The label manufacturing industry has displayed its resilience over the past five years. A global pandemic, supply chain shortages, international conflict, and trade wars are just a few of the headwinds impacting the space. Meanwhile, brands are still more discerning and demanding as ever, meaning performance – both in terms of quality, speed, and sustainability – must be a constant.

“The state of the label market continues to be strong and resilient,” states Paul Teachout, marketing and technical content specialist, Harper Corporation of America. “We are still trending for positive CAGR for the foreseeable future. Current market uncertainty continues to be on everyone’s mind, but growth will continue although with a little pain.”

There are a host of trends impacting the label and package printing industry, and a wide range of industry experts share their views in the pages that follow.

The Shifting Landscape in Label M&A

By Jonathan White, managing director, and Stuart Sanford, director, Mazzone & Associates LLC

It is no surprise to market observers that financial sponsor-backed rollups have long driven M&A in the label market space, notes Mazzone & Associates. Mazzone & Associates is a middle market investment bank and mergers and acquisitions advisory firm, with offices in Atlanta and Chicago. It provides comprehensive transaction services for middle market companies, private equity groups, and executives buying and selling companies, raising capital, and structuring debt. 

During the 2020-2023 period, sponsors accounted for 75% of transactions in labels, with new platforms peaking in 2021 and add-ons peaking in 2022. The top nine platforms alone accounted for well over half (57%) of all transaction volume. Consequently, overall market transaction volume peaked in this period with pricing to match. As these rollups were still trading at double-digit multiples of EBITDA themselves, the market supported these above-average values and volumes across the label transaction market.

These acquirers stepped back from the market in 2023 and 2024, decreasing their overall and proportional participation. In 2024, new platform volumes were off -81% from their 2021 peak; add-ons to existing rollup platforms were down -41% from their 2022 peak. Those same top nine platforms from 2020-2023 represented only 27% of activity in 2024. Year-to-date activity in 2025 appears to be a continuation of trends noted in 2024.

Pricing followed these volume trends, with the average multiple of 9.25x for 2020-2021 decreasing by two turns of EBITDA to an average of 7.2x for 2022-2024. The disparity is heightened when considering the premium paid for larger buyout transactions versus smaller transactions, the latter of which constitutes the bulk of add-ons and private transactions in the label industry. While multiples among larger transactions generally held to the 2020-21 pricing, the discount to smaller transactions increased to over 2x during this period.

So, what happened? Coming out of the pandemic year of 2020, rollup acquirers were eager to put capital to work – and they did, acquiring market share at prices well above long-term averages. Privately held independent label converters, as add-ons to these rollups, benefited from this exuberant market. So long as the rollups themselves performed and traded at higher multiples than the add-ons they acquired, the math worked. 

The cumulative effects of the supply chain squeeze, the “great destocking,” and finally interest rate increases changed the math. Growth and operational headwinds made investor returns more difficult to deliver, and with leveraged balance sheets, the rollups were particularly challenged. Given these results and challenging overall M&A conditions, they could not command an attractive valuation from another sponsor. Their lenders were also reticent to provide additional leverage for more add-ons. As a result, they reduced pricing for add-ons and turned their focus internally to integration and consolidation. That is not a bad thing – the rollup companies will be better for this focus in the years to come.

As of May 2025, we counted an astonishing 58 financial sponsors that were invested in the global label market. There are a few points that forecast future market activity. Of these 58, half entered since 2020 (either as new buyouts or secondary buyouts from one sponsor to the next), and 16 of these 29 were launched in 2021. Of those that entered since 2020, 10 are yet to do an add-on – the remaining 48 qualify as “Active Rollups” – at least one add-on since 2020. Of the 48 Active Rollups, 29 are over five years old; and sponsor platforms average over three add-ons during the course of ownership.  

So, what’s next? We see two probable outcomes from this shifting landscape. First, consider that the target investment period for a financial sponsor is three to five years. This means that the vintage of many label rollups is reaching or is already beyond the typical holding period. These rollup platforms need to trade to provide a liquidity event for their investors. If, as many believe, interest rates decrease later this year, we anticipate that several of these legacy platforms will trade (likely to new sponsor-investors). This could begin as soon as the end of this year, with more activity likely in 2026. 

Secondly, the principal strategy of financial sponsors in the label market is to gain economies of scale via consolidation. With 10 new platforms yet to do an add-on (when the average is over three) and the fresh capital of new rollup owners, we anticipate a new wave of M&A activity and consolidation within the marketplace. This should increase overall activity and return valuations closer to a long-run average. While perhaps not a return to the levels of activity and pricing witnessed in 2021, it could certainly be an increase from levels in 2024 and year-to-date 2025.

