A Field Report: Leaders Discuss Conditions in Key Vertical Commercial Printing Industry Markets
Printing Impressions recently made available its annual “Top 25 Hot Markets for Printing in 2023.” That guide, researched and written by Vincent Mallardi, provided a statistical framing of market moves in the printing industry. This article instead provides an anecdotal approach, checking in with companies focused on key printing markets within the commercial printing sector. In it, industry professionals provide insight into market changes, barriers to success, technology strategies, automation, and more. It serves as a clue to how companies serving these vertical markets are managing today and anticipating tomorrow.
Market: Direct Mail
Company: Data-Mail, Newington, Connecticut
Person: Bruce Mandell, owner and CEO
Starting with the widely-observed fact that 2022 was a banner year for direct mail, Bruce Mandell says 2023 has shown “a bit of a drop-off … 10-20% on revenue.” Interest rate increases, he says, are one key reason. “Direct mail is driven by the financial industry. Programs went on hold or there were decreases in quantities. We’re starting to see a rebound as the financial sector figures out its needs.”
Among barriers to success moving forward, Mandell is resolute: “Postal rate increases are foremost. Not just the dollars, but people talking about them. It creates a poor environment, and we need stability.” Postal increases have been a burden for the direct mail space. “Imagine where [the market] would go if the USPS gave some relief to its paying customers?”
Equipment upgrades and acquisitions factor into Data-Mail’s path forward. Mandell says his company invested $30 million in new equipment in the past two-and-a-half years: “More digital printing, higher speed inserters, sorters, and folders ... the ability to do things faster and be more cost-effective.” Mandell adds that during COVID, the company took time to think about where improvements were needed: “That was a benefit.” He believes this effort made the company more competitive in what he calls a “hyper-competitive space. You will see a strata built among companies. Fewer companies competing for a larger share.”
Regarding the amount of incoming jobs, Mandell says work at Data-Mail is increasing. He is seeing more programs being initiated and seeing more RFPs. The student loan forgiveness issue has also brought the company a lot of activity.
For Data-Mail, the labor market has improved as well. He notes that there are more people in the job market, creating more potential candidates for job openings. Automation has also helped relieve the labor crunch.
Asked about supply shortages, Mandell says, “There is not a supply chain issue right now. Zero. And that includes paper.” While he says paper costs increased 70-80%, he is seeing some pricing improvement: “Nothing dramatic, but it’s there.”
Market: General Commercial
Company: Pioneer Press, Greeley, Colorado
Person: Cris SoRelle, CEO
Cris SoRelle says that, as he views the general commercial printing market, last year was “more of the same.” The general trend he has seen during the past five-10 years has been a change in what could be classified as average work: more jobs at shorter run lengths. “We’re seeing a lot of competition,” he notes. “It’s almost like there’s a race to the bottom.”
Asked if there is a current barrier to success in general commercial printing, SoRelle points out that as a family-owned company, they increasingly find themselves competing with “big, national print organizations that have facilities across the U.S. They’re our biggest competition now.” Although the company competes against digital printing specialists for some work, “Our relationship with them is good. We need to play in the sandbox with each other,” he points out.
Pioneer Press has adjusted its technology mix in recent years, between the addition of a new RMGT sheetfed offset press last year, and taking a higher number of jobs received digitally. According to SoRelle, year to date, the company has received roughly 2,000 jobs through its online portal — more than half of total jobs. It is important to note, however, that this work comprises only 8% of the company’s total production.
Pioneer Press has also sought to automate, particularly with the addition of a new slitter/cutter/creaser that utilizes barcodes to keep jobs moving. “It has relieved bindery time,” he says. Additional automation via software upgrades is currently underway.
Asked whether work volume is increasing or decreasing, “We’re as busy as we have been, but it’s different,” SoRelle says. For instance, while summers are generally slower, June was particularly busy. “It’s traditionally our slowest month,” he adds.
The company’s staffing level is good. “I’d say we’re fully staffed right now, but it’s an aging staff.” Regarding the supply chain, he says his suppliers have “gotten it back to normal,” except for the cost, which he says has “pretty much doubled between 2020 and 2023. We’re trying to pass that on to customers,” he explains, “but that’s tough.”
Company: Data Media Associates, Alpharetta, Georgia
Person: Cleve Shultz, CEO and president
About the current state of the healthcare-related printing market, Cleve Shultz notes business for Data Media Associates has returned to pre-COVID-19 levels, and that he has seen activity in the market as healthcare billing entities — his primary customers — are evaluating future moves. “Those types of changes were not happening during COVID,” he explains.
Asked about his company’s current barrier to success, Shultz begins by saying, “We’ve been super excited with what we’re seeing in 2023.” That said, he shares that there is “some angst” in the market regarding pricing and e-delivery of medical documents.
