You need money to make (more) money, the adage goes. Imagine having 10-figure annual sales, as in billions with a “b.” Only eight print-related companies in North America post sales that high, and seven of them now are publicly held. One US-based mega printer’s sales are 11 digits, not counting decimal points. Indeed, firms such as Cenveo, Consolidated Graphics, Deluxe Corp., RR Donnelley, Quad/Graphics, Transcontinental Printing, and Valassis Communications have deep financial resources.
So what’s new with the “big boys” of print? QP reports on the recent partnerships, equipment additions, and new market opportunities that are helping to reshape our industry. Let’s start at the top.
With 2011 sales of more than $10 billion, Chicago-based RR Donnelley (RRD) is far and away the largest print firm in North America and, possibly, the world. Often still referred to as “the Big Indian” because of its one-time Indianhead logo, Donnelley is more like the chief of our industry. All print business owners need cash flow: Donnelley’s operating cash flow, excluding capital expenditures, was up just shy of $700 million last year.
Many printers are envious of the Big Indian’s financial position. With those deep pockets has come more than a hint of arrogance over the years. For example, Donnelley rarely if ever advertises because it doesn’t need to, the firm contends. Repeated voice- and emails to its corporate communications department typically go unanswered. And there are ample stories (many true) about RRD throwing around its considerable weight, using its leverage and economies of scale at contract renewal time. To call the process “negotiation” would be a stretch, insist those holding the short end of the stick.
“We find ourselves benefiting from the economies of our scale and not needing to compete on a one product basis,” CEO Thomas Quinlan told financial analysts during a February conference call discussing the company’s 2011 earnings and performance. As examples, Quinlan cited contracts with Chrysler, IMG, and Office Depot in the US, and the Metro grocery and pharmacy chain in Canada.
Giving credit where credit is due, traditionally Donnelley has reinvested heavily back into the company, spending millions of dollars each year on research and development. While its think tank and number of engineers may not be as large as, say, Kodak’s or Xerox’s stable, keep in mind that this is a printing company and not a vendor/supplier to the industry.
More recently, however, RRD has become an equipment supplier to itself. Notably, in late June it introduced a series of ProteusJet Multiweb digital print applications for direct marketers. That’s right: The Big Indian has designed and built its own digital press platform. The new technology enables credit, telecom/cable, retail, and insurance marketers to better manage one-to-one communications. The integrated piezoelectric, four-color inkjet technology and fully automated mail assembly lines create mailings targeted to the individual needs and interests of millions with precision, speed, and familiarity, Donnelley says.
“Our clients succeed when content connects to deliver the right message precisely and in an impactful way,” notes Mary Lee Schneider, RRD’s chief technology officer. “The ProteusJet Multiweb platform harnesses complex business rules developed by our clients to dictate text and color graphics instantaneously. The production lines allow direct marketers to mount campaigns with versatility and with production efficiencies unattainable in traditional direct mail manufacturing,” Schneider continues. “The downstream dividend of enhanced postal savings is a further testament to the cost efficiencies that are vital to direct marketers.”