Labels under pressure

As multinational sales director of Skanem, one of Europe's fastest-expanding label converters, and having spent 30 years in the labelling field, FINAT's new president says he has seen far-reaching changes in the self-adhesive labelling sector and expects more to come.

Harrisson reckons that, in the next 3-5 years, the sector will see consolidation accelerate even faster than in the preceding five, driven, increasingly, by the buying power of large retail chains, and their frantic drive to stay ahead of their rivals. This is seeing "unprecedented" price pressures on label and material suppliers. Faced with supermarket demands to deliver "more added value", yet keep prices low, FMCG producers' response is to ask ever more from their packaging suppliers, not only via lower prices, but equally by demanding packaging which ensures that even goods once considered staples positively trumpet their benefits from supermarket shelves.

"The upshot for the self-adhesive labelling community," says Harrisson, elected FINAT president in June following two years on the association's board, "is that to remain profitable, stay ahead of competitors and grow their businesses, label suppliers must increasingly find new ways to innovate and deliver added value, make their operations leaner, and form alliances, perhaps with other key players serving similar FMCG sectors overseas."

Harrisson says the major brand owners' growing tendency for specifying packaging from one, or perhaps a handful of suppliers from one central European location, is also forcing label converters to become more pan-European, or indeed global, in outlook. "In the next 5-10 years I believe many small and medium-sized label converters will be swallowed up by the biggest players, while for the small, niche players particularly prevalent in southern Europe, even surviving will be a battle."

Despite such harsh economic realities Harrisson sees many positives in an industry becoming ever better at adapting and innovating, whether by transforming once inefficient plants into well-oiled, highly automated label factories, or producing exciting labels which interact with consumers through touch, smell feel, or even sound.

"I am hugely excited at taking up FINAT's presidency," he enthuses, "because although the sector will have to work ever harder to keep its customers happy and remain profitable, there are strong signs it is adapting to new challenges."

While self-effacing many ways, Harrison acknowledges his sound business and management experience – he started a self-adhesive labelling business from scratch earlier in his career when self-adhesive was still in its infancy – and his reputation for a hands-on approach, were instrumental in his election.

Increase in membership

"Working with the managing director (Jules Lejeune), FINAT's Board and committees, I aim to run the association very much along business lines," he says. One key objective will be to continue a recent 25% year-on-year increase in membership – FINAT now has over 460 label converter, material supplier and other trade association members in 40 countries. "This is "a self-fulfilling objective. The more members we have, the more revenue that will enable us to increase and enhance the benefits we give members. It will also give us greater lobbying authority."

Another priority will be improving training, not just for converters but equally for end customers so major brand owners "better appreciate the benefits self-adhesive labels can bring".

"With the whole label industry getting more competitive, we have to ensure self-adhesive labels maintain their superiority over rivals," he says. "This means increasing their use not just in established markets like western Europe and the US, but equally in fast-growing areas like Russia and Poland, currently seeing growth levels 3-4 times higher than Western Europe, albeit from a much lower base."

Harrisson also intends providing enhanced support for FINAT's numerous task forces, currently looking at everything from the implications of the European REACH directive (which governs testing and use of chemicals and could see many disappear from use) to the challenges posed by RFID and alternatives to sending large volumes of silicone label backing paper waste to landfill.

"There is masses to do," Harrisson concedes, "particularly against a backdrop where rising oil prices are seeing big hikes in the price of plastic label raw materials, putting further pressure on FINAT's members.

"Nevertheless, the association's board is generating an excitement and energy that will benefit the entire membership, giving member companies an edge over non-member rivals. This should be a spur to the further recruitment, which in turn will help ensure members get maximum value and the best possible range of services. I'm looking forward to a busy two years."