Is digitally printed packaging really the future for smaller commercial printers?

In the past days, I have been thinking about how we as an industry might have set the course completely wrong for the future. In the past years, I have attended several exhibitions and events, and of course some of the headlines there are about where our industry is heading and how we can survive as an industry.

To most, it is obvious that some products are on their way to disappearing, and therefore it is only natural that industry leaders point at new business areas where we can be successful. Five years ago, the payoff for Heidelberg was "Verpackung" (packaging), and Heidelberg combined with other machine manufacturers to promote large-format litho printing. These machines are exceptionally great, fast, and have a second-to-none quality. From a technical perspective, they are even more amazing because they simply deliver an extremely astounding output. 

I have also in previous articles referred to the INKISH.TV episode "Who Makes Money in the Printing Industry", where both large format printing and packaging actually ranked quite high. The episode describes comprehensive research done by Federation of Printers in Sweden and big data research company Bisnode. They conclude and underscore basically what Heidelberg and other major influencers have been preaching: packaging is one of the ways to develop and survive.

At this year's Drupa, the paroles were pretty much the same except for the added word "digital" in front of nearly every packaging machine. HP, Landa, Heidelberg, Konica-Minolta and more companies introduced digital printers capable of printing large-format, high-grade paper/cardboard, but... 

Which companies actually invest in these digital wonders? Who invests in the Indigo 30000, the Landa W-series, and the other great machines? I, of course, don't know for a fact who, but my guess is that the investors are existing packaging companies. This makes sense for a few quite obvious reasons: they see a market for short-run applications, they may see that existing clients ask for digital solutions with variable data, and they also see a potential thread from traditional commercial printers who would like to get market shares.

The packaging of physical products, of course, will never be replaced by tablets and other digital devices, instead of needing paper or plastic-based printed products (at least for a period). Since megatrends forecast an increased number of variants and versions, it is quite likely that production will move from litho to digital. Also, some customers may require variable data and packaging that can't be produced in litho or screen. The number of products globally is probably also increasing. Another mega-trend also describes that customers request products to be produced locally. The challenges and the development aren't easy to predict, and that leads me to what I was thinking of a few days ago.

The smaller commercial printers in the market have replaced their smaller - and often quite old - litho machines with digital printers. This means smaller print format for most, and it most certainly leads to click-based pricing, which makes a breaking point for printing in litho quite low. Another megatrend that our industry has faced for years is customers requirements for faster and faster turn-around time. Producing packaging materials requires some kind of die cutting and often also some kind of gluing. If the smaller commercial printers are hoping for a share of the growing packaging market, my guess is that it will simply be too expensive for them.

So is the packaging market at all interesting for the smaller commercial printers? A few days ago, I would have undoubtedly endorsed this idea, but since industry leaders are focusing so much energy on it, this almost becomes a self-fulfilling prophecy. And of course, you as a printer always should be 'suspicious' when equipment manufacturers try to convince you to invest. They have a HUGE interest in selling new equipment.

International competition in the even smaller print run of packaging material is quite tough, and there is a reason. If you don't have the equipment that can produce short runs cheaply, you will have to use labor - and labor cost is maybe one of the easiest commodities to get in some countries. Transportation cost is constantly falling and time to market is important, but for smaller production runs, sometimes price becomes more important.

I am sorry to say this, but after re-thinking packaging, I am not at all convinced that packaging is the future for the smaller commercial printers. I honestly believe that packaging is so specialized that it requires specialized equipment and human skills. Most smaller commercial printers have spent their entire business life printing business cards, letterheads, leaflets, etc., so the skill set and equipment for packaging is something that would need to be invested in before I believe this could work. But let me hear what you think.

Credits: 

Laura Cockman - proof reading