My first exposure to digital printing for Corrugated Packaging occurred when I joined Inland Container. This occurred in late 2000, and Inland was in the process of developing a prototype digital press to evaluate the potential for digital printing in Packaging. At that time, technology options were extremely limited, and the resulting image quality was at best suitable for printed stock boxes. Still clear is the excitement; confusion and disbelief in the eyes of a customer when we showed them how they could design packaging, press a button, and see the packaging production begin in less than 90 seconds. Job changes were managed on the fly, with versioning occurring without stopping production. The final, Aha moment occurred when the cartons were printed with a picture of each participant, each carton within the run different, at production speed. The reaction was as they say, priceless. The problem is, and continues to be, priceless is an emotion; and emotions will not pay the bills! Welcome to the digital promise! The question needing to be answered is; how and when can we pay the bills with digital printing?
Our firm Karstedt Partners consults with a wide variety of companies at many levels within the Packaging Supply Chain. Forecasting and projecting the technical requirements necessary for success with digital technologies in Packaging applications is one area we are quite familiar with. We regularly speak with converters involved in high end graphics. These converters consistently speak of 15%-20% of high graphics jobs being a better fit for digital printing. Order volume is just one of the reasons frequently cited, others include difficult job set-ups, addressing urgent customer needs/lead time issues, and reduced cost. Converters who currently have digital assets also speak to the eventual development of discreet digital markets. These converters believe widespread access to digital printing, combined with a desire among Brand Owners to expand the use of print in promotional events, may grow high graphics demand by 20%-40% over time. The concept of a discreet digital market is not unique to Corrugated Packaging, and has developed in virtually every segment digital printing participates in. In Commercial Printing, the discreet market has developed around variable data, enabling customers to personalize printed literature. In Labels, the discreet digital market has developed around JIT initiatives supporting new product launches, initial production requirements leading to full production, end of life product management, and packaging enhancements adding additional color. Brand Owners, especially smaller Brands, consistently state the desire to extend beyond two color printing, but lack the budget to do so. Digital printing enables the addition of color at little to no expense. If you are printing in blue today, and wish to replace some of the blue with red, digital printing can easily accommodate that, without adding expense. In our discussions with digital technology developers and Corrugated Converters, we define the current available US market for digital participation at approximately $1 billion dollars at the converters selling price. The current market will most likely expand to a $2-$3 billion dollar market fairly quickly, based on the capabilities of the press. Even at $3 billion dollars, digital printing is about 10% of the overall corrugated market, so why bother? Our response is competitive advantage and profitability.
How do you build competitive advantage and profitability through a niche digital offering? First, digital printing will not be a niche offering. In the context of the overall Corrugated Market, digital printing will not have a commanding presence. In the context of High Graphics Corrugated, digital printing has the opportunity to be a significant participant. Keep in mind, digital printing is potentially a “disruptive technology”. By definition, disruptive technologies have the capability to be game changers. In my first days at Inland a senior sales executive made the following comment, “if we make digital printing about the ability to print a box, we all lose”. Converters have sufficient options for printing a corrugated box. What is lacking is a print technology capable of addressing process inefficiencies, directly or indirectly related to the expanded process for corrugated printing, design, procurement and brand strategy. Digital printing offers several unique advantages in this area. What are the process inefficiencies that you or your customers are struggling with? How can digital printing be used to address them? I was visiting with a company that manufactures air filters for the automotive aftermarket when an urgent call came in from their Sales Manager in Canada. Their largest Canadian retailer had just stumbled upon the fact that the packaging they were receiving from the filter company was not printed in both English and French. They were advised they would lose the business unless they could have new packaging on the shelf in two weeks. Over 80 SKUs were involved, and the GM was not optimistic about the ability of their suppliers to respond in such a tight time frame, not to mention the expense for managing that many revisions. Now, imagine if you had digital printing capability, even to manage the interim requirements while you completed the overall packaging transition. A digital printer could be printing packaging within hours. How often is your business confronted with similar issues? What capabilities do you have to respond? Competitive advantage can be obtained in a variety of ways. Few truly obtain cost advantage, but many act like they have it. Product advantage, when similar materials and processes are utilized is hard to obtain, much less sustain. Service advantages built around digital processes have the ability of extending from product design to inventory and replenishment strategies. And, service advantages are sustainable with digital printing.
