Digital’s Expansion Across Packaging Segments
The rate of technological evolution in the package printing industry has moved incredibly quickly over the past decade, with digital production technologies bursting onto the scene. While digital printing and finishing equipment was slower to take hold in packaging than in other print industry segments, what was once viewed as a novelty or niche technology has now become mainstream in some segments, and is entering the mainstream in others. NAPCO Research, a division of NAPCO Media and PRINTING United Alliance, recently published a study that engaged package printers and brand owners on their usage of and viewpoints on digital printing.
The study, which was sponsored by BOBST, CloudLab, Durst, EFI, Elitron, Landa Digital Printing, and Screen and is now available as a free download from the Packaging Impressions’ website, uncovered adoption and investment trends in digital package printing and how package printers are making the most of the technology. Additionally, brand owners shared their increased levels of knowledge of the technology, and expressed strong desires for their package printing partners to offer digital printing services. The study takes a deep dive into the ongoing drivers of digital adoption, including expanded SKU proliferation and versioning.
While digital printing first made in-roads in packaging via the label and folding carton segments, the study also revealed that converters across all segments, including flexible packaging and corrugated, are increasingly bringing digital on board, expanding the technology’s benefits to brand owners that historically relied heavily on conventional printing.
Along with the technological evolution, the retail landscape is changing, as e-commerce continues to impact how consumers shop and brands promote their products. This shift has also led to opportunities for digital printing and production of packaging, and will drive ongoing adoption of digitally powered printed packaging manufacturing. For all packaging stakeholders, however, the production efficiency advantages of digital, particularly in short runs, remain the top benefit the technology provides, while its creative design capabilities are not far behind.
Digital’s Expansion Across Packaging Segments
Though digital represents a small fraction of the total output of printed packaging, it has become increasingly common to see on shop floors. In fact, while flexography was the most utilized print technology among respondents (39% using narrow-web flexo and 37% using wide-web flexo), digital technology adoption was comparable. When asked to indicate which print technologies they use to produce labels and packaging, 33% of respondents cited their use of inkjet, while dry toner electrophotography and liquid electrophotography were each in use by 19% of respondents.
Digital printing and production adoption rates, which rival those of conventional technologies, indicate that printers and converters are increasingly installing digital equipment at their facilities. Though the output volume coming off these presses may not be in the neighborhood of their conventional counterparts, these data points demonstrate that digital printing services are being offered to brand owners in ways that compete with conventional.
While digital printing is not a new technology to the package printing industry, its initial primary adoption areas were in the label and folding carton segments. Though these segments still remain the most common adoption areas, the technology has gained noticeable traction in both the flexible packaging and corrugated segments, allowing brands to access the benefits of digital for all their packaging formats. For example, 72% of respondents that produce non-prime labels, 64% of respondents that produce prime labels, and 60% of respondents that produce folding cartons state they use digital printing — and flexible packaging and corrugated are close behind. Of the flexible packaging respondents, 42% use digital printing to some degree, while approximately 45% of corrugated respondents cite their use of digital.
These adoption rates are encouraging for brand owners that purchase these packaging formats, such as flexible and corrugated packaging; they can now benefit from digital’s short-run efficiency and customization advantages.
Brand Packaging Desires Correlate to Digital’s Rise
The success of any technological advancement in the printing and packaging industries is, of course, contingent on how well it meets customer needs. In the case of digital package printing, the top desires and challenges among brand owners demonstrate a direct correlation to digital’s value propositions.
For example, when NAPCO Research asked brand owners to indicate their top packaging challenges, they largely selected obstacles that can be eased via digital printing. The top challenge brand owners cited was designing packaging that influences purchasing, with 38% of respondents. With digital printing, not only do the latest printing platforms rival the quality of flexography and offset, they provide creative design options unattainable via conventional presses. Specifically, the personalization, customization, and versioning attributes of digital can create labels and packages that engage the consumer in ways static, long-run production on conventional presses cannot.
Similarly, 32% of respondents stated managing many product versions was a top challenge, while 31% cited enhancing the consumer and brand relationship via packaging. As versioning continues its rise, digital printing will continue to play an essential role in packaging. And as brands work to maintain strong relationships with their customers, the ability to leverage digital to create personalized experiences will lead to enhanced connections.
While many of the top packaging challenges brands face pertain to packaging design and enticing consumers, efficiency- and production-related challenges were also weighted strongly. For example, 35% of respondents stated that improving their supply chain efficiency and responsiveness was a top challenge, 33% cited meeting sustainability goals, and 26% selected meeting shorter time-to-market requirements.
Leveraging digital’s fast turnaround capabilities, brands can be responsive to fluctuations in their supply chains. Brands can also be more reactive in how they source packaging because the production workflow is more agile. For example, if a product needs to get to market quickly, the lack of platemaking and makeready needed in digital printing can make that a reality. However, brands should keep in mind that for longer runs, digital is likely not as cost-effective as conventional printing, despite its fast turnarounds. Meanwhile, as sustainability maintains its position as a top priority for brand owners, digital printing offers advantages as a print process producing less waste. In many instances, the makeready required for digital presses does not require as much substrate waste as a conventional makeready. Brands that want to adhere to sustainable practices in their label and packaging production can cite digital printing as a viable method for reducing the amount of material being sent to landfill during the package manufacturing process.
