The role of labels and packaging solutions in product management has changed significantly over the years, as the modern consumer’s ability to better comprehend what is inside the product he/she chooses to purchase, has grown tremendously. While the demand for automatic labeling equipment is growing at a significant pace, leading manufacturers are further trying to innovate their product features with the adoption of next-generation technology trends.

According to Packaging World News, the preference among end-users for RFID (radio frequency identification) labeling solutions is increasing at a healthy pace, accounting for nearly one-fourth revenue share of the global market for labeling equipment.

- Demand for automation in the food & beverage industry is driving the market. As consumers are today are more conscious about the details of the product, the labels play a crucial role in providing information about the product and help boost sales. Manufacturers are now shifting to automated labeling systems to meet the growing demand from the food and beverage industry. It was mentioned in 2017, Food and Drink Industry Economic contribution and growth opportunities information, 73% of food and drink manufacturers are engaged in automating manufacturing processes, while 46% are engaged in warehouse and logistics automation.

- Also, according to a survey from the Association for Packaging and Processing Technologies, 94% of food packaging operations are already using robotics. As for food processing, approximately one-third of companies are using robotics. The concept of decentralized “power” has extended to packaging machines as well, and manufacturers are now relying heavily upon automation. For instance, PDC International has developed a steam tunnel for a full-body shrink sleeve label that has integrated boilers, which provides a complete steam tunnel system. Due to this installation of an additional separate boiler is not required, and the manufacturers can better manage their power consumption.

- The tire manufacturing has vastly benefitted from the automation of the labeling process. The labeling process has brought down the labeling rates from 10 to 2 tires pers second.
- The high cost of automatic labeling machines has been significant factor that has hampered the growth of the market. The overall cost plays an important factor when labeling is done for smaller batches, due to which it is not economically feasible in such cases.

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Key Market Trends

Personal & Household Care Accounts for a Significant Market Revenue

- With technological advancements and digital transformation, the importance of labeling has increased tremendously over the years. Cosmetic and household products are available in different forms of packagings and material. Due to the changing landscape, the requirement for faster and automated labeling machines has increased.

- The US and Europe have many label related regulations in place for the cosmetic industry. The manufacturers in this region have to mention the ingredients used, along with the manufacturing date and batch number. And due to these regulations, manufacturers tend to use automated labeling machines to eliminate human errors.

- Various companies are innovating new technology to update their existing labeling machinery or manufacture a fully automated labeling machine. One such company, HERMA labeling systems, In September 2019, launched HERMA 500 labeling machine. The company integrated the Industrial Internet of Things (IIoT) in their new offering. The Integration of IIoT enables it to offer higher speed, connectivity, and safety with maximum quality and flexibility.

- According to Association for Packaging and Processing Technologies, in the United States, the market is largely driven by package and labeling services providers who cater to the FMCG sector, and personal care products are a crucial part of the FMCG sector. Furthermore, the demand for pressure-sensitive labeling is high in this segment, as it is a highly versatile label solution that can be applied to nearly any type of packaging.

- The companies manufacturing cosmetics are expanding their production facilities, owing to the increase in sales of consumer goods for personal care. According to the Centers for Medicare and Medicaid Services, the United States is expected to spend USD 3.2 trillion in 2019 on personal healthcare.

Asia-Pacific is Expected to Have a High Growth Rate

- Asia-Pacific is home to the largest population in the world. With increasing consumer awareness regarding packaging, the demand for packaging in the food industry, and the need for high speed & high-quality labeling solutions is increasing. China and Taiwan are the major exporters in the APAC region for automatic labeling machines.

- The Chinese economy has been growing rapidly from the turn of the century, the government regulations allowing foreign firms to invest heavily, and the need for brand recognition among the large consumer-base has led advertising to reach a new high in the country.

- Various Chinese firms are integrating new technology into automatic labeling machines, for instance, in June 2019, Chinese machine supplier Spande launched the S7 flexo press and hybrid N610IM, developed in collaboration with Domino. The ‘i-Vision’ intelligent registration system uses two cameras to ensure registration accuracy at each printing and application station, independently.

- According to Labels & Labeling in 2018, Southeast Asia had a population of over 646 million, and label consumption growth of around seven percent, making it a hugely significant market and is the fastest-growing market. Furthermore, in May 2019, Labelexpo Southeast Asia, organized their first event in Bangkok, in May 2019, to cater to the growing demand from this region. The event aimed to cater to printers, brand owners, technicians, buyers, and designers. The event was held to attract visitors from Thailand, Malaysia, Indonesia, Vietnam, Singapore, the Philippines, Japan, South Korea, and Australasia.

Competitive Landscape

The automatic labeling machine market is fragmented as the major manufacturers in the market are facing stiff competition from smaller players. The industry players are competing on price, distribution network, service quality, innovation, and brand reputation. Also, mergers and acquisitions, partnerships, and technological innovations are some of the primary strategies adopted by these companies to ensure long-term growth. The key players in the market are HERMA GmbH and Wuxi Sici Auto Co.

- June 2019 - Herma US, the subsidiary of Herma Gmbh, a Germany-based provider of labeling machinery, self-adhesive labels, and materials, upgraded their Herma 132M Wrap-around Labeler. The machine is now available with motion control and is now designed to evenly ramp up and tamp down speeds for improved product handling. The new features are particularly useful for fragile containers such as glass vials.

- Sep 2019 - Herma US introduced a new ultra-compact labeling machine at Healthcare Packaging Expo held in September 2019. The new labeling machine is designed to meet the pharma sector demands for a fully FDA-compliant labeler in a very compact footprint. This Herma 211 HC is suitable for labeling a wide range of cylindrical products, including syringes, tubes, glass vials, and ampoules.

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