By Linnea Keen, president and CEO, TLMI

The industry is experiencing changes in consumer behavior and preferences, says TLMI, which result in changes in labels and packaging. The shift in consumer behavior is coupled with advances in technology, normalizing demand and regulatory pressures. Factors such as economic uncertainty brought on by tariff implementation and the challenges of a generational swing in the workforce lead the label converter/printers to demonstrate agility and adjust to the changing landscape.

In today’s fast-paced consumer-driven world, the label and packaging industry plays a crucial role in not just product presentation but also in sustainability, brand identity and consumer safety. The label and packaging industry continues to demonstrate its agility and resilience with the new challenges in the past year.

The focus of the label converter/printers and their suppliers has shifted to managing their business, costs, internal operational efficiencies and revenue growth, while adjusting to the change in consumer behavior and preferences. Inflation has impacted the consumer over the past few years, and the rate of inflation has slowed down and, in some cases, declined. Consumers are spending less and have shifted premium brands to private label or store brands to save money at the grocery store. This shift sends ripples through the industry, impacting market segments and verticals. It results in changes in label type, material used, run length and many other factors. The industry demonstrates its agility daily by how it continues to adjust to the ever-changing landscape.

The shift in consumer behavior is coupled with technological advancements, normalizing demand and regulatory pressures across different markets and individual states. Labels and packaging no longer are just functional; they are critical components of brand strategy, product differentiation and environmental responsibility.

Advancements in technology in label printing

Digital adoption continues in label printing

Digital printing continues to evolve and improve its speed and capabilities. As a result, it has revolutionized the label industry by offering shorter print runs, customization capabilities and quicker turnaround times. This technology allows brands to personalize labels and packaging, thus responding swiftly to market demands while enhancing consumer engagement. Consumer behavior has shifted due to inflation but also due to digitalization, i.e. digital consumer ads. Small private brands have grown significantly as a result of digitalization leading to personalization, multiple SKUs and smaller orders and runs. This is a perfect fit for digital printing.

In a recent study conducted by Napco Research for TLMI, respondents shared the benefits of digital printing in their operations. Most label converters have invested in digital printing equipment as they expand their capabilities to meet their growing customer demands. They shared the benefits they have experienced with the addition of digital, which included faster turnaround and the elimination of plate and tooling production (see Figure 1).

Advances in flexographic printing yield efficiency gains

While digital printing is growing, flexographic printing remains the dominant print technology in label production due to the significant installed base and infrastructure in place (see Figure 2). Flexographic printing continuously is evolving with improvements in print quality, efficiency and sustainability. Innovations such as LED-cured inks and advanced plate-making technologies have reduced environmental impact while maintaining high print standards. Label printers are investing in digital printing to enhance their capabilities, which adds complexity to their operation. The complexity raises the need to invest in automation and platform production systems to drive efficiency in their operations.

Automation and artificial intelligence (AI) are priorities for business owners and leaders. Investment in automation is a priority not only for operational gains in efficiency but also as a means to manage workforce challenges. Low unemployment and lack of qualified workers have driven investment in automation, and it will continue.

Artificial intelligence continues to be a hot topic for industry.  TLMI offers both in-person and virtual sessions on this topic to educate members and for members to share their knowledge and experience with each other. Many leaders and owners are trying to understand how to incorporate AI into their business strategy and operations. It is a technology that will bring tremendous benefit, but there will be a steep learning curve first as companies adopt AI.

Other trends shaping the packaging industry

Alternative packaging solutions

It is all about shelf appeal for the brands looking to influence consumer-buying behavior. There are several packaging solutions to meet the needs of the brands, which include pressure-sensitive label, cut-and-stack label, in-mold label and shrink-sleeve label. Package decoration technologies have expanded to offer more eye-catching enhancements and embellishments.

Growing label and packaging solutions are linerless label, narrow-web flexible packaging, smart labels and RFID technology. Linerless labels are a solution that is based on the application and fit for purpose. Narrow-web flexible packaging is growing to meet the needs of CPG companies to offer their products in convenient packaging with a stable shelf-life and appeal.

Smart labels equipped with RFID (Radio-Frequency Identification) and NFC (Near Field Communication) technologies enable brands to track products throughout the supply chain, enhance inventory management and provide consumers with interactive experiences. These technologies are transforming how brands engage with consumers and manage logistics. They also assist in authenticating products, traceability and origin of products.