And tariffs? There is one caveat to the above: the impact of tariffs and trade friction. Our general view is that labels remain a largely “local market,” with relatively less direct impacts from international trade in either supply or product. The one exception to this general view (at least in the US) would be the added expense of adding production capacity. As the majority of press manufacturers are from outside the US, with tariffs the relative cost to increase capacity via M&A becomes relatively cheaper than to invest and import a tariff-burdened press. As most large rollups are still consolidating acquired capacity, we see this having limited positive volume impact in the near term. If tariffs extend into the future, however, the impact could provide a boost to the M&A market. 

That one exception aside, with ~80% of packaging destined for consumers’ homes, our larger concern is the potential for an overall weakening of the consumer economy. 

Following the post-Covid rebound, volume growth among consumer-packaged goods has been anemic (the above is global CPGs – a lack of growth is even more pronounced in developed economies). While much demand for consumer-packaged goods is comparatively “inelastic,” slow growth nevertheless impedes performance and margin among CPGs and their suppliers. This weakness in consumer volume growth has been reflected in label converters’ growth and margins since 2021. If a concerned consumer pulls back further, it would continue those headwinds in growth and performance for label converters. The knock-on effect would be a continued dampening of volume and pricing in the label M&A market, extending the hesitancy to transact M&A that has prevailed so far in 2025. 

State of the Industry

The label manufacturing industry is in a unique spot that can only be described as “cautious.” While numerous economists have projected industry growth, an uncertain economy – fueled by global unrest – have stalled those initial projections. 

“The label industry is steady but cautious,” states Jennifer Dochstader, founding partner, LPC, Inc. “Most converters are managing well due to a diverse customer base and a steady flow of replacement orders. The levels of intensity we saw during the pandemic and post-pandemic surge have settled into a more normalized rhythm. That said, uncertainty – around tariffs, consumer demand, and capital equipment investments – is creating an environment where a lot of converters are keeping overhead tight and delaying big purchasing decisions.”

“The overall state of the label industry is slow,” states Cindy White, president and CEO, Channeled Resources Group. “With economic uncertainty, there is less spending on discretionary items. Also, as fewer items arrive in the States from overseas, there is less need to put labels on items, whether logistics or shelf labels. I don’t see a massive slowdown – more like a 3% to 4% slowdown from the previous year.”

The volatility of proposed tariffs and legislation has made the economy far more tenuous. “The uncertainty causes cautionary buying and the inbound shipments, which have slowed to historic proportions, meaning there are less items to label and ship to stores and individuals impacting both prime and VIP labeling,” adds White.

“In our industry, we will see some increased costs in consumables and raw materials,” notes Harper’s Teachout. “What we don’t want to see happen is a return to the ‘Covid’ mindset of stockpiling and then destocking that throws the supply chain in a tussle. These tariffs are meant to drive onshoring or reshoring of US manufacturing. ITR Economics reports that the US has had five years of continuous GDP growth, with domestic investments exceeding $4 trillion. This trend was well established before the tariff wars began. 

“The US is and will continue to be the best bet in the global manufacturing space, either in onshoring or reshoring manufacturing,” Teachout continues. “The tariff concern will stabilize and offer some long-term results, but we should continue to focus on competitive advantages and profitability and not give into fear of uncertainty. There is still no better place to be than right here in the good ol’ USA.”

In the short term, however, the supply chain is at risk. As numerous economists have noted, uncertainty is the enemy of the economy. “That unpredictability is creating pockets of paralysis in the supply chain, especially among small to mid-sized brands that import components or finished goods and rely on US converters for their labeling and printed packaging,” says Dochstader.  “We’re seeing brands delay product launches or cut back SKUs due to landed cost increases, and that directly impacts label order volumes. The damage isn’t always visible at first, but it builds over time, particularly in sectors like personal care, wellness, pet food/care, and electronics.”

From the supplier standpoint, Harper anticipates M&A continuing to have an impact on the label industry. While this activity has slowed down in recent years, it is still poised to be a driving force in our industry for years to come. Much of that interest can be attributed to the way the label industry performs in times of uncertainty.

“We continue to live in the age of consolidation,” remarks Teachout. “Over the past 20 years, the M&A activity has changed the landscape of the label industry. Because of our resilience, we are a prime target for PE activity. Our consistent growth rate and stability make us very attractive. This evolution has really affected the mid-size operations in the $10-35 million size range. Operations that have shown positive growth, continued investment, and millennial staffing are prime targets. These consolidations have allowed these larger converter groups to capture market share and strengthen geographical presence in common assets and resources. 

