FLAG explores growth of AI in labels and packaging

JC McKay, president of Flexo Label Advantage Group (FLAG), reprised his popular keynote session from the 2026 Annual Meeting in San Diego, CA, USA. Discussing the growth of AI, McKay presented the full AI keynote on May 19 while also providing updates and real-world use cases to help members grow their businesses.

Due to the topic’s importance, McKay brought back the session – with new information. The event also benefited those who were unable to attend the Annual Meeting.

According to McKay, he wants members to recognize their Blockbuster moment. In 2000, Blockbuster was worth $6 billion and turned down an opportunity to acquire Netflix for $50 million. “They were crushing it in the movie rental business and they didn’t think Netflix was going to be anything at the time,” said McKay. “Year after year, stores kept closing down because they decided the old way was the way. This was how they’d always done it. They made a $300 billion decision that day, and that decision put them out of business.”

That moment is now with AI. Currently, 77% of manufacturers have already implemented AI in some form, and data shows they’re 3x more likely to improve their KPIs with AI. Plus, 72% of manufacturers report reduced costs and improved operational efficiencies. Additionally, manufacturers are experiencing 4.8x faster labor productivity growth if they have embraced AI.

Three Levels of AI

McKay succinctly delivered the three levels of AI impacting the marketplace: chat, automation, and agent. Chat serves as the most basic question-and-answer function.

“If all you’re using AI for is chat, you’re leaving 90% of the value on the table,” noted McKay.

Most people get stuck in level one. However, the second level – automation – involves analyzing workflows and working with semi-automated processes using AI. Here, the goal is to reduce touchpoints, generate faster responses, and leave less room for error.

Finally, the third – and most advanced – level involves agents. AI agents can act as employees, where they are given a goal and they can figure out the rest.

It’s important to note, there are countless AI services on the market today. “With AI, there are 10,000 tools all claiming to be the one you need to solve the problem in your business,” explained McKay. “The question becomes – with so many tools – which platform should you use? There happens to be a platform for everything you can think of, from voice dictation to video creation.”

Platforms to use

McKay detailed the various AI platforms available on the market today. They all provide their own pros and cons. For example, ChatGPT is best suited for reasoning, strategy, and complex problem solving, while Claude specializes in human tone, nuance, and long form writing. Meanwhile, Perplexity deals with real-time facts, sourcing, and market intelligence.

As McKay noted, though, “The output is only as good as the direction.”

During the Lunch and Learn event, McKay also delivered some real-world use cases for these platforms. McKay provided a sales example for Claude and onboarding queries for ChatGPT.

AI can also provide internal growth strategy planning. “AI can support internal growth strategy planning, helping leadership evaluate market direction, identify new opportunities, and pressure-test decisions in seconds,” remarked McKay.

While AI can be beneficial, there will still be room for the human touch. “Every human being is hard wired for connection with others,” adds McKay. “AI can write your emails, build your workflows, and analyze data at 3am while you sleep – but it cannot sit across the table from another human being and build genuine connection. It cannot replace over a decade of trust. It cannot replace what my Dad started 17 years ago and what this community has become.”

LabelConverter.ai

In addition to his role at FLAG, McKay has established LabelConverter.ai. As McKay notes, most label converting shops run on skilled people performing repetitive work. LabelConverter.ai identifies where that work can run itself – and builds the systems to make it happen.

Currently, LabelConverter.ai now features a live quoting agent. The agent reads incoming quotes, extracts specs, validates them, and delivers MIS-ready output.

“It’s live and ready to implement,” stated McKay. “This live quoting agent is built and running, and converters are onboarding to it now.”

Another key feature of LabelConverter.ai is the AI Readiness Assessment. “Anyone can go to LabelConverter.ai and answer 10 questions and get a free score across five key areas of their business,” added McKay.