Digital Label Printing: Understanding the Sticking Points

As in most corners of the industry, digital printing has made substantial inroads into label printing, a segment dominated by flexo and other analog technologies. In the past several years, both toner and inkjet label printing systems have appeared at both the high and low ends of the market, and some mid-tier devices have filled in some of the gaps.

At present, “digital is a very small chunk of the overall label market,” said Mark Hopkins, president of iSys Label, a Calgary, Alberta-based manufacturer of digital label printing equipment, “but it has the most growth and the most growth potential. There seems to be double-digit growth in the digital label space. One of the biggest things in the digital space is that the community is starting to really understand what digital is.”

The company that became iSys Label has been designing, building, and selling continuous printers more than 20 years, emerging from the plotter division of Veritas Geophysical in 1990. A decade later, leveraging color print engine technology from Okidata, iSys was officially launched. In 2006, they developed a color LED printer technology which they sold as a digital label press. Today, iSys Label serves a wide variety of end-use markets that include oil and gas, government agencies, engineering consultants, aerospace, military defense, marine, manufacturing, commercial art, graphic design, and newspapers.

We sometimes take labels for granted, but they’re an essential marketing tool for brand owners. As a result, one of the barriers to acceptance of digital label printing has been image and color quality. “The label industry is looking at dots through the loupe, and some of the tolerances are quite tight,” said Hopkins. “Barcodes and packaging material is not as stringent, but if you’re putting a brand label on their product, they’re going to be looking at colors, Pantone colors, color separations, and they’re going to critique that because they want to nothing but the best on the shelf.”

Over the years, the quality of digital label printing equipment has improved dramatically—even rivaling flexo—but the real drivers of digital label printing have been (surprise!) the ability to do shorter run lengths, and the ability to version and customize labels.

Hopkins has also found that hybrid applications allow brand owners to get the best of both worlds. A large Australian winery, for example, mass produces hundreds of thousands of their brand labels on a traditional press and uses embossing and foil stamping to produce a beautiful label. However, the vintner sells wines of different vintages and different grapes, so they run the mass-printed labels back through a digital press. “The Apex 1290, our machine, does a great job on overprinting,” said Hopkins. “They overprint that label with the year, grape, even a graphic of the grape, and some data on the back of the bottle. They run maybe 10,000 to 50,000 labels. So we can go back in and do the more specific versioning for then. There’s a great marriage between the two label presses.”

As with so many print applications these days, it’s not just a case of buying some equipment and the customers will come. “You’ve got a capital cost and a running cost,” said Hopkins. “You look at your capital cost, and you may look great. You look at your running costs, and you may not look so great compared to a traditional press.” As with other types of digital printing, the “sweet spot” in terms of run length is a moving target. So thinking about digital label printing in terms of quantity alone is not necessarily the best place to start. “The biggest thing is understanding the user’s business and how to parlay all those price points and put them into a justified business plan for them,” said Hopkins. That becomes the big part of the justification for a move into digital. “When you can justify that, that’s where the excitement and that’s where the growth are coming in. ‘Yeah, I’m going to be running a traditional press, but I may want to overprint some of my labels and have some of those versioned for a shorter run.’” Know your customers’ needs and where you can offer a digital label solution that meets those needs.

Part of the cost analysis and justification should also take into account ancillary pre- and postpress equipment. Color management and other workflow software at the front end, and an array of finishing equipment at the back end—knives, die-cutters, slitters, laminators, UV coaters, and so on. The advent of digital label presses has also kick-started the market for compatible finishing equipment that can match the printer not just in terms of speed and quality but also in terms of pocketbook. Laser cutters are especially attractive for digital label finishing, since users can just send a digital file to the device rather than make plates.

At the end of the day, making money with digital label printing comes down to due diligence: know who your customer is and what they’re looking for. “Really understanding what that customer’s key issues are,” said Hopkins, as well as “what the expectations are for digital.” What is their time to market? Is it a test market? What are the cost savings on long runs? Where is your—and their—crossover point between “long” and “short” runs? When does it make sense to print labels on a traditional press, and when doesn’t it? What about customization, versioning, and/or overprinting? When does digital help the brand owner achieve his objectives—and when does it not? Asking yourself these questions in the context of customers’ needs is the essential first step in moving toward successful digital label printing.

“Understand what that final customer is looking for,” said Hopkins. “Educate yourself as to what their needs are. Bringing that into an Excel spreadsheet and really understanding how you can make money using the digital technology is a really big step. If that end user can get their head wrapped around that, and what digital really is, it’s an easy sell.”