Cross currents for labels in a growing economy

Demand volatility and raw material supply

73
labels
Packaging and labels which cannot perform without information, inserts, outserts, QR codes, and barcodes apart from the variable printed manufacturing.

Society and business may be going digital but it is unlikely they will get wherever they are going, without print – which is in fact in the middle of everything. The same goes for packaging and labels which cannot perform without information, inserts, outserts, QR codes, and barcodes apart from the variable printed manufacturing, sell-by, and use-by dates. Nevertheless, print has taken a knock in the pandemic because of the closure of schools and retail shops while packaging and labels have held up and become stronger in an era of remote shopping, commoditized choice, hygienic, or at least layers of packaging, handling, and last-mile delivery. All riding on the cellphone and digital backbone of the country which although cantankerous and occasionally frail is more than good enough for an emerging economy. 

However, as the packaging and label industries grow even with the moderate 5 to 7% real GDP growth for the Indian economy that we expect – there are several overall trends that could even be described as cross-currents. Firstly, the economy has reached a level where even small growth matters for industry, especially for its consumer product segments since it is still a consumption-led economy. Secondly, there is more interest in our economy from global investors and manufacturers partly because we have reached a critical mass or size in consumption, and partly for other factors such as the need to diversify manufacturing supply chains from other parts of Asia. 

The startup culture is also gaining traction. New organic, sustainable consumer products are also emerging which directly benefit labels and packaging. Cross currents are those of business or demand volatility which is normal from day to day but which has been accentuated during the last 22 to 23 months on a practically monthly, or quarterly basis. The positive side of volatility is that customers return and generally with erratic volumes and new demands. And this makes the more frequent (than earlier) shortages of raw materials such as label stocks a problem, because converters’ calculations and productivity go haywire. 

Several of these issues, trends and cross-currents become apparent when we visit and talk to a mix of label printers who may have active plans to challenge the everyday trends in the industry and others who are also growing but more modestly or incrementally. However, the overarching issues are similar for the wide range of converters. There are the newbies with or without deep pockets who may have entered the industry with locally manufactured or high-end imported label presses, to the biggies who are scaling up with good access to investors. And in the middle are the established players with three or four label presses who feel the price competition, skill shortages, demand volatility, the raw material prices and delays more intensely.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Packaging South Asia’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

Subscribe Now
Previous articleKumar Labels’ ambitious backward integration and training plan
Next articleMedical packaging films, global CAGR 5.1% till 2028
Editor of Indian Printer and Publisher since 1979 and Packaging South Asia since 2007. Trained as an offset printer and IBM 360 computer programmer. Active in the movement to implement Indian scripts for computer-aided typesetting. Worked as a consultant and trainer to the Indian print and newspaper industry. Visiting faculty of IDC at IIT Powai in the 1990s. Also founder of IPP Services, Training and Research and has worked as its principal industry researcher since 1999. Author of book: Miracle of Indian Democracy.

LEAVE A REPLY

Please enter your comment!
Please enter your name here