The industry has come a long way from the days of Stan Avery's "Gum Tacks" and Mark Andrews Sr.'s motorized hand-stamp tape printers.

The growth of the label business has been evolutionary. Primary factors that have contributed to its success have included:

• Continuous expansion of graphic capabilities,
• Increasing capabilities and greater reliability of materials,
• User-friendliness (ease of application and use),
• Reduction of product costs,
• Applications engineering (cost-effective use of materials and converting capabilities).

The cost of our "toys" has certainly changed. In the 1970s, a state-of-the-art four-color flexo press cost about $35,000. Today, this machine (with greatly expanded capabilities, obviously) will cost $300,000 to $500,000.

The pioneers who established the concept of pressure-sensitive labels were risk-taking entrepreneurs. For many years, almost all of the label companies were privately owned, if not family-operated businesses.

However, by the 1960s, this began to change. Some owners wanted to cash in their chips and enjoy the fruits of their hard work. Other families had no siblings interested in continuing the business. Outsiders saw opportunities to enter profitable businesses. For other firms, rapid growth created cash-flow problems. All of these scenarios contributed to the mergers and acquisitions that continue up to today.

In almost every instance where an organization from outside the industry entered the label business through acquisition, that label company has ultimately failed, or has been acquired by another label-industry firm. The message here is that if you are going to be successful, you need to understand the business and be involved in the industry on a daily basis.

As I look back over the years, I am amazed by the demise of many firms that once were recognized as industry leaders. As in professional sports, it is difficult to remain at the top: competitors are always waiting to knock the leader from the top of the hill, as soon as he becomes complacent. Pause to rest and you go backwards!

Today, there are many small, privately owned label producers, with ample market niches to support them. While Custom Label, National Label, and Tapemark are examples of family-owned firms that have provided pressure-sensitive labels for a long time, the total number of family operations is declining. The strong ones will determine their own destiny.

However, the overall trend in American business is the creation of a few, larger, firms in each industry. This trend is also evident in both the supply and the label producing sectors of our industry. On the supply side, mergers and acquisitions are creating companies that provide a broader spectrum of goods and services to label producers—in effect becoming the Lowe's and Home Depots of the label industry.

Mergers and acquisitions on the label-producing side are creating full-service product decoration/identification suppliers, offering multiple product capabilities, equipment options, and label formats and options, from multiple plants nationwide.

Let's hope the day never comes when pressure-sensitive labeling is a static situation. Standing still is one step away from demise.

Skip Heintzelman

Consulting Technical Editor

704/366-5204