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

• 1950 - Dow distributor of Trycite• 1974 - Columbus, Ohio site opened• 1976 - Polyflex OPS lines purchased from

Monsanto (beginning of manufacturing) –thermoforming and label stock material

• 1985 - Purchased Sidaplax in Gent, Belgium• 1993 - Courtalds distributor of SCA heat-

sealable polypropylene• 2004 – Began manufacturing OPS and PLA

transverse oriented (TDO) shrink film• 2005 – Enjoyed first commercial success of

blown PLA film• 2009 – Celebrated 60th anniversary• 2013 – Began distribution of PETG TDO films

through long-term partnership with SKC Films

Founded in 1949 by J.D. Tatem, Plastic Suppliers is plastic film manufacturer and distributor. The company is a privately held business.

HistoryOf Plastic Suppliers.

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

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 1982. 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.

Circa 1985: “Petainer” – JV of Coca-Cola, Cortaulds, and Sewell Plastics – Aluminum lid, PET can, PVC shrink label

New York Seltzer line (late 80s)

Shrink film background (continued)

• In the late 1990s, the concept of using shrink label in conjunction with unique bottle shapes began to take off.

1997: Arizona Ice Tea

1998: Dean Foods

1999:Nestle

• 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

Full body sleeve(TDO Shrink)

Roll-fed(MD Shrink/ROSO) Wrap Around (OPP)

High Shrink

Contoured Bottles

Low Shrink

Applications

SHRINK LABEL TYPES

“Mid” Shrink

Applications

Focus of this presentation

TDO SHRINK LABEL TERMINOLOGY– FOUR PRIMARY TYPES

What does the Shrink Label need to Deliver?

Fuji Seal (PETG)CCL Label (OPS)Sleever International (Multiple)

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)

BROOK & WHITTLEFT DEARBORNGILBRETHHAMMER PKGPRINTPACKSMYTHWALLENUMEROUS OTHERS

Packers

Consumer Goods 

Companies

DEANVERTASEAST COAST BEVERAGEHOOD DAIRY

SKC (PETG)

SHRINK SLEEVE VALUE CHAIN - 2014

Retailers Consumers

RecyclersIn 1998, there were 4 to 5 label converters capable of producing shrink labels; in 2014, there are dozens (not counting imports)

Cast and Tenter Process

Transverse Direction Orienter (TDO)

Machine Direction Orienter (MDO) By-Passed for Shrink Films

EQUIPMENT & PROCESSING – TYPICAL CONVERTER PROCESS

TDO shrink

EQUIPMENT –SEAMING PROCESS

EQUIPMENT – USED BY THE END USER OR DECORATOR

• 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.

PVC SHRINK FILMS

PROs for PVC• Excellent price performance• Very customizable film options from

primary film producers• Multiple film sources• A domestic supply base for resin

(less reliance on overseas sources)• Broad range of shrink performance –

up to 75% shrinkage

CONs for PVC• Packaging applications for PVC

based products have been under environmental pressure for 40 years

• Greenpeace negative campaigns (factual and non-factual) have left negative perceptions in many geographies

• 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

• 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..

PETG (PET) SHRINK FILMS

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

• OPS – Oriented polystyrene – made by blending commodity styrene resins with specialized additives

• The dominant shrink film choice in Japan and increasingly in Europe.

OPS SHRINK FILMS

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

• 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)

PLA SHRINK FILMS

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

RELATIVE COST OF EACH OF THE MATERIALS

$2.00 cost per LB of

filmFilm Yield*

Sp. Gravity

FilmSq.In/LB

(MSI)

1.03 2.00$ 13,6431.32 2.00$ 10,8071.33 2.00$ 10,7001.25 2.00$ 11,160

1.03 2.00$ 15,1701.32 2.00$ 11,8881.33 2.00$ 11,8891.25 2.00$ 12,400

1.03 2.00$ 17,0541.32 2.00$ 13,076

1.33 2.00$ 13,375

1.25 2.00$ 13,950

0.1318$ oPS

45 micron - 1.8 mil

40 micron - 1.6 mil

oPS 0.1173$ --

PVC 0.1495$ 28%

0.1613$ 22%

28%Earthfirst® PLA 0.1792$ 22%

Earthfirst® PLA 0.1434$ 22%

PETG 0.1682$ 28%

PETG 0.1529$ 30%

Yield Cost Comparison of OPS, PVC, PETG, and PLA TDO shrink film

$ per 1000 sq.in. (MSI) % MSI Cost

differential relative to

highest yield material (OPS)Film Gauge Shrink Film Type

Typical gauge -50 microns

50 micron - 2 mil (most common

thickness)

oPS 0.1466$ --

PVC 0.1869$

--

PVC 0.1682$ 28%Earthfirst® PLA

PETG 26%0.1851$

COMPARATIVE SHRINK FILM PERFORMANCE - TD

PLA

PETG

OPSPVC

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.

Special thanks to these early adopters of PLA TDO shrink film

Brand Owners

Shrink Sleeve Converters