Second is the ability for digital printing to impact profitability. We see several ways for digital printing to enhance profitability:
- Incremental sales through enhanced service and product capabilities
- Leveraging your ability as a problem solver into additional business opportunities that fit your business
- Participation in the development of the “discreet digital” market
- Attacking areas of operational inefficiency being created through SKU proliferation.
We have covered the first three items, let’s address the fourth. In a high graphics environment, what is the impact on your operational cost when job set-ups increase by 10%, but volume remains constant? What if the number is 30%? We know, you would identify and capture the resulting inefficiency, and charge the customer accordingly, correct? If so, you are in the minority. Even simple moves, like moving four-five set-ups per day from your existing operation to a digital press may free up a shift per day for production, rather than set-up. We have had a number of converters, after working with them to assess digital opportunities, state that digital printing may be the lowest capital investment for adding incremental or peaking capacity, in addition to the other potential advantages of digital printing. Resist the desire to do a side-by-side comparison on the cost of print between analog and digital presses. Instead, look at the value generated when you use a digital press for operational relief, the results may surprise you.
For digital printing to succeed and be in a position to impact a converters business as described above, the technology must be able to participate in production job requirements. What is required? Current flatbed capabilities generally fall into a range of 5,000-6,500 square feet per hour. This range needs to increase to 25,000 to 30,000 square feet per hour, and help is on the way. Barberan, a company located in Spain, has introduced a single pass UV press capable of printing on sheets with a maximum dimension of 59.5” x 144” at a speed of 178 linear feet per minute. This output rate equates to over 50,000 square feet per hour, production capable for sure. We know little about this press or the company, other than what is on their website, but it is indicative of what the future may hold. Seven years ago there were five to seven digital companies exhibiting at label Expo. At last month’s Label Expo there were over 30 companies promoting digital printing solutions. HP has been a long term participant in developing packaging solutions, other well-known industry leaders such as Kodak, Epson, Konica Minolta, Oce/Canon, Xerox, FujiFilm and Screen have either introduced products for packaging, or have announced their intentions to do so. At last year’s drupa exposition, traditional analog manufacturers such as Bobst, KBA, Heidelberg and ManRoland announced partnerships with digital developers. Over the next five years we anticipate a host of solutions, addressing both sheet fed, and web fed requirements, as both stand-alone and in-line solutions.
Dr. Geoffrey Moore is the author of several well-known books addressing all facets of disruptive technologies. Dr. Moore uses the following diagram to explain the technology progression.
The chasm is where most new products die, as they fail to move from early adopters to the early majority, or the mainstream market. Flatbed digital technology has established a beachhead in corrugated packaging, but it is clear the output of these products is not sufficient to gain the interest of mainstream markets. The next generation of technology has garnered the attention of mainstream markets, but it still needs to deliver. Digital printing in Labels has either passed through the chasm, or is close to passing. New press technology targeting Folding Carton has caught the attention of mainstream Folding Carton Converters. Efforts in Flexible Packaging are developing. The combined efforts in all four markets have caught the attention of the Brand Owner, and they are now preparing for a future with digital printing. Coca Cola gained a lot of positive press this summer by launching a campaign in Europe for several Coca Cola soft drinks through a promotional campaign combining traditional media such as print and TV with interactive promotions through social media and the Coca Cola website. The cornerstone of the initiative was the use of digitally printed labels enabling Coca Cola to personalize the cans with the most popular names in designated regions. Yes, the consumer was able to purchase the product with their name on the can. In his books, Dr. Moore speaks about the dangers to companies who are late in adopting disruptive technologies. The value of competitive differentiation enables those with the differentiation to participate, while effectively locking out those without the differentiation. Sustainable differentiation means the competitive advantage endures, assuming you leverage the early gains into other areas of competitive advantage. Digital value propositions focused on print deliver short-term competitive advantage. Digital value propositions focused on upstream and downstream process advantages, both internally and externally create sustainable competitive advantage. If you are a participant in High Graphics Corrugated, you may not desire to be the first to enter, but can your business really afford to be late?
