Labelmakers can look forward to smooth sailing in the next few years as US label shipments are forecasted to increase 5.1 percent annually to $18.3 billion in 2011, says a new market study by Cleveland-based research firm The Freedonia Group, Inc. (www.freedoniagroup.com). According to the report, the pressure-sensitive segment is expected to account for more than two-thirds of all US label shipments (see chart).

However, stretch sleeve and heat-shrink labels will be hot on its heels as they are expected to post more rapid advances, climbing 7.7 percent a year to 2011. This is due in part to the demand from the large US beverage-packaging industry. New developments in resin technology also will support this growth.

Better plastic resins will, on the flip-side, adversely affect the market for paper labels. Though paper will still dominate the label industry, it is beginning to lose out to plastic stocks. The market for glue-applied labels (typically paper-based), for example, will rise only 2.7 percent annually to 2011. The aesthetic and performance advantages of plastic labels; growing use of plastic packaging; and the popularity of labeling methods relying on plastic substrates will aid plastic in its campaign to gain market share. Oriented polypropylene will show the fastest growth, further supplanting polyvinyl chloride, Freedonia says.

The growing interest in using labels for brand identity will keep primary packaging as the major market for labels through 2001. Labelmakers can continue to count on primary packaging for business opportunities, the report says. Having value-added labels such as those for enhanced security and expanded product information will provide increased business prospects as well.

Secondary label applications are expected to post the fastest gains overall, with the continued demand for bar-coding labels, radio frequency identification (RFID) and electronic article surveillance (EAS), according to the study.

Flexography will still be tops when it comes to the most commonly-used method of printing labels. Above-average advances through 2011, the report says, will help continue this trend. Lithographic, screen, letterpress, gravure and digital will still be employed. These processes are commonly combined in the label industry, Freedonia says. For example, digital technology will be increasingly incorporated with conventional techniques. Digitally printed label shipments will continue to expand at a double-digit pace through 2011, helped by a growing trend toward the use of mass customization.