“M&A activity also creates economies of scale, which makes it very difficult for independent operations to compete,” adds Teachout. “So, to answer the question of how acquisitions have affected the health of our industry, I guess it depends on which side of the fence you’re on, but in general, our industry’s health continues to thrive.”

There is a positive aspect to M&A activity, too. “I love M&A,” exclaims CRG’s White. “My favorite part is seeing people who have worked at companies that have been purchased go out and start their businesses. It feels like every week I hear of a new label converter starting up. It’s an entrepreneurial business, and there are lots of us out there making a go at it.”

Technological Boom

Technology has evolved at a rapid pace, with automation and AI impacting a wide range of businesses. Plus, sustainability has been prioritized more than it ever has been, especially as consumers demand more environmentally-friendly products from their brands.

With labor in heightened demand and customers more discerning than ever, automation will continue to ramp up in the manufacturing sector. It’s not just about presses, either, as LPC’s Dochstader notes. “It’s about automation at every step: prepress, job batching, inspection, and finishing,” she remarks. “Converters that are investing in automation and integrated processes are gaining more operational efficiency and consistency. Companies that still rely on manual setups or disconnected systems may be feeling more pressure in today’s tighter-margin environment, especially as customers expect faster turnarounds and more flexibility. It’s less about pulling ahead and more about finding ways to stay competitive as the demands of the market continue to evolve.”

In many cases, automation is required as a response to significant workforce challenges. The talent pool and labor force continues to be a diminishing resource. Meanwhile, The Manufacturers Institute estimates that the US is set to add 3.8 million new manufacturing jobs by 2033. According to Teachout, our industry is currently trending to fill less than half of those jobs. 

“As we continue to evolve into the age of AI, autonomation, digitalization, and robotics, let’s say Industry 5.0, we still do not have enough resources to overcome the challenge of the current labor pool,” explains Teachout. “We must employ strategies that align with workforce expectations. We must stop fighting recruitment and start focusing on retention. Simply put, take care of your ‘A players’ or someone else will. Offering flexible work arrangements, a pathway to advancement, and keeping your employees engaged is the key. Invest in upskilling as you continue to invest in new innovations. I feel you will find the cost of constant recruiting and training far exceeds the cost of taking care of your A players that set the culture of winning. Workforce expectations have changed, and so must we.”

There are other challenges, as well. Although sustainability has emerged as one of the label industry’s hottest trends, the financial ramifications of “going green” could put environmental initiatives in a holding pattern. According to Dochstader, the suppliers that can offer sustainability at a comparable price point will find the most success.

“Converters that can offer sustainable solutions that don’t increase cost or complexity will still find strong interest, particularly in sectors like personal care, food, and wellness, where consumer expectations remain high,” she says. “Converters who can strike that balance – practical, cost-conscious sustainability – will be able to differentiate themselves in a crowded market.”

Additionally, current market conditions could have a direct impact on the viability of labels in general. “I continue to watch new technologies like printing directly on packaging (bottles, boxes, etc),” says CRG’s White. “PSA is a beautiful way to identify and market products, but not every item needs it – and I think as costs keep going up, we will see some markets shift away from PSA to direct print. Not that I like that idea, but I think it is a valid threat.”

Even though sustainability could suffer among cost concerns, Teachout believes green philosophies have been baked into the culture and products at many companies – meaning this will still be a priority for suppliers, converters, and brands alike.

“Sustainability has become more of a requirement than a request by brand owners,” remarks Teachout. “They want new ideas and solutions that appeal to the consumer that also meet regulatory requirements. We have all learned over the years what it takes to provide sustainable solutions. The challenge continues to be the cost to go green and the regulatory overreach by policymakers who do not understand our industry. We need to have a plan set forth with obtainable goals to meet these requirements. Sustainability is now a strategic business approach rather than a trend.”

Even though sustainability has become ingrained in our industry, we still have a lot of room to grow. “I am aghast that the industry is years behind on doing the right thing for recycling and building more sustainable substrates,” says CRG’s Cindy White. “We are a wealthy, wasteful society – but some day it is going to haunt us. Tissue, toweling, and chipboard can all use silicone release liner. Everyone should be utilizing recyclers to send their by-product to those types of mills. And everyone should be forcing suppliers to help.”

