Brand Owners and Converters Aligned on Digital Printing Benefits

Throughout a new technology’s journey, it is often met with early excitement, some skepticism, and finally, mainstream adoption. In this final phase, the benefits of the technology are fully realized, and industry suppliers release new iterations and advancements. In the label and package printing industry, digital printing and production technologies are squarely in the mainstream, as printers, converters, and brand owners seek to maximize their advantages.

NAPCO Research’s latest study on digital printing and production technology in packaging highlights package printers’ and brand owners’ insights into the benefits of digital printing and the advantages they expect the technology to provide in the future. The study, Digital Packaging: The Pursuit of Prosperity, is sponsored by BOBST, Fiery, Screen, and TLMI, and is now available as a free download from Packaging Impressions. To provide a well-rounded view of the industry, NAPCO Research surveyed both package printers and brand owners. This approach offers insights from digital print technology users and the customers they serve. The full report provides a deep dive into current adoption and investment trends, packaging challenges and opportunities, trends driving the continued growth of digital printing, and the technology’s impact on sales.

The study was released at the 10th annual Digital Packaging Summit, held November 12-14, 2024, in Ponte Vedra Beach, Florida. At the Summit, many of the attendees, spanning all industry segments, revealed they were already digital adopters and were searching for subsequent assets. As digital printing in packaging gains prevalence, research shows that printers, converters, and brand owners are implementing strategies to maximize their capabilities and revenue with the technology.

Converters and Brands Cite Common Benefits

Among the encouraging findings revealed in the research is how both converters and brand owners surveyed align in their views of digital printing’s benefits in labels and packaging. Converters and brands recognize that digital printing and production offer efficiency and creative benefits and clearly value both. However, the production efficiency and speed to market of digital printing is valued slightly higher than the creative components of digital packaging, such as personalization, variability, and versioning.

On the converter side, when asked to cite the most important benefits that digital printing provided to their businesses, respondents currently offering digital ranked accommodating customer demand for fast turnarounds as the top response (35%). Slightly below that, 32% of respondents reported optimization of their production print equipment as a top benefit, revealing that adding digital printing to their offerings has allowed them to utilize all of their production in the ways it performs best.

Similarly, brand owners that currently purchase digitally printed labels or packaging report efficiency advantages as the top benefits provided by the technology (Figure 1). Specifically, 55% report cost-effective short runs as a top challenge. Digital printing’s lack of plates and fast changeovers make cost-effective short runs more achievable. Additionally, 53% of brand owner respondents reported increased speed to market as a top digital advantage, again owing to digital printing’s fast turnaround attributes.

Figure 1: Brands Value Speed and Efficiency Advantages of Digital Printing

Click to Enlarge | Credit: NAPCO Research

While speed and efficiency emerged as the primary advantages of digital printing, both converters and brands did report the creative attributes the technology can bring to labels and packaging as key advantages. Since its emergence in the label and packaging segments, digital printing’s ability to personalize, add variability, and increase versioning among product and package lines has intrigued industry stakeholders. Though personalization has been a challenge for package printers, opportunities are emerging, particularly with the rise of e-commerce. Versioning, meanwhile, has allowed brands to alter their packaging designs more frequently, creating new opportunities to engage with the consumer.

On the brand side, 42% of respondents reported versioning, personalization, and customization of packaging to be a top benefit, while 34% cited the ability to change designs more frequently. Converters, seeing the benefits of both versioning and personalization, did report them to be top advantages. On the converter side, 30% of respondents reported printing multiple versions in a single run as a top advantage, and 29% cited the ability to use digital printing to personalize labels and packaging.

Trends Driving Digital Growth

Though digital printing and the production of labels and packaging have gained mainstream acceptance, their growth trajectories are continuing upwards. Several trends that were instrumental in digital printing’s early adoption appear to be ongoing, and as such, converters and brands are expected to expand on their need for the technology.

Versioning is clearly an important strategy among brand owners (Figure 2) as they continue to seek new ways to engage with consumers. SKU proliferation is hardly a new trend in the packaging industry, but it continues to have a profound impact and is showing no signs of stopping. In fact, in the 2023 edition of NAPCO Research’s digital packaging study, when asked if their SKUs had increased, stayed the same, or decreased over the preceding 24 months, 41% of respondents reported an increase. While that statistic demonstrated a clear desire among brands to grow their product lines, in this year’s survey, 79% of brand owner respondents reported an increase.

