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Management Side
The Unavoidable Shift From Paper to PET Liner

Well, guys...here we go AGAIN!

The labeling industry is about to be dealing with yet another rapid change that we'll have to adjust to.

What's the crisis this time? Another massive paper release liner shortage.

The situation has become so disruptive that Avery Dennison recently referred to the current environment as "inflationary and highly volatile."

And yes, I know. We're all tired of hearing this type of news, too. But unfortunately it's unavoidable and we need to address things head on.

So let's dive into the latest issue to see where our industry is headed:

According to Kevin Clunie, VP of Sales & Marketing at Mactac, 87% of the release liner consumption in North America is paper-based.

However, continued supply chain shortages have created an unstable supply and demand environment for paper products.

"The industry has been growing, but the paper supply has been slacking," states Clunie, referring to the growing demand for release liner in North America, which was up 3.5% in 2021.

The most recent causality of this is the shortage of paper-based liners.

With few solutions available, polyethylene terephthalate (PET) quickly became the material of choice as a paper liner replacement.

But why has it become the go-to product?

It's because PET is the closest alternative to paper release liner.

Before the liner shortage began, PET was promoted as a sustainable option for companies looking to reduce their carbon footprint.

But now, PET liner has become crucial for businesses to continue supplying customers and end-users.

"The move of the moment is around supply," mentions Clunie. "Customers are going to PET out of necessity right now more than sustainability."

So how did a paper release liner shortage sneak up on us?

The last several years alone have proven extremely difficult to secure the materials necessary to produce release liners.

Some recent events that have exacerbated this crisis include:

Add the rapid increase to pulp and paper prices across the global market and you've got the perfect storm for a paper shortage.

All of these events have been warning signals to the labeling industry.

Despite trying to recover over the last 2 years, we're still in a very unstable environment. And the release liner shortage is putting us in the middle of another major shift in infrastructure.

The shortage also signals how unprepared the label industry was for these events.

Granted no one could have prepared for a global pandemic or the resulting issues that quickly overwhelmed the supply chain because of it.

However, the paper industry's response (or lack thereof) has only exacerbated the current shortage. Particularly in the lack of investment over the last decade.

Paper mill closures have been escalating, removing tons of material from the market. And many of the remaining mills simply don't want to make release liners.

This is because release liners take more time and money to make. Machines have to be converted, which costs millions of dollars and months to complete. In the end, mills are more incentivized to make money through other products, like face sheet. Release liner supply has plummeted as a result.

Now everyone is suffering and there's no easy solution. Companies cannot simply seek out other vendors to get paper liners.

SPOILER ALERT: no one has any.

The last several months have shown top label suppliers pushing the launch of PET products as an "alternative option" to their customers. Here are some examples:

Avery Dennison

Jeoren Diderich, VP & General Manager of Avery Dennison North America, stated back in July 2022 that the industry shortages have resulted from increased consumer demand over the last several years, lack of investments, and unpredictability, especially during the pandemic.

Trying to increase its visibility as a supplier to companies in desperate need of release liner, Avery has encouraged customers to buy into PET.

In a September 30 announcement they stated, "As an alternative solution to the paper liner shortages, we continue to recommend that customers consider switching to PET liners as this material is more readily available."

Avery also announced the launch of a liner circulatory program in partnership with Mitsubishi.

While this program allows Avery to advance into more recyclable solutions, these conditions have helped accelerate Avery's part in the PET liner game.

Abbott Label

Abbott Label transitioned several items to PET liner starting July 1, 2022.

They announced this adjustment to customers via email several weeks prior. The email stated the change was "due to the paper liner shortage and supply chain issues." As a way to conserve paper for custom orders, PET would be used on standard label stock.

Abbott also included a paragraph explaining the benefits of PET to customers. This reassurance attempted to highlight the positives of PET after announcing such a major change.

But as companies consider making this transition, they're faced with yet another challenge: customer acceptance.

No one likes change. And customers are not keen on trying new products. So getting them to switch to materials they're not familiar with creates friction.

When asked about how customers are taking to the switch, Clunie said the reviews are "mixed."

"We've seen both; we have seen some people move to PET and feel they can run a bit faster. We've also seen folks that have moved over and it's just a temporary measure."

Because the hesitancy doesn't just come from using a new product. Clunie mentions changes to print dies, runs speeds, and applications are all contributing factors that make customers reluctant.

"It's the unknown," he says. "When people use other liners, they may like how it performs. But there's a lot of installed costs and installed need for change...that makes it hard."

While customers may view the switch to PET liner as an obstacle, they'll be forced to make adjustments to continue getting label products.

What does the future hold for the label industry?

For now, we'll have to keep finding innovative ways to work around the liner shortage. But when will the label industry finally see a light at the end of the tunnel?

As previously discussed, these shortages have been the culmination of events spanning well over a decade. So how do we find a resolution?

The answer lies with the paper mills.

Because the harsh truth behind the lack of investments is that the labeling industry is not an attractive customer. And we haven't been for years.

But the burning question is why. Why are the paper mills leaving us behind? Does the blame lie with the labeling industry or the paper mills?

So whose fault is this?

Alaina D'Altorio is the Content Marketing Specialist at Smith Corona Labels. She explores topics relevant to the paper and pulp industry, including mill closures, material shortages, and supply chain issues. Smith Corona Labels is located at 3830 Kelley Ave, Cleveland, OH 44114. Alaina can be reached by email at daltorio@smithcorona.com or by phone at 216-426-5611.

This article was originally published on the Smith Corona blog. You can find it here.


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