In the Future

Given the uncertain state of the economy and global trade scenarios, the economy is increasingly hard to predict. In the short term, numerous substrate and ink suppliers have already initiated surcharges to offset rising raw material and freight costs.

However, Harper’s Teachout associates the short-term future with the future. Change will be required for continued success, as well. “If you are not changing production models today, you are already behind,” says Teachout. “The faster things move the faster things move. Our industry continues to grow, our human and intelligent resources continue to convert, the digitalization of everything we do is here. If you are waiting to see what happens or how things turn out, you are already too late. Even with the current geoeconomic and geopolitical uncertainty, the time to invest is still now. Our industry will continue to grow and evolve, and those who continue to invest in the innovations of today will lead the way, others will quickly be left behind.”

“For the rest of 2025, I think we’ll see continued caution across the supply chain,” states LPC’s Dochstader. “Brands and printed packaging buyers might continue to delay product launches, consolidate SKUs, and place smaller, more conservative orders. That restraint ripples through the supply chain and some converters report that they are seeing softening volumes in certain segments.

“Longer term, projected demand for printed packaging remains strong, but expectations are shifting,” adds Dochstader. “There will be continued investment in automation to achieve leaner, more connected workflows, with a growing need for agility and cost efficiency. Converters that position themselves as highly collaborative, resourceful partners will be best equipped to navigate whatever comes next.”

TLMI printTHINK Summit examines tariffs, legislation

Through TLMI’s dedicated committees, the association has long served as a hub for knowledge and networking in the label and package printing industry. TLMI’s Sustainability and Regulatory Affairs (RAC) Committees have been instrumental in preparing members for upcoming changes that will impact their businesses.

TLMI has often advocated for its members. This includes policy shifts and equipping companies to stay resilient and informed, noted Linnea Keen, president and CEO, TLMI. The return of printTHINK Summit, which kicked off on June 11, 2025, welcomed members seeking more information on legislation and tariffs.

Inland’s Mark Glendenning and Pace LLC’s Bryan Vickers hosted the opening session, entitled, “Coffee & Clarity: TLMI’s Vision, Tariffs & Legislative Outlook.” Here, these experts delved into legislative developments occurring on Capitol Hill.

“We’re excited, happy, and proud to be in the label industry because it’s a wonderful industry, and it’s changed so much,” stated Glendenning. “Having Bryan (Vickers) here with us and the power of RAC behind our industry is critically important. This is especially true since we’re made up of so many family businesses. We’re focused on everything from tax issues and sustainability to other regulations affecting our customers and the products we produce. That’s why there’s huge power being part of this organization.

“We have such a great strategic plan,” added Glendenning. “I want to make sure I’m here to help foster that collaboration of where TLMI has been and where we’re going. We’re really excited about the future, and we want to create value deep into companies.”

Position on Tariffs

TLMI released a statement on tariffs in 2019. “We didn’t want to be anti-tariff or pro-tariff,” explained Vickers. “We looked at in 2019 as an opportunity to engage. This is about fairness and due process. While the politics of tariffs have changed a bit, from a business perspective you have to understand why a tariff is being used. The landscape is a lot different now, especially with respect to tariffs.

“There is a hesitancy to push back against them,” continued Vickers. “We have been hopeful to see a tariff exclusion process, but that’s not been made available and that’s probably not forthcoming. We’re going with the direction the administration goes, whether that’s with China, EU, or the United Kingdom. There will be deadlines approaching at the end of June, and hopefully they will be extended because we’re not closer to a deal. A 10% tariff on the EU is not small if you’re bringing in an expensive piece of equipment from that region. We’ve seen aluminum and steel tariffs double, and that’s across all countries, including Canada and Mexico. More certainty would be better because uncertainty is what we have for the most part now.”

Despite a 145% tariff for the majority of April, Chinese exports increased by 36%. However, this figure includes orders likely placed in March. The order is not assessed until it reaches the ports and customers. Meanwhile, the May data will tell the industry more on the impact of tariffs.

The Freedom to Invest in Tomorrow’s Workforce Act, part of the recently approved “One Big Beautiful Bill,” is great news for TLMI members. The TLMI Workforce Committee has spent considerable time looking into ways to expand the workforce. “Being able to use a traditional 529 fund will help, and it doesn’t cost anything,” said Vickers.

Sustainability

From a sustainability standpoint, 12 states have introduced legislation on EPR for packaging in 2025. Meanwhile seven EPR for Packaging bills have passed in the US. New York and New Jersey are still considering EPR legislation, however, it is less likely to pass this session.

