Technical editor Sean Smyth explains why this year will be big for digital printing
If you supply labels and packaging you will be aware of several significant changes to the competitive landscape, with retailers changing as brands change as consumer preferences develop.
Sustainability and product safety are increasingly important considerations for all production, while price pressure continues for shorter runs, that are required in less and less time.
The key driver for adoption of digital production is economics. Money talks louder than everything else in business, and the short run economic benefits of digital production are well understood in labels. Many converters have invested in digital printing methods to realise these advantages. While the unit cost of production is lower in flexo or litho for the same design, the set-up cost is much lower on a toner or inkjet press. Depending on the number of copies, this provides a great advantage for the digital press, and as the technology has developed the economic crossover of the digital machines has increased. The arrival of hybrid digital-flexo presses allows converters to print some parts of the design with the lower cost flexo ink if the design allows, further boosting the position of digital. If there are multiple versions, for example flavour, colour or language variants, hybrid printing becomes very cost effective.
Then there is the explosion in consumer choice, with more varieties and new products being launched. The rise of the trend to shop local, and that of organic craft and artisan products across multiple product sectors has changed consumer expectations. In the packaging sector this has led to many more short runs. Changing demographics and work patterns also mean there are many more single or two-person households across Europe, with fewer large family groups eating and living together. This results in smaller pack sizes, requiring more packaging to contain the same amount of product meaning many more short runs, creating demand for digitally printed packaging and labels.
Jorge Paulo Lemann, co-founder and chairman of 3G Capital, the owner of Anheuser-Busch InBev, Restaurant Brands and Kraft Heinz, talks about brands today existing in an age of disruption. ‘I’m a terrified dinosaur. I’ve been living in this cosy world of old brands and big volumes. We bought brands that we thought could last forever, borrowing cheap money to do so. You could just focus on being very efficient, but all of a sudden we are being disrupted.’
‘Craft took us by surprise,’ Lemann continues. ‘We went to a board meeting in a restaurant and there were 200 craft beer brands, none of them ours. Now we have to adjust.’
This has seen AB InBev create Zx Ventures to invest in innovations like craft beer, e-commerce and home brewing, a venture that Lemann describes as, ‘self-disruption, focused on younger consumers.’
‘We hope this will be a model that we can build on; I’m not going to lie down and go away.’
Many craft brands rely on high quality, cost effective, fast turnaround digital label and packaging production. As big brands change their strategies, so their requirements for packaging and labels change, with innovation enabled through the use of digital print more important than ever before. It is not just the physical label or pack but the business model that can be changed. Digital packaging is useful for small companies because of the low cost entry point, and shorter runs tying up less capital in stock, some of which may not be used so boosting cash flows.
Cost pressure is also present for long runs, limiting take-up of digital print, but as the technology develops the total cost of digital printing drops. It is not just cost benefits driving digital ahead, reducing time to market is a key advantage of digital production. Improving agility, the ability to respond to customer requests and demands rapidly provides a competitive advantage. As manufacturing processes evolve so the need for a quick response grows. It was a determinant for Italian converter Nuova Erreplast to invest in a Uteco/Kodak inkjet-driven Evo Sapphire press. Its managing director Domenico Raccioppoli comments, ‘As our customers digitise, they are demanding instant information and a response that we just could not achieve with flexo, so we bought a digital flexible packaging press. Now we have the accreditations we are building up the business, with our systems now able to react to the fast-changing needs of customers.’
The Millennial and Gen-Z generations are now important customer groups. As they grew up in a connected world, their experiences are moving into all aspects of their lives as consumers. All consumers have become accustomed to the speed and convenience of Netflix, Uber or Amazon Prime, and on-demand expectations are growing. App stores promise instant access, with Deliveroo changing the expectations for food ordering and delivery. These expectations will move into label and packaging specification and buying processes.
Labelexpo Europe 2019 showed many providers offering web-to-label storefronts that allow upload of artwork and instant approval processes (with payment up front, in some cases) for labels. This has been common for stickers and will become used for labels, initially on a limited series of substrates and shapes where there are cutting dies, or linked to laser cutting to provide greater flexibility. With no plates or dies, the time to produce can be greatly reduced.
Probo is a digital print company in the Netherlands with two HP Indigo 6900 presses with analogue and laser finishing. It currently offers trade buyers a next-day service for orders placed before 4.00pm. This is being moved to a five-hour cycle to improve the services provided.
Probo has a large development team to handle its proprietary workflow, generating print-ready les and tracking for re-seller companies. In many cases, jobs are despatched direct to the end user, so have to have the correctly branded paperwork accompanying the job. Internal efficiencies, such as combining and queuing the jobs to the appropriate digital press and finishing combination, is critical, together with the packaging requirements to ensure the items, many large format signage, are suitably protected.
Whilst Probo is at the forefront of such developments, most companies using digital printing have had to change their internal admin and pre-press systems. The capability of MIS software is allowing companies to automate all processes from order receipt to production, with many companies having developed low-touch systems to reduce the manual involvement, eliminating errors and ensuring optimised quality in labels and packaging. There will be much growth in online ordering, with web-to-label and web-to-pack increasingly important going forward.
Technology provides opportunities to innovate, offering new products and services for customers, solving their pain points. The good news is converters know their customers’ business needs much better than the equipment manufacturers, and can use a digital press in new ways to offer new versions of print and trade through new routes to market.
When investing in a new digital machine, don’t fall into the trap of using digital just to replicate analogue methods of production, well, not when you have a reasonable volume built up. Removing short runs from flexo or litho machines helps boost available capacity for longer runs, so digital equipment helps to optimise analogue machinery, significantly boosting the overall capacity and response level of a print shop. Digital can do a lot more, with full variable capability helping businesses offer new products to help brands.
To succeed in 2020, packaging converters are innovating, with materials designed to reduce the environmental impact of packaging and supply while providing new capabilities and experiences for consumers.
The Austrian economist Joseph Schumpeter talked about capitalism as, ‘a gale of creative destruction’, and a, ‘continuing series of processes of industrial mutation that continuously redefines the economic structure from within, incessantly destroying the old ones while creating new ones.’
This is certainly the case in packaging as we enter the new decade, and digital methods seriously challenge the established analogue base. The growing installed base of digital production equipment is allowing new functions and supply chain efficiencies across labels, cartons, corrugated and flexible packaging, with direct-to-shape and metal packaging also examining the potential.
There will be many more examples over the next decade.
This article was first published in the January/February issue of Digital Labels & Packaging, which you can read here; register here to receive future editions of the magazine
