Creating innovations in labels
The estimated growth rate in India for the label industry is between 7% and 15%. If assuming only a 10% growth, the market will probably grow by 100 million square metres (sqm) adding a considerable 2500 million Rupees or about USD 38 million to the existing market size. But, with demand growth in double digits, how will the Indian label industry deal with intense competition and stressed margins?
by Harveer Sahni
In a growing economy, with governments encouraging new investments and banks ready to finance, people are starting to look for areas with stable growth such as the label production industry. The packaging industry being keen to offer a complete range of packaging products, continues to add labels to their product portfolio. Capacity seems to be growing a little faster than demand which leads to a situation whereby to service their debt and stay afloat, printers gravitate toward leading brand owners who drive the competition amongst printers. Further reasons for the demand in label production and the pressure on margins include the increasing raw material prices, and trends like short runs. In order to achieve a higher profit, there is a need for “creating innovations in labels”.
Many label companies in India have already moved in this direction by investing to enhance their capabilities with the aim of creating outstanding products. Even brand owners, who are in a race to catch the consumer’s eye, are searching for labels to improve attention at the point of sale (POS). They are willing to pay higher if the label has unique features which can enhance their brand image. We asked a range of companies why they have chosen this path.
Lead by Gautham Pai, Manipal Technologies has made substantial investments in label manufacturing facilities even though they have units located in India and abroad. During a tour of their facilities in Manipal, the company explained that they have invested in diverse technologies to enhance their capabilities. They offer security labels, security envelopes and labels with their own holograms. The company further produce their own self-adhesive labelstocks on a Nordson hotmelt coater. Recent developments include electroluminescence labels. This eye-catching and low power consuming optical lighting system was developed inhouse using printed electronics technology. The system works best for promotional activities with several activation options using touch-, pressure- or motion-sensitive sensors. This can be adopted for labels and carton packaging.
At the beginning of the 21st century, Kuldip Goel of Anygraphics Noida realised that the key to producing successfully is not commodity labels, but labels with added value. Thus, Anygraphics creates innovative labels and packaging using multiple equipment and processes for the same product employing technologies like screen printing, foiling, embossing, doming, narrow web letterpress, flexo printing, offset printing and digital printing. The company has already won several awards from different associations and organisations.
Hemen Vasa’s Unick Fix-A-Form was set up in 1985-1986, in rented premises with one small machine (semi-automatic model) for making booklet/leaflet labels in Ahmedabad. In the few first years, they outsourced printing. Bayer-India was their first customer for their leaflet labels which were produced using wet glue and developed for manual application on containers of agrochemical bottles. In 1992 another customer requested these labels in self-adhesive format. Because locally made silicone release paper was not consistent creating problems for label dispensing from an applicator, Unick started to import self-adhesive paper. Being the only manufacturer of booklet/leaflet labels in those days, their business grew and they expanded by moving into their own premises and installing rotary label presses, booklet making equipment and offset presses. Their business has expanded to the pharmaceuticals segment by offering e.g. cartons, labels, in-mould labels and shrink sleeves. Their supremacy in the leaflet/booklet label segment could be one of the major reasons for their success and expansion and also a reason for winning awards in India and abroad.
Pragati Pack (India) Pvt. Ltd., being one of the most awarded printers in the country, Hemanth Paruchuri says, they try to bring innovation into labels by investing in the right equipment and pushing the limits of that equipment. Their knowledge and experience gained in the carton and commercial printing are part of their efforts. The aim of the company is to create unique innovations with a high shelf appeal.
“Change is the only constant”
U K Gupta, managing director of India’s largest hologram manufacturing company and speciality label manufacturer Holostik India Ltd. says, “Innovation is the key to driving any industry in the ever-changing dynamic world, anything that does not keep changing, ultimately loses track and is out of the race.” He has mentored his team to understand that “change is the only constant”. Therefore, extraordinary labels, not only visually appealing but also adding security to the product, are now essential. Security features on labels cannot be ignored due to the high growth of the counterfeiting business. Holostik plans to further invest in order to enhance their capabilities.
Trigon Digital solutions provides packaging mock-ups on substrates with finishes like foiling, embossing, varnishing or laminating for cartons, pouches, shrink sleeves, lami-tubes and labels. They specialise in “print on demand”, small and medium quantities for shrinks sleeves and labels with personalization and variable data printing.
How to create innovative labels?
“Innovation is a continuous process” comments Anil Namugade from Trigon Digital solutions describing the company’s philosophy. Established in 2007 Trigon Digital solutions has production facilities in Mumbai, Bangalore, Delhi, Dubai and an office in Singapore offering services in prepress, package printing, colour management and serving over 350 brands.
Anuj Bhargava of Kumar Labels, belongs to a family of label printers. As the recipient of several label awards in recent times, the company’s team is trained to look at the product, its target audience, selling price bracket and the brand’s desired perception, before proposing a label solution. According to Bhargave, for them innovation is not just increasing the price of a label or adding shots of foil or screen inks. Different brands need different innovations. A mass market brand needs a re-engineered cost-effective label stock with which it can reduce its decoration costs. A brand from the same customer, which may be targeted for the upper market segment, may need multiple foils and textured stocks. By utilising their expertise in print process, machine manufacturing and labelstock making, Kumar Labels is able to produce their own specialized labelstocks that include textured and unique substrates.
In order to achieve better margins, capabilities in print and decoration need to be substantially enhanced by making correct and timely investments. In earlier days, a reasonably designed and printed label was enough. Now, with the growing number of well-informed consumers, print shops need to study the demand perception and design the label to appeal and communicate with the end consumer.
Prepress is an important tool to point out the creativity that the design tends to deliver. Selecting the right substrate, the adhesive and shape of the label is also a key factor. The label on the product remains visible in the customer’s life and keeps delivering value to the brand by its aesthetic appearance.
All this means that the press will print, decorate, inspect and finish the label with speed, ease of use and less waste during production. Productivity and managing production waste are other decisive factors affecting profitability. Brand owners try to buy at the lowest prices for their established products. They have to stay competitive by grabbing the consumer’s attention. With numerous options available in a crowded shelf space, brand owners will only consider higher prices if a label promotes their sales. To sum up, to reach a win-win situation for suppliers and brand owners, printers need to invest in “creating innovations in labels”!
Editorial comment: This article was first published in NarrowWebTech print issue, 1-2018 available as download in our shop.