Labels and Flexible Packaging Take Center Stage at PRINTING United
Two of the most exciting segments of the packaging industry took center stage at the PRINTING United Digital Experience today, as labels and flexible packaging were put in the spotlight. The day featured the latest research into these segments from NAPCO Research’s principal analyst, an overview of the segment’s key opportunities from the presidents of two industry specific associations, and two panels featuring representatives from leading label and flexible packaging companies, who shared their experiences in these segments.
Opening the day’s events was Lisa Cross, principal analyst for NAPCO Research. Over the course of the year, Cross and the NAPCO Research team have been exploring the key drivers behind growth and opportunity areas throughout the printing industry. In packaging, Cross has focused in on digital printing, and detailed some of the reasons this technology has been gaining so much attention in the industry.
The top digital technology drivers in labels and flexible packaging were similar, as 59% of label printer respondents and 65% of flexible packaging respondents said shorter run lengths was a top reason for adopting digital technology. Meanwhile, 47% of label printer respondents and 53% of flexible packaging respondents indicated that personalization opportunities were behind their digital technology adoptions.
“Technology innovations and brand owner demands together are expanding the need for digital printing,” Cross said. “Digital printing offers many transformational benefits. It allows for affordable short runs and brand owners can produce as needed.”
An Industry Overview
While there is increasing overlap between the label and flexible packaging segments, both of these segments are distinct in their positions in the overall packaging industry. To provide a detailed look at the trends and opportunities in both labels and flexible packaging, the presidents of the two leading North American industry associations joined the broadcast. Linnea Keen, president of label industry association TLMI, opened the presentation, followed by Alison Keane, president of the Flexible Packaging Association (FPA).
As a packaging format utilized across several industries spanning consumer product goods, industrial applications, the medical segment, among many others, Keen provided a breakdown of the significant size and scope of the label industry. With approximately 2,200 label printing and converting companies across North America, Keen explained that the label segment represents an approximately $13 billion portion of the overall printed packaging market.
Digging deeper into the label market, Keen explained that there are several different label formats produced, which are classified as pressure-sensitive, glue applied, sleeves, in-mold labels, and other. Pressure sensitive is the largest segment of the group, representing 54%, while glue applied and sleeves are 29% and 11% of the market respectively. However, Keen stated that shrink labeling is becoming increasingly popular in the food and beverage markets, with 50% of shrink applications found in beverage and 25% in food.
Overall, Keen said that the food and beverage markets are where the majority of label applications are found. With the combination of the COVID-19 pandemic causing consumers to spend more time at home, and an increasing number of more localized brands, she added that food and beverage should continue to be where many of the growth opportunities in the label segment are.
“Food and beverage are making up the lion’s share of the market and those are really strong, especially this year as we spend more time in our home,” Keen said. “As we look deeper into those markets, local, regional, fine foods and craft segments have been particularly growing.”
To provide some insight into the fastest growing segment of the U.S. packaging industry, Keane, president of the FPA, shared some statistics behind flexible packaging’s rapid rise. Of the $177 billion packaging industry in the United States, Keane said flexible packaging comprises 19%, with more than 450 companies across the country.
Similar to the label segment, the food and beverage markets are where the majority of flexible packaging is found, with food in the dominant No. 1 position at $17.6 billion annually. Beverage meanwhile, accounts for $3.4 billion, with the medical and pharmaceutical segments at $3 billion.
While not all flexible packaging is printed, Keane said that 89% of the FPA’s converter members report that they do at least some printing within their facilities. In North America, flexography is the top technology utilized at about 74%, with gravure representing approximately 9% of output.
Digital printing meanwhile, represents about 1% of flexible packaging output, but Keane explained that while digital printing is still in its early stages in the segment, it is experiencing very rapid growth.
“In the last couple of years we’ve been asking converters how they have been using digital from 2018 to 2019, and it’s double digital growth,” she said. “That may be complete digital or hybrid with some digital print at the end.”
While the growth trajectory of the segment has been exciting for flexible packaging printers and converters, Keane said that one of the toughest challenges the industry is facing are concerns and legislation surrounding sustainability, and increasing anti-plastic sentiment. During the COVID-19 pandemic however, Keane said the sustainability push has seen a temporary slowdown as packaging — single-use flexible packaging included — was in high demand.
Additionally, with the urgent need for personal protective equipment, Keane said the flexible packaging industry stepped up to not just produce the packaging for the equipment, but in many cases, utilized its resources to make the equipment itself.
“Not only did we make packaging for PPE, but a lot of converters switched over to make face shields and other PPE that you need paper or film to make,” she said.
While some attention has been pulled from sustainability during 2020, Keane said she expects it to just be a temporary pause. And with legislation surrounding single-use plastics expected in 2021 across several states, she said it’s imperative for the flexible packaging industry to educate brands, consumers, and legislators on the benefits it provides including transportation benefits, increased product shelf life, and a reduced product to package ratio.
“We need people to know how important it is for everyday life,” she said.
