Latest Label Industry Research Highlights Workflow Complexities and Strategies

Despite the strength of the label printing segment, which is buoyed by high demand and emerging opportunities, label printers and converters are facing distinct challenges that must be overcome to stay competitive. An increase in the quantity of total jobs and label versions, along with fluctuating average run lengths and increasing output volumes has led to a distinct need to optimize workflows, especially at a time with ongoing material and labor shortages. In the latest report from NAPCO Research, these trends are put into perspective, with eye-opening data that sheds light on the label industry, expectations for the future, and what converters and suppliers can do to stay ahead of the competition.

In early 2022, NAPCO Research embarked on its deepest dive to date into the label segment, seeking to understand the pressing trends that are impacting label production and to test key hypotheses garnered from extensive industry reporting. New subscriptions to this research are available. For more information, contact Nathan Safran, VP of NAPCO Research at nsafran@napco.com.  

Label Jobs and Versions on the Rise

While an increase in jobs is certainly a good sign for the health of the label industry, as more individual label versions flow through a facility, the complexity of a printer’s workflow can be difficult to manage. Because the industry has started to move away from high-volume work produced on conventional presses, label printers have had to assess the role that digital production equipment and automation plays in their facilities so that short run, quick-turn jobs can be produced efficiently and cost effectively. The research enforced that versioning has increased, and in many cases, by a significant margin. Key findings include:

• 84% of respondents saw an increase in label versions in the past two years.
• 43% of respondents cite customer awareness of digital printing as a driver of versioning
• 35% of respondents that have seen an increase in versioning have invested in digital printing and automation.

A Run Length Reversal

While the research validated the suspected increase in total jobs, a surprise in the data emerged when label printers were asked about their average run lengths. After years of declining average run lengths, the various impacts of the COVID-19 pandemic appear to have reversed this trend and have led to run lengths ticking upward since 2020. While this trend does mark a reversal, it is important to recognize that short runs are still prevalent throughout the industry and converters that strategically deploy their conventional and digital assets will be in the best position to handle run lengths of all sizes.

In digging deeper into why this phenomenon is occurring, the primary reason appears to be that material shortages across the industry are leading printers and their customers to want to run as much material as possible when it is available, marking a change from pre-pandemic years when just-in-time or on-demand printing was a top strategy. While the expectation is that run lengths will decrease as the supply chain returns to normal, the study reveals that label printers expect to continue to see run lengths increase over the next two years. Key run length findings include:

• 71% of respondents stated their company’s average run lengths increased in the past two years.
• Short runs are still prevalent, however. 34% of respondents stated their average run lengths were between 1,001 and 5,000 linear feet.
• 44% of respondents indicate that they have invested in digital printing to take on these longer runs, indicating a need for robust digital platforms and increased capacity.

More Output Requires a Streamlined Workflow

Another statistic that bodes well for the health of the industry is that total output volume is on the rise across the label printing industry. While this is a good sign that indicates a strong demand for printed labels, there are potential challenges that an increase in demand can cause for label printers. Difficulties in procuring material, particularly paper, can make it difficult to meet the increased demand, leading converters to purchase as much material as possible and produce jobs in longer runs.

Additionally, the need to push more individual jobs through a facility and produce more overall labels has required technological advancements, particularly as new, skilled employees have been difficult to hire. This has led to significant consideration for and investment in digital production equipment and automation solutions that can help streamline workflow without the added headcount. Key findings pertaining to output volume include:

• 78% of respondents have seen an increase in total output volume over the past two years.
• 52% of respondents indicated an increase in output volume between 21% to 40%.
• Digital print solutions top the list of investment desires. 24% of respondents are considering a standalone inkjet press, 23% are considering hybrid, and 27% are considering dry toner, liquid toner, or both.

The label industry is a high-growth segment that is rapidly evolving. Printers and their suppliers must stay on top of the latest trends and customer demands in order to remain competitive. This subscription-based research, which will be conducted on an annual basis, is available to new subscribers. Those interested in subscribing can contact Nathan Safran, VP of NAPCO Research, at nsafran@napco.com.