Label Printers Prepare for a New Year of Supply Chain Challenges and Partnership Opportunities

At the end of the day, we’re over circling back for more deep dives about our new normal. Wait, what? If you’ve been keeping up, you’ll recognize five of those phrases from Lake Superior State University’s 2022 list of banished words and phrases. Such lists are generally amusing, but one of the chosen words evokes negative reactions among label printers: supply chain.

Deemed essential, these suppliers kept the presses running throughout the early days of the pandemic, while facing familiar challenges regarding capacity, rushed timelines and nonprint-ready art files. COVID vaccine distribution inspired hope for a safer, more productive 2021. The reality was a bit different. Early last year, brands that had limited or paused marketing campaigns returned in droves, ready to regain lost revenue. Paper mills weren’t prepared for the fast rebound. Nobody was prepared for idling containers, allotment systems, long lead times and the rising costs of, well, everything.

According to Tony Heinl, president of Repacorp Inc., Tipp City, Ohio, that includes paper, synthetics, shrink film, flexible packaging, cores, cartons, skids, thermal transfer ribbons and freight — with price increases, on average, hovering between 6% to 7%. And there could be more increases on the way.

“A shipping container that costs $5,000 pre-pandemic now costs $100,000,” he shared. “Every month, to every other month, our suppliers are handing us price increases.”

Like many of its industry peers, Repacorp never closed shop. As Heinl tells it, employees are “scared,” but they still go to work every day. Even with safety precautions in place, waves of COVID have hit the company in pockets. When people call out, production slows, and finding replacements hasn’t been easy. If anything, the pandemic has highlighted print’s ongoing hiring problem. No one is qualified (or applying). Everyone is burnt out, Heinl said.

“Customer service representatives are delivering long lead times and getting the brunt of frustrated resellers trying to fulfill their customers’ needs,” he added. “Sometimes, we can’t even give a ship date because our suppliers can’t give us one due to raw material issues. Delivery dates are unacceptable, and we agree.”

The Goods

With so many orders coming in from just about every market, the next question is: What are people trying to get? For some, labels to amplify COVID safety messaging.

“As much as we would like the COVID crisis to be behind us, we still see quite a lot of business for COVID-related labels, stickers and decals,” observed Sharon Menssen, marketing manager for Label Works, North Mankato, Minnesota. “Labels and stickers that say, ‘I’ve been vaccinated,’ ‘Stay 6 feet away,’ ‘Wash your hands,’ etc. Hospitality and safety seals are still very hot that seal doors after a room or car have been clean[ed] and sanitized.”

Though hard to imagine, there is life outside of COVID. Variable information labels and tags — produced via direct thermal, thermal transfer, inkjet, laser and impact print technologies — were already in strong demand, and they rode that momentum into 2021.

The label market outlook is positive, with strong growth in the e-commerce, healthcare and food segments. Wise is ready to help.

Will Prettyman, general manager for Wise, Alpharetta, Georgia, pointed to preprinted sequential barcode labels/license plate number (LPN) labels, used to track movable units (e.g., cartons, bins and pallets) in a warehouse. He also said companies started to see the benefits of mobile printing.

“There was noticeable growth in small rolls of direct thermal labels used in mobile thermal printers,” Prettyman remarked. “For example, 4x6" labels finished 105 labels per roll on a 0.75” core. ... The warehousing, manufacturing and healthcare verticals were large contributors.”

Food and beverage product labels remain another area of interest. “The advancements in label printing from digital to foil printing to embossing have created a demand for more custom, smaller-quantity orders in the prime label space,” Prettyman said. “These end-users need labels to stand out and are willing to pay for it.”

Heinl added that microtext continues to be a trending feature among shrink sleeves, flexible packaging and other labels. It provides an extra layer of authentication because the hidden, tiny print is only legible through a magnifying glass. (Pro tip: Microtext, among other secure features like track-and-trace technologies, specialized inks and finishing elements, is great for the booming cannabis market.)

