Market report - Labels and labelling

Manufacturers are endeavouring to hold prices as their costs continue to rise sharply, Sally Drury finds.

Conventional labels are only a part of a bigger picture including QR codes and DataMatrix technology - image: HW
Conventional labels are only a part of a bigger picture including QR codes and DataMatrix technology - image: HW

Think you are paying too much for plant labels? It could have been worse. Over the past 12 months, label manufacturers have seen sharp increases in costs, with materials, energy and logistics leading the way. With many blaming the volatility of oil prices, the cost of plastics has rocketed. At the moment, much of those increased costs are being absorbed by the manufacturers.

"Raw material costs have gone up in the region of 20 per cent compared with this time last year. Most of those costs are being absorbed internally," Floramedia managing director Nick Mathias confirms.

PPC Labels says it has been fortunate in being able to fix material costs for this spring. Combined with the company bringing most of its production in house, this has enabled PPC to hold its label prices in most cases.

"Although some production costs have increased over the past year, the rise in the cost of polypropylene material we experienced in the spring and early summer has now dropped back to 2010 prices. This appears to be due to the polypropylene sheet manufacturers putting in more production and there being spare capacity," explains PPC managing director Jeremy Watkinson.

Price pressure

But how long can label manufacturers continue to hold prices? How soon will it be that the grower has to bear the brunt of the price storm? And, apart from being ready to seize special promotions and early-order discounts, is there anything growers can do to prepare for the increases?

James Buffoni, head of marketing at Hortipak, part of the Ryedale Group, says: "We are constantly working to improve the ways in which we can help customers communicate and get value for money - labels play a huge part in that. But let's make no bones about this - costs are going up dramatically across the industry. That's not an excuse, but it requires a different approach."

Buffoni sees this approach as being a team game. He says there is not much room for exerting unreasonable pressure on suppliers, as perhaps there once was, because of the risk that unsustainable business deals might kill off key elements of the supply chain - catastrophic in an industry where demand peaks are so high in a short period of time. Instead, Hortipak has looked at its processes.

"We have invested millions to streamline our processes. But to take full advantage of them, we need to work together. Growers can get more value by discussing their wishes and requirements with us as early as possible," says Buffoni. "We have lots of knowledge, skills and resources to take advantage of, so I see our job as being to advise on the best way to meet those requirements in a way that demonstrates value for money."

Best quality and dependable service are basic requirements but Buffoni adds that once they are proven, the key is to look to innovation. "To innovate effectively we need to understand the direction of the industry, the direction of our customers' businesses and also keep an eye on any opportunities from the wider world."

Options for growers

Remembering that the plant label is primarily a marketing tool and is essential to the sale of the plant, what options are available to growers to lower costs or perhaps boost the value of the label?

Several companies offer different levels of service when it comes to label production. Advance Bunzl gives the choice of three options in its Quick-Colour service, which enables short runs - say 100 labels comprising 10 labels of 10 varieties.

Option one is the most economical and gives the fastest turnaround times - the grower chooses a background style and provides the photographic material and relevant text. The next level gives the benefit of a quick turnaround working from an agreed design but again with the image supplied by the grower. For the top-level service, the firm researches the text and pictures. This is the most expensive, but least hassle, option.

Ball Colegrave offers an extensive range of labels as a promotional aid to support retail sales. Marketing manager Stuart Lowen says he understands the challenges faced by customers in getting the right label at the right time and feels that the company has the solution.

"Lasting Beauty Perennial and Darwin Perennial labels are all stocked by ourselves and despatched to arrive with the customer's plant order, so there is no extra challenge of searching through catalogues to find a matching label," he says. The 4in Ball label is offered on more than 950 ornamental varieties and 120 vegetables. The Lasting Beauty label covers 340 varieties and has been upgraded to a 6in size to make oneto three-litre products stand out on the retail bench. The firm also offers the MasterTag label collection to cover all Ball Colegrave plug ranges - more than 2,200 ornamentals and 400 vegetables.

Short runs are likely to become more important to growers as new lines are tried as a means of boosting sales and as more retailers demand a level of uniformity of product. For a long time, short runs have carried a premium price because "set up" for printing has involved the same amount of work whether 10,000 or 10 labels are printed. Technology has largely turned that around and it is now common to find most companies offering shorter print runs.

"Our short runs are now down to 250 for a number of clients," says Watkinson. "It means growers can do a full range of varieties rather than having half their range with bespoke labels of their own design and the other half off-the-shelf stock labels." Growers need to look carefully at whether their labels are performing in the best possible way.

Greater economy

This month also sees Bamboo Print in the final stages of commissioning some new kit that will give greater economy on shorter runs. "Shorter runs are a facility that all our customers ask us for, to cut their need and hold stock and also to test-market new varieties," says Bamboo Print director Duncan McLintock. "The new kit will also let us offer customers a wider choice of substrates than before, including some plastics that seem to have a lot of potential."

Hortipak also constantly seeks to improve every area of offering, from materials to the number of channels through which it can communicate. "Labels, relative to conventional printed products, are in fact highly engineered products that have to withstand a lot of punishment from their environment, so it is a mistake to commoditise the pricing as has been seen in the wider printing industry," says Buffoni.

"More recently, labels have become part of a wider communication package all linked to mobile/web-based interactive channels and that's where we see value - looking at all the different ways in which we can communicate for our customers, advising on the most effective channels and working together to improve or add to them, using new materials, processes or technologies."

Marketing messages

The value-added solutions from Hortipak connect marketing messages across print and digital media with links to websites and video content via QR codes and smartphones.

Floramedia, as well as having introduced a new range of Grow-in and Pop-in labels for bulbs and vegetables is also focusing on the development of its FloraLinQ.

"It's all about extending the power of the label by linking it to the internet and making sure there are web pages that provide further information the consumer can enjoy," Mathias explains.

The company continues to develop new services and is expanding the companion planting feature that allows the consumer to look at other plants for their scheme. Mathias believes QR Codes will become a necessary and versatile tool that will be considered an everyday function. FloraLinQ, currently available in English, Dutch and German, has more than 4,000 pages linked to it.

Open-source technology

At Bamboo Print, McLintock says: "We now include QR codes on almost all custom labels. Growers have been quick to latch on to the opportunities they provide and they love the fact that it's an open-source technology and doesn't cost them a penny."

He reports that Irish growers have been particularly quick off the mark. Ireland has the highest per-capita ownership of smartphones in Europe. McLintock adds: "A lot of growers are extending their websites to take maximum advantage of the technology - it's going to be fascinating to see how it all pans out."

QR codes and DataMatrix technology show that labels are only a part of a much bigger picture. They are a marketing tool and should be used as such, but as growers seek to differentiate and make their products stand out in a crowd, the use of additional devices such as printed pot covers and point-of-sale items should also be given value and be viewed in the same light of innovation.

ONLINE LABELLING

Ever thought about designing and managing your label requirements yourself? Various software packages are available for growers to generate and print their own labels, but one company offering an online design/management service with professional print is Advance Bunzl.

Working in partnership with Smit Media in Holland, Advance Bunzl runs the Elburg Online Publication System to allow growers to design their own plant labels and then edit and approve them online.

"It basically enables growers to set up an online system - a real time online system - with their own account. We put in a template or templates to their design. The grower can then crop and edit pictures and enlarge, reduce or turn them. They can edit all the text and they can secure it, proof it and say it's ready to go. Then we print the labels for them," explains Advance Bunzl general manager Mike Sutton.

Growers get access to all of the images in the Visions library of pictures and photographs. Plant labels, care cards and swing tags can all be generated via the system.


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