Increases/Shortages, Existential Risks, and Efficiency: Label Expo Recap

Since things are abnormally quiet in the political realm and because our industry just wrapped up its largest trade show of the year, I thought it made sense to focus on the trade show this week.

Through various meetings and casual conversations, three main themes emerged:

  1. We’re in the middle of increase #3 in the last 10 months and the stage is being set for increase #4. Raw material pressures have not abated.  Tariffs are not helping.  There are threats of shortages in various chemicals and liner materials.  If you are a direct thermal user, make sure your supplier has a plan B.
  2. Existential risks. Would you like to be a straw manufacturer in the US today?  That analogy was relayed numerous times in comparison to the label industry.  Direct print, linerless labels, and recycling mandates are all threats to our industry.  Pay attention.
  3. One digital press manufacturer told me he has seen up to four of his company’s machines run by one person.  Given the challenges of finding labor, more and more automation will be brought to our industry.  That requires more and more capital.

None of these themes is particularly revolutionary; your humble blogger has written on all of them in the past.  But if you put them together, they make it clear: it’s going to be harder and harder for small companies to compete in the label/packaging world.  Expect the consolidation train to start moving a little faster over the next several months.

 

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