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Making the Move to Digital Packaging Production

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.  

In fact, says Golan, allowing brands to maintain the same colors and packaging became the mission statement in designing the HP Indigo line of packaging presses: the HP Indigo WS6600 (narrow-web), 20000 (wide-web) and 30000 (sheetfed / paperboards).

HP is looking for a paradigm shift in the conversation about digital printing, and instead of talking about “ feeds and speeds, short runs and cost of ink, focusing on the role digital printing plays in the overall supply chain,” says Golan. “HP customers in the packaging industry on average transition 25 percent of their original business from analog to digital. The rest of the press capacity is used to fill new jobs received from current customers as well as net new customers who are attracted to the additional digital capabilities, such as customized variable data printing.”

Digital press speed does remain a challenge, especially in the folding carton arena. Within the prepress arena, top considerations are color management and the reliance of a good digital front end for package printers, says Larry Moore, vice president – Partner Programs, Esko North America. “Those features that are important to drive traditional print —structure, step & repeat— are just as important for digital print. And, color must match from one print process to another.”

Also, package printers need to rely on workflows and color management that can transfer traditional print to digital seamlessly, such as accurate color, image translation and structure, says Moore.

Whether it’s for niche or longer runs, the requirements are the same for digital or analog print, notes Vanover.

For its fastest system, the CENTRA HS Digital Label System, Allen Datagraph considers short runs to be about 5,000 linear feet of material or less. “However, one thing we’ve learned is that every printing facility is different, and their definition of ‘short run’ can be different as well,” notes Vanover.

Another facet, and one that is often overlooked, are digital packaging’s requirements on the back end. You need cost-effective short-run converting methods for finishing and filling, such as an Esko’s Kongsberg digital cutting table, says Moore.

“If you are running an auto-platen type die-cutter, it is likely that you have to plan to run 10-20 percent scrap, to account for set-up and press waste,” says Moore. “Beyond that, there are die costs and set-up times that factor in as well. That is why for short runs converters are looking for finishing devices suited to short run. Digital converting is best for short run converting. They do not require the overhead cost of dies, setup is very easy, and there is no need to allocate a portion of the runs for mis-registration and lengthy set-ups.”