Inaugural 'Live and Local' Event Reveals Printing Industry Challenges and Opportunities
The only participants in the inaugural PRINTING United Alliance Live and Local event — held in downtown Minneapolis on Sunday, Oct. 3 — who didn't deliver quite as promised were the Minnesota Vikings. They were defeated 14-7 in a hard-fought defensive battle with the Cleveland Browns, despite the fervent fan support from the area printing professionals who watched the game while networking inside a luxurious suite within U.S. Bank Stadium to conclude the day's event.
Sponsored by the Indigo division of HP Inc., the program kicked off that morning at the Elliot Park Hotel with a breakfast and a fast-paced slate of educational sessions. "The Printing United Alliance event held in Minneapolis was very educational and informative," noted Kevin Langstraat, HP Indigo L&P Manager, N/NE, who attended the program. "The attendees learned about current and future economic trends, and how companies are looking at ways to diversify their offerings to stay relevant in the market."
Following a welcome address by Chris Curran, Group President of NAPCO Media Publications, James Martin, Group President, Associations, described the value proposition for printing companies within all industry segments to become members of PRINTING United Alliance. The largest and most comprehensive member-based printing and graphic arts association in North America, the Alliance comprises the former SGIA, Printing Industries of America (PIA), and Idealliance associations, as well as NAPCO Media (publisher of Printing Impressions and several other industry-related publications and brands, and organizers of the Inkjet Summit, Digital Packaging Summit, and Wide-Format Summit).
Martin described Alliance member access to industry-specific subject matter experts and materials related to human resources, legislative affairs, OSHA and other regulatory affairs; discounts on Alliance-backed conferences and e-learning programs; free entrance to the 2022 PRINTING United Expo (Oct. 19-21, 2022, at the Las Vegas Convention Center); industry-specific research and economic reports; and more. The attendees who were not already Alliance members were quite surprised that a corporate (printing company) membership is only $400 annually.
Supply-Chain Disruptions, Labor Shortages Impact Economic Outlook
He was followed by Andy Paparozzi, Chief Economist at the Alliance, who gave a sneak peek into the soon-to-be-published "2021-22 State of the Industry Report." The veteran economist predicted preliminary printing industry sales growth for 2022 to fall between 5.2% to 6.2%. Industry sales, he noted, will be hampered by cost inflation as the year progresses, due to supply-chain disruptions and material and labor shortages, which will suppress supply and stimulate inflation economy-wide.
In fact, 88.2% of "State of the Industry" participants pointed to material and labor shortages, or both, to among their biggest challenges in the coming year, according to Paparozzi. "As the economy slows, we slow, and our ability to pass inflation along as higher prices diminishes," he said.
Not surprisingly, partly in response to the ongoing skilled labor shortage and customer demands for increased turnaround times, he pointed out that respondents indicated the top three capital investments they would most like to make in the coming year to further drive automation and efficiencies include binding/finishing equipment, workflow software, and e-commerce solutions, respectively.
Paparozzi qualified his 2022 industry economic forecast that results will vary drastically from company to company. The difference will not be company size, equipment configuration, markets served, or any conventional method of classifying printing companies, he noted. "The difference will be who best protects themselves from the ongoing supply chain disruptions and their consequences, and who is best prepared for the post-COVID-19 world."
Paparozzi advised the printing company executives in attendance that success in the post-pandemic world will require them to maximize virtual/remote selling capabilities, become more data-centric, and to lead the digital transformation of their businesses.
Overcoming the labor shortage party requires increased engagement with your workers and the need to craft an effective employee value proposition, he also advised the audience.
Convergence and Analog-to-Digital Technology Transfer
Nathan Safran, VP of Research at PRINTING United Alliance, closed out the programming with a presentation based around the latest NAPCO Research report, "Convergence in Print: A Shift to the New Normal." He discussed some of the factors that are driving commercial, packaging, graphics/signage, and promotional products print service providers to expand into segments beyond their primary segments to serve a wider variety of customer needs.
Not only has the percentage of service providers considering segment expansion increased since the initial study was completed in 2018, the number of different segments that printers are considering entering has increased as well, with more than half of printers surveyed considering entering three or more print segments beyond their primary focus.
The packaging market remains the most active, according to Safran. The most popular segment service providers are migrating to is the label printing market, with 38% of all service providers evaluating that segment (40% of commercial printers are eyeing that segment, followed by 37% who are considering folding carton production).
This migration to labels, in part, is being driven by lower barriers to entry in comparison to to other packaging applications. Unlike folding cartons or flexible packaging, which require extensive finishing and converting processes to achieve their final form, labels are two-dimensional and can often be produced on existing equipment, the study pointed out. There is also widespread interest among package printers/converters (73%) to expand into adjacent label, folding carton, flexible, and corrugated packaging segments, partly since they already have an existing customer base that could potentially purchase these additional products.
Safran also addressed the growing industry migration from analog to digital print production. Based on survey results, digital sheetfed inkjet and toner presses (including B2-format digital presses) will continue to outpace sheetfed offset press purchases among commercial printers. This is being driven by customer demands for shorter runs, personalization, quicker turnaround times, and the number of veteran skilled sheetfed offset press operators who continue to retire as they age out of the industry.
Safran advised the Live and Local event attendees to continue to evaluate options to pursue new market expansion opportunities, and to expand into the segments that best align with their current equipment capabilities, staff knowledge, and customer needs. "Also, find the right technology vendors who can become trusted [long-term] partners," he said.
Positive Feedback from Printing Industry Attendees
The attendees at the Minneapolis event were unanimous that attending the Live and Local event was well worth their time:
- The short and to-the-point presentations were valuable.
- The economics presentation was very insightful.
- I came to learn more about PRINTING United Alliance and to understand more of what the association does.
- Enjoyed the industry forecasting and learned how to better take advantage of PRINTING United Alliance benefits.
- It was a great venue and a wonderful time had by all.
The next PRINTING United Alliance Live and Local events are scheduled for Oct. 17 in Detroit, tied in with a Detroit Lions football game; Oct. 25-26 in Raleigh/Durham, North Carolina, which includes a golf outing; and Oct. 28 in San Francisco, in conjunction with a Golden State Warriors basketball game.