Digital Printing Latest technology and new business models
makes digital transition a key issue As businesses across the packaging sector are adjusting to new market realities in the wake of Covid-19, internal business imperatives and shiſting print buyer requirements are creating a direct incentive to invest in digital print technology as this report from Smithers reveals.
T
he latest market data from Smithers shows that digital production surged across 2020 and into 2021, as fast turnaround and shorter run production became a priority to maintaining packaging supply chains during a period of unprecedented disruption worldwide. In 2021 the total sales of digital printed packaging and labels will reach $21.1 billion. Now representing 4.9% of total value in the market this is up from $16.49 billion in 2019, and $18.51 billion in 2020; as the latest generation of digital presses prove increasingly competitive against existing litho, flexo and other analogue print platforms. The leading growth segments and latest technical innovations will be examined in depth at the forthcoming Smithers Digital Print for Packaging Europe conference on 8-9 December. Delegates will hear presentations companies at all stages of the supply chains – including Constantia Flexibles, BHS, ePac, Fujifilm, Wipak, and Tetra Pak.
ORDER TURNAROUND
Digital packaging is suited to fast turnaround for new products, given the easier, low-cost print set-up, and many early adopters report that this service is valued by customers. As shortages and supply chain problems came to the fore during lockdowns, digital printing was used to replenish labels and packaging quickly. Once reduced lead-times are experienced, it is difficult for any business to return to the pre-pandemic status quo. One method that has long been used is for converters to manufacture large quantities and then fulfil orders from stock. The risk of holding high inventories may be shared between buyer and supplier, but as demand patterns fluctuate widely unsold inventory becomes a costly problem.
The digital alternative to this is best illustrated by companies like ePac. The digital flexible packaging pioneer reports that many of its larger customers are using its online ordering platform to move order patterns from large runs to multiple small orders,
reducing cash tied up in stock and allowing designs to be updated over a period.
THE EVOLVING MARKET SPACE Even if the Covid-19 pandemic is longer an immediate threat its influence will continue to shape the future of packaging print, inclining it to the wider use of digital systems. The pandemic’s legacy of locked down consumers and greater online ordering will shape the market going forward. At its most immediate this has seen increased demand for printed e-commerce delivery packaging and labels. Many new businesses and service lines that have moved to online selling across the past two years. Brands are now keen to explore direct-to-consumer e-commerce selling further, eliminating physical retail from the equation and forging their own direct relationships with consumers. Bespoke designed e-commerce printed packs can aid this, with innovative brand graphics, version printed packs for specific promotion periods, and personalised messages to the recipient. Within this channel packaging can play a greater role as a touchstone for brand values leading to less emphasis on price relative to traditional bulk supply of labels and packaging.
Again this favours digital production, especially for brands that will pay for the flexibility to be able to react to periodic oscillations in order volume.
A logical extension of this is for brands to move pack production in-house, gaining flexibility and cost advantages, through
purchasing their own digital presses. There are challenges however, as these companies do not always have the necessary skills. A viable alternative is to transition to through-the-wall manufacturing in partnership with established converters. Thus over the next five years, end- customer sites using digital print and finishing, in partnership with converting companies, will become more common.
A parallel trend is greater brand fragmentation. Though there was some consolidation of SKUs through 2020 to simplify supply, this trend is now reversing calling for greater variation in labels and primary packaging. This includes labels and packs tailored to the needs of new ‘artisan’ brands that place a premium on fresh, local and sustainable sourcing; and more localised varieties to make product portfolios more appealing to consumers in specific geographical locations.
Just as consumers are turning to the internet, so too are print buyers, supported by the availability of more web-to-print platforms. These systems can generate press-ready artwork from orders placed on a website or other portal, chosen from a catalogue of stock items or with the buyer specifying and creating the printed material using an online app. Both approaches integrate best with digital press rooms, where they can further cut turnaround and increase customer control.
Xwww.printfutures.com/europe
Xwww.smithers.com
www.convertermag.com
November 2021
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