But there is time before the segment goes fully digital, he
predicts, adding that it is complicated for customers to commit to, and execute, full digital billing. “We can provide comfort that we can keep their work on time.” Regarding competition, Shultz says it remains about the same: “No new players and nobody leaving.”
Asked about technology moves and investments, he says Data Media Associates has invested significant resources in developing “digital-first” strategies for its clients. This includes, for instance, pushing out text messages in advance of printing — a strategy he says is doubling each quarter. These strategies can partially offset increased postal costs and fit with what medical customers
The company’s amount of work has been steadily increasing since January. He sees this increase partially as the result of pent-up demand for non-essential medical procedures and visits not done during the pandemic. Healthcare organizations, he shares, are finding additional ways to engage his company beyond simple payment. Examples include reminders and financial assistance information.
Data Media Associates is also making steps in production automation, Shultz says. Of particular focus is moving print spooling out of the process, thus keeping printers from having to stop during that process step. “We have a high expectation as to what that will bring to our plant.”
Staffing is in a good place as well. “There were challenges late last year. But, for us, that has leveled out,” he notes. The supply chain has also leveled out, he adds, though he would like to “see the prices come back down.”
Market: Transactional Printing
Company: InfoIMAGE, Coppell, Texas
Person: Christina Esparza, vice president of operations
“Customers are now starting to re-engage in projects that were held up at the beginning of the pandemic,” according to Christina Esparza. Because of that, InfoIMAGE is seeing organic business growth that was pent up over the past couple of years.
For Esparza, the company’s current barrier to success is the increased cost of paper and envelopes resulting from tightened supply chains and mill closures. This problem is in addition to other potential challenges related to sales-and-use taxes and postal rates. She says customers need to understand the cost of everything is up, both in their personal lives and in business.
Overall, however, work at the company is increasing — more internal projects from customers, new types of outreach. “There is more work across the board.”
Asked whether InfoIMAGE has changed its technology mix to better serve the transactional market, she says there are two factors at play leading the company to consider upgrading its equipment earlier than expected in order to accommodate faster turn times. The first is shorter rollouts for complex projects. “What used to be 90 to 120 days is now 60 to 90.” Also, delivery times by the U.S. Postal Service is changing production expectations. “I’ll need to look for faster equipment sooner.” Automation, in both software and equipment, will factor into those purchases.
Asked whether the transactional market is more or less competitive than it was, say, a year ago, Esparza says that while she hasn’t seen anything dramatic — “constrictions or flood gates opening” — industry consolidation remains. “I’m seeing more mom-and-pop shops being brought under larger companies.” But so far, she hasn’t seen it significantly affect the overall market.
InfoIMAGE is currently 86% staffed, and Esparza notes while that hasn’t changed since before the pandemic, “It’s harder to find applicants and retain them.” She says the company raised pay during the pandemic: “We weren’t going to be beat out by McDonalds!” she jokes.
Supply issues have also abated: “No issues with timelines or deliveries. Paper vendors are reaching out to engage again. That’s nice to see,” she notes.
Company: Jos. Berning Printing Co., Cincinnati, Ohio
Person: Michael Berning Jr.
Asked about changes in the nonprofit printing sector, Michael Berning, Jr. says his company has seen an influx of new nonprofit prospects looking for vendors. While price factors into their priorities, he says they’re also looking for a partner to help them maximize their marketing and fundraising efforts.
One barrier to success in serving the nonprofit space is turnover within nonprofit organizations, he points out. Maintaining a customer often means ensuring a new client contact understands production schedules and timelines. “We try to be proactive … and catch them up to speed so they can hit the ground running and enjoy success from the get-go.”
To effectively serve the nonprofit market, Jos. Berning Printing Co. has had to adjust its technology mix. Serving the market, he says, often involves trimming timelines, and the addition and improvements to the company’s digital capabilities — including variable data software — have been essential. “It allows us to quickly print and mail, saving days in our typical production schedule.”
Automation is also important to serving nonprofits effectively. “It’s all about being automated, efficient, fast, and nimble,” Berning notes.
Regarding the amount of work the company does for nonprofit customers, Berning says it is “increasing for sure.” Part of this improving reality comes from efforts to establish and present themselves as a trusted service provider that understands “their clients’ unique needs, timelines, and busy times of year, and are proactive stewards of their … marketing dollars.”
“We are very proud to have kept 100% of our employees during COVID,” Berning points out, when asked about current staffing. He notes that amid increased demand for quick turns, especially in finishing and fulfillment, staffing has grown by 7% in the past year.
Addressing another common, recent challenge, he adds the company is starting to see “close-to-pre-pandemic supply levels,” with surpluses noted among vendors. He says that during the height of the supply chain crunch, envelopes were especially difficult to find. But careful pivots and thoughtful customer consultation helped the company weather that storm.