What is Important in Selecting a Shrink Label Material?
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1 What is Important in Selecting a Shrink Label Material? This presentation will provide a general overview of shrink labels and the reasons for the ongoing adoption in the market. The desired takeaway is to provide an objective perspective on the pros and cons of each of the common material types; PVC, PETG, OPS, and PLA. Presented by Randy Scott Vice President of Sales & Marketing Plastic Suppliers, Inc. Columbus, Ohio
2 Founded in 1949 by J.D. Tatem, Plastic Suppliers is plastic film manufacturer and distributor. The company is a privately held business. History Of Plastic Suppliers Dow distributor of Trycite Columbus, Ohio site opened Polyflex OPS lines purchased from Monsanto (beginning of manufacturing) thermoforming and label stock material Purchased Sidaplax in Gent, Belgium Courtalds distributor of SCA heatsealable polypropylene 2004 Began manufacturing OPS and PLA transverse oriented (TDO) shrink film 2005 Enjoyed first commercial success of blown PLA film 2009 Celebrated 60 th anniversary 2013 Began distribution of PETG TDO films through long-term partnership with SKC Films
3 Why this topic? Shrink labels one of the highest growth segments of flexible packaging over the last 15 years average of 10% growth per year: 2000: about a $75 million market for both printed shrink and T/E bands 2014: should exceed $700 million in North America alone. With the number of SKUs on the retail shelves double or triple where they were 20 years ago, consumer goods companies have relied increasingly on shelf appeal to achieve their market share. Shrink Labels have been a driver of shelf appeal They enable the use of unique container shapes which enhances the consumer s awareness of the brand. Increased label surface enables more print, more and greater use of graphics Consumers equate a shrink labeled product with higher value simply based on appearance compared to traditional bottle designs and labelling. In many cases, provide lower overall cost in light of frequent graphics changes and product extensions
4 Background on shrink label film It has been around since the 1960s thanks to innovators such as Fuji Seal, Toyobo, and CI Kasai The concept was a relative novelty until the unfortunate circumstances of the Tylenol tampering in Subsequently, Consumer Goods Companies needed to adopt methods of ensuring product safety to their customers. Tamper evident bands were the result. In the 1980s, there was increasing interest in using shrink labels to enhance the use of containers shapes that incorporated contours. New York Seltzer line (late 80s) Circa 1985: Petainer JV of Coca-Cola, Cortaulds, and Sewell Plastics Aluminum lid, PET can, PVC shrink label
5 Shrink film background (continued) In the late 1990s, the concept of using shrink label in conjunction with unique bottle shapes began to take off. 1999: Nestle 1997: Arizona Ice Tea 1998: Dean Foods All of these programs ended up being incredibly successful for their companies and the North American shrink label industry took off from there. Since then, shrink labels have become a prime marketing tool for all CPG
6 SHRINK LABEL TYPES Full body sleeve (TDO Shrink) Roll-fed (MD Shrink/ROSO) Wrap Around (OPP) Focus of this presentation High Shrink Contoured Bottles Mid Shrink Applications Low Shrink Applications
7 TDO SHRINK LABEL TERMINOLOGY FOUR PRIMARY TYPES
8 What does the Shrink Label need to Deliver?
9 SHRINK SLEEVE VALUE CHAIN Resin Supplier Film Extruder Label Maker EASTMAN (PETG) BASF, Denka (OPS) PVC resin various PLASTIC SUPPLIERS (OPS/PLA/PETG) KLOCKNER (PVC /PETG) BONSET (PVC /PETG/oPS) GUNZE (ops) SKC (PETG) BROOK & WHITTLE FT DEARBORN GILBRETH HAMMER PKG PRINTPACK SMYTH WALLE NUMEROUS OTHERS Packers Fuji Seal (PETG) CCL Label (OPS) Sleever International (Multiple) DEAN VERTAS EAST COAST BEVERAGE HOOD DAIRY Consumer Goods Companies Retailers Consumers In 1998, there were 4 to 5 label converters capable of producing shrink labels; in 2014, there are dozens (not counting imports) Recyclers
10 Cast and Tenter Process Transverse Direction Orienter (TDO) Machine Direction Orienter (MDO) By-Passed for Shrink Films
11 EQUIPMENT & PROCESSING TYPICAL CONVERTER PROCESS TDO shrink
12 EQUIPMENT SEAMING PROCESS
13 EQUIPMENT USED BY THE END USER OR DECORATOR
14 PVC SHRINK FILMS PVC Polyvinyl Chloride (PVC) - it is a commodity resin that is very customizable and is the lowest cost on a per pound basis in this segment. It was the first shrink material and brought to the U.S. by Fuji Seal in the mid-70s. PROs for PVC CONs for PVC Excellent price performance Packaging applications for PVC Very customizable film options from based products have been under primary film producers environmental pressure for 40 years Multiple film sources Greenpeace negative campaigns A domestic supply base for resin (factual and non-factual) have left (less reliance on overseas sources) negative perceptions in many Broad range of shrink performance geographies up to 75% shrinkage Concerns about harmful by-products from incineration after use Growth of PET bottle recycling is not a good match with chemistry of PVC waste products
