Digital printed packaging will reach a market value of $12.26 billion by 2016, delivering a compound annual growth rate of 20.6 percent between 2011 and 2016, according to forecasts from consultancy group Smithers Pira. In 2011, the global market value was worth $4.8 billion. While reflecting a...
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Digital printed packaging will reach a market value of $12.26 billion by 2016, delivering a compound annual growth rate of 20.6 percent between 2011 and 2016, according to forecasts from consultancy group Smithers Pira. In 2011, the global market value was worth $4.8 billion.
While reflecting a small amount of the overall $300 billion packaging market, the use of digital print systems is growing, especially for labels, but also for corrugated/folding carton, and rigid packaging sectors for short to medium runs, notes Sean Smyth, a print consultant with Smithers Pira and the author of “The Future of Digital Printing for Packaging to 2016.
Similar to what is happening in the commercial market, value-adds in the packaging sector, such as personalization and versioning, are seen as useful methods for brands/retailers to connect with their customers, says Smyth. Within the folding carton arena, supply chain pressures, growing SKU diversity, frequent and seasonal redesigns, point-of-sale campaigns, and customized product offerings all require shorter print runs and faster turnaround time. Across all sectors, while still not mainstream, demand is growing for variable-data features, including graphics, photos, text, barcodes, and security features.
“All the equipment suppliers see labels and packaging as significant markets for their systems, as the formats increase (B2 and up) and productivity increases, on such presses as HP Indigo B2, Océ, Xeikon and Landa,” he adds. There will be shift toward digital for mainstream applications, but it will take some time to shift the current supply chains.”
The Value of Digital
Getting marketers to understand how to use the tool is a bit of a challenge, notes Bob Scherer, formerly of CL&D Digital and a frequent speaker on digital packaging.
“There has been greater acceptance from larger brand owners—the people who buy labels,” says Mark Vanover, VP Sales & Marketing, Allen Datagraph. “The key drivers are color and cost. They will not go to digital unless the quality and cost is in line with what they are currently doing.”
The trick for converters is how to sell the move from analog to digital, given that initial costs are often higher. “Label costs, which is basically shrink sleeves, increase 30 percent to move to digital,” says Scherer. “If all you talk about is the cost of the label, the label buyer will throw you out the door.
“But here are no cylinders with digital, no printing plates involved,” adds Scherer. “There is also zero inventory. When you look at the entire package, at the cost of the total product, the net result is that costs drop eight percent.”
“In the printing industry, the focus for print service providers is typically on the cost-per-print, whereas in packaging, printing is actually a smaller part of a larger supply chain,” explains Yuval Golan, packaging HP Indigo product manager. HP Indigo customers in the packaging industry have related to the company in order for the digital press to be considered ‘industrial’ or used for longer production runs, it needs to fit into the supply-chain and offer three things:
- Significant cost-savings for the supply chain. The cost-savings can be the result of reducing the cost-per-print, or from reducing the total system cost, specifically reducing inventory capital or process waste.
- Measurable added value, This can come from increased sales or market buzz directly resulting from package customization, as was recently shown in the U.K. Coca-Cola “Share a Coke” campaign “ which ran 800 million labels for 500ml bottles in 27 countries printed on HP Indigo presses,”
- A seamless fit into current supply chains. Printers must integrate into the converters production floor and workflow, have undistinguishable print quality as well as meet market functional needs in addition to complying with regulations. Even the most creative brands are averse to changing their standard print specs.