Throughout the history of the digitization of printing technology and processes, we have seen a fairly repeatable model of change. It goes something like this:
- A new technology is introduced.
- It drives new creativity in how it can be used in the manufacturing process.
- Manufacturers (in this case, converters) introduce it to their customer base who see the possibilities of new applications, and with that comes new requirements.
- This in turn drives new technology development.
- And the cycle continues…
While all of this is going on, consumers (whether of information or product) are adapting and redefining their expectations as well, creating new market demands. As this cycle continues, it spurs the digital adoption rate and the transition from legacy technologies and processes.
We are already well on our way in this transformation process in the labels and packaging industry.. While the total annual market for retail packaging is hard to pin down, it seems to fall in the $400 to $500 billion range. Estimates are that only about 3% is currently digital production, most of that in labels and flexible packaging, creating significant opportunities for growth, but in which applications and at what rate?
Historically, labels were predominantly manufactured using flexography or offset, with gravure picking up some of the larger runs. In the mid 1990’s, we started to see the early use of digital electrophotography for label production, with the Xeikon DCP/32S. Since then, we have seen a shift to a variety of electrophotographic and inkjet technologies, from Mark Andy, HP Indigo, Gallus, Xeikon and others. This shift has been driven by the growth of short run label production, offering brand owners the benefit of customized branding, targeted marketing and faster time to market.
At the same time, we have seen an increase in the use of flexible packaging which has also impacted printed label production. The flexibility and cost advantages of direct-to-package printing, especially with the introduction of inkjet, are now starting to affect label and some rigid packaging print production as well. So this translates to not just a shift from analog to digital but also a shift in the type of print demand. These new applications are impacting growth beyond shifting from analog to digital through the introduction of new applications.
We are beginning to see a similar scenario emerge in the folding carton space. There has been some growth in digital folding carton migration from offset, primarily with electrophotographic technology, primarily driven by, and offering some of the same benefits of, digital label production. Additionally, we are now starting to see shades of some alternative packaging methods in the expanded use of flexible packaging and digital direct-to-corrugated in place of folding carton. The developments in this space are still in the early stages, and it will be interesting to see what directions it takes. We got a good taste of the potential for dramatic change with all of the announcements during drupa 2016.
Labels and packaging have many different and unique requirements compared to print for publications or marketing collateral. Media and ink compatibility and regulatory compliance, especially for food, Pharma, cosmetics and other sensitive products, are critical. There are broader and more stringent color requirements to enhance visibility and maintain brand identity and shelf appeal. Specialized converting needs, and streamlined design to distribution workflows to enable faster time to market, are just some of the areas that are accelerating the adoption and growth of digital print technologies in this space. If you add to that some of the new opportunities for brand owners, like personalization, on-package promotion and embedded intelligence just to name a few, you can see that there are some challenges and exciting times ahead.
In future articles, we will take a deeper dive into many of these new technologies, processes, and success stories. In essence, we will be looking at how we use and produce packaging today and in the future. As I stated in the beginning of this article, this shift from analog to digital and new forms of packaging is not new and we are well on our way. Many of the demands, requirements, and technologies that will dominate and drive this change we have already started to cover in that cyclical change journey, and are available here and here.
More to Come …
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