GRAPH EXPO 2014: Opportunities in Packaging

Facing flat or declining revenues, more than a few commercial printers are on the lookout for new opportunities to expand their offerings, drive growth and add new revenue. One compelling move can be a segue into packaging, especially labels and folding cartons, where printing expertise is required and the margins—often 9 percent or more—offer an attractive way to increase profitability while also adding value to one's business.

To help commercial shop owners start down this new path, packagePRINTING magazine (a sister publication of Printing Impressions)—in partnership with EFI, Fujifilm and Mark Andy—hosted a lunch-and-learn seminar at GRAPH EXPO 14 and the co-located CPP EXPO that brought in owners and top-level managers from some 40 commercial print shops. The meeting led off with an overview of the printing and packaging marketplace from Kevin Karstedt of Karstedt Partners, the leading consulting and market strategy firm in the packaging industry. Karstedt described the broad industry trends in commercial and package printing, and how the skills of commercial printers pave the way for them to take the first steps into packaging.

Megatrends Driving Digital Growth

Several megatrends drive the emerging potential. First, are shorter product lifecycles, which decrease demand for a given label or package, resulting in lower run lengths. Next, is SKU proliferation, which also drives shorter and more frequent print runs to maintain branding, reduce waste and, in some cases, target specific audiences. Third, is the increase in local and regional brands such as wines, craft-brewed beers, coffee, and other businesses that need labels or other packaging. Finally, the demand for prototyping of designs for labels and folding cartons is growing, with some brand owners seeking out shops that can provide prototypes and examples of new designs. Together, these trends converge to alter the landscape of label and package printing—and in, some cases, create opportunity for commercial printers.

Next, Noel Ward, editor-in-chief of packagePRINTING, explained why the most likely entry points into packaging for commercial shops were labels and folding cartons. These segments can be a relatively straightforward entry point for commercial shops with offset and/or digital presses, but he cautioned that the details are critical. Labels, for example, are best produced on rolls, so as to simplify application onto a final product. Labels may also require coating and diecutting, and substrate selection can be of prime importance. Folding cartons can be produced on many offset presses, but require scoring, diecutting and may require UV or other coatings. Commercial shops must have such capabilities for successful entry into the packaging space.

Ward also delved into business development, encouraging commercial print shop owners to start by leveraging relationships with customers to learn about any packaging needs they may have. Then, seek out local businesses such as wineries, microbreweries, bakeries and coffee roasters that need labels. In talking with these smaller businesses, be sure to make clear the range of services offered, such as graphic design, customer service, customization, and the ability to offer more than labels and folding cartons.

Digital, Analog Are Complementary

Executives from three sponsors also took part in the seminar: Ken Hanulec from EFI, Jon Fultz from Fujifilm and Steve Schulte from Mark Andy. All noted that the shift to digital printing in labels and packaging is going to accelerate over the next few years. While conventional technologies such as flexography, offset and screen printing are not about to fade into history, the megatrends cited by Kevin Karstedt will drive the need for digital printing. Many attendees were already attuned to the promise of digital. In fact, the majority of the audience indicated they either had or were about to purchase some type of digital press.

Still, digital presses are just another tool. Mark Andy's Schulte, whose company makes a flexographic press with integrated inkjet printing capabilities, noted that label printing demands the flexibility of using both analog and digital technologies. "It's important to be flexible and able to adapt to customer needs," he said. "Many run lengths are declining, but it's good to be able to handle longer ones as well, or those that need more printing capabilities than is available on digital-only solutions."

EFI's Hanulec agreed. "Digital offers a lot of advantages, but this is not an either-or issue. Digital printing is a complementary technology, not a replacement for analog systems," he affirmed. "You need to use whichever system is best for a given job."

EFI's Jetrion modular inkjet presses are gaining a following among label converters and commercial shops seeking flexibility and performance.

"The shift to digital is going to increase," said Fujifilm's Fultz. "Printers need to really understand customer needs and be ready to offer solutions that can address those needs." Fujifilm has multiple inkjet presses in the market, from continuous-feed label presses to larger sheetfed systems, all of which have a place in packaging.

The panel further emphasized that it is especially important that printers have candid conversations with customers, as well as with existing and prospective equipment and software providers. From customers, it's vital to understand how the needed labels and folding cartons will be used, plus all expectations for color and graphics. That sets the core requirements. Then, work with press and software suppliers to identify and test the equipment to learn whether it can do the job. PI