Label and Tag Opportunities Show Promise for 2021 and Beyond

As part of an essential industry, label and tag producers have kept the presses running throughout a trying 2020. They faced familiar challenges regarding capacity, rushed timelines and nonprint-ready artwork files, but thanks to COVID-19, the new normal quickly became business unusual. Raw material supplies tightened, employee shortages persisted, and on-site service and installation visits halted—not to mention all the energy spent coordinating front office activities with remote employees.

It’s enough to make even the most optimistic person feel weary, and yet, in spite of this, James Cirigliano, vice president of marketing for Diversified Labeling Solutions (DLS), Itasca, Ill., believes the pandemic has made his company stronger.

“We learned how to modify our operations to become more efficient, operate remotely, increase overall safety in our facilities and work closer with our customers to ensure we took care of the end-users’ needs,” he said. “We learned and embraced new technologies so we could creatively work through the issues caused by the virus. So, when the COVID-19 air clears, DLS will continue to innovate and modify our presses to better meet customer needs, no matter what hurdle is presented.”

And the air will clear. COVID-19 vaccination is inspiring hope for a safer, more productive 2021. The true effects of the pandemic, however, won’t be behind us until we’re able to gather and connect in the ways we always have (with some modifications, of course). When that day comes, expect a robust economic rebound that bodes well for several key verticals that the label and tag segment supports.

“We see the label and tag market continuing to grow at, or slightly above, GDP for the foreseeable future,” Cirigliano said. “This is due to the fact that labels and tags represent an economical and efficient way to communicate information and market products.”

Furthermore, the development of new materials, inks, adhesives and technologies, including RFID and Near Field Communication (NFC), is expanding the reach of labels for manufacturing, distribution, logistics and other operations. This is good news for distributors, because from a business standpoint, hope, regardless of the source, translates to stability and profits. Want to learn more? Here are five best practices sure to stick in 2021.

Dive Into Digital

In a report from NAPCO Research, parent company of Print+Promo Marketing, titled Digital Package Printing: The Time is Now, 80% of brand owners surveyed said that they preferred to work with printers and converters that offer digital printing. Cirigliano has also noticed the attention digital is receiving. Technology innovations coupled with brand owner demands are a possible explanation for the slight shift away from flexographic.

In addition to easing worry about plate costs and copy change charges, digital technology gives the advantages of higher print quality, enhanced color management and flexibility with label shapes and sizes, and the barrier to entry is minimal, according to Cirigliano. Now more than ever, small brands need to find ways to stand out from their larger competitors, so, naturally, visually impactful and personalized labeling are trending. Cirigliano pointed to the aggressive label marketing efforts found in the craft beer, spirits and flavored water markets.

“All of this is especially true for small to medium-sized jobs,” he asserted. “More and more, customers are seeking to have personalized labels produced in smaller quantities for product packaging and promotional purposes.”

The explosive cannabis market is another area where digital can shine. These labels, Cirigliano said, often require secure features, such as microtext, track and trace features, and specialized inks or finishing elements. DLS’ newly purchased HP Indigo 6900 Digital Press and Grafotronic finishing unit have equipped the company to handle such jobs.

“This is a great market for … the use of hybrid printing, where part of the label is printed digitally and another part is printed flexographically on the same press,” Cirigliano explained. “Whether this is based on the need for exact color matching, personalization, more exacting screen requirements or cost containment, the ability to provide flexible options to our distributors is becoming more and more important.”

Don’t Be Late

Talk to any label or tag supplier and the conversation will inevitably turn to lead times. Lead times can vary based on several factors. Debi Van Handel, general manager for Special Service Partners, a Div. of Ennis, Neenah, Wis., cited a few examples, including materials/packaging (e.g., standard material versus a special material that must be ordered); tooling (e.g., some jobs require special dies, made specific to that job, that must be ordered); and the number of production steps (e.g., certain items run through two presses and finishing).

Both SSP and Ennis Tag & Label can produce these full-color roll labels. they feature a pressure-sensitive adhesive.

“One thing that has the potential to affect workflow for any manufacturer and potentially affect delivery for the distributor is not getting proof approval back on time for new or changed orders,” she said. “We always work with distributors to do our best to meet their need. For a basic tag with standard finishing (wire, string) 25m or less, we, and our Ennis sister plants, strive to ship within 10 days.”

Although equipment investments can help companies stay competitive (SSP currently has five inkjet systems that print traditional black inkjet, as well as colors), pandemic-induced challenges exist. For Kyle Smith, general manager of Ennis Tag & Label, Wolfe City, Texas, the most common issue is meeting shrinking lead time expectations while trying to secure the necessary materials and components of a job in a punctual manner.