Converters Seek Productivity and Creativity in Packaging
The study furthers the case for digital printing, as converters’ top packaging challenges and top perceived benefits of digital are largely comparable to those of brand owners. For example, 91% of package printer respondents stated that shorter production lead times are a top challenge at their company, with nearly one-third (29%) calling it a critical challenge. Given brand owners’ desire for faster speed to market, there is clear alignment among packaging stakeholders in that labels and packaging need to be delivered faster — a benefit digital provides given its lack of plates and reduced makeready.
Additionally, short-run production, an ongoing trend across packaging for several years, continues to present challenges to converters. More than one-quarter of respondents (27%) called accommodating an increasing quantity of smaller jobs a critical challenge, with 86% stating that this was at least a slight challenge.
Brands seeking to produce packaging in smaller quantities so as to not be saddled with substantial packaging inventory are increasingly requesting short runs of labels and packaging, which is another ideal task for digital presses.
When NAPCO Research asked converters what they perceive as the top benefits of digital printing, 36% of respondents cited the technology’s ability to accommodate short runs, which was the top response. This was followed closely by accommodating customer demand for faster turnaround, with 34% of respondents. However, just behind the efficiency aspects of digital, converters cited the creative components of the technology. Specifically, versioning and personalization are viewed as top benefits, as 31% of respondents selected each of these attributes as top advantages of digital printing. As consumers demonstrate positive reactions to personalized packaging and an increased variety of products within brands’ product lines, these benefits of digital have emerged as top solutions for enhancing the connection between brands and consumers.
Digital’s Presence in the Evolving Packaging Landscape
Though digital printing has been prevalent in labels and packaging for well over a decade, the brand and consumer trends driving packaging’s evolution further make the case for digital’s presence in the industry. For example, the phrase “SKU proliferation” is well-known among package printers, as for years brand owners have expanded their product lines, offering consumers more variety. This diversification has appeared in a number of ways, including increased flavors of food and beverage products, cosmetic items targeted toward specific consumers, seasonal and limited product releases, and much more.
Because brand owners continue to produce more varieties, they are in need of design flexibility from their label and package printers. Brands also don’t want to be stuck with excessive packaging inventory that would bind them to either producing more of a single product, or discarding the inventory if and when it became obsolete. With digital printing, these brands can get on press very quickly, without incurring the cost of platemaking, and produce a short run of packaging, ensuring they can have the specific quantity they need, without an unnecessary overage.
While SKU proliferation has been an ongoing trend, data in this report indicates that it is expected to continue. When asked to indicate how their SKU quantity had changed in the past 24 months, 41% of brand owner respondents stated it had increased. Meanwhile, when asked to share their expectations for their SKU quantity over the next two years, 60% of respondents predicted an increase. The reasons for this are largely tied to consumer demands, with 75% of brand owner respondents that expect an increase in SKUs stating consumer demand for more product variety was a top driver.
Of the respondents that plan on investing in a digital press in the next two years, 58% stated they plan to use the equipment for producing flexible packaging. Meanwhile, 19% of respondents each stated they plan to use their new digital asset for printing either preprint or postprint corrugated applications.
On the flexible packaging side, this high-demand packaging format — which has been lauded by brands, consumers, and retailers for its portability, convenience, and resealability — has been largely relegated to conventional printing processes, such as wide-web flexography and rotogravure printing, which require a sizable capital expenditure and floor space. Because these conventional print processes are best suited toward long runs, smaller-sized brands that require lower volumes of packaging have often not found flexible packaging to be cost-effective. However, with digital printing solutions, these brands can now benefit from the same advantages as their larger competitors and maintain the short runs and design flexibility that are hallmarks of their brand identities.
With corrugated, brand owners and retailers have been able to leverage the power of digital printing to coincide with the rise of e-commerce. While online shopping has been a mainstay of the retail landscape for years, e-commerce has skyrocketed since the onset of the pandemic, with expectations that those consumers will maintain their online buying habits, even with lockdowns and quarantines a thing of the past. As e-commerce has continued to make waves in retail, the need for corrugated shipping boxes has increased, and full-color digital printing has allowed brand owners and online retailers to transform the plain brown box into a high-end graphic, and, in many cases, personalized packaging experience. With brands seeking to enhance their connections with consumers, digital printing for corrugated packaging is a surefire way of elevating the unboxing experience when a package arrives at a consumer’s front door.
While digital printing has been a mainstream technology in packaging for the better part of a decade, the opportunities to thrive with the technology are growing rapidly. For label and package printers and converters seeking to maintain an edge over the competition, a sound digital strategy is imperative to success.