Jeff Wettersten is President of Karstedt Partners, consultants to the Packaging Supply Chain. Karstedt Partners work with technology developers, retailers, brand owners converters/printers and suppliers in strategy development, product and market commercialization strategy, process optimization, and sales training. Jeff may be reached through e-mail at Jeff@karstedt.com or www.Karstedt.com.
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Print 13 started out very nicely for me as my first official meeting was a breakfast meeting on Sunday morning with Benny Landa and three of my “packaging” colleagues, Danielle Jerschefske of Labels and Labeling Magazine, Pat Reynolds of Packaging World and Yolanda Simonsis of YTC Media. At the very relaxed event at a downtown Chicago hotel, Benny (as I now call him because we are “buds”) shared with us the updates on the packaging versions of the new nanographic digital press line that was introduced at drupa last year.
Coming out of drupa last year I had a pragmatic set of expectations set for the release of the Landa presses to the world. This kind of technology is not easy to bring from the lab to the production floor, my feeling is that drupa was about 12 months early, but that could not be adjusted. So the early print sample quality (and the problems I saw in what they were showing) and aggressive target for beta were just that, samples and targets. I expected the quality to rise and the beta to slip so the announcement over eggs and toast that beta for the first press would be Q4 or 2014 and impressive print samples did not surprise me. What did surprise me a bit was that the first press would be the S10FC with FC standing for Folding Carton. We in packaging are so used to getting commercial printings hand-me-downs, it was a breath of fresh air to hear we were FIRST on the docket. It makes sense in that the FC does not have to print on both sides (duplex) for most carton applications so getting one sided printing commercially acceptable is the first hurtle and one we in packaging can handle just fine. Another nice thing is that the S10 frame can handle a sheet size of about 41” by 29.5” (updated on September 24th) or as they like to say “B1”; which is another pet peeve of mine, “drop the ‘Bs’ when you talk packaging”, lets see if it gets through this time…
There will be numerous articles written on this topic but few will have the “packaging spin” that this one will as I will focus on the items my readers are most interested in. I suggest you read the article by my colleague, Cary Sherburne, also on WTT, to get her keen insights; she was invited to a special session at Print13 for the commercial side of the house. Included with her article is the Landa Press Release around these announcements.
So here are my observations and comments:
New ink “ejectors” – I think it interesting that they continue to call them “ejectors” when the rest of the world calls them inkjet heads but that is part of the mystique of Landa. The resolution of the “ejectors” has gone from the drupa 600 dpi to 1200 dpi today. Speculation is that this is being done with new Kyocera heads, ooops, ejectors, but that was not confirmed or denied when I asked. This is likely one of the key reasons they have been able to increase print quality as much as they have. It is also a reason they will be able to control nozzle dropout problems as the systems go online.
The Quality “S” Curve – Shared with us was a graph they use to show where they were and are going related to print quality. They fully admit the quality has been sub-par and needs to improve. On the curve you can see they feel they are almost at “offset” quality and plan on being will within that range by next years beta. Quite honestly the image quality I saw over breakfast was sellable for most uses, better is always better and I am sure we only saw “the good stuff” but I was encouraged. Issues of printing on various coated and uncoated stocks as well as virgin and recycled boards don’t seem to intimidate them due to the way the ink layer is transferred from a printing blanket to the substrate in a solid rather than liquid form. This could be an advantage over systems that jet UV or Aqueous inks directly to the board where spread and adhesion can be challenging. This could have real benefits to carton producers looking for an edge.
FDA Compliant Inks – As the print samples were being passed around the table while we were still drinking coffee and munching on something sweet, it was noticeable that there was on odor coming from the print samples as you would usually notice from digital samples. This is due to the inks being water based and maybe from the strong smell of the Starbucks coffee. The company claims the inks are all FDA compliant and with low or no odor they will be good for cosmetic and pharmaceutical work as well. This needs to be validated but it is a good sign.
