Ways Commercial Printers Can Expand Into the Lucrative Packaging Market
A common downfall of commercial printers expanding into packaging is thinking that buying new equipment is all it takes. While having the right tools for the job is essential, to truly succeed in the packaging segment, printers need a healthy combination of confidence and determination. But perhaps most importantly, they must understand that package printing is very different from commercial printing and be willing to accept the necessary education.
When Charlie Cox joined Wallace Carlson, a Minnetonka, Minnesota-based print services provider (PSP), his extensive experience in packaging helped the company grow its now robust packaging division. But Cox, who is the COO and a co-owner of the company, explains that investing in training, along with bringing in outside expertise, was key to navigating those challenging early years.
“We have some really good internal seminars teaching the different departments the differences, nuances, and engineering standpoints of developing and putting together retail packaging,” he says. “There are complexities to packaging printing that involve a deep understanding of the process, which is why investing in training is important.”
A Popular Destination
Despite the added complexities of label and package printing compared to commercial printing, there is convincing evidence that droves of commercial printers are seeking to enter the space. In November of 2021, NAPCO Research, a division of NAPCO Media and PRINTING United Alliance, published “Convergence in Print: A Shift to the New Normal.” The study provides in-depth insights into the ongoing trend of PSPs expanding beyond their core segment and adding new print capabilities. Of all the segments studied, packaging proved to be the most popular market for printers to consider.
For example, of the nearly 250 commercial printers surveyed, 40% stated they either have added label printing capabilities or are considering it. Meanwhile, the three other main packaging segments were not far behind, with 37% of commercial printers eying folding cartons, 32% exploring flexible packaging, and 29% considering corrugated.
In addition to revealing the desire among commercial printers to expand into packaging, the research uncovered printers’ willingness to back these explorations with their checkbooks. Because expansion into a new print segment may require investment in equipment, software, materials, and staffing, printers’ allocation of funds for the specific purpose of adding capabilities is a good indicator of their level of seriousness about making such a move.
Of 443 total respondents, more than a quarter (28%) stated they had already allocated funds for the necessary equipment to expand into an adjacent printing segment. An additional 50% stated that they were at least considering making this allocation.
Digital Technology Lowers Entry Barriers
While packaging has been among the top growth segments of the printing industry, one of the most substantial barriers to entry has been the equipment that is required. For example, in label printing, narrow-web flexography — a technology rarely seen in traditional commercial printing — has been the dominant platform. In folding cartons, sheetfed offset, which is nearly ubiquitous across commercial printing, is the most common printing technique.
However, for commercial printers entering the market, their first packaging jobs tend to be of the short-run variety, which their offset assets are not as well-suited for. Meanwhile, the complexity and large manufacturing footprints required for conventional flexible packaging and corrugated production have long kept commercial printers on the sidelines.
However, digital printing solutions spanning electrophotographic and inkjet technology have emerged across the four major segments, giving commercial printers increased options to enter the packaging space with a lower-cost, short-run platform that does not require plates, tooling, and other components of conventional processes. While there are complexities in prepress and finishing that commercial printers must become acclimated with, the rise of digital printing has at the very least made the printing component of the process far more accessible.
According to a 2020 NAPCO Research survey, which was a component of a multi-part project titled “Lowering Entry Barriers in Digital Package Printing,” commercial printers who have adopted digital printing for their packaging shared the top five benefits of the technology. Short-run production capabilities (62%) was the top benefit, followed by versioning (51%), fast turnarounds (50%), cost- effective prototype and sample production (49%), and personalization (45%).
With an influx of smaller brands across CPG markets, commercial printers that can take on their needs for shorter production runs, design flexibility, and versioning, will be at an advantage.
‘Never Start from No’
Packaging and label printing and converting brings added complexities that traditional commercial printers are not accustomed to. While investing in the education necessary to succeed in the space is essential, so is establishing a company-wide mindset and determination to find the solutions customers need.
At SunDance, an Orlando, Florida-based printing and marketing services company, the expansion into packaging has involved adding label, folding carton, flexible packaging, and corrugated capabilities. Having the ability to produce all four packaging formats in-house is rare but, according to company President JohnHenry Ruggieri, the story of SunDance and the company’s core values — which includes ‘Never Start from No,’ a favorite saying of his father and company founder John Ruggieri — have provided SunDance with an ingrained determination to creatively find solutions for its customers.
JohnHenry Ruggieri explains that around 2007, SunDance evolved from its origins as an art publishing company into a commercial print services provider. As an outlier compared to commercial printers that have long been entrenched in the segment, SunDance has maintained the flexibility to explore outside opportunities.
In 2009, the company made its first leap into folding cartons, bringing a Heidelberg Speedmaster CD 102 on board, which could print on board stock. Ten years later, SunDance added label printing capabilities, followed by the 2021 addition of an HP Indigo 25K to make the move into flexible packaging. Throughout all of this, the company was also able to utilize its wide-format equipment for corrugated applications.
