A convertor or a print service provider looking at expanding their product and services portfolio has to develop a long-term strategy to capture a share in the developing market, reports David Zwang, a print-packaging expert
We keep hearing about all of the opportunities available in labels in packaging production, but where can you find them, and which ones are right for you and your company? Whether you are already a converter or are a print service provider looking at expanding your product and services portfolio it is important to develop a long-term strategy in order to capture your share of the developing and changing markets.
Where do you start? Purchasing new technology? In essence, if ‘you build it will they come’? If it is about technology, what type of print and converting/finishing and embellishment technology should you be looking at; flexo, gravure, offset, toner, inkjet, hybrid, bespoke? Drupa 2020 is about a year away, what should you be looking for when you get there? What about workflow? Does one size fit all, or do you need to create a workflow that will enable you to integrate all of your production processes? We recently touched on personalization in packaging. Is that the secret key to success? If you are a commercial printer and really don’t have an interest in expanding into label and packaging production, are there lessons you can learn from converters to enhance your business?
There really are no quick and easy answers to many of these questions, and to address each of them with the necessary focus to enable you to fully understand them and prepare to take action requires more than one article. So, I will take each of them on in this new series of articles, but in the context of the bigger picture.
To get this started, let’s take a look at some of the current and projected future market numbers, and perhaps put them in some perspective. According to Smithers Pira report – ‘The Future of Packaging: Long-Term Strategic Forecasts to 2028: the total value of packaging is projected to rise at a CAGR of 2.84%, from $906.59 billion in 2018 to in excess of $1.2 trillion by 2028. Additionally, digital print for packaging is projected to grow at an average CAGR of 13.6% in NA and 16.2% globally.
While that is a healthy increase, a more interesting factor is that according to an IDC Digital Printing for Packaging survey, the volume trends of packaging print over the last two years across most of the packaging segments showed an extremely healthy market with over 80% of the respondents reporting year over year increases.
Furthermore, while the Smithers study shows that 35% of the substrate used in 2018 was paperboard, IDC reports that a general increase in volume seems to hold across all of the packaging types.
Customised packaging will increase to $25.58 billion by 2025 projecting a CAGR of 5.1%, according to Research Report Insights’ ‘Personalized Packaging Market’ report. Digging deeper as I covered in a recent article on the personalisation study funded by HP, while consumers were interested and even willing to pay more for personalisation of products, it was very dependent on population segment and product types.
One of the fastest growing segments in packaging is corrugated, with an estimated global growth of parcel shipments of up to 31.5kg increasing from 74.4 billion in 2018 to 100 billion in 2020 according to Pitney Bowes. How do you take those packages and turn them into marketing opportunities rather than just a brown shipping container? What kind of equipment and processes are needed to address those needs, especially in light of the significant increase in production printing technology targeted at the corrugated market?
According to IDC, over 63% of brand owners don’t have a preference for what technology is used provided the finished product meets their requirements. While digital print is usually thought of as higher cost than analog technologies, we have already seen that some of the newer digital technologies can compete almost head to head.
The answers to the questions I posed are not as clear as one would think. There is no doubt that packaging print production is full of opportunities as you can see from this small sampling of projections. Are these opportunities the right fit for you? According to Amy Machado, Research Manager for IDC. “If you are already a packaging converter there could be good times ahead, especially if you are not in the commodity side of the business. If you are a print service provider looking at packaging print production as a way to expand your offerings, you need to first think about what your value proposition will be in order to even get the attention of packaging buyers.”
(The copyright article originally appeared on WhatTheyThink.com. Reprinted with permission. Headline and standfirst modified to suit the template.)