Optimism Runs High at Digital Packaging Summit’s Return
The mood was celebratory as the 2021 Digital Packaging Summit returned to luxurious coastal Ponte Vedra Beach, Florida. Senior managers and business executives converged to learn how digital production printing technology, software and solutions can elevate their businesses.
The strategic insights began with a opening keynote on the state of the industry by Marco Boer, vice president, I.T. Strategies and the conference co-chair. Boer began his presentation with an analysis of the supply chain issues strangling everyone from print service providers to OEMs. Boer emphasized the importance of discussing, analyzing and managing the situation because “the instability is not going away.”
Boer also noted that situation could deliver some unexpected collaborative growth between printers and their buyers. “Perfect storms. Storms are bad, but they clear the air,” Boer remarked. “The opportunity is there to open the door to conversations you haven’t had in a long time.” These supply chain conversation could open up conversations and clear away some assumptions made on both sides as far as supply availability, pricing and turnaround expectations. These conversations are especially important because sunny days are ahead for print service providers who provide digitally printed products, Boer noted, because “there’s pent-up demand.” This, Boer explained, means “growth is coming back far faster than we expected,” which he conceded was a good problem to have.
After his opening keynote presentation, Boer introduced fellow co-chair
CEO of Karstedt Partners, LLC. Boer and Karstedt conducted a multimedia panel discussion that encompassed both live and video interviews. Panelists included Brian Cleary, category manager, HP Indigo Label Solutions, HP Inc.; David Ellen, global divisional director, Domino — Digital Printing; Dean Kenan, digital packaging solutions, Screen Americas; Eric Steinwachs, director of sales and marketing at CDigital; Jim Priebe Executive VP, CTO of Lithotone; John Abbott, president of Abbott Label; Rob Daniels, president of QTL, a Fortis Solutions Group; and Todd Blumsack, director, sales, Xeikon. Although the panel came from a range of industry backgrounds, they all agreed that the agility afforded by digital printing can be transformative for package printing businesses.
The final presentation came from a person very familiar to Packaging Impressions’ audience but in a new role. Cory Francer, former editor-in-chief of Packaging Impressions turned industry analyst at NAPCO Research, delivered a comprehensive analysis of the package printing industry and digital printing’s evolving role.
Francer’s presentation pulled from his experience both as the chief editor of Packaging Impressions and in his current role as analyst for NAPCO Research. To help the audience better understand how package printers and converters used digital printing to help both themselves and their customers during the pandemic, Francer shared highlights from NAPCO Research’s COVID-19 Print Business Indictors Research along with examples from Packaging Impressions’ reporting during the pandemic.
He shared findings from the research, which comprise six reports that were published from May 2020 to August 2021. Francer noted that early in the pandemic, printing sales dropped drastically across applications. How much? Commercial printing saw sales drop 57%; graphic and sign production, 52%; apparel decoration, 68%; and package printing and converting, 15.3%
“Comparatively speaking,” Francer said, “it was apparent right from the start that packaging was going to be able to weather the storm better than other segments in the printing world.” Although packaging fared better than other industry segments, it still faced substantial challenges, including launching “extreme efforts” to provide a safe and sanitary work environment. There also was a challenge in meeting unprecedented packaging needs during an unprecedented time. These circumstances, Francer explained, amplified the need for digital printing’s quick turnaround times to meet retailers’ needs as consumer habits changed overnight.
Package printers, e.g., International Label & Printing Co., Francer explained, met the challenge for new products that were developed seemingly overnight — such as the many new lines of hand sanitizer. Despite the great number of distilleries and breweries that answered the call and started producing hand sanitizer. “All those bottles of hand sanitizer need labels,” he remarks. “Digital really rose to the occasion to ramp up.”
Additionally, Francer noted, the decline in packaging printing sales didn’t last long. By early June 2020, most package printers surveyed by NAPCO Research reported a sales increase. The changing retail landscape, during the pandemic, favored printers that could serve smaller brands. Francer explained, “Digital printing and some innovation creative printing helped small brands get out in the market.” He shared the example of Ka-Pop! from the June 2020 issue of Packaging Impressions. The healthy snack food brand uses digitally printed flexible packaging.
Consumers were not only more willing to try new brands, shoppers were more apt — often because they lacked other choices — to make those purchases online. This created opportunities for printing operations that could provide digitally printed corrugated. “You can get the at-home first-brand interaction up to a higher level,” he explains of digital printing’s ability to elevate the first moment of truth for e-commerce transactions. Francer shared the following quote from Justin Stacey, Vice President of e-commerce solutions for Fantastapack – part of The BoxMaker in Kent, Washington: “What ended up happening is most companies that needed to stay in business had to pivot into e-commerce, or had already started into e-commerce. We were at the right place at the right time. The backbone of our whole architecture and the company itself is to support e-commerce through digital print.”
At the end of 2020, Francer notes, vaccine rollouts helped grow optimism. This optimism paired with improving market conditions led to a high percentage of package printing providers reporting expected growth in May 2021. Just among flexible packaging printers alone, 69.6% surveyed by NAPCO Research reporting expected growth.
And just a few months ago, in August 2021, printers are preparing for the industry to bounce back with nearly 60% of printers surveyed by NAPCO Research reporting plans to make capital investments this year and an additional 26.3% considering capital investments. “It’s interesting to see how the printing industry has come out of this and come out strong,” Francer said.
Francer ended his presentation noting there’s room for even more growth in the package printing markets. “Packaging segments, at the time , were largely recognized as significant growth areas,” he said. “Of the big companies we surveyed, up to 70% of flexible packaging providers we’re expecting growth.” He noted that several other segments, such as corrugated and folding carton were expecting very strong double-digit growth—often in the double digits.
Driving this growth is an elevation in customers’ appreciation for the power of digital printing for packaging. Francer said, “Brands really learned the importance of flexibility, and they have learned that digital printing is a tool to provide that flexibility, that agility in some very dire straits.” This, he concluded, made “the packaging space a great place to be.“