“Market reacts slow, understanding faint signals critical”

Starting off his presentation, he said, “We need the liner to produce good quality labels. Label is good, healthy.” During his presentation he added that every sector demands a different label type and labeller technology. He shared that a majority of labels produced by Skanem utilise honey glassine liners, followed with white glassine and filmic type liners. And within the filmic type liners, a lion’s share is held by PET 30 liners, followed by PP30 and PET 23 liners.

He said that as a label producer, he looks for three factors while choosing a liner: standardization between suppliers and across grades; consistency in thickness for die-cutting, strength for unsupported web and curl for label flatness. The third factor is controlled siliconisation including the silicone coat weight and process control plans involving the voids and inclusions. He added that die-cutting problems are now almost the thing of the past.

He noted that the key issue is the squeeze between suppliers and consumers. “Every year you are forced to reduce 5% of your label prices. On the other hand, suppliers ask for increase in price. This is where shrink sleeves, direct print and liner-less labels are posing as threats to liner growth. Market is very slow to react, therefore understanding the faint signals are very critical to anticipate the upcoming trends. The net result of various purchasing behavior is material efficiency and less liner.” He was quick to add, “PP30 doesn’t seem to create wonder in the cosmetic segments but in bigger labels, it is a very strong technology.”

He also said that three major challenges are faced by the label user: brand management, purchasing management and operations management. Within brand management he found that brand maintenance, shelf positioning, price competition and innovations are the hurdles. At the same time, price level, added value, flexibility, robustness of supply chain environmental impact and supply sustainability is important.

Taking a dig at the procurement tactics, he said, “When comparing the purchasing behavior and alternative liners or linerless formats, the cost reduction initiative is nearly empty. The idea is that if we sell the liner, the price of label will come down. This means that we expect around 10% change in the prices. To move to a filmic liner, we will have to change the machinery involved in the company. Price parity is opening up competition. Decisions will be made on product offering available, market segment performance requirements and sustainability.