SOI Labels & Tags: Beating the Odds
What do the labels and tags industry and Daniel E. "Rudy" Ruettiger (of Rudy fame) have in common? If you said, "neither is a very good football player," you'd technically be correct, but that's not the answer we had in mind. The right answer is that both exemplify the feel-good underdog story. Rudy triumphed over his unfavorable socioeconomic status and small stature (and lack of appreciable athletic talents) to play football for the University of Notre Dame. The labels and tags industry? All it did was overcome the biggest economic disaster since the Great Depression.
While labels and tags suppliers never got triumphantly carried off the field by their teammates like Rudy did, their success is just as inspiring. Surviving the recession has been difficult, and some of the other product sectors weren't as fortunate.
"The labels and tags industry has generally done better than many other industries during the economic downturn," said John Shanley, president of Labels West Inc., Woodinville, Wash. "While there certainly are those companies that didn't make it through the downturn, I believe most companies learned valuable lessons about their operations and how to make themselves more efficient. The result should be much better [and] stronger companies when the economy improves."
Shanley's optimism is far from wishful thinking. Many suppliers have experienced growth in line with the Freedonia Group's 2011 projection that the North American label market would grow 4.5 percent annually over the next few years. According to Shanley, Labels West saw sales increases of 3 percent in 2009, 3.5 percent in 2010 and 6.7 percent in 2011, and anticipates a 5 percent growth this year. And he's not alone in that assessment.
"Based on last year's sales, we saw a substantial growth in labels and tags," said Tony Heinl, executive vice president of Repacorp, Inc., Tipp City, Ohio. "We saw sales increases in all markets—stock, custom, RFID, digital and flexo. I believe the Freedonia Group projected correctly."