Two types of people are in this world - those who see the glass as half full and those who see it as half empty. In tough times, it can be easy to detect to which group a person belongs. And during the economic downturn, beverage labeling manufacturers have proven themselves to be a decidedly optimistic bunch. With innovations in shrink and stretch labels, the glass (or, more appropriately, bottle) looks good enough to attract even the most ardent pessimist.
Some manufacturers, such as Deer Park, N.Y.-based Overnight Labels, have experienced growth in this economy.
“Everything pretty much operates the same regardless of a good economy or bad economy,” says Don Earl, founder and president of Overnight Labels. “You still do the same things to be competitive, and you should still invest in new equipment and technology. The only difference between a good economy and bad economy is that you have more time in a bad economy to investigate and do things better.”
Although the basic business principles remain the same regardless of economic climate, shrink and stretch labeling manufacturers are noticing a change in customer behaviors. Namely, more customers are asking for shorter runs and more flexibility in terms of turn-around.
“In this economy, we’ve seen differences in order patterns - more ordering infrequently, more just-in-time situations,” says Jyl Gryder, marketing manager for Dawsonville, Ga.-based SleeveCo. “Our customers are still planning, but they’re now ordering monthly instead of quarterly.”
An ever-present issue for beverage label manufacturers is how to differentiate the product on an already crowded retail shelf. Harnessing the creative potential of shrink sleeves is the best way to catch consumers’ eye, according to Lou Iovoli, vice president of strategic partnerships for Rochester, N.Y.-based Hammer Packaging. And with the tough economic climate, product development is even more important because end users are more selective, he says.
“The 360-degree image area, the ability to shrink to the curves of the bottles and the eye-catching graphics all contribute to the visual appeal of the product,” Iovoli says. “We are being asked for more colors, unique finishes and eco-friendly, bio-based films.”
Although green packaging and materials are not exactly new trends, eco-friendly products are growing steadily, in response to customer demand for more sustainable and affordable labeling options.
“There’s so many options for sustainable products, it’s really what the customer is looking for and what their practices are,” Gryder of SleeveCo says. “If they’re looking for renewable, we’ll offer PLA films. If they’re looking at reducing packaging and eliminating cardboard boxes, then they’re looking for combo packs.”
For eco-friendly products, standards are still PET and PLA films, says Kathy Popovich, director of marketing for Innovative Label Solutions, a digital packaging specialist in Hamilton, Ohio. PET material is recyclable when applied to a PET structure, and PLA is a compostable film made from corn-based materials.
But other than PET and PLA films, the viable options for green beverage labeling materials are limited.
“There is still a long way to go in increasing the portfolios of sustainable materials, and we continue to impress on our suppliers the need to develop products that meet these standards but are also cost competitive, as this is the major objection of widespread application,” Popovich says.
Despite a limited eco-friendly product selection, some manufacturers continue to make a positive environmental impact - and cut costs - through their printing processes. Hammer Packaging, for example, has put a dent in its energy bill because of electron beam curing. The company’s two new variable sleeve offset printing (VSOP) presses are each equipped with the technology.
“In addition, [electron beam] inks and coating avoid Hammer putting [volatile organic compounds] into the environment,” Iovoli says. “This is not the case with solvent-based inks used in the rotogravure process.”
Similarly, Anaheim, Calif.-based The R.B. Dwyer Group’s printing processes use water-based or UV inks, both of which generate virtually zero volatile organic compounds, according to company President and Chief Executive Officer Jim Dwyer.
Opportunities for 2011
This year, manufacturers hoping to capture the eye of consumers should capitalize on the growth potential of shrink labels, according to SleeveCo’s Gryder.
“I definitely see shrink still continuing to grow,” she says. “More and more people are going to it. They can do more with it. They can use different type bottles - curved and contoured - and do more from a marketing perspective to differentiate themselves on the shelf, especially in the single-serve market.”
Innovative Labeling Solutions’ Popovich agrees that shrink sleeves boast great areas of growth and opportunities.