“Our HP press allows the printing of text and numbers to appear, to the naked eye, as a thin line or decoration,” Heinl explained. “Microtext can blend into the graphics in strategic places, such as hyphens, lines and even text.”

Repacorp Inc. is using modern marketing methods to make every label, shrink sleeve or flexible package unique.

While the pandemic didn’t give label printers the luxury of downtime, it did inspire new ways of thinking. Beyond the production floor, Repacorp’s creative team flexed its marketing muscles through multichannel experiences. Following the success of 48 Westcott Lane, a fictional murder mystery game that wove elements of social media, a dedicated website and print into a compelling story of brand awareness, Repacorp launched an interactive “Mixer” game.

The company sent an email to resellers explaining the game and inviting them to “click the button” to play. Repacorp then entered the names of those who wanted to participate into a database and sent them samples of shrink sleeves — each boasting a unique character, or “mixer.” Repacorp posted calls to action on its social channels. For example, if a player’s shrink sleeve sample had a female character with white hair and downcast brown eyes (advertising the cherry or lime flavor of the beverage), they could post a picture for the chance to win 10% off their order up to $500. Another clue even made use of the microtext Heinl mentioned earlier, instructing users to get a strong magnifying glass to decode the hidden message and post to win a discount.

These campaigns paid off for Repacorp, but the hope is that distributors will use packaging and labels as components of a larger and more effective multichannel marketing campaign for their own customers.

“With our Collage and Mosaic software, Repacorp can make every label, shrink sleeve or flexible packaging unique, so your customers can tie unique designs to a website, social media, causes, games and contests,” Heinl said. “You are no longer just selling printed labels or packaging; you are selling unique, fun brand experiences and relationships that deliver results for your customers.”

The Solutions

Building relationships with reliable suppliers has never been so important. A good partner understands their client’s needs and can provide the background assist needed to win the job. Suppliers are often willing to hop on a sales call, schedule plant tours (COVID permitting) or offer design input — the latter of which can require testing and time to get the materials right.

“Last year, we designed a solution for labels being applied to a very textured carpet-backing surface,” Prettyman recalled. “The customer needed the label to stick, and wanted the face of the label to be perfectly smooth. The solution was a very heavy aggressive adhesive with a multilayer construction to keep the face stock rigid and smooth.”

Although Prettyman couldn’t disclose details, he said Wise is currently working on a project for cryogenic labels that can withstand temperatures of -320 degrees Fahrenheit. “The pharmaceuticals need to be labeled before being preserved in liquid nitrogen,” he noted.

Suppliers can also guide distributors through the murky supply chain. Heinl, who doesn’t expect relief before July or August of 2022, encouraged resellers to call their customers and reeducate them with a snapshot of what is happening within the industry. And, of course, order in advance.

“We have been advising our resellers to work off a year’s blanket order, if possible,” Heinl said. “With a blanket order, the order is placed for the quantity needed for a year, then we warehouse and drop ship portions at designated intervals so that the customer has product when needed.

“If a blanket order is out of the question, order early — real early,” he continued. “There really isn’t a workaround. Just know we are all in the same situation, so be patient and trust that your print suppliers are doing the best they can with the situation they have been handed.”

Wise does its best to keep common materials in stock, but the situation is unpredictable for more custom items. Prettyman recommended ordering at least 30 days in advance, adding that depending on the level of customization, it could be shorter or longer. While they, nor their customers, prefer it, partial shipments using the materials they have can prevent clients from running out of crucial labels.

Menssen said Label Works is no different than anyone else out there, and credits her purchasing department for buying early — and deep — in their most requested stocks. One thing she confidently predicted is a steady influx of orders spilling into the new year. Her company is ready.

“We have a very experienced workforce that takes awesome care of our customers and helps guide them to the right label, sticker or decal for their application,” Menssen concluded. “We truly have many ‘Label Experts’ passionate about what they do and helping the customer.”