Re-Assessing, Reacting to Global Situation
- Published: January 01, 2002, By Corey M. Reardon, AWA, Alexander Watson Assoc.
Ed. Note: This month we are introducing EuroTalk, a quarterly column focusing on industry issues in Europe of interest and relevance to the North American market. It is contributed by Corey M. Reardon, a Principal of AWA Alexander Watson Assoc., leading international market research consultants in the converting and packaging industries.
Overall, the converting industry in Europe has been affected by the global economic slowdown and, of course, by the events of September 11 in particular as multinational product manufacturers re-assess their markets.
The converting industry value chain is being required by a cautious customer base, especially in the retail sector, to deliver smaller orders faster, often at a lower price. It has responded to this difficult trading environment by consolidating to retain its profitability — although overcapacity is still a critical issue.
Consolidation and rationalization are seen at all levels, except among actual label and package print companies, which remain resolutely small, individual companies or groups, mostly local or regional. Without some urgent response to the changed business environment, this segment of the value chain must be seen as at risk; company causalities can be expected.
In terms of product identification, self-adhesive labeling remains the preferred technology in Europe, but increasing fmcg (fast-moving consumer goods) manufacturers are evaluating alternatives — particularly shrink-sleeving, which is taking a significant share in the beverage market, especially in the arena of trendy alcoholic beverages and energy drinks.
