Primarily a technologically-based industry is using conventional letterpress or flexographic printing for label conversion. Today the demand of brand owners for adding value in the label is becoming almost limitless with all in shorter and shorter runs with reduced lead times. While conventional servo drive flexo and offset presses will still continue to have a dominant place in the installed base of label presses for many years, it is digital, particularly inkjet, that will undoubtedly become a longer-term market leader as quality and performance continue to improve. Most certainly, hybrid conventional and inkjet presses will find a growing market alongside stand-alone digital presses in the future. Everything will continue to become more automated which reflects a future trend of the market.

- The rise of customization and premium labels drives the market. The demand is evolving rapidly towards more customization and promotion, which means smaller runs, greater cost constraints and eventually the transformation of the entire digital workflow.

According to Big Presence, a digital marketing and sales solutions firm, says that 82% of investors want the companies they invest in to have a strong brand. Brands, small and large, are promoting so-called “targeted campaigns”, where the labels alone can enhance the apparent quality of a product which eventually increases the brand image. Different print effects, such as hot foil stamping, cold foil stamping, and gravure printing are used to embellish the labels to give them a more ‘premium’ appearance, as are tactile or haptic effects using processes like spot varnishing. Some of these enhancements can even be done digitally. This effectively drives the demand for label converting equipment.

- Increasing automation in machinery drives the market. The growing demands on label converting and greater flexibility and customization are driving the industry towards higher levels of automation across the machinery. Automation has also rapidly spread into the equipment world, reducing plate handling, plate room labor, and eliminating key areas of potential plate damage due to constant handling in label converting machinery. Moreover, the integration of newer technologies, such as UV LED technology, is also rapidly gaining adoption in the equipment world.

- The companies are adopting the solution towards automation. For instance, in 2017, Esko showcased solutions designed to improve lead time and equipment utilization, reduce errors and ensure consistent output quality regardless of the printing technology used. The company highlighted WebCenter QuickStart for Labels which is a communication bundle for label production with pre-configured process flows targeted at label converters of any size.

- The high cost of label converting equipment is restraining the growth of the market. As mostly this machinery is linked with flexographic printing for conversion, the printing plates are the most important and cost of reprographics to get to the final print stage There are also high operational costs that are linked to the use of machine. These relate to things such as costs of electricity which is used to run the machines as well as regular maintenance.

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Key Market Trends

Food & Beverage Accounted to Hold Major Market Share

- With increasing consumption of food and beverages, the demand for label printing is increasing which essentially rises the demand for label converting equipment.

- A beverage label is very much the same as the beverage consumer i.e, constantly evolving. Changing demographics and new print methods are impacting the products currently hitting store shelves. Popular beverages from major brands are seeing subtle changes, while up-and-coming brands are looking to capitalize on a growing industry. This factor enhances the usage of label converting equipment.

Moreover, beverage labeling is all about shelf appeal and today’s brand owners are trying to capture a certain look. With only seconds to persuade potential customers, the labels on bottles and cans are just as important as the liquid inside. So, the requirement of the top quality label is a necessity by which the converting equipment is necessary to integrate it.

- Appearance to text or graphics and holographic foils, which create a 3-D image by use of a digital hologram and two or more layers of prismatic foil are highly being used in the wine label and sometime in the food sector at retail to attract the customer attention to create their brand image.

- Also, food and beverage products must adhere to FDA guidelines. These rules are set in place to assure that food sold in the United States is wholesome, safe, and most importantly properly labeled. This majorly demands the Unwind & Re-winding machinery which removes the waste substrate material left and maintains the quality of labels under the FDA guidelines.

- With increasing sales value in Japan in food and beverages, the demand for label converting equipment is increasing. In Japan, every year Label Forum Japan exhibition held in which the delegates provide their solutions and technology innovations in the label printing sector.

- In July, in Label Forum Japan 2019, 140 booths were exhibited with a gathering of latest equipment and materials which includes demonstrations and various semi and automatic label converting machinery, which can provide market gain to the Japanese label industry to accelerate globalization.

Asia-Pacific to Witness Market Growth

- With increasing consumer awareness regarding packaging, the demand for packaging in the food, cosmetic and household industry, and the need for high speed & high-quality labeling solutions is increasing the market growth in the Asia region.

- According to Labels & Labeling, Southeast Asia has a population of over 646 million and label consumption growth of around seven percent, making it hugely significant as one of the world’s fastest-growing markets. Further with labelexpo Asia 2019 held in Dec 2019, hundreds of live demonstrations of ground-breaking technology were exhibited related to label machinery and label converting machinery.

- Moreover, various global leaders have opened their plants in the Asian region which effectively helps in growing the market. For instance, RotoControl has broadened its label finishing portfolio with the Ecoline brand. Initially launched by RotoCon in 2013 for South African label converters, Ecoline today has various installations including the plant in Australia.

- Moreover in Sep 2019, the RotoControl Ecoline brand features the RSI-340and RSH-340(horizontal alignment) designed for inspection and slitting of printed labels; and the RDF-340, a digital label converting system that is customizable to meet design requirements. Further with the installation in Australia country in future the market for label converting machinery will effectively grow.

- Also, various local Asian firms are buying the latest technology of the machinery to enhance their brand image and increase the customer base. For instance, Lombardi sold one of the Synchroline 430 presses to Prakash Printers from Ahmedabad, India during the Labelexpo Europe 2019. Also Al Hadiqa Adhesive, a label converter based in Sharjah, UAE, has also opted for a Lombardi Synchroline 430 press along with a plate mounter from Vinsak.

Competitive Landscape

The label converting equipment market is fragmented in nature as the market is is highly competitive and consists of several major players. Many companies are increasing their market presence by introducing new products or by entering into strategic partnerships or acquisitions. Key players are Spartanics Ltd., ASHE Converting Equipment, etc. Recent developments in the market are -

- August 2019 - French label-converting company SMAG Graphique expanded its label equipment portfolio to include RFID-based systems that provide inlay insertion, encoding, and control. The company brought approximately 165 potential RFID technology users to its headquarters in Paris, France, so they could view how the technology is being used and the benefits it provides to retailers and other companies that require automated access to digital data via a product's label.

- October 2019 - ProMach acquired Canada-based Jet Label & Packaging, a manufacturer of labeling and coding solutions. With the addition of Jet, ProMach continued its label converting expansion that began over a decade ago with the vision of providing its North American customers with a labeling and coding partner that could serve their needs including labels, machinery, sales, service, and support.

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