Figure 2: SKU Proliferation Expected to Increase

Click to Enlarge | Credit: NAPCO Research

Those two statistics come from separate respondent pools, so they are not directly comparable. However, it can be assumed that in general, brands interested in increasing their SKUs are predominant. It is also possible that since 2023 respondents were asked to report on their SKU trends dating back to 2021, they could have still been in the midst of COVID-era packaging trends, in which brands consolidated their product lines to focus on getting their core products out to the market.

Brands also revealed the top drivers of their increasing SKUs. Respondents who stated they saw an increase in SKUs over the past two years were primarily driven by consumer demand for more variety in their product mix (55%). Additionally, 42% of respondents cited an increase in limited edition products or packaging designs, indicating this is a key strategy for engaging consumers. But perhaps most eye-opening is the 36% of brand respondents, each of whom stated the availability of printing technology allowing cost-effective short runs and the ability to produce packaging on demand as a top driver of SKU proliferation. This indicates that brand owners are aware of digital printing and how the technology can help them diversify their product lines and packaging designs.
Other key trends driving digital’s growth include the continuing rise of e-commerce and the pressing need for sustainability in labels and packaging. Of the brand owners surveyed, 89% of respondents currently offer their products through e-commerce channels. Of those 89%, all but 3% have taken on some level of strategic packaging to account for their e-commerce efforts. Interestingly, personalization was at the top of the list with 52% of respondents stating they utilized consumer data such as names, previous purchases, or other identifying information to personalize their e-commerce packaging to some degree. With this growing personalization opportunity, digital printing becomes an even more valuable asset.

Digital’s Continuing Value Add Promise

In addition to any new technology’s functional viability, it must be commercially viable to remain a key component of an industry. In the case of digital printing in packaging, printers and converters largely see the technology as a key driver of sales going forward. In fact, when converter respondents who reported currently using digital printing were asked about their expectations for digital printing’s impact on their future sales, the majority reported an expected increase. Two-thirds of respondents anticipated an increase in their sales in the next 24 months, with 62% reporting an expected increase of 1% to 20% (Figure 3).

In an encouraging sign for digital printing’s future viability in the packaging industry, just 4% of respondents reported an expected decrease in their digital printing sales in the next 24 months. And those that did report an expected decrease all indicated they anticipated it to be minor, at just 1% to 10%.

Figure 3: Digital Packaging Sales Expected to Rise

Click to Enlarge | Credit: NAPCO Research

Brand owner data also supports an increase in sales of digitally printed packaging, as those brand owners surveyed indicated they anticipate digital printing to be part of their packaging strategies into the future. Nearly all brand owner respondents (91%) indicated that some of their labels or packaging are digitally printed. Meanwhile, brand owners were also asked to share key attributes of package printers they look for when seeking a supplier. Digital printing was among the top attributes for brand owners, as 39% stated it is essential that their package printers offer digital printing, while nearly half (49%) stated it is very important.

Final Thoughts

The journey a new technology takes on its road to viability will typically include some false starts and skepticism. Ultimately, once technology proves its ability to improve the lives of its users and their customers while driving revenue gains, it will surely lead to long-term success and mainstream application. In the label and package printing industry, digital printing and production technologies have demonstrated to converters and brand owners that digital not only provides efficiency and creative advantages but will also be a key component of package printers’ sales strategies in the future.

With brand owners needing cost-effective production solutions for increased speed to market and growing SKU proliferation, digital printing makes sense as a strategy for their labels and packaging. And as personalization opportunities expand with the rise of e-commerce, digital printing again presents advantages that conventional technologies cannot provide.
On the sales side, package printers report that digital printing already contributes to a sizable portion of their sales and expect it to stay that way in the coming years. As digital printing continues to advance and gain adoption across all packaging segments, converters will be well served by making digital printing an integral component of their business strategies for the long term. To download the full report, Digital Printing: The Pursuit of Prosperity, visit packagingimpressions.com