At the end of a calendar year, just before Christmas, it is always a natural moment to reflect on past achievements, the takeaways from the previous 12 months, and the outlook for the coming cycle. This year, Easter offers a timely moment for the same exercise. Not only because it coincides with the beginning of Q2, with some businesses closing their financial year at the end of Q1, but also because an eventful first quarter (and in particular the turbulence caused by geopolitical interventions in Latin America, Northern Europe, and most recently the Middle East) compels us to reassess the outlook.
I have just received the Q1 edition of Labels & Labeling, featuring a summary of global label industry predictions for 2026 from nearly 80 business leaders, most of them European suppliers to the label industry. These views were collected around the turn of the year. When we compare this collective industry perspective with the findings from the most recent FINAT RADAR Converter Survey (Q2 2025) and the FINAT RADAR Brand Owner Survey (Q4 2025), we get a consolidated view of the priorities and expectations of around 200 actors across the label and packaging value chain.
Based on that comparison, we identified the following top 10 industry drivers for 2026.
- Sustainability moves from strategy to compliance
Regulations such as PPWR, EPR and recycling targets are forcing the practical implementation of circular packaging solutions, including wash-off labels, mono-material designs, linerless formats and recyclable constructions. - Labels become enablers of circular packaging
Labels are no longer merely decorative; they are increasingly expected to support recycling, sorting, carbon reduction and circular material flows. - Operational efficiency becomes the core competitive metric
With persistent margin pressure and labour shortages, converters are focusing on automation, uptime, waste reduction and productivity per operator. Investment decisions increasingly depend on measurable ROI. - Automation and AI move into the production core
AI-driven workflows, predictive maintenance, vision systems and automated order processing are transforming production and enabling more stable operations. - Digital and hybrid printing become the standard production model
Hybrid flexo-digital production architectures continue to expand, allowing converters to manage shorter runs, SKU proliferation, faster design cycles and late-stage customization. - SKU proliferation and faster time-to-market
Brand owners are demanding shorter production runs, more frequent artwork changes, faster lead times and greater flexibility. This structural shift strongly supports digital printing and agile workflows. - Smart labels and connected packaging expand
RFID, QR, NFC and serialization technologies continue to gain ground, driven by traceability, anti-counterfeiting, supply chain transparency and consumer engagement. - Supply chain resilience and regionalization
Geopolitical instability and raw material volatility are pushing companies toward regional sourcing, local technical support and stronger supplier partnerships. Resilience is becoming a purchasing criterion in its own right. - Data transparency and compliance reporting
Digital product passports, carbon reporting and traceability requirements are forcing companies to build more integrated data infrastructures across the packaging value chain. - Convergence of label and packaging technologies
Converters are increasingly diversifying into flexible packaging, mid-web printing, inline folding carton production and integrated decoration solutions. Production platforms are evolving to support multiple packaging formats.
Taken together, these drivers describe an industry entering 2026 in a state of disciplined transformation. Growth was expected to remain moderate, while complexity continued to rise. Competitiveness was increasingly seen to depend on combining sustainability, digitalisation and operational excellence. In other words, the likely winners were those able to simplify complexity while delivering measurable value across the packaging value chain.
Stress testing the baseline scenario
However, the developments of recent weeks require an important next step. The question is no longer only which structural drivers will shape the industry in 2026, but also how resilient those drivers will prove under renewed geopolitical stress.
The rapidly evolving global situation is already putting upward pressure on raw material prices, which will ultimately feed through the value chain. In addition to tariff-related distortions of trade flows, there is growing uncertainty about the physical availability of critical raw materials that pass through or originate in areas affected by conflict. As a result, the ten drivers above should not be seen as a static forecast, but as a baseline that now needs to be stress-tested against a more volatile external environment.
To do that, two key uncertainties stand out:
- How severe and long-lasting will the geopolitical disruptions be?
- How quickly can the supply chain adapt operationally?
When these two uncertainties are combined, four plausible short- to medium-term business scenarios emerge for the label and packaging industry.
I. Managed turbulence
In this scenario, raw material prices remain elevated, and lead times stay volatile, but major disruption is largely avoided. The market remains difficult, yet manageable. Cost increases are gradually passed through the value chain, customers become more accepting of price adjustments, and converters adapt through tighter planning, selective inventory building, dual sourcing and stricter operational control. Sustainability and compliance continue to advance, but in a more pragmatic and cost-conscious way. In this environment, operational efficiency becomes even more critical, not just as a differentiator, but as the baseline condition for maintaining margins and service levels.
II. Regional resilience race
Here, geopolitical instability proves more persistent and begins to reshape purchasing and supply chain strategies more fundamentally. Companies place greater emphasis on regional sourcing, local technical support and stronger supplier partnerships in order to reduce exposure to global disruptions. Resilience becomes a strategic purchasing criterion alongside price and quality. This scenario also accelerates investment in traceability, compliance reporting and connected packaging solutions, as companies seek greater visibility and control across the supply chain. The industry becomes less globally optimized and more regionally anchored, with European networks and partnerships gaining strategic importance.
III. Cost squeeze and shake-out
In this more severe scenario, sustained raw material inflation, tariff distortions and physical supply interruptions combine into prolonged margin pressure across the industry. Converters with limited scale, weak balance sheets or a narrow customer base come under particular strain. Investment is postponed, innovation slows, and consolidation accelerates as stronger players acquire or outlast weaker competitors. Compliance obligations do not disappear, but are increasingly experienced as an additional burden rather than a source of competitive advantage. In this environment, operational excellence is no longer simply a growth lever, it becomes a condition for survival.
IV. Automation leap
In this scenario, the pressure created by cost inflation, labour shortages and geopolitical volatility triggers a much faster shift toward automation, AI-enabled workflows and hybrid production models. Rather than responding defensively, leading converters use the turbulence as a catalyst to redesign operations around productivity, flexibility and measurable ROI. Vision systems, predictive maintenance, automated order processing and integrated data infrastructures move further into the operational core. As a result, companies are better able to manage shorter runs, SKU proliferation, faster artwork changes and increasing compliance demands. This scenario creates a sharper divide between businesses that invest decisively in digital capability and those that remain trapped in labour-intensive, lower-margin operating models.
In practice, the most likely future will not consist of one pure scenario, but of a combination of several. That is precisely why the strategic challenge for converters and suppliers is not to predict one future with certainty, but to prepare for several, and to build the resilience, flexibility and data-driven capabilities needed to perform across all of them.