Managing the transition to inmold labeling

Ubiquitous among packaging manufacturers in Europe, inmold labeling (IML) has been slower to catch on in the United States. The North American market for inmold labels is estimated to be $140 million, which is only 1.4 percent of the total $10 billion global market. And while growth of inmold labeling is moving along at a good clip in Europe at 15 to 20 percent annually, in the U.S. growth is only 7 to 9 percent annually. 

Even U.S. companies like Precise Technology Inc. that have delved into IML must rely on the European market for support. Precise's Bridgeport, NJ facility is the largest dedicated injection molding plant in the U.S. using inmold labeling technology, explains Ray Veno, vp of automation and continuous improvement for the company. Veno says that the facility is forced to purchase its labels from a European source because of a lack of appropriate suppliers in the U.S. 

There are several reasons inmold labeling hasn't caught on in the U.S., notes Veno. One big drawback is the investment required. "You have to use robotics for inmold labeling in injection molding," he says. But while this is an extra cost, such robotics can also improve overall efficiencies, he adds. 

A second drawback is finding a customer with an application that provides the molder with a long-term venture for a good return on investment. Veno says that Precise looks for products that have a five-plus-year product life because of the significant investment that the company makes in facilities and equipment. 

Another reason for the lack of interest among injection molders in the U.S. could be that inmold labeling is used most frequently on blowmolded containers (95 percent) in the U.S. In Europe, however, 75 percent of inmold labeling applications are for injection molded, open-top containers. 

Look Before You Leap 
Before taking the plunge into IML, molders should consider the risks and the rewards. Using IML, label stock costs are lowered, and the need for secondary labeling is eliminated. This, of course, leads to more savings with the elimination of a separate labeling machine, flame-treating equipment, and the floor space required to hold this capital equipment. 

The customer realizes benefits as well. Veno points to Precise Technology's plant in the Netherlands, where 60 percent of the company's business is producing food containers using inmold labeling technology. Many of the containers Precise produces at this plant have labels to accommodate consumers in several European countries. "To broadly market their products, our customers require labels in 17 different languages," says Veno. "With injection molding, we can get this type of flexibility. We can deal with many different colors as well." 

Because inmold labels allow molders to reduce the wall thickness of containers, the containers themselves cost less and may have faster cycle times. Veno says that most of the thin-wall food containers produced in Holland run in the neighborhood of 5- to 7-second cycles. 

However, a consumer products manufacturer that wants to introduce a new product or do a major makeover of a current product's packaging must confront the costs and lead times involved in designing and manufacturing molds for IML. 

SC Johnson Wax, for example, went back to pressure-sensitive labels from inmold labels to gain more flexibility and faster speed to market. The company decided it was easier to change labels than to rebuild or change an entire mold. 

Still, while there are costs associated with the label magazine and the robotics required for automated placement of the labels, Precise's Veno says it's worth the investment. "You have to insert a label into the mold during the molding cycle, but overall, the technology reduces direct labor content and gives a more uniform product in faster cycles," he explains. 

Precise's 70,000-sq-ft CAP facility in Bridgeport contains nine high-speed Krauss-Maffei molding presses (seven 575-ton machines and two 300-ton machines) equipped with inmold labeling robotics. Each mold gets 100 gal/min of water to minimize the cycle time and help offset the additional cooling required by the IML process. 

IML Market Opportunities 
Opportunities for inmold labeling applications abound, but for the technology to take off in the U.S., a good balance of benefit vs. risk must be reached for both the molder and the end user—one that results in cost savings. 

For inmold labeling to be cost effective, manufacturers must do long runs of the same container, says Ron Schultz, a pioneer in the labeling and adhesives industry. It usually takes 12 to 14 weeks to make the transition from pressure-sensitive labels to inmold labeling—generally the amount of time it takes to make the mold. Also, adds Schultz, "You need accurate advanced planning so you don't have a lot of extra, obsolete [prelabeled] inventory." 

Inventory depends on the size of the orders generated, which depends on the product. "If you only have a few SKUs [bar codes that differentiate products] but millions of the same bottle, as in laundry detergent, then inventory isn't such an issue," Schultz explains. "But in the hair care market, for example, you might have more product differentiation for a particular customer niche, resulting in a lot of SKUs. This makes inventory planning critical to cost effectiveness." 

Veno sees many advantages to using inmold labeling for injection molded containers and would like more molders to convert labeling applications to inmold, which would in turn nurture more label makers in the U.S. "We'd like to invite more molders to get into this," says Veno. "We'd love to have a label source in the U.S." 

Editor's note: The 10th Annual International Inmold Labeling Conference was held in Scottsdale, AZ Sept. 24-26. Ray Veno of Precise Technology Inc. and Ron Schultz, founder of RBS Technologies, spoke at the conference.