A new Freedonia Group analysis projected the demand for heat shrink and stretch sleeve labels will grow at an above average pace among label application methods through 2025, rising 5.2% annually compared to 3.3% for the label market overall.

Aiding long-term growth, heat shrink and stretch sleeve labels — also known as sleeves –— were the only label type to see growth in 2020 amid the sharply reduced economic activity of the pandemic.

While the widespread use of sleeves in 'essential' food and beverage markets supported gains as at-home grocery sales soared, sales were also boosted by the growing use of these labels for OTC and other pharmaceuticals, which saw strong sales growth during the pandemic.

Though comparatively more expensive to produce, heat shrink and stretch sleeve labels have superior aesthetics and are becoming more affordable due to advancements in digital printing — boosting demand for sleeves in a growing range of applications beyond plastic and glass bottles and jars, such as the following:

• plastic tubs and cups
• plastic canisters
• cosmetic tubes (e.g., lipstick)
• overlabels for multipacks

As a result, sleeves will continue to take market share from glue-applied labels. Additionally, advances in digital printing will boost the competitiveness of sleeves with pressure-sensitive labels — which accounted for 76% of labels demand in 2020, particularly in the food market.

U.S. Labels Market to Exceed $20 Billion in 2025

U.S. demand for labels is forecasted to expand 3.3% per year to $20.6 billion in 2025, accelerating from the pace seen during the 2015-2020 period, when average annual growth was affected by a 2020 decline in label demand that resulted from the pandemic:

• Growth will be boosted by the continued focus on labels as marketing and track-and-trace tools, buoying growth for value-added label types.
• Though technologically advanced labels will remain pricier than standard types, improvements in converting and printing technologies that make them more affordable will promote sales gains, helping to increase their penetration in a number of markets as the price gap shrinks.

Application method demand is provided for the following types:

• Pressure Sensitive
• Glue-Applied
• Stretch Sleeve & Heat Shrink
• In-Mold
• Heat Transfer
• Other Application Methods
• Label demand is also presented for the following label stocks:
• Paper
• Plastic (polyethylene, polypropylene, PVC, and other)
• Other Label Stocks (metal, ceramic)
• Label demand is also presented by market:
• Primary Packaging (food, beverages, pharmaceuticals, cosmetics & toiletries, other primary packaging)
• Secondary Packaging
• Industrial
• Mailing & Shipping
• Decorative
• Other Markets

Demand for labels by printing technology is also included:

• Flexographic
• Lithographic
• Digital
• Screen
• Gravure
• Letterpress

Visit www.freedoniagroup.com for more information.