Brand owners – whether they are manufacturing foods,
beverages, personal care products, or toys – have a common need: labels for
their products. Today, ‘labels’ come in many forms and, as well as identifying
the product and its contents, perform additional key roles – decoration,
promotion, and a track-and-trace functionality.
A panel of brand-owner packaging experts from different
market sectors came together recently, courtesy of Finat, the international
label industry association, to debate specifically ‘the future of product
decoration’. Here, Finat Managing Director Jules Lejeune recounts some
interesting aspects of the conversation.
The occasion for this panel discussion was the 2014 Finat
Annual Congress in Monte Carlo last June, attended by our association’s
membership, which spans the extremely complex label industry value chain, from
raw material suppliers to label printers.
The panel was well-qualified to discuss the subject of
product decoration. Participants were Olivier Delataulade (F), finishing
and printing expertise controller at L’Oréal, with extensive experience in the
company’s packaging and brand strategies; Jesper Toubøl (DK), head of
LEGO’s packaging and processing research, and with a wide-ranging career with
the company in strategic roles; Arno Melchior (D), global supply
excellence director with Reckitt Benckiser, tasked with the continuing
harmonisation and optimisation of the merged companies’ two product ranges and
their packaging; and Brendan Kinzie (USA), a senior director for G3
Enterprises, global suppliers -- with a specialist focus on the wines and
spirits industry -- of packaging components, including labels, as well as
logistics services and technical and laboratory expertise.
Choosing the right label technology for the product on hand
Labelling is not a single-track activity. As well as
self-adhesive and glue-applied labels, it embraces sleeving, in-mould
solutions, flexible packaging, and direct-to-container print. L’Oréal, said
Olivier Delataulade, chooses to employ all the available technology options,
including multiple imaging processes on one label, and makes each choice on the
basis of ‘What’s the best solution for THIS product?’ With product and label
print runs getting shorter and shorter as a result both of local language and
regulatory requirements and product versioning, he said, production using
digital print is an increasingly-favoured option.
L’Oréal is also keen to keep abreast of imaging trends, like
3D polarising Fresnel lenses, metallisation, holography, the ‘no-label look’,
fabric substrates, and leaflet labels. ‘Labels’, Mr Delataulade observed, ‘are
more technical than other print’.
Overall,
Arno Melchior defined the decision-making criteria at Reckitt Benckiser as
‘quality and volume – on time.’ For very high-volume product packaging runs,
Reckitt Benckiser are finding in-mould labelling a good choice. Interestingly,
he said, ‘label printers could usefully be much more aligned with our
production process’; and added that the company are also moving more of their
packaging and print supply functions in-house, or as close to their production
units as possible, to respond appropriately to the persistent challenges of
tight delivery timelines. Another challenge is presented by label design changes
created in the marketing department, which can mean that ‘a lot of labels of
the old design are wastefully thrown away. This is another area for more
alignment.’
Should more brand owners print their own labels, or can our
label industry platform provide everything they want? G3 Enterprises’ Brendan
Kinzie replied: ‘I don’t see in-house print happening in wines in the short
term. Our label print involves lots of special processes like embossing to
attract consumers’ attention – it’s too complex – and it is the label that
actually sells 80-90% of wines in America!’ For G3 Enterprises’ clients’
specialist packaging/labelling needs, ‘it is quality that drives the decoration
choice decision,’ he confirmed, adding that it is G3 Enterprises’ creative
agency that buys label print. Talking about label print technologies, he told
us, ‘flexo is doing well, and so is digital print, which is enjoying – and will
continue to enjoy -- a lot of growth in the wine industry, where it still
represents a very small percentage of label volumes.’
LEGO packaging differs significantly from that of FMCG
products in that it consists primarily of cardboard boxes, and its market focus
is on children, as Jesper Toubøl explained. ‘Digital print is growing fast – it
enables us, for example, to respond to seasonal needs’, but he advised: ‘the
separate, additional label still needs to compete with other packaging
segments’.
Technology choice made at too late a stage in production
Mr Melchior drew attention to some concerns Reckitt Benckiser
experiences on the packaging/labelling front. The decision on choice of
decoration technology is, he said, taken at too late a stage in the chain. ‘We
may need, for example, to change a bottle shape to accommodate a shrink sleeve.
The label supplier therefore definitely needs to be integrated at an earlier
stage in the production process.’ Mr Kinzie concurred with this statement,
because, in his world of wines and spirits, the ‘label is actually printed and
applied – and then assessed for its value and efficiency!’.
Connecting with brand owners: a label printer’s challenge
In truth, one of the most difficult challenges experienced
by Finat label converter member companies is making contact with the right
people in an end-user company to discuss their needs and wants. For L’Oréal,
the right pathway is to involve not just purchasing, but also marketing. ‘For
packaging, the marketing people need to say what they want, and then we can
look at the technicalities’, said Mr Delataulade.
Mr Melchior, Reckitt Benckiser, enlarged on this theme. He
said that ‘purchasing’s target is to control costs. The design manager and
packaging manager are the company contacts who are likely to want to develop
higher-quality, innovative solutions… But, in the end, it’s always about price
in some way or other. If you have a product that people will pay more for, then
there’s room for extra label costs.’ ‘And,’ added Mr Toubøl, talking for LEGO,
‘you really need to be able to add value – especially for products for kids.’
That may be the case, but the fact remains that ‘end users
will generally go to label converters in the event of a practical problem – and
if that doesn’t produce a solution, they will go to the material supplier’,
said Mr Melchior. That is also the case for G3 Enterprises. ‘In a field like
ours, involving lots of glass,’ said Mr Kinzie, ‘whenever there’s a problem we
expect the vendor to cope!’ It would appear that there is still some way to go
before label printers can establish a more fundamental relationship in a brand
owner’s packaging planning.
Innovation?
What
about brand owners’ typical response to innovation in product decoration? The
response was universally guarded. For L’Oréal, Mr Delataulade commented: ‘It’s
really difficult to get end-user companies to commit to starting a testing
programme for new or different labels or materials, so that they can make
relevant comparisons’. Mr Melchior added, for Reckitt Benckiser: ‘New products
must perform better. As a brand owner, you need to be clear on what additional
benefits a new product can deliver, and then you can choose to increase the
product price to accommodate it if necessary. The factory, of course, would
like to continue to always run the same product – no change!’ LEGO’s Mr Toubøl
agreed, adding that brand-owning companies ‘would need to move to more flexible
production platforms’ to accommodate product decoration innovations.
‘Adding value’ may indeed be the key influencing factor.
Panelists reconfirmed that brand owners are prepared to pay more for a label if
the consumer will pay more for the product as a result.
Sustainability
On the high-visibility topic of sustainability, panelists
outlined their companies’ definition of the word, and their response to it. Mr
Delataulade identified reduced-weight products as the core definition within
L’Oréal. For Reckitt Benckiser, it is their carbon footprint reduction
programme, in which energy usage, and the product/packaging relationship, are
key. But ‘It’s our company and its investors that care… Consumers don’t want to
pay more for “green” products.’ Product downgauging, Mr Melchior continued, is
also a current company focus, and the company is continuing to reduce aluminium
foil calipers – but it is a complex matter, and may not in fact make price
reductions possible.
Mr Toubøl agreed that, as far as sustainability is
concerned, ‘consumers believe it’s the job of their suppliers. LEGO plans to be
carbon-neutral by 2020’, he said. Mr Kinzie supported his fellow panelists: ‘G3
Enterprises works with supplier scorecards, and our own internal ones… Everyone
wants the more sustainable option, but consumers aren’t willing to pay more for
it’.
Recycling
A continuing central focus for Finat and its members across
the value chain is the self-adhesive label release liner recycling programmes
that are now active in Europe. But what of the brand owners? LEGO already
regranulate plastics, and G3 Enterprises have contracts with waste-handling
companies. However, neither L’Oréal nor Reckitt Benckiser currently participate
in any release liner recycling programmes. In fact, Mr Melchior stated that, in
Reckitt Benckiser, there had been ‘internal problems in engaging colleagues to
separate the waste (they don’t explicitly separate liner).’ He added: ‘If the label
industry introduced an incentive programme, it might help!’ Finat is very
actively promoting release liner recycling initiatives in presentations at
mainstream end-user events. This year, Finat also launched its own
international Recycling Awards, with recognition both for brand owners and
label makers.
What of the future?
The influence of online consumer
purchasing will, the panelists agreed, challenge the current model of packaging
and labelling, and may even involve game-changing innovation. Already, the
ubiquitous cellphone in partnership with QR codes on packaging is creating a
new relationship between the consumer purchaser and a retail product – which,
often, may no longer be physically selected/purchased in a shop, but ordered
online. This does not, however, negate the value of product decoration and the
role of the label: it only increases the number of platforms on which it must
perform. Arno Melchior, from his viewpoint within a major diversified consumer
goods company, aptly summarised the panelists’ opinion. ‘There are real
opportunities for you as label printers to respond – by integrating into your
product offering shrink sleeves, direct digital print, and flexible packaging.
It’s your logical next step!’
