Coding and Marking Market

Market Overview

The global coding and marking market size was valued at USD 6.12 billion in 2022. It is estimated to reach USD 11.03 billion by 2031, growing at a CAGR of 6.78% during the forecast period (2023–2031).

Coding and marking equipment are employed in printing product-specific details on the outer covering of a product. These details aim to provide end-users and manufacturers with authentic information about the product. Coding involves printing details such as manufacturing, expiration dates, and package lot sizes. Manufacturers can reduce the risk of counterfeiting and safeguard the brand's reputation among end-users by imprinting codes or other identifiers on their products.

Coding or markings are essential for authenticating products. It aids in informing the supply chain of a product's details and current location. It establishes the product's unique identity and increases its traceability. Government regulations now require printing crucial product information on every manufactured product across all industries. The performance of the whole supply chain and the quality control process has become incredibly dependent on the coding and marking of the products over the last few years.

Market Dynamics

Global Market Drivers

Rising Demand from Healthcare Industry

The pharmaceutical industry is one of the major end-users of packaged products and is growing at an annual rate of over 4.4% and is expected to reach USD 1.52 trillion by 2026. The major packaging products used are blister plastic films, aluminum foils, and pouches. The pharmaceutical industry is currently witnessing a huge demand for blister packaging as it enables anti-counterfeiting with barcodes.

In the year 2020, the market for blister packaging was assessed to have a value exceeding USD 15 billion. Its share in global pharmaceutical packaging was 15–18% in 2020. Since blister packs are child-resistant and senior-citizen friendly, they are currently the most preferred format for single-dosage drugs. They are incorporated with RFID so that they can be tracked easily. Since these are the most preferred format for single-dosage drugs, they are produced in smaller sizes and higher volumes, boosting the demand for packaging and coding. The demand for RFID technology has contributed to the growth of the coding and marking industry.

Growing Applications Across End-User Industries

Numerous industries use coding and marking technologies, including FMCG, electronic products, metals, food and beverages, rubber, textile, chemical and agrochemical, seeds, construction, healthcare, and pharmaceuticals. Increasing demand for packaged food, healthier packaged food, and urbanization are driving up the consumption of these products, which is driving up the need for coding and marking systems.

Additionally, the food and pharmaceutical sectors are subject to extensive regulation with respect to supply chain traceability. Coding and labeling products contribute to total traceability by using batch numbers, barcodes, and expiration dates to safeguard consumers and businesses. As coding technologies evolve with real-time reporting and analytics, consumers can access more transparent information regarding the origins of a product's components. The utilization of coding and marking technologies is prevalent in various end-user industries, resulting in a significant boost to market expansion.

Global Market Restraint

Counterfeit Products

A primary hurdle in the global coding and marking market is counterfeit products. The replication of the material, technology, or performance of the marking and coding equipment is frequently observed among other vendors. These products are then sold at a lower price than the original product. For instance, 9.7% of pharmaceutical products sold across the globe are counterfeit. Infiltration of the market with counterfeit products poses a challenge to existing vendors. Therefore, authentic vendors must patent their technology, which is tedious and expensive. Such factors restrict market growth.

Global Market Opportunities

Growing Demand for Laser Coding 

Laser coding is one of the recent developments in the global coding and marking market. This technology has witnessed a sharp upsurge in demand, largely due to its properties and feasibility across various end-user industry applications. A key reason for this growth in popularity is the ability of laser coding to remain permanent and of high quality than its peer coding and marking solutions.

In recent years, various vendors operating in the global coding and marking market have made significant advancements in the development of a diverse array of laser marking solutions. This is also attributable to the fact that laser coding and marking is one of the best methods to maintain packaging demands while adhering to regulatory standards. Since a packaged product must undergo a series of processes in a supply chain that tests its marking durability, it is relevant for the marking to remain substantially strong throughout the process. Laser marking has shown positive signs of staying permanent, creating opportunities for global market growth.

Regional Analysis

Based on region, the global coding and marking market is bifurcated into Asia-Pacific, North America, Western Europe, Middle East and Africa, Latin America, and Central and Eastern Europe.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global coding and marking market shareholder and is anticipated to exhibit a CAGR of 8.69% during the forecast period. The urbanization of developing countries in the Asia-Pacific region is expected to bolster the demand for food and beverage products and healthcare provisions, driving the demand for coding and marking equipment over the forecast period. While Japan and China are significant markets for coding and marking equipment, countries like India are estimated to witness high demand due to improved quality of life. The main tactics the end-users use to strengthen their positions are expansions and investments, acquisitions, agreements, and introducing new products.

The Asia-Pacific region is among the fastest-growing regions in the global coding and marking market. The implementation of measures aimed at the development of new standards has significantly contributed to the rapid growth of the regional market. This region is the most appealing market for producers of packaged foods due to higher domestic demand and the availability of cheap labor. In order to enhance their market share and profitability, the stakeholders prioritize their efforts in this domain. These factors will boost the coding and marking market in the forecast period.

North America is estimated to exhibit a CAGR of 7.97% over the forecast period. The demand for F&B, pharmaceutical, personal care, and industrial applications is expected to fuel the market growth over the next few years. The demand for coding and marking in North America is expected to rise continuously at a significant rate due to the growing end-user industries, healthy lifestyles, and the presence of regulatory bodies to ensure superior quality of food packaging. The abrupt beginning of the COVID-19 pandemic and the escalating number of cases in the area have led to a major increase in the demand for pharmaceutical drugs and medical devices. This, in turn, is propelling the market growth in the region severely hit by the COVID-19 pandemic, with rising demand for more medicines, testing kits, and high-quality packaging to contain the spread of the virus.