The New Operator “Cockpit” – If you are reading this far into the article you have likely seen the original Landa press shown at drupa. When looking at the huge “iPad” type control screen stuck to the front of the press my business partner, Jeff Wettersten, said to me “now that looks like a forklift accident waiting to happen”. It seems that others, some of the 120 customers the company says they visited to gain feedback, told them the same thing. So the new version has this interactive cockpit for the operator to work in more of a conventional environment. On the screen are video monitors with real-time shots from critical areas inside the press and all the critical operating functions right next to the output tray. They even have a viewing table (where is the back of the light booth?).
Optional Conventional Inline Coating – In their press release the company says: “An optional conventional inline coating unit will efficiently enhance Nanography-printed products with both flood and selective coating. The coating unit will support flexo rollers and plates as well as a variety of UV and aqueous coatings.”
My question to Landa and the others with digital printing solutions is; “Why would I want an analog coating system on my digital press?” The pragmatic side of me knows the difficulties of integrating a digital coating station but the idea of a static coating system on a digital press just seems counter intuitive to me. There has to be high speed jetting (ejecting) systems out there that could jet coating solutions at the speeds and (low) resolutions needed for digital coatings. I am sure that these conventional coating solutions are simply stopgap solutions and that a true digital solution is just a matter of time but I would have thought that if anyone were to bring that to the market first it would have been Landa.
Note that when looking at the overall diagram of the S10 the coating unit is called out as the white unit after the print engine and the large gray unit between the coater and the delivery is the dryer for the coating. The print unit does not require a dryer as the ink is dry from the time it is transferred from the blanket to the substrate.
Not a Niche Printing Press – The notion that the Landa presses will be for short run digital use was totally dismissed. It is clear that mainstream production is the target for the Nanographic technology. In the presentation Benny showed the popular slide of where digital and analog technologies play now with a gap in the middle of production volumes where his presses nicely fit. It is clear they do not see their presses playing niche roles in the production of folding cartons or even flexible packaging in the not to distant future but playing a major one in terms of jobs and volume produced.
Question of Throughput – A few questions were raised at the meeting that I worked with the Landa team to clarify and I have received that clarification on this question today. Originally the system had eight ejector bars (two each for CMYK) this gave the system the ability to print 13,000 sheets per hour. Now the system has a standard configuration of one set of CMYK ejectors that will give a 6500 sheets per hour rating. They say there is a future option for an added CMYK set of ejectors to get the system to 13,000 sheets. This however will likely jeopardize the extended color gamut plans the company plans.
Extended Color Gamut – Benny was very excited about, the use of extended color gamut printing using, CMYK +OVG on the Landa presses. It is interesting to see the level of excitement the company seems to have on this topic, it almost felt as thought this was a new line of thinking. In fact, this topic has been discussed in packaging circles for the better part of the last decade. Outside of a few instances it has yet to gain major traction while it is of keen interest to Brand Owners and Converters alike. I see the obvious upside potential of its application but also see the issues holding it back from full scale adoption. These Nanographic presses coming into the market may add some weight to the positive side of the scale, may help the tipping point, for extended gamut printing to become mainstream. That is yet to be seen but it is an intriguing prospect.
Not So Final Note – My final thought on this article… undoubtedly there will be many more on the topic… I am pleased with the prospects that my new BFF, Benny has laid out for us. Yes the timing is not what some had hoped but it is what realists projected. While it is not rocket science, it is pretty complicated and they had a long way to go coming out of drupa. Frankly I am impressed with the progress they have made and thank the Landa team for including me with “the Packaging People”.
Check out Benny’s latest video update on Karstedt Partners TV. Bookmark the station too…
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For the first few weeks of we featured articles focused on the corrugated packaging and folding carton sectors. For the next few weeks we will be focusing on the flexible packaging sector.
To help us introduce the various packaging sectors to the growing WhatTheyThink Labels & Packaging readership we asked PRIMIR if we could pull excerpts from their 2012 study that Karstedt Partners was commissioned to write titled Packaging: Evaluation of Vertical Markets & Key Applications. This study was unique to many industry studies in that it looked at the force being placed on Brand Owners, the originator of packaging orders. Taking this focus a step further the study looked in-depth at the major vertical markets of food, beverage, household, personal care and healthcare to see what will be driving packaging demand in these verticals and thus driving the supply chain. Following are some of what we brought to PRIMIR members surrounding the folding carton sector. The full table of contents for the report can be downloaded here.
Flexible packaging converters have been leaders in active and intelligent packaging for the past decade. The Freedonia Group projects growth in active packaging to be 6.5% per year to $1.9 billion in 2015. Advances in gas scavenger technology in food and pharmaceutical packaging are the drivers. There are also continued opportunities in self-venting substrate usage of the type used in microwave popcorn. An example of how pervasive these capabilities are, can be seen with the adoption of microwavable, steamed vegetable packaging. Originally developed for premium brands just a few years ago, it is now used for a very high percentage of products in the frozen vegetable and entrée section of grocery stores for national and private brands. Consumer preferences for more natural products with no or less preservatives are creating opportunities for packages that offer longer shelf lives for both fresh and processed foods.
Intelligent packaging, that is more a marketing and sales enhancing tool, currently comes in the form of QR codes and 2D barcodes that aid the brand in communicating with the customer. Freedonia projects expansion of this group now at 20% annually to $370 million in 2015. It is hard to quantify how much activities in this group will affect packaging converters, as much of the implementation is done through communications infrastructure, web sites and databases. Converters add the printed QR codes, barcodes and other graphic components. Intelligent packaging require frequent package design changes to keep their promotions ‘fresh and engaging’ for the consumer. Heavy users of flexible packaging will us these active measures for better tracking and trace capabilities for food and other perishable products. This is significant in light of the passage of the Food Safety Modernization Act (FSMA http://www.fda.gov/food/foodsafety/fsma/default.htm) introduced in January 2011. FSMA is contamination prevention legislation that will have a large impact on food processing and packaging over the next few years.
Brands and retailers are pushing for packaging and materials that help food products stay fresher longer. Source reduction initiatives are becoming increasingly valuable with initiatives taken by major retailers and brand owners to evaluate supplier packages for eco-friendliness and cost reduction.
Increases in the application are also driven by continued conversions to standup pouches and flat pouches in a number of markets including sauces, dried foods and spices. Flexible packaging converters also benefits from the increased use of convenience features such as zippers and spouts integrated into pouches and the emergence of new applications and products such as flat-bottomed, side-gusseted pouches and hybrid pouch/folding carton products.
Growing efforts by retailers and brands to demonstrate their commitment to sustainability may lead to a renewed interest in paper, for its perceived benefits: renewable, recyclable and compostable.
Growth in food applications targets eat-on-the-run consumers that will drive more costly film and barrier coatings to extend shelf life. These trends boost the demand for food in smaller package sizes and more convenient foods designed to reduce food preparation time. Trends toward healthier eating will encourage food manufacturers to expand their offerings of products, especially snacks, baked goods and beverages, in single serving packages. Such products require more packaging than standard packages of similar items.
The fastest growing food packaging markets for flexible packaging are: beverage, meat and related products and snack foods. In non-food applications, advances will be led by pharmaceutical and medical product markets based on heightened barrier requirements, cost and convenience advantages.
New developments in barrier resins, bio-plastics, recyclability, biodegradable films and compostable films will also drive market expansion.
Other factors influencing the flexible packaging application include considerable cost and material reduction programs by major food manufacturers, brand owners and retailers. Packaging waste reduction initiatives at the local and government levels also impact flexible packaging producers.
Lean manufacturing programs are present at all levels of the flexible packaging segment. The goal of most converters is produce less waste, reduce setup times, maintain consistency within and between jobs, and gaining overall efficiency.
There are industry efforts to expand the acceptance and use of digitally imaged flexo plates. In-the-round imaging has limited implementation to-date. Other industry technologies that are in the ‘ramp up’ mode are extended color gamut printing, G7 near neutral calibrations and in-line full web defect detection systems. One of the great successes of recent years in flexographic printing is the relative acceptance of High Definition Flexography (HD Flexo).
While pre-recession growth rates of 4.5% per year are unlikely to be repeated for some time, industry associations and experts expect growth of around 1.8% per year for the next five years.
As part of the study Karstedt Partners interviewed 122 Brand Owners in multiple vertical sectors as well as 60 converters and industry leaders to compile comprehensive trending information that will be affecting buying decisions for the next few years. For more on the study and to become a member of PRIMIR visit them at http://www.primir.org.
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With the launch of the Labels & Packaging section of WhatTheyThink now behind us, we wanted to give you a preview of upcoming topics and what to expect.
First, because our audience includes Brand Owners, Converters/Packaging Printers, Suppliers, and many other readers, the familiarity with Packaging is going to vary. A significant part of our vision is to educate and keep audience members informed regarding the state of the industry, significant events occurring in the industry, and trends or issues that may affect the industry. Our desire is to provide a communication link bridging the packaging supply chain, from the suppliers of equipment and raw materials, all the way to the retailers.
Our focus for the next 9-10 weeks will be discussing specific application segments within the packaging industry. These application segments will include corrugated packaging, folding carton, flexible packaging, labels, rigid containers, and glass packaging. Industry executives will provide inputs on the current state of their segment, opportunities and challenges affecting their segment, and their view on the future outlook. We are inviting suppliers and brand owners to provide feature articles discussing issues or opportunities they see specific to that application area, and how their industry is responding to the issues or needs.
Following the series for packaging applications, we will turn to the retailers and brand owners to gain their input on future trends in retailing, consumer behavior, or packaging requirements that will affect the packaging industry. Topics we will explore will include sustainability, private labeling, the impact of social media on packaging, demand patterns, contract manufacturing and contract packaging, and sources of supply. We are inviting converters/package printers, contract packagers and contract manufacturers, and suppliers to provide feature articles on how the upstream changes at retailers and brand owners is impacting their business, and what their industry is doing to respond.
Next, we will turn to the suppliers of the packaging industry. What is happening with print and converting technology, what is happening with basic raw materials, pre-press supplies and equipment, software, and inks and coatings?
If you have additional thoughts or would like to add areas for exploration, or if you would like to be a author/contributor please feel free to contact me at Kevin@Karstedt.com. We also invite press releases and industry news article to be sent to firstname.lastname@example.org to make sure they get placed in the news feed section of the site.
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Welcome to the inaugural post for WhatTheyThink’s Labels & Packaging website. The folks at WTT and I have been speaking for quite some time on the need a version of WTT that focused on the needs of those in the packaging supply chain. I am honored to be the Managing Editor of this new endeavor and will strive to bring meaningful and timely content to those in the packaging supply chain who are looking for information and intelligence in order to do their jobs better.
As the supply chain for packaging is extremely divers, we will try to address the needs of multiple disciplines from graphic design, structural design, prepress, workflow, product and project management and printing and finishing of all flavors. This is a good time to begin this effort, coming out of a drupa year there are many new products and services that are targeting the package printing marketplace, products and services that are in need of exploring and understanding. Through out this inaugural year of WTTL&P (how is that for a twitter hashtag #WTTL&P?) we will grow the content areas of the site as the needs of the readership direct. Starting with areas around design, prepress and workflow we will expand out to areas asked for by you the readers. These areas could include flexo, gravure, offset, digital and screen printing; finishing in cartons and flexible packaging; color management, in the pressroom and back to design; substrate manufacture and usage to name just a few.
In addition to the mechanical part of the packaging supply chain, WTT has done a good job in addressing business issues facing printers and suppliers and that will continue on the Packaging side of the site. Mergers and acquisitions in packaging have been increasing for the past few years and with all likelihood will continue in 2013 and beyond.
Readership will likely be a combination of users and suppliers with each group having different agendas and needs. This medium is unique and is well suited to the goals of both groups as each is hungry to reach and learn from the other. WTTL&P will be a conduit for that linkage and will strive to bring meaningful content to the readership.
A mainstay of the WTT model is a comprehensive news feed section on relevant topics to their readership. This will continue on the Packaging side bringing readers news that is compiled daily to bring the latest news and information in one place. To all the vendors and businesses in the audience, be sure to send your press releases to email@example.com in text or word format to be sure it is included on the daily news feed. I will be funneling worthy information to the site as well. Users and business owners, be sure to check the site regularly to be close to the news that affects you and your business.
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