The GS1 Sunrise 2027 Project will transition to 2D barcodes. This transition will drive innovation and changes in the label and packaging industry. It will accelerate the adoption of RFID, and there will be changes to the design of labels.

Sustainable packaging solutions

The shift toward sustainable packaging solutions continues to be a defining trend in the industry. Consumers increasingly favor brands that demonstrate environmental responsibility through recyclable materials, biodegradable packaging and reduced carbon footprints. Packaging manufacturers are responding by innovating with eco-friendly materials and adopting circular-economy principles.

Many states are implementing Extended Producer Responsibility, which will have an impact on the industry and the materials used in labels and packaging. Sustainable product changes will have a positive impact on sustainability, with mandatory recycling targets, reporting and restrictions on single-use plastics. One high-profile product change is the elimination of PFAS in materials, inks and coatings in the industry. The suppliers of films, inks and paper products to the industry invested significantly to ensure that their solutions meet the performance requirements of the applications.

Challenges facing the industry

Cost pressures and economic uncertainty

In 2025, the main economic impact on industry has been tariffs. Tariffs are having a profound effect on the label and packaging industry, reshaping supply chains, cost structures and sourcing strategies. With new US tariffs targeting imported materials like paperboard, plastics and aluminum, companies that rely heavily on foreign suppliers – particularly from Asia – are facing significant cost increases.

This has led many businesses to pivot toward domestic sourcing, which, while potentially stabilizing in the long term, introduces short-term challenges like supply bottlenecks and longer lead times. For example, tariffs on polyethylene and aluminum have driven up prices for flexible packaging and metal containers, respectively, forcing companies to either absorb the costs or pass them on to consumers.

The uncertainty surrounding trade policy also is creating strategic dilemmas for packaging firms. Many are diversifying their supplier base, investing in local production or redesigning products to reduce dependency on tariff-affected materials.

This shift is particularly evident in the label and flexible packaging segments, where even minor cost fluctuations can ripple through the supply chain, delaying product launches or rebranding efforts. These challenges are not new to the industry. Business leaders will employ cost-management strategies and optimize operations to deliver on their promise to their customers and investors. This will bring an opportunity for advancements in technology and innovation.

Workforce opportunity

On the workforce side, the Freedom to Invest in Tomorrow’s Workforce Act is part of the One Big Beautiful Bill, which would provide added flexibility for how students can use funds that have been saved on their behalf in a 529 Plan. Though there are some exceptions, 529 savings funds primarily are designated for traditional college or university tuition. Should the Freedom to Invest in Tomorrow’s Workforce Act pass, it provides added flexibility for 529 funds to be allocated toward other types of job training programs, certifications or apprenticeships.

The rapid pace of technological innovation requires packaging professionals to continuously update their skills and embrace digital tools. Bridging the skills gap and investing in workforce training are essential for leveraging new technologies and staying competitive. The changing generational demographic in the workplace will aid in navigating this change and provide new solutions for companies and enhance their customers’ experience.

Future outlook

The label and packaging industry is poised for further transformation driven by advancements in digital printing, sustainable practices and consumer-centric innovations. Key areas of focus include:

• Operational Excellence: Companies will continue to invest in automation and equipment to expand their portfolio of capabilities to serve their customers and brands. This will lead to improved efficiencies and more complexity in the operations. The use of technology will provide solutions to manage that complexity.

• Personalization and Customization: Brands increasingly will use digital printing technologies to create personalized packaging and enhance consumer engagement.

• Circular Economy Initiatives: Adoption of recyclable materials, sustainable packaging and closed-loop systems will accelerate as brands strive to achieve sustainability goals.

• Smart Packaging: Integration of Internet of Things (IoT) technologies and interactive packaging solutions will provide consumers with real-time information and enhance brand loyalty.

As the label and packaging industry evolves, stakeholders must navigate a complex landscape of technological innovation, regulatory requirements and shifting consumer expectations. Embracing sustainable practices, leveraging digital technologies and fostering collaboration across the supply chain will be crucial for achieving long-term success and meeting the demands of a dynamic market.

In conclusion, while challenges abound, the label and packaging industry’s commitment to innovation and sustainability promises a future where packaging not only protects products but also enhances consumer experiences and preserves the planet for generations to come. This is a resilient industry. The future is bright. 

Linnea Keen is president and CEO of TLMI. She can be reached at 615-432-5442, email: linnea.keen@tlmi.com,  www.tlmi.com.