Crossroads of Opportunity

Narrow-web flexo converters look to benefit from new technologies and market trends, but competitive pressures will be formidable.

BRAND OWNERS WANT high-quality packaging and labels that increase product differentiation, produced in shorter runs. Those are taxing demands, but the narrow-web flexo industry is positioned to deliver.

Today's market trends offer an opportunity for narrow-web flexo converters to grow their businesses in the face of industry consolidation, competition, and financial pressures. It's a simple formula: What consumers want is what consumer product companies (CPCs) want their converters to deliver, and new narrow-web technologies are making that possible.

"Narrow-web converters, press manufacturers, and CPCs are all reacting to current consumer trends and market changes," said Steve Leibin, sales manager for Matik North America (a distributor of OMET and Codimag printing presses). "Today's consumers want products and packaging that meet their lifestyle needs. In addition to meeting consumers' needs, CPCs would like packaging to help them gain market share in a fiercely competitive retail environment, reduce costs, be secure, and get noticed. All of these needs combine to present new challenges and opportunities for narrow-web converters."

Following trends to get ahead

Market trends show that consumers want more from packaging. Leibin said, "Very often, in today's crowded marketplace, 'the package is the product' in the consumer's mind." In the two to three seconds that consumers take to decide what product to buy, the package is often the deciding factor.

"It is said that 70 percent of the buying decision is made when the consumer is viewing the product on the shelf, thus making it increasingly necessary for companies to differentiate themselves, to standout on the shelf," said Mike Schmidt, vice president of sales, Nilpeter USA.

Differentiation calls for high-quality printing, decoration such as cold or hot foil and/or specialty inks, and substrate variation—all of which has equipment