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The Labels and Tags Industry

The tag and label industry continues on a steady path of change. It wasn’t too long ago that primary product labeling meant one of two decoration formats—pressure-sensitive or glue-applied paper labels. But with major inroads being made by film materials and competition from other product decoration methods, tag and label printers find themselves dealing with a multitude of challenges and opportunities.

Alexander Watson Associates released the Tag and Label Manufacturers Institute (TLMI) 2007 North American Label Study (NALS) in 2007. AWA’s research for this extensive study showed a hefty 46 percent North American market share for pressure-sensitive labels, along with 44 percent for cold glue, wrap-around cut-and-stack, and wrap-around reel-fed labels.

Growth for pressure-sensitive labels in the NAFTA region is predicted to be 1.5 to 2.0 percent annually during the 2006 through 2010 time frame. The North American tag and label printing industry is characterized by a large number of relatively small, privately owned companies that can easily be caught in a supply chain pricing squeeze. Reardon believes that label printers will continue to be pressured from both sides of their value chain, which in many cases can be suppliers or customers that have scale advantages well beyond those of the printers.

In its study titled, “RFID Forecasts, Players & Opportunities 2007-2017,” IDTechEx reports that of the 3.752 billion RFID tags were sold in the last 60 years, with 19 percent sold in 2005 and 26 percent in 2006, clearly showing a solid increase. However, IDTechEx does acknowledge that the 1.02 billion RFID tags sold in 2006 was “disappointing to those expecting higher volume sales of versions in the form of labels.”

Successes noted in the report include airline baggage and some segments of the retail sector. Airlines in 2006 used 25 million tags, despite experiencing problems with the UHF global standard for baggage. In retail, U.K.-based Marks & Spencer is extending its item-level RFID tagging program from 42 to 120 stores by 2Q07. Its goal is to tag all of its 350 million items of apparel yearly. In stores that have implemented the program to date, the company has seen sales increases due to the enhanced visibility of stock availability.

In 2007, IDTechEx expects 1.71 billion RFID tags to be sold worldwide, with the largest segment being RFID cards. The value of non-card RFID tags (e.g., labels, tickets) in 2007 is predicted to be $1.97 with 58.4 percent of this being in the U.S. and 33 percent in Europe. Out in time, IDTechEx expects a $27.88 billion worldwide market in 2017, including new market items such as Real Time Locating Systems (RTLS) using active RFID tags.