“Shrink sleeves offer the maximum real estate to engage the consumer,” Popovich says. “Also, the fight for coveted shelf space and high consumer impact continues to drive brands toward unique container shapes. This, in turn, fuels the growth of the shrink sleeve segment, as it’s challenging for pressure-sensitive labels to adhere to the curves and tight corners.”
Fasson, a supplier of pressure-sensitive material, recently introduced a new film label called Curvy, which combines a wraparound look with a pressure-sensitive label.
Another application process that is emerging is Roll On Shrink On (ROSO). This allows for a larger sleeve format and gives more graphic flexibility, suppliers say. However, the ROSO application process requires a significant changeover in production, so Popovich says Innovative Labeling Solutions considers this trend still in its infancy.
Another trend gaining momentum is the use of shrink sleeves on metal cans instead of pre-printed cans for new product launches, extensions or movement into emerging markets, according to Sean Gallagher, technical specialist for Innovative Labeling Solutions.
“We have educated many customers on the value of printing a shrink sleeve and applying it to a blank can versus printing on the can directly,” Gallagher says. “Oftentimes, the minimum order of a pre-printed can is a container load, and that’s a lot to invest into a new product launch or to even test into new regions. This has really taken hold in the energy and relaxation beverage market, in particular.”
To provide a viable alternative for customers who cannot invest in a container load, Innovative Labeling Solutions uses its HP Indigo Presses, which do not have minimums. The presses allow customers to manufacture the exact amount of product they need, Gallagher says.
“For many, especially private label or regional players, this option has opened up a whole new business opportunity,” Gallagher says. “With the flexibility of the HP Indigo presses, customizing graphics and messaging by retailer, region, season and even special promotions are handled with ease.”
Overnight Labels also is addressing the challenge of convincing smaller customers who are on the fence about whether they can afford shrink sleeves, Earl says.
“We’ve tried to offer niche, smaller runs to help companies that are too small to deal with the big guys,” he says. “If you’re interested in going into shrink sleeves, you don’t have to run 50,000 pieces and break the bank - we can run 5,000 for you.”
Despite an economy that is affecting cus-tomers large and small, a number of notable manufacturing innovations have been introduced in the past year and are improving the graphic appeal of shrink and stretch labels, while keeping costs down. One of these new innovations is a seaming process that Hammer Packaging launched in 2010.
Hammer Packaging’s proprietary seaming process produces zero edge lift and a 29 percent narrower seam than the current industry standard, according to Iovoli. The process not only results in a smoother seam but also prevents any separation of color at the seam once the sleeve is shrunk onto the container, he says.
Hammer’s improved seaming process is the result of market feedback. The company had many customers report that they had ongoing issues with seam quality, Iovoli says.
“We had our R&D team investigate how we could use our state-of-the-art web offset printing technology and combine the chemistry with the newest seaming technologies to improve the seam,” Iovoli says. “The end result was a narrower seam with zero edge lift. We’re pretty excited; it was a big deal for our team and our customers.”
On the printing side, manufacturers are exploring presses that allow them to continue creating appealing and unique sleeve graphics. The R.B. Dwyer Group is one company offering customers shrink sleeve labels made on an Infinitely Variable Cylinder Web Offset (IVCO) press. It allows the company to offer gravure quality, no plate costs, quick changeovers and low volume SKUs, Dwyer says. The IVCO press also uses UV inks for vibrant and eye-catching graphics, he says.
“This press will be instrumental in helping our customers with lower costs, faster lead times and a great looking label,” Dwyer says. “It provides an option for shrink label printing. In the past, the best shrink labels were printed in rotogravure, so having the ability to offset print with lower costs is an advantage. Plus, the quality is excellent.”
In addition, this process is more affordable for companies to launch a new beverage with multiple flavors, Dwyer says, because label changes can be made without a huge expense or holding up a press run.
Whether it’s a time of prosper or struggle, customers are looking for the same thing: the best looking label at a low price. That’s a challenge the majority of manufacturers are eager to take on.
“I think [consumer packaged goods] companies will continue to push the market for unique touches to sleeves - anything to make their package stand out,” Hammer Packaging’s Iovoli says. “It used to be just going to a shrink package was exciting, but now the question is: ‘What more can we do?’ But we love the challenges.” BI