In Western European countries, the market is approaching a state of saturation, resulting in a growth rate or compound annual growth rate (CAGR) relatively lower than the global CAGR. Western Europe has a larger base of installed equipment than Eastern and Central Europe, which is still a developing region. The legislation imposed by government bodies is driving the growth of this region's coding and marking market. The Falsified Medicines Directive mandates that all drugs manufactured in the region have a unique authentication code for identification. This would require investments by pharmaceutical companies in coding and marking devices, which is the major source of revenue for the respective markets.

In Latin America, the growth rate of the coding and marking market is comparatively lower than that observed in other regions. This disparity can primarily be ascribed to the augmented logistical expenses of importing raw materials to these areas. The limited accessibility of raw materials in Latin America relative to other geographical areas necessitates their importation, resulting in elevated manufacturing expenses for vendors operating within this region. However, the middle-class population in Latin America grew by 50% in the past decade, and now, the middle-class population accounts for 30% of the total population.

In addition, the consumption and spending on packaging have escalated due to the higher consumption of consumer products during the COVID-19 pandemic. The regional economy has experienced positive growth due to these factors, leading to positive traction in various industries. This helps increase people's per capita disposable income and contributes to the market's growth in the region.

Central and Eastern Europe countries are witnessing increased demand for coding and marking services. However, the major reason for this rapid growth is the low base figures of the market. Countries such as Russia, Poland, and Bulgaria are the major revenue contributors to the market. The major reasons for the rising demand for coding and marking solutions are the thriving food and beverages and retail industries, the high demand for packaged foods, and the growing healthcare industry. In addition, the food and beverage processing sector is the most significant manufacturing sector in Eastern and Central Europe. The region accounts for over 4% of the global packaging market. Eastern and Central European countries are also witnessing rapid industrial development and are among the favorite investment destinations for many companies. These factors will help fuel the coding and marking market growth during the forecast period.

Segmental Analysis

The global coding and marking market is segmented by end-user, technology, and product mix.

Based on end-user, the global market is divided into F&B, healthcare, electrical and electronics, chemicals and construction, automotive and aerospace, and others. 

The F&B segment is the largest contributor to the market and is expected to grow at a CAGR of 7.60% during the forecast period. The F&B segment or industry refers to all those companies mainly processing raw materials, packaging processed food or drinks, and distributing them. Coding and marking play a vital role in the F&B industry worldwide. With the holistic growth of the global sector, the demand for appropriate coding and marking solutions becomes imminent. In recent years, the expansion of this market sector has been further fueled by the introduction of new potential markets across geographies and the proliferation of stock-keeping units (SKUs). This rise is further backed by increased consumer spending across the industry.

In the healthcare industry, the application of coding and marking technologies is gaining traction in the global market. Government regulations and norms are mandating drug-specific information on pharmacy products worldwide. For instance, in November 2013, the US government passed the DQSA, a traceability initiative to develop a national pharmaceutical serialization and track and trace regulation. This act mandated serialized coding on pharmaceutical packaging, both primary and secondary, from 2017 onwards. This is expected to create a high demand for coding and marking solutions in the healthcare industry in the US during the forecast period.

Based on technology, the global market is bifurcated into CIJ technology, laser technology, palm technology, TTO technology, PIJ technology, VIJ technology, and TIJ technology. 

The CIJ technology segment dominates the global market and is projected to exhibit a CAGR of 7.71% over the forecast period. CIJ (continuous inkjet) is the most commonly used coding and marking technique. This is mainly because the installation procedure is user-friendly. One of the primary benefits of this technology is its ability to achieve rapid printing speeds and its characteristic of quick drying. The technology exhibits a high degree of versatility, facilitating the process of printing on a wide range of surfaces. It is easy to install and has become a standard solution in many coding applications.

PIJ technology is a sub-variant of secondary/tertiary package coding applications. This technology is gaining acceptance among commercial and industrial end-users. The print heads used in piezo printers are more expensive due to piezoelectric materials, including lead zirconium titanate. In addition, PIJ technology offers high-speed printing, long service life, and relatively low end-user operating costs. PIJ technology marks codes on the products in the production line. For instance, the "use before" date is often applied to products and packages using this technique. Advancements in other technologies make it essential for PIJ to compete effectively to retain its market share during the forecast period.

Based on product mix, the global market is segmented into consumables, equipment, and spare parts and aftermarket. 

The consumables segment owns the highest coding and marking market share and is estimated to exhibit a CAGR of 9.37% during the forecast period. The consumables segment is further sub-segmented into ribbons, fluids, print heads, and filters. The global market for consumables in coding and marking experienced growth despite the COVID-19 pandemic, primarily driven by the high demand for inks and other consumables in the food, beverage, and healthcare industries.

Recent Developments

• July 2023- Videojet Technologies, a world leader in coding, marking, and printing solutions, added the Videojet 3350 and Videojet 3350 Smart Focus 30-watt CO2 laser marking systems to its successful line of CO2 lasers in response to manufacturers' demand for high-performance laser marking solutions.
• May 2023- Markem-Imaje, a subsidiary of Dover (NYSE: DOV) and an international supplier of end-to-end supply chain solutions and industrial marking and coding systems, today revealed the launch of the 9750 E continuous inkjet (CIJ) printer range, introducing industry-first innovations for the extrusion industry.