William Llewellyn, vice president and senior consultant at AWA Alexander Watson Associates, reveals trends emerging from the firm’s latest analysis of the South American label market.
A third evaluation called Label Markets: Market and Source Study of South America 2012 shows that this label market is one of the fastest growing markets in the world. It contains the growing trends in the market within different formats and materials, as well as the technologies used, in the context of demographic changes and infrastructure development in the region’s business.
According to the research, mature label markets have limited growth at or below GDP, and global growth rates of 4.5% in 2011 were undoubtedly sustained thanks to activity in emerging markets such as China, India and South America. While Asia continues to report significant growth in label volumes, South America is unique, showing a high rate of growth across all label formats – cold adhesive, self-adhesive, shrinkable and in-mold – albeit from a one-point lower starting point than other regions.
Driven by Brazil, the leading economy in the region, and, to a lesser extent, Argentina, Chile and Colombia, the South American label market presents differences between the preferences and levels of sophistication of its countries. It is not homogeneous.
The estimated regional growth volume for 2011, of 11.5-12%, hides considerable variation by country, from a high of 12.5-13% in Brazil to a low of around 7.5-8% for Chile. These growth rates are comparable to those in China and India, at 12 and 9% respectively, and are strong evidence of the dynamic growth of the South American market, both in label production and consumer demand.
In terms of label formats dominating the market, adhesive technologies – cold glue and hot wrap – stand out with the largest market share at 65% across the region, and all indications are that they will continue to represent healthy growth in the medium term. While with less than half of the total volume of adhesive applied labels, self-adhesive labels enjoy only 26% of the total market in South America.
The market continues to invest in small width flexography, and especially UV flexography, with the support of global print manufacturers such as MarkAndy, Nilpeter, MPS, Omet and Gallus willing to offer local support. Interest in digital printing is even growing. Opportunities for self-adhesive labels exist particularly in the area of added functionality – especially for security labels using anti-counterfeit devices and for transparent beverage labels.
Meanwhile, heat shrink technologies have achieved only 3% market penetration so far, but are growing rapidly thanks to their two properties such as protective packaging barrier and anti-tamper protection; for the wide range of special effects they offer (thermochromatic, pearl, etc.); and for complex and innovative packaging geometries to which they can be adapted.
In-mold marking is still in its infancy, but after strong investment in 2011, it is expected to grow significantly in the medium term.
The study also revealed that Brazil is the dominant label consumer in the region due to its vibrant economy, with an estimated market share of 50%, followed by Argentina with 18%; and Colombia and Chile with 10 and 9%, respectively.
Fuente: Labels and labeling