When SunDance made its initial move into packaging, Ruggieri explains that it was at a time when commercial printing opportunities were declining due to the Great Recession. Meanwhile, the company stayed plugged in to industry seminars and research reports which made it clear that, despite the economic struggles the nation was facing, consumers were still in need of products, and demand for packaging and labels remained high.
As the company has grown its packaging capabilities with the recent addition of flexible packaging last year, Ruggieri explains that SunDance experienced some similarities between the recession of 2008 and the economic downturn driven by COVID-19. The firm’s main verticals, he says, include tourism, theme parks, restaurants, and entertainment. While these markets experienced significant dips, packaging offered an opportunity for stability.
“Our major verticals were really, really hit,” Ruggieri says. “We had the conversation of, ‘Why not take the opportunity to reinvent ourselves and push forward?’ That’s when we made the giant leap into flexible packaging. Printing with the wide-format printers on corrugated doing POPs, the folding cartons, the labels, they were little steps that were good steps. They were little in retrospect [compared to flexible packaging], but seemed big at the time.”
Investing in Growth Opportunities
While the rise of digital equipment has lowered the entry barriers for expansion into packaging, the latest conventional technology is broadening the horizons of what can be achieved. Wallace Carlson for example, has expanded its packaging division with significant investments in sheetfed offset printing technology, along with high-end diecutting, folding, and gluing equipment.
Specifically, the company’s recent purchase of a Komori GLX640 advance press with coater, PQA-S quality inspection system, UV curing, and a Vinfoil Optima cold foil unit marks the first installation of this series press in the U.S., and is Wallace Carlson’s second Komori. Cox explains that Wallace Carlson’s packaging prowess is in specialty applications, and as the company grew that side of its business, many of the jobs were being produced on its older Komori press, an eight-color GL840 HUV that it brought on board in 2015.
Cox says that while that press has served the company well on the commercial side, Wallace Carlson needed something more robust for its specialty packaging applications, and the GLX640 advance has been the right fit.
“The GLX640 advance is a packaging beast,” he notes. “We run substrates all the way up to 40 pt., including synthetics — so plastics, PETGs, polypropylene — and then of course the board.”
He adds that the new Komori press has double the drying and curing power compared to the older press, along with the ability to run 18,000 sph with quick changeovers powered by automatic plate changing capabilities.
On the finishing side, Wallace Carlson brought a Brausse Tornado 106CE on board in 2014 to take on high-speed diecutting and embossing, followed by a Brausse TA900 folder/gluer in 2017. The finishing equipment, Cox reports, has been essential in expanding the company’s specialty applications, which include in-line production of tip-ons, security tear string applications, and security label applications. While this high-end equipment is certainly a significant capital expenditure, Cox explains that having the right tools for the job is imperative in expanding a packaging business.
“Get the right equipment, get your processes streamlined, and invest in automation and technology,” he advises. “It’s an expensive game. There’s no two ways around that. But our industry has always been very capital intensive.”
Finding a Niche
In addition to the equipment and expertise that is necessary for commercial printers to grow a thriving packaging division, establishing a packaging customer base can be a distinct challenge compared to commercial printing. In many cases, large CPG brands have long been entrenched in a business relationship with their label and package printers. And for those printers that specialize in packaging, they can typically offer a variety of run lengths, design options, and finishing capabilities.
But there is more to packaging than what can be found in brick-and-mortar retail environments. For example, Premier Press, a creative production company based in Portland, Oregon, has grown a sizable part of its business in the burgeoning world of influencer marketing, a key component of which involves “influencer kits,” or highly complex packages that companies distribute to promote a high-end product.
According to VP Manuel Saez, Premier’s packaging division began approximately 10 years ago and currently consists of about 25% of the company’s revenue. From the start, he explains, Premier’s goal was not to be a producer of long-run commodity packaging, but rather to focus on the design and production of some highly ambitious packaging concepts. The influencer kits that Premier produces span a variety of markets, including athletic footwear, apparel, cosmetics, beverages, and beyond. They often feature a multi-faceted rigid box that in addition to printing can include elaborate add-ons such as lights, audio, and structural components that take the package to new heights.
Matthew Castor, Premier’s creative director, explains that part of what makes Premier stand out is its internal creative studio that not only helps its clients develop the concepts for these elaborate packages, but also works with the production staff to ensure they can be feasibly produced.
“We’ve really structured our team much like an agency and have all of those skillsets and mindsets,” Castor says. “The majority of our team comes straight out of brand and agency backgrounds. Being able to partner on that level, it helps us to push the edge in terms of creating innovative designs. We also have engineering, R&D, etc., in-house. Not only are we coming up with innovative ideas, but we’re able to vet those in real time in parallel, so we’re making sure they also align with timelines and budgets.”
That combination of knowledge and flexibility has been key to growing the packaging division at Premier, and makes for a strong blueprint for how to approach customer service in this growing industry segment.
“The most important part for the company was the mindset,” Saez concludes. “The mindset was that this is a service. They need something. How do we go about it?”