Benchmarking and Worldwide Market Trends for Flexographic PrintingJuly 19, 2010
Since packaging is a key growth engine for the graphic communications industry, and flexography is a dominant process for many packaging applications, PRIMIR recently commissioned LPC Inc. to conduct research on the topic. The resulting outcome is a new report, “Benchmarking and Worldwide Market Trends for Flexographic Printing” which was released in May 2010. The study provides a comprehensive assessment of the global flexographic industry while answering how this analog print process fits into a world that is increasingly going digital and which world regions are likely to provide opportunities for future growth. The study investigates flexo in packaging as well as non-packaging applications.
According to the new PRIMIR study, packaging comprises nearly 92% of the global flexographic volume; the remaining volume is in non-package printing applications such as security printing, pharmaceutical products and commercially printed electronics. In the next several years flexo will enjoy a 4-5% growth rate—largely coming from growth in the developing regions, more specifically the BRIC countries.
LPC reports in the study that flexography accounts for nearly 60%, or just more than $260 billion, of the $440 billion printed packaging market. In 2009, flexo’s market share for packaging applications included: $125 billion for corrugated, $81 billion for flexible packaging, $56 billion for labels and tags, and $1.2 billion for folding carton.
Not surprisingly, North America and Western Europe featured the most flexo press installations. However, global growth opportunities lie in the emerging markets where flexo is not currently the dominant process. As urbanization occurs and incomes rise in these countries, consumers will increasingly purchase packaged foods at retail stores versus fresh foods from local outdoor markets. This trend will increase the demand for packaging, and in many cases, flexography. The adoption of flexo in these markets depends on numerous variables such as: training, consumable costs, and changing perceptions about the flexo process—mainly quality concerns.
One of the more exciting growth areas for flexography is printed electronics. While reportedly only accounting for $3 million in sales in 2008, the printed electronics market is forecast to grow to $89 billion by 2020. Even sharing this growth with the other print processes, there are tremendous opportunities for flexo in this area.
As part of the research, LPC surveyed more than 75 print buyers or specifiers to learn about their purchasing practices and any biases they have towards flexography. Not surprisingly, 63% of those respondents believe that flexography has limitations when it comes to their specific applications. Many of the limitations cited related to print quality issues, however some felt flexo lead times were longer, flexo printing plates were too costly, and there was concern around authentication of packaging using flexo versus other print processes. But, despite those concerns, more than 70% of those respondents also indicate that their company’s use of flexography will increase during the next five years, often replacing materials printed by another print process (see Figure 1).
It is also interesting to note that print buyers expect in the next five years they will be sourcing their flexo printed products from regions of the world separate from the one in which they are located. In fact, 70% anticipate sourcing these materials from Asia, while 60% will be sourcing from Latin America.
Getting back to the quality perceptions about flexography mentioned earlier, clearly those concerns are not an issue in the tag and label sector where an estimated 92% of label printers in North America use flexography on their production floor. In fact, the quality levels of flexo-printed graphics are the highest in the tag and label marketplace where the narrow to mid-web presses produce six to ten-color, 175 linescreen applications with sophisticated graphics targeted at discerning consumers. It should be noted though, that digital presses are making a tremendous impact on the flexographic label industry as flexo printers around the globe install digital press systems alongside their conventional flexo presses. Given this development, it should be no surprise that the study predicts that as digital press systems offer faster run speeds and enhanced processing options, digital printing will undoubtedly take market share from flexo in the tag and label sector.
Flexible packaging is another high quality, high growth area for this print process, whereas rotogravure is slowly declining. To quote the study, “In no other flexo sector does the converted product have to perform like in the flexible packaging marketplace. The package must decorate, convey, contain, preserve, protect and provide optimum functionality.” As a result, like the tag and label market, due to customer demand, the number of colors has increased for flexo printed flexible packaging, and line screen values are trending upwards with values of 133 lpi or higher. These quality improvements, along with decreasing run lengths and lower costs, give flexography the upper hand over rotogravure, which once was the dominant process for flexible packaging. On a global scale flexo dominates the flexible packaging sector with over 64% of the market share.
The report concludes “as flexo press, ink, plate and prepress technologies continue to raise quality and print-consistency standards; run size trends and total applied cost benefits continue to position flexo as a process that will increasingly capture gravure market share in every global region.”
The growth of flexography has implications for every NPES member, presenting both challenges and opportunities. Even if flexography isn’t the focus of your company’s products or services, flexo growth may cause downward pressures on your existing conventional products.
The study “Benchmarking and Worldwide Market Trends for Flexographic Printing” was circulated to all PRIMIR members and is available upon request to all NPES members as one of their many member benefits. Want to know more? For a quick overview, reference the Executive Synopsis of the study posted online at: www.npes.org.