Global consumption of sleeve labels is forecast to grow at a calculated annual growth rate (CAGR) of 5.6% in the 2014-2019 period, according to a new market report by Smithers Pira.

Sleeve label consumption is projected to reach 6,425 million m₂ in 2014, with a value of approximately $4.4 billion. Sleeve labels are growing at a faster rate than the label market as a whole, and represent a projected 12.5% share of global label consumption by area in 2014.

The Future of Stretch and Shrink Sleeves to 2019 examines the global market and technology trends from 2008 to 2019, and presents forecasts for the five-year period to 2019. Market forecasts are presented by sleeve label format, materials, end use sectors and geographic markets. The report also examines the sleeve label industry supply chain and key market drivers and trends.

Sleeve labeling has been used predominantly for food and beverage product packaging. Combined, these areas account for a projected volume share of 85.3% in 2014. Gains have also been made in other non-food and beverage markets during the review period. Sleeve labels are now used for cosmetics and toiletries, health and pharmaceuticals, household care products and many other markets.

According to the study, sleeve label demand is largely driven by its advantages in terms of marketing, brand identity and visual on-shelf appeal for customers. Growing demand for plastic bottles and light-weighting of both plastic and glass bottles is also a positive influence on demand. New technology developments in films and manufacturing processes are improving the quality and definition of sleeve labels on a continual basis. Other market drivers for sleeve labels include economic influences, consumer demand for convenience products and retail trends.

According to the report, Western Europe is the largest regional market for sleeve labels, accounting for a projected share of close to one-third of global consumption in 2014, followed by Asia Pacific and South America. The South and Central American market is forecast to grow at the fastest rate in the next five years.

As the major sleeve label markets are maturing in developed countries and competition from lower-cost labeling alternatives is intensifying, the market is not expected to increase in value as quickly as it did during the early to middle part of the last decade.

The Future of Stretch and Shrink Sleeves to 2019 also reports that there is mounting concern from recyclers and brand owners that some sleeve label materials are incompatible with existing PET bottle recycling processes.