15 PETG (PET) SHRINK FILMS PETG Name that has stuck from initial Eastman Chemical offering, this type of shrink film refers to amorphous polyester film that has been customized for TDO shrink label market. It basically came about in Japan and later in the U.S. for CPGs that had determined they would not use PVC for their shrink film. Nestle s Nesquik program was the first major use of PETG in the U.S.. PROs for PETG Price premium versus PVC has come down considerably as more suppliers have entered market in last 10 years Good downgauging potential Ambient stability vs OPS/PVC Highest shrink potential of all materials Co-mingling of small amounts of PETG shrink labels for PET bottles is less problematic than PVC or OPS Easy to print material CONs for PETG Highest shrink force can impair shrink labelling of lighter containers High rate of shrink makes it more challenging on less capable shrink tunnels Inherent swelling (thermal expansion) of Olefin (PP or PE) bottles are more problematic for PETG shrink films relative to OPS or PVC
16 OPS SHRINK FILMS OPS Oriented polystyrene made by blending commodity styrene resins with specialized additives The dominant shrink film choice in Japan and increasingly in Europe. PROs for OPS Nearly 30% higher yield per pound versus PVC or PETG (25% better than PLA) Slower shrink rate performs well with unique contoured containers such as trigger sprayers Material has the lowest shrink force which is ideal for very lightweight Latest high shrink versions are on par with PVC or PLA (but not PETG) Available down to 40 micron but not as downgaugable at PETG due to lower modulus/stiffness CONs for OPS Supply chain has been limited until the last several years Early offerings were not on par with PVC or PETG Sources of resin have traditionally been imported (changing) Ambient stability is less than other three materials, requiring extra care in storage and in shrink label design Not a good choice for bundling due to low shrink force Requires different ink and adhesive systems versus the other materials
17 PLA SHRINK FILMS PLA Polylactic Acid a misnomer, technically a thermoplastic aliphatic polyester Relatively new on the scene with two known commercial suppliers (PSI U.S. & Sleever International Europe) PROs for PLA Bio sourced Comparable shrink potential to PVC & OPS (less than PETG) No ambient shrinkage up to 100 F vs <80 F for peers Max shrink potential at up to 20 F less than peer material Excellent surface energy doesn t require pre-treatment for printing Good shrink force/tensile is excellent for bundling CONs for PLA Single source versus multiple sources for other materials Longer leadtimes than other materials at onset Initial costs were higher than competitive materials First generation materials had brittleness issue (since solved) General unfamiliarity with material by most of the shrink sleeve converting segment
18 RELATIVE COST OF EACH OF THE MATERIALS Yield Cost Comparison of OPS, PVC, PETG, and PLA TDO shrink film Film Gauge Shrink Film Type Sp. Gravity $2.00 cost per LB of film Film Film Yield* Sq.In/LB (MSI) $ per 1000 sq.in. (MSI) Typical gauge - 50 microns % MSI Cost differential relative to highest yield material (OPS) 50 micron - 2 mil (most common thickness) 45 micron mil 40 micron mil ops 1.03 $ ,643 $ PETG 1.32 $ ,807 $ % PVC 1.33 $ ,700 $ % Earthfirst PLA 1.25 $ ,160 $ % ops 1.03 $ ,170 $ PETG 1.32 $ ,888 $ % PVC 1.33 $ ,889 $ % Earthfirst PLA 1.25 $ ,400 $ % ops 1.03 $ ,054 $ PETG 1.32 $ ,076 $ % PVC 1.33 $ ,375 $ % Earthfirst PLA 1.25 $ ,950 $ %
19 COMPARATIVE SHRINK FILM PERFORMANCE -TD PLA PETG OPS PVC
20 Closing Thoughts Bottom line, all of the shrink film material choices bring value to this segment. All have good performance and each has their unique values relative to the others. After ten years of development and initial marketing, PSI believes that TDO shrink film can be a viable offering in this segment: Competitive on cost to traditional Petrochemical-based materials Proven processability on existing converter infrastructure and downstream manufacturing equipment Unique characteristics: Lower shrink initiation temperature enabling higher sleeve application productivity or lower energy consumption Higher heat stability for unused film that can reduce the cost of refrigeration Supports the use of Bio-Sourced materials, IF this is a strategy of your respective company or organization Demand will drive the supply chain. All of the producers can produce PLA TDO film if they have a business justification to do so.
21 Special thanks to these early adopters of PLA TDO shrink film Brand Owners Shrink Sleeve Converters
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