant Snapsight. (For the full ELF report click here.)

The near-record attendance of 270 at our ELF in Athens as well as the record participation of nearly 100 label companies in the converter survey demonstrates that knowledge and data are critical in the era of unprecedented disruption that the 2020s have been so far. As stated under the ‘Knowledge’ pillar of our association’s strategy, it is FINAT’s aim to provide its members with a first-hand source of knowledge and information, whether through printed, digital, live or recorded content on a variety of relevant topics.

I trust you will find this edition of the FINAT RADAR worthy of that purpose and wish you insightful reading.

On behalf of the FINAT Board I wish you a pleasant summer and a successful second semester of 2024!

Jules Lejeune, FINAT MD