Vickers also detailed Prop 65 – California’s Consumer Notification Program. According to Vickers, long-awaited changes in the Prop 65 Consumer warning notices were approved and took effect in May. Businesses will have three years (January 1, 2028) to comply with the new short-form and other requirements. Products manufactured and labeled prior to that date will not have to be relabeled, though. Prop 65 will largely be enforced through civil lawsuits, brought on by public enforcers or private individuals.

Suppliers of any covered chemical under Prop 65 should provide ample notice and information through their supply chain and document all information on warnings sent.

More details on the impact of sustainable legislation can be found on TLMI Community.

US tariffs could redirect manufacturing to Mexico

The United States–Mexico–Canada Agreement (USMCA), effective July 1, 2020, modernizes the North American Free Trade Agreement (NAFTA) by updating trade, labor, environmental, and digital commerce regulations. A key feature is that USMCA-compliant goods are exempt from US tariffs, including those that were set for April 2, 2025. Compliance hinges on a significant portion of a product’s value coming from North American sources. Thus, companies relocating production to North America and using regional inputs can avoid US import duties, with Mexico positioned to benefit strategically in the current trade environment, says GlobalData, a data and analytics company.

GlobalData’s recent report, “Industry Insights: The impact of tariffs on consumer packaged goods,” reveals which CPG-relevant sectors are most affected by tariffs within specific trade relationships and how companies within these sectors will be affected. It also provides insights into consumer reactions to changes in the market caused by the imposition of tariffs.

Rory Gopsill, senior consumer analyst at GlobalData, comments, “Products manufactured in the US, Mexico, and Canada using materials sourced from North America are generally more likely to meet USMCA regulations and, as a result, may qualify for tariff exemptions. However, the situation becomes more intricate when raw materials are obtained from outside North America, known as ‘non-originating’ materials. To qualify as USMCA-compliant, these non-originating materials must not contribute more than 40% of the product’s transaction value or more than 50% of the net cost of production, as outlined by the US Trade Representative. Therefore, it is essential for companies to ensure that a significant portion of a product’s value and cost is derived from materials and processes sourced within North America.”

The exemption of USMCA-compliant goods was confirmed by the US when a raft of tariffs was announced in April 2025. This is likely to have contributed to concerns about tariffs’ inflationary impact not increasing significantly among Mexican consumers and decreasing noticeably among Canadian consumers between Q1 and Q2 2025 (according to GlobalData’s Q1 and Q2 2025 surveys). This reflects the positives that the exemption of USMCA-compliant goods could yield for the Canadian and Mexican economies.

Compliance will require supply chain changes

This situation presents two strategic opportunities for consumer goods and packaging companies. The first opportunity involves reshoring manufacturing operations to North America, with Mexico positioned as the primary beneficiary of this trend. Among the three North American countries, Mexico offers the lowest labor costs, making it an attractive manufacturing hub. This is evidenced by Mexico surpassing China as the largest exporter of goods to the US in 2023, as reported by Legacy Supply Chain.

Additionally, foreign direct investment in Mexico saw a 5% increase in the first quarter of 2025 compared to the same period in 2024, with new investments contributing 7.4%, up from 3% in the previous year, according to Mexico Daily News. This indicates a growing trend of both new investments and the reinvestment of profits in Mexico, despite the presence of tariffs, suggesting that Mexican manufacturing remains a viable option.

The second opportunity involves reformulating and adjusting supply chains to maximize the use of materials sourced within North America. For instance, a paperboard manufacturer may consider transitioning from pulp sourced in Asia to Canadian wood pulp, thereby ensuring that the packaging component is sourced from Canada. 

This strategic shift enhances the likelihood of the packaged product being compliant with USMCA regulations, thus qualifying for tariff exemptions. Similarly, a food and beverage company could opt for Canadian wood-fiber lids or board for their cartons. By utilizing North American raw materials in this manner, consumer goods companies can improve their chances of adhering to rules of origin, thereby reducing import costs and simplifying supply chain compliance for their finished products.

Gopsill concludes, “Companies should observe that these strategic shifts would not necessarily deliver on the US aim of revitalizing its domestic manufacturing sector (since the USMCA could result in manufacturing being reshored to Mexico, not the US). This could result in the Trump Administration rethinking tariff exemptions for USMCA-compliant goods.

“The USMCA is scheduled for review and potential renegotiation in 2026, and edits currently under discussion include modifications to automotive industry rules of origin and restrictions on Chinese companies in North America. Consumer goods and packaging companies should monitor how these talks progress closely to minimize risk when adjusting North American supply chain.”