How to Span Both Segments
One of the most exciting aspects of the label and flexible packaging segments, is the increasing number of companies that have strategically expanded their offerings to encompass both applications. Joining Packaging Impressions Editor-in-Chief Cory Francer for a panel conversation on how to bridge the gap between label and flexible packaging were representatives from two companies that have been successful in doing so. Jackie Kuehlmann, director of marketing and inside sales for Inland Packaging, and Kimberly Flynn, marketing manager for Hammer Packaging, each offered a glimpse into their company’s strategies for application diversification.
When exploring a potential new segment to enter, Kuehlmann explained that La Crosse, Wis.-based Inland takes a deliberate approach backed by research. For example, she said that if there is a shift in the marketplace from one label format to another, or a change in consumer behavior, the company will dig into the reasons behind that change. Combined with consistent communication with customers and suppliers, Kuehlmann said that this exploratory approach has been key to Inland’s growth.
“At the end of the day, we look to see how we can best serve our customers,” she said. “You have to continually evolve to stay relevant and successful.”
At Hammer Packaging, Flynn said the company takes a similar approach, monitoring social behaviors and tracking information from customers and vendors. Additionally, she said that Hammer Packaging has a close relationship with nearby Rochester Institute of Technology in Rochester, N.Y., which helps keep the company in tune with students coming into the industry with a passion for print technology.
On the technology front, Flynn said Hammer Packaging maintains a 10% reinvestment model to ensure it is on the leading edge of production equipment and software, allowing it to explore new packaging opportunities.
“We see ourselves as an engineering company,” Flynn said. “We focus on R&D and innovation, testing unique solutions, and pushing the boundaries of technology … We’re constantly looking at presses, press capabilities, and plates to get the best reproduction.”
For both companies, offering multiple packaging applications under one roof provides a great variety of options for customers, but also requires close communication and collaboration to decide on the best packaging format for a product. Flynn said that the most successful projects are often a result of bringing the packaging converter into the conversation early on. She added that Hammer Packaging has a team of experts on board spanning R&D and sustainability to help find the right solutions.
At Inland, Kuehlmann said early conversations are also highly encouraged so the team can provide education on all elements of the package. She said that it’s not uncommon that multiple Inland representatives will go on the road to meet with customers at their facility to ensure all players have an opportunity to be in the same room together.
“We really want to be there for the initial discussions,” Kuehlmann said. “It’s so much easier to have a lengthy up front discussion than going down the path and realizing this is not going to work.”
The Digital Print Opportunities
Despite the many crossovers in labels and flexible packaging, one of the key areas where the segments differ is in the prevalence of digital printing. The label segment has been the digital printing leader in the packaging realm, while the technology is still in its early adoption stages in flexible packaging.
The final panel discussion during Day 4 of the PRINTING United Digital Experience however, featured three leaders in digital printing in the label and flexible packaging segments. For this session, Francer was joined by Craig Moreland, owner and CEO of Coast Label, Carl Joachim, co-founder and CMO of ePac Flexible Packaging, and Lou Dolgin, corporate business development and marketing leader for American Packaging Corporation.
Representing the label segment, Moreland explained how his company’s Durst Tau 330E inkjet label press fits in well with Coast Label’s specialty in industrial and medical labels. In these markets, he said many of the labels Coast Label produces require some complex converting needs. However, Moreland said that the UV inkjet technology of the Durst press provides substantial durability to the point where many applications won’t require any lamination or varnishing.
“It’s a real advantage for the customer to not have to purchase those additional steps,” he said. “The color really pops. Even in medical and industrial, it’s got a great look.”
On the flexible packaging side, ePac and American Packaging Corp., both have implemented the HP Indigo 20000 digital press, albeit for rather different business models.
ePac, Joachim explained, is entirely based around digital printing, serving the flexible packaging needs of small to medium-sized brands in the geographic regions it serves. With 18 global locations, he said one of the key goals for ePac is to integrate itself among the brands in these communities and provide the high-quality flexible packaging options in the quantities that digital is best suited for.
“Our business model is based on bringing great packaging and great capability to small and medium sized brands in the communities we serve,” Joachim said. “Our primary value prop is speed to market … we can change on a dime.”
Meanwhile, American Packaging Corporation has served its customers with the wide-web flexographic and rotogravure printing technologies that have thrived in the flexible packaging segment for decades. However, Dolgin said the company recently supplemented its conventional printing technologies with the HP Indigo 20000.
By adding the digital press, Dolgin said American Packaging Corp. has added significant flexibility for its customers, while allowing both them and the company to learn about digital and how it can best supplement the long run, conventional jobs being produced.
“We think digital is going to play a bigger role in our space,” Dolgin said. “We’re looking at larger runs that could be on press for two or three days. Digital provides customers with a lot of flexibility and gives them opportunity for them to learn.”
To listen to all of these sessions, along with product demonstrations from centers around the world, register at https://digital.printingunited.com/register/. And for more content and information, download the official PRINTING United Digital Experience Guide for Day 4 here.