The North American Label Study 2004 from the Naperville, IL-based Tag & Label Mfrs. Institute finds the current economic climate presenting new challenges as well as new opportunities for US and Canadian label converters. Conducted by LCP, Inc., the study reports on consumption, growth and trending for both p-s and non-ps decoration technologies, and offers an in-depth look at various dilemmas labelmakers face today.

"Consumer products companies [CPCs] and other packaging buyers are foregoing longer-term innovation strategies while maintaining a shortsighted fixation upon showing a profit for the upcoming quarter by implementing quick-fix, cost-cutting measures that erode margins throughout the supply chain," the study says.

That won't come as news to most label converters. But some of the report's end-user interview results from the likes of Colgate-Palmolive, P&G, Coors, Kraft and Gillette are bound to get p-s labelmakers re-thinking about how they do business. When asked if they felt that their label suppliers organize their businesses well, add value to their services, and respond to end-user requirements, label buyers responded:

• 62% feel that label converters are true partners and strive to meet their needs.
• 24% say label converters are "sometimes" true partners but need to be more proactive vs. reactive.
• 14% don't consider their label suppliers as true partners and say they provide only labels.

To say the market has changed may be an understatement, especially in the past few years are more and more CPCs latch onto other labeling forms (see pie chart). The study shows, for example, that nearly half of the converters polled had seen customers shift away from p-s labels toward non-ps, heat-shrinkable materials in the past year.

Fortunately, the news isn't all grim. Projected growth rates for p-s labelstocks through 2005 show resurgent demand across all three major types (see bar chart). Non-VIP (variable-information printing) papers, especially, are forecasted to recover from -1 percent growth to as high as a positive 3 percent next year.

Copies of the 136-page North American Label Study 2004 are available to TLMI members for $495; to FINAT members for $750; and to non-members for $4,000. More info: 800/533-8564, www.tlmi.com