Preparing to attend the 2023 PRINTING United Expo in Atlanta, Ga.? If so, there is a high likelihood that you are looking for equipment that will enable to you to enter or expand your presence in the label market. After all, labels are hot. Just ask an Amazon warehouse employee or Amazon Prime driver.
But if you’re looking solely at commercial labels, you might be missing an opportunity—and a big one. That opportunity is industrial labels. According to The Freedonia Group, the global (commercial) labels market is poised to grow by 3.3% per year to $20.6 billion in 2025. According to research by Market Research Future (MRFR), however, the value of the global industrial labels market is set to reach $66.7 billion in 2023 and grow at CAGR of 5.2% through 2033—three times higher.
Of course, the numbers for both the commercial and industrial labels markets will vary from research firm to research firm. But using these as examples, the industrial labels market dwarfs the commercial label market that printers are rushing into.
What Is an Industrial Label?
What are industrial labels and how do they differ from commercial labels? Industrial labels are specialized adhesive tags or stickers designed to be affixed to various objects, equipment, or surfaces within industrial settings. Their performance qualities differ, as well, including:
- Anti-peel qualities
- High pressure and temperature resistance
- Moisture resistance
- Abrasion resistance
- Chemical resistance
- Requirement to stay on the life of the product (such as a tire, lawnmower, or industrial drum) or company asset (such as warehouse shelving or industrial drum)
- Often must adhere to governmental regulations.
Industrial labels are critical to the operation of business operations and are, therefore, a stable, predictable market. They are crucial in manufacturing, logistics, warehouses, and other industrial environments where high-performance, often “for the life of the product” labeling is necessary. Consequently, demand for these products does not fluctuate the way it does for consumer products.
Examples include:
Equipment identification labels: These labels are used to identify machinery, tools, and assets within a facility. They often include equipment names, serial numbers, model numbers, and other essential information.
Hazardous material labels: Employed to indicate the presence of hazardous substances or materials, these labels convey vital safety warnings and handling instructions. For instance, labels denoting flammable, toxic, corrosive, or radioactive materials.
Barcode labels: Barcode labels play a significant role in inventory management and tracking. They contain encoded information that can be scanned and linked to databases, facilitating streamlined stock control and supply chain management.
Safety and warning labels: These labels alert workers and visitors to potential hazards and provide safety instructions. Examples include “Do Not Enter” or “Wear Protective Gear.”
Compliance labels: Used to demonstrate compliance with industry standards, regulations, or certifications. For instance, ISO certification labels or labels indicating adherence to specific safety guidelines.
Instructional labels: Labels that provide operational instructions, maintenance guidelines, or troubleshooting tips for equipment and machinery.
Quality control labels: Used during the manufacturing process to indicate quality inspection status, inspection dates, or conformity with quality standards.
Electrical labels: These labels assist in identifying electrical components, wiring, and circuits, and (if necessary) UL certification.
Calibration labels: Labels affixed to instruments and tools that display the date of the last calibration and the next due date to ensure accurate measurements and adherence to calibration schedules.
Industrial labels are often constructed with robust materials to withstand harsh environmental conditions, including extreme temperatures, moisture, chemicals, and UV exposure.
Not Sexy, But Profitable
Industrial labels aren’t sexy, and producing these products requires a high level of expertise. They also require the use of specialty substrates and (often) specialized production processes, so this is a market that few commercial printers venture into. Experts in this market can spend decades in R&D developing the experience necessary to get it right.
If industrial labels require this level of expertise outside the traditional bailiwick of commercial printers, why should printers think about entering this market? Because they are often already selling into these companies—so they already have the relationships—and industrial labels create an opportunity to gain more share of the customer. Plus, industrial labels are extremely profitable for a variety of reasons (see below).
While printers may already have relationships with these companies, selling industrial labels will require developing new relationships within them. Often, these relationships will be at the operations level rather than the marketing level, but existing contacts can open those doors. Then you can work with an experienced industrial labels vendor to produce the applications. Yes, that means outsourcing.
You sell them, they print them. Everybody wins.
Benefits of Industrial Labels
Sound like a lot of work? For the adventurous, it can be worth it. Industrial labels are sticky and highly profitable.
Industrial labels require a “problem-solutions” approach. Once you sell into these accounts, customers are unlikely to move easily. Furthermore, unlike other types of labels, where sales volumes are only as stable as the “flavor of the week” product they adhere to, industrial labels often remain unchanged year after year. This makes these jobs not just highly repeatable, but highly profitable. Once you sell into an account, these jobs tend to repeat month after month, year after year, without much intervention.
Thus, industrial label vendors promote these products as having a number of key benefits for resellers (which commercial printers can become in order to sell into this market):
- Less work
- Higher level of customer retention
- Higher profitability
- Predictable revenue
- Increased customer lifetime value
- More stable cash flow
- Higher company valuations
So when planning your schedule for PRINTING United Expo, you might consider venturing onto the “other side of the tracks” to the industrial label side of the business. Stop by a booth or two. Take the time to ask questions and explore those opportunities. You might find a new revenue stream you hadn’t anticipated—no capital investment required.
