Global Functional Labels Market - 2024-2031

Overview

Global Functional Labels Market reached US$ 48.1 billion in 2023 and is expected to reach US$ 71.1 billion by 2031, growing with a CAGR of 5.0% during the forecast period 2024-2031.

With fierce competition in a variety of industries, there is an increasing demand for product differentiation that will stand out on store shelves and capture consumer attention. Functional labels have unique characteristics like temperature indications, tamper-evident seals and interactive elements (QR codes, NFC tags) that help firms differentiate their products, increase consumer engagement and promote brand loyalty.

Firms that incorporate RFID technology into e-commerce can avoid problems such as available stock not matching actual stock. It leads to a loss of sales and consumer confidence, challenges with customer shipments and stock that does not combine online buying with the physical store or warehouse. Retailers can update product pricing and information in real time using a mobile device or PC equipped with NFC technology included in these digital price tags. It saves time and money while also reducing the possibility of price inaccuracies.

In 2023, North America is expected to be the second-dominant region with about 25% of the global functional labels market. The working population's fast-paced lifestyle has resulted in a significant increased demand for FMCG, ready-to-eat foods and beverages. In accordance with United Nations Conference on Trade and Development, internet retail sales in U.S. increased from US$ 598 billion in 2019 to US$ 791.7 billion in 2020. The expanding e-commerce sector in the region has greatly accelerated market expansion.

Dynamics

Rising Emphasis on Brand Protection and Anti-Counterfeiting

Brand owners in all industries are increasingly worried about protecting their products against imitation, diversion and manipulation. Functional labels with security features such as holograms, watermarks, RFID tags and serialized barcodes aid in product authentication, counterfeit prevention and supply chain integrity, which is pushing their acceptance in industries such as medicines, cosmetics and electronics.

For example, in 2021, the next version of StellaGuard, a smart label and mobile authentication system developed by Covectra, a pioneer in track-and-trace systems, will enable brand managers and customers. For the first time, real products can be more rapidly and precisely identified, traced and validated, which helps combat counterfeiting.

Growing Focus on Product Safety and Traceability

Increased awareness of product safety, cleanliness and quality assurance has resulted in a greater demand for functional labels that include information on product ingredients, expiration dates, allergen warnings and country of origin. Labels with track and trace features improve supply chain visibility, ease product recall management and boost consumer trust in product authenticity and safety.

Market participants are developing innovative solutions to meet client demand. For example, in August 2022, Oli-Tec introduced a new smart label technology for temperature and time-sensitive items. The labels can be applied to any product having a five to fifteen-day shelf life. It incorporates a temperature and time-sensitive visual indicator.

Cost Sensitivity and Technical Challenges

Consumer price sensitivity and severe competition in the packaging business can put pressure on producers to cut costs and provide competitive pricing for labeled items. The additional expense of deploying functional labels, particularly those with advanced functionality or security elements, deters some businesses from adopting these solutions or puts margin constraints on label producers.

Functional labels must meet strict performance standards, including durability, adhesion, readability and resilience to environmental conditions. Technical issues, such as obtaining consistent print quality, assuring barcode readability or maintaining label integrity throughout transportation and storage, impact the reliability and effectiveness of functional labels, resulting in consumer discontent and product returns.

Segment Analysis

The global functional labels market is segmented based on type, material, end-user and region.

Rising Shift Towards Sustainable Packaging

Food & beverages are expected to be the dominant segment with over 1/4th of the market during the forecast period 2024-2031. With growing environmental awareness, there is more focus on sustainable packaging. The increasing focus on sustainability, eco-friendly packaging and circular economy principles has created a need for functional labels composed of recyclable materials, biodegradable substrates and water-based inks.

In accordance to the Organization for Economic Cooperation and Development, the demand for frozen and packaged foods has increased significantly. In Germany, customized packaged food sales increased by 56% year on year. Based on Label Insight and the Food Marketing Institute, 86% of customers are worried about transparency. At the same time, supermarket shopping would put more trust in food producers and retailers who provide thorough, easy-to-understand ingredient information.

Geographical Penetration

Rising Usage in Food & Beverage Industry in Asia-Pacific

Asia-Pacific is expected to be the dominant region in the global functional labels market covering over 35% of the market. As consumer awareness of packaging increases, so does demand for packaging in the food and beverage industry, as well as the need for quick and high-quality labeling solutions. The packaging and labeling sector operates only in some nations, such as China and India, where packaging adds significantly to GDP.

In addition, three key regional industry associations, including the Federation of Indian Chambers of Commerce, the All Indian Food Processors Association, U.S.-India Strategic Partnership Forum and major beverage companies including PepsiCo and Coca-Cola. Nestle, Mondelez and others deem the food and beverage manufacturing sector a "essential service" and request that the government exempt lockdown limitations from continued production.

Competitive Landscape

The major global players in the market include CCL Industries Inc., Avery Dennison Corporation, Label and Narrow web, Henkel AG & Company, 3M Company, Cenveo Inc., Fuji Seal International Inc., H.B. Fuller Co., Herma Labels and Flexcon Company, Inc.

COVID-19 Impact Analysis

The epidemic raised awareness about product safety, cleanliness and sanitation, resulting in a rise in demand for labels with tamper-evident seals, temperature indications, expiration date labeling and hygiene-related messages. Functional labels were essential in delivering product information, maintaining traceability and assuring consumers regarding the safety and quality of packaged items.

During the pandemic, the rapid expansion of e-commerce increased demand for functional labels with track and trace capabilities, QR codes and barcode scanning abilities. In response to the boom in online shopping and home delivery services, manufacturers invested in technologies that enhanced online product visibility, enabled contactless transactions and improved supply chain visibility.

Russia-Ukraine War Impact

Functional labels are used in a variety of industries, including food and beverages, pharmaceuticals, healthcare, consumer electronics and automobiles. interruptions in these businesses caused by supply chain interruptions, economic instability or changes in consumer behavior as a result of the war can all have an impact on demand for functional labels. For example, decreased consumer spending or manufacturing slowdowns in impacted areas result in diminished demand for branded items.

The battle will have long-term economic consequences for the global economy, including as trade disruptions, supply chain restructuring and changes in investment patterns. The factors can affect consumer spending power, market demand and corporate confidence, influencing the overall growth path of the functional labels market in the medium to long term.

By Type

• Peel-away
• Bundling
• Pressure-sensitive
• Booklet
• Collectable stickers
• Resealable
• Others

By Material

• Paper
• Plastic
• Metal
• Others

By End-User

• Consumer Durables
• Chemicals
• Pharmaceuticals
• Food & Beverage
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In April 2021, Neenah, Inc. obtained nine certified U.S. Department of Agriculture Certified Biobased Products in the durable label products lineup, demonstrating its commitment to sustainability activities. With this third-party certification, DISPERSA, ENDURA and PREVAIL durable label and board products can now display a unique US$A label emphasizing their bio-based content, which ranges from 68 to 99%.
• In March 2021, Dearborn Company stated that it has purchased Hammer Packaging Corporation. The united firm leverages Hammer's cutting-edge technology to strengthen Fort Dearborn's dominant position in the decorative label and package marketplace by extending the company's geographic reach, capacity and capabilities.
• In February 2021, Mondi Group has released a line of innovative paper-based release liners made from recycled and lightweight materials, offering a more sustainable alternative for a variety of applications. Being lighter in weight, they offer a sustainable choice for labels, tapes, envelopes and industrial usage.

Why Purchase the Report?

• To visualize the global functional labels market segmentation based on type, material, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of functional labels market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global functional labels market report would provide approximately 61 tables, 59 figures and 197 pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies