Relative to digital printing for packaging, drupa 2008 was a time for investigation and generalized discussion regarding product concepts and market requirements. Drupa 2012 delivered a variety of solution targeting a broad range of packaging markets that attracted the attention of converters present at the show. The focus on packaging was not limited exclusively to developers of digital presses. Also well represented were pre-press and converting solutions to support digital presses in a packaging environment. The magnitude of the investment made at all levels of the supply chain over the past four years validates the packaging market as a catalyst for future growth in digital printing. This bodes well for the packaging industry.
Analog Printing for Packaging
Several items stand out from the interviews:
- Traditional press manufacturers are focusing on driving down waste and reducing make-ready time. Press demonstrations were showing four-color press changeovers occurring in less than 15 minutes. Omet has redesigned their process for registering print, reducing scrap from typical 200-300 sheet quantities to 2.5 meters.
- Traditional press suppliers are no longer ignoring the impact of digital printing. KBA, Heidelberg, ManRoland, Komori, Mitsubishi, Bobst and Omet were all discussing plans and options for digital printing.
- Packaging is a growth opportunity for most traditional analog suppliers. Demand for packaging historically tracks to GDP, and unlike the Commercial Print Market, demand for printed packaging will benefit from digital media, rather than be harmed by it.
- Several traditional press manufacturers stated a nuisance order for Folding Carton is any order less than 5,000 impressions, 20,000 impressions are considered a standard run. One supplier estimated 65% of production jobs are less than 20,000 impressions. Whatever the actual numbers may be, the point is, regardless of how the jobs are run, individually on a narrow width press, or ganged on a wide press, changes in the order flow are creating headaches for the printer.
Different marketing messages yield different results
There is a stark contrast in the marketing messages delivered between traditional and analog press suppliers. Analog suppliers speak about productivity and flexibility. Digital suppliers speak about one-to-one marketing, personalization, and customization. In terms of productivity, analog suppliers speak in terms of sheets produced per hour, using the sheet size as a reference point. Digital suppliers also speak in terms of sheets per hour, but use terminology such as B1 or B2 size configurations that are foreign to most North American Converters. The prospect for both suppliers is typically a converter, so why is there a difference in the message conveyed, and what is the impact on the converter? We spoke with several converters that attended drupa to gain their thoughts; following are a few comments on the topic.
- “With economic uncertainty continuing, our business focus is on doing more with less. That means how we continue to grow the volume and produce it for less. Fewer people, less expense, and less material are a way of life in our business. Digital technologies can certainly play a critical role in fulfilling that need, but digital suppliers must learn how to connect their technology to my immediate need. One to one marketing is nice, but the supply chain from the Brand Owner to the Converter cannot manage one-to-one marketing campaigns today”.
- “What constitutes a low volume run? Digital printing is not about managing to a theoretical run volume, it is about increasing the utilization of high volume assets.”
Drupa attendees seeking packaging solutions now have multiple options to consider. How will the respective technologies be positioned in the market? What is the marketing message and how do converters perceive it?
Impressions post drupa
- Traditional analog suppliers are in a tough position. The supply base will undoubtedly experience additional contraction and consolidation. A digital solution will not solve the problems faced by analog suppliers, but it may be critical to have a solution in place to preserve a relationship with key customers.
- Digital suppliers need to articulate the digital value proposition. The need for variable data in Commercial Printing is a critical requirement. At least initially, variable data for most packaging applications is not a critical need.
- In speaking with several converters post drupa, we asked if digital printing is now the lowest cost investment option for incremental capacity. They believe it is, but need more information related to how much capacity it will deliver and what the impact is on current operations. The answer for which technology to pursue, traditional wide width presses versus narrow width sheet-fed digital presses, will take some time to sort out. In an uncertain economy, converters like the security of limited investment.
Winners and Losers
While all participants were claiming drupa was a tremendous success, with the exception of Landa, we saw nothing on the print side of technology that was a game changer.
On the traditional analog side, most companies in the sheetfed offset have made solid improvements in productivity, sustainability and scrap reductions. The absence of a clear winner in terms of technology typically pushes the purchasing decisions to ancillary services such as parts and service. Pre-press integration will now begin to become a larger part of the decision making process. Heidelberg and KBA will retain a dominant market position due to their strength with large companies purchasing multiple presses. Companies such as these find it convenient to have commonality in equipment throughout their facilities. Smaller participants such as Goss, Ryobi, Mitsubishi and Komori will survive as long as their customer base survives. Heidelberg and KBA continue to grow share in Asia, a historical strong hold for Komori and Ryobi. It is too early to predict the future of ManRoland. Do new customers need them as a potential supplier? Will existing customers abandon them on new press purchases, seeking greater security in other suppliers?
The introduction of combo presses and the expansion of DI technology into packaging will be intriguing to watch. Combo presses may find a niche in high value packaging applications such as beverage, cosmetics, and premium brands. The challenge these companies face is finding printers with enough volume in the target applications to justify the investment. DI technology is also interesting. It has been around for some time, and the traditional issues (no variable data capability and imaging errors in the plates) creating doubt around the investment have been addressed. The price point for this technology is below many comparable pure digital systems, with higher thru-put and a potentially lower cost of print.
On the digital side, it was interesting how toner technology stole the show. HP, Landa and Xeikon all positioned themselves as the clear market leaders. Maintaining that leadership will require delivery of successful solutions on the promises made. Surprising is the lack of any real attention to Kodak, Xerox, Konica Minolta, Epson, FujiFilm. Oce and Screen. These companies have all enjoyed success in other digital arenas, but they have thus far failed to captivate a new audience with solutions suitable to garner attention. Kodak may be a wild card with either their stream or prosper technology, but for now, only two companies, Bobst and Sun Automation have acknowledged being development partners, and both are struggling.
The third post in this series: Addressing the Unmet Needs in Packaging, will discuss what challenges face packaging converters that digital and analog systems suppliers are trying to address.
Series Overview: True to its history of introducing new technology to the printing world, drupa 2012 offered plenty of new things. In addition it showcased a great deal of packaging specific offerings in printing and finishing technologies. If drupa 2008 was “The Inkjet drupa” this time around it was surely “The; ‘we think we have a digital solution for packaging’ drupa”. Karstedt Partners spent 10-man days on the floor meeting with equipment suppliers, users, journalists and pundits evaluating what was being offered by vendors, and what was being asked for by users. This 4 part series of posts offers an overview of what we learned from these meetings and can share with those interested in our opinions and observations. The full 61-page report is available by clicking here.Continue reading
Overview: True to its history of introducing new technology to the printing world, drupa 2012 offered plenty of new things. In addition it showcased a great deal of packaging specific offerings in printing and finishing technologies. If drupa 2008 was “The Inkjet drupa” this time around it was surely “The; ‘we think we have a digital solution for packaging’ drupa”. Karstedt Partners spent 10-man days on the floor meeting with equipment suppliers, users, journalists and pundits evaluating what was being offered by vendors, and what was being asked for by users. This 4 part series of posts offers an overview of what we learned from these meetings and can share with those interested in our opinions and observations. The full 61-page report is available by clicking here.
The objective for this analysis is to assess the potential opportunities, threats, and implications for the packaging supply chain posed by new products and initiatives introduced at drupa 2012. Following are a few general comments and impressions regarding the show. In preparing for the show we scoured the web sites and presentations of the major players attempting to gain a feel for the state of the market from their perspective. The following slide from KBA caught our attention, and raised a big question; How is the industry going to respond to a 49% decline in revenue?
At 73% share, sheetfed offset dominates the new equipment market. Market segmentation of sheetfed offset typically groups press sizes into the following configurations: less than 24 inches, 24-36 inches, 37 to 42 inches and 43 inches and above.
As we prepared for our drupa interviews, we desired to understand where companies participated and what their outlook was for their particular segment of the market. Following are some observations:
- Press options for the under 36-inch segment are numerous with no shortage of participants. Heidelberg is the dominant player in this segment, with a 35% share in the 50 x 70 cm format size and a 48% share in the 70 x 100 cm format size. The bulk of Komori, Ryobi, Mitsubishi, Gallus, Presstek, and Omet sales also come from this classification.
- Press options in the VLF (very large format) size, or above 40 inches reduce dramatically. KBA is the market leader, followed by Heidelberg, ManRoland and Goss.
- Packaging applications are beginning to become the driver for sales in the VLF format. A sales manager from a large press supplier estimated 65% of VLF presses sold are being purchased for packaging applications.
- Digital printing is having the greatest impact in the 50 x 70 cm format size. Hot button issues are the requirements for flexibility, derived through flexibility in format size, quick set-ups and changeovers, and solid integration of pre-press to press.
- Digital capabilities in the 70 x 100 cm format size are now being introduced. FujiFilm, Screen, HP, MGI and Landa all displayed technologies targeting this format size. Having missed the boat on the 50 x 70 cm format size, traditional analog suppliers are quickly announcing strategic partnerships with digital developers.
- Entry into the 70 x 100 cm format size has also opened the door into potential expansion into Folding Carton. While Commercial Printing applications remain the primary target, Folding Carton is viewed as a potential opportunity through Commercial Printers as well as Folding Carton Converters.
- The introduction of off-line converting equipment specifically designed for packaging applications makes an off-line digital printing solution much more attractive.
The next post in this series will look how digital and analog systems as well as their promotions to the packaging market have progressed since drupa 2008. For the full review click here.Continue reading