“Some of [our] new processes and technology, as well as our incredible service team, have helped us to successfully meet these challenges,” he said, adding that his plant has three inkjet systems and may soon acquire a digital system.

Brad Shuff, CEO of Bluestone Label Company LLC, Morristown, Tenn., has observed subtle scheduling differences with smaller to medium-sized brands compared to their larger counterparts.

“Small to medium-sized clients tend to require faster turn times and tend to need custom designs,” he said. “Fortunately, we excel at servicing both.”

Form Strong Industry Ties ...

Amid heightened market insecurity—specifically in the hospitality, travel and education verticals—many customers are requesting smaller quantities, and are waiting until it’s absolutely necessary to order, again underscoring the importance of delivering fast without compromising quality. Sure, flashy graphics and innovative substrates are pushing boundaries, but familiarity with print limitations is crucial to the successful execution of a design. Partnering with a technical supplier can help.

“For us, the most important component is the ability to effectively print the design,” Cirigliano shared. “It is one thing to make it look good on a computer monitor or mobile device, but it is a completely different thing to be able to print the piece effectively.

“High-resolution images, proper trapping and taking dot grain into consideration are all important to us, along with the effect of how we see color [on] different types of materials,” he continued. “We often engage in the design effort to support our customers’ needs, and when we don’t, it is not uncommon for us to rework art files to make them more printable.”

For Bluestone Label Company LLC, which is also involved in the design process with up-and-coming brands, the customer’s marketing intentions influence the aesthetic thought process.

“[From there,] we provide multiple versions for review within their company,” Shuff said.Finding the right supplier to produce high-quality, functional labels or tags is just the first step in the process. To succeed, the relationship must be nourished. When asked what they need from distributors, the suppliers’ responses were unanimous: open communication.

“[Distributors] don’t need to know every detail, but even a small piece of information can be helpful in making valuable design suggestions,” Van Handel said.

Smith was even more direct in his advice. “Knowing how and where the product is used is the most important thing,” he said. “Occasionally, we have a customer who is unsure of what they need, and it is the job of our customer service team to ask the right questions to help that customer determine the best option.”

This information matters because many substrates are used in labels, and not all are created equal. Take ketchup packaging, for example. To the everyday consumer, a label for a bottle of ketchup looks like a standard paper level. But as Van Handel pointed out, ketchup is bottled at no less than 190 degrees, and then cooled, so a standard label couldn’t withstand the high heat and temperature swing. Knowing those things, a supplier could provide the appropriate material/adhesive combination.

The same logic applies to tags. “If a basic tag is going to be outside in the elements, a traditional paper tag may not hold up, so depending on the exposures (i.e., weather, sunlight, etc.), we have materials ranging from a light-duty synthetic to very durable,” Van Handel said.

... But Never Take Your Supplier Partner for Granted

Time is money, and money is time, so as the big events of 2020 spill into the new year, there isn’t a minute to waste. What seems easy to write off as a quick fix can be laborious and complex for suppliers. A valuable partner will go above and beyond to meet their clients’ needs, but distributors should be mindful of the effort that takes.

A project for a longtime airline client stood out to Van Handel. The product in question, which SSP has manufactured for years, was a multiple-part manifold tag with numbers and barcodes. The airline wanted to tweak the barcode to include more information like unique alpha characters and extra digits. To the customer, it was a simple change. However, due to the construction of the tag, it was only able to run on one type of press.

“To produce it required a complete redesign of the tag (i.e., layout and construction), so we could print the numbers and barcodes variably,” Van Handel said. “The challenge was not whether or not we could do it, but educating the customer along the way and getting it done with minimal impact on the cost.”

She encouraged distributors to approach partnerships with an open mind, and added that communication and collaboration are what led to an ideal solution for the airline customer.

“There may be options a customer is unaware of that could be suitable for a given project, or something that’s available at a better price, etc.,” she said.

Work Smarter

Tunnel vision can also result in missed sales within a distributor’s existing customer base. Opportunities are everywhere, and businesses are eager to streamline processes during challenging times. Why not be their one-stop shop?

“If you are selling an envelope or packaging, it’s a pretty safe bet that the customer uses a tag or a label in their business as well, but may not think of you as a source for that,” Van Handel said. “If you ask, you may get the opportunity to quote more products and ultimately grow your business with an existing customer.”

Like many members of the print industry, Van Handel has weathered other crises—most notably, the financial crash of 2008. There were struggles, but through hard work and smart business practices, her company emerged and has since grown. The same can happen for distributors. Although the pandemic has presented unique obstacles, some things never change.

“A satisfied customer is our greatest asset,” Van Handel reminded.