February 19, 2014
Label and Tag Opportunities Show Promise for 2014



After a year fraught with industry shake-ups, government red tape and global strife, many are turning to 2014 for hope. For distributors, hope translates to stability and profits-both of which can be found in the label and tag market. Just ask Sandy Brown, plant manager for New Dimension Labels - a Graphic Dimensions Company, Austell, Ga. "I have heard the term 'Print is dead' so many times and it is simply not true. Labels and tags are the future," she said. "They will always be needed, and as technology continues to create new adhesives, face sheets and print methods, the sky is the limit." Brown's optimism is backed by encouraging statistics. According to the Freedonia Group's July 2013 study on the label market, product demand in the United States is projected to climb 4.2 percent annually to $19.1 billion in 2017. To stay on track, labels and tags are getting a little help from their friends. Thanks to digital enhancements like QR codes, these pieces are positioned to engage their audience in exciting ways. Richard Phelps, owner and director of marketing for Allen-Bailey Tag & Label Inc., Caledonia, N.Y., offered more information. "The QR code can be static or consecutive and have a GUID (globally unique identifier) associated with it," he explained. "Allen-Bailey has some proprietary ways in which it addresses these requirements and distributors should not be afraid of the new requirements. They should capture as much information as they can from their customer in regard to the use of the product, and convey that to their manufacturing partner." Certain printing processes are also creating opportunities for distributors.
John Shanley, president of Labels West, Woodinville, Wash., pointed to flexography as one example. Because of advances in press design and plate making technology, the quality of flexo printed products has grown exponentially compared to just a few years ago. As a result, customers are afforded more flexibility in what they choose to print on their label, giving distributors an easier sell, Shanley said. "Distributors can spend more time adding value to the products using the skills that they bring to the transaction-organization, finding the best vendor for the job, follow-up, inventory management and just making it easier for end-users to get the printed products they need," Shanley commented. While flexography is arguably the most common method for producing labels and tags, Shanley acknowledged that digital is closing in fast. In addition to easing worry about plate costs and copy change charges, digital technology has allowed distributors to respond to small run jobs without compromising quality.


Brown shared these sentiments. "The digital label presses have allowed distributors to sell labels to all size companies, from small specialty shops to larger manufacturers," she said. "By having shorter run capabilities and high-quality printing at a reasonable price and short lead times, distributors can offer their clients multi-lot press runs for many types of products and allow them to market seasonal and promotional label items as well." Listen, Sell and Repeat In order to reap the benefits of repeat orders and a growing market share, there are a few things distributors should know. First, labels and tags do not come without challenges. Flashy graphics and unique substrates are pushing boundaries, but familiarity with print limitations is crucial to the successful execution of a design. For this reason, distributors are encouraged to partner with a technical supplier. Although Labels West does little design work, the company consults closely with the people handling the design, providing input on how to get the best outcome from a particular printing process. In an effort to alleviate designer's remorse, Labels West has new equipment that uses servo motors (rather than gears) to drive the presses. Shanley explained that because metal-to-metal gears are subject to wear, images can lose their crispness. Servo motors, however, solve this problem. "With servo motors there are no metal-to-metal gears running the press. The rotating component 'floats' with the help of electromagnetic energy," he said. "The tolerances are much tighter, allowing for better quality print and faster running speeds." New Dimension Labels recently worked with a distributor looking to target a group of microbreweries. The company offered sales and marketing collateral along with label samples showing different materials and print specific to the brewing industry, Brown recalled. LaunchPad Marketing and Technology Services, another division of Graphic Dimensions, provided creative design for two of the labels as well as the design for the six-pack carriers. "We are also developing their website," Brown added. "We took it from concept to the final outcome of great quality labels. The distributor was able to offer a complete solution from creative design, high-color label products and website creation all from one vendor."
Phelps recommended that distributors pay close attention to materials. For instance, are you using the right tag stock for a job? "It involves more than matching the thickness of a previous product," he said. Meanwhile, label applications require the proper face material and adhesive. "You can have the proper face material, but if the adhesive doesn't stick under the conditions the label will be subjected to, it's a failure. Or, if the adhesive sticks too aggressively, it's also a failure," Phelps remarked. "The face material also comes into play for more than appearance. Does it need to be thermal transfer imprintable? If so, what type of ribbon is best for that stock? Will that ribbon withstand the planned exposures? If not, you may have to start over and I.D. the ribbon for your printer first, then work backward." Finally, if distributors hope to enjoy what Phelps refers to as "quiet money" (i.e., the result of repeat orders), they must nourish relationships with supplier partners. After taking the initial steps to secure a trustworthy partnership, distributors are advised to give clear instructions for all jobs. This includes detailed product specifications. "Describe the use of the tag or label and try not to guess. Ask your customer if you're not sure," Phelps cautioned. He added the following pointers to the list:
  • Give your converter partner the time to obtain its own pricing for special materials or tooling required.
  • Utilize a small group of tag and label manufacturers and stick with them.
  • Try not to be the one who is always demanding emergency service. (If you have an urgent need, bring it to the forefront; admit you know it is an exceptional situation and work out the best solution with your converter.)
Shanley agreed and shared one last piece of advice. "Keeping current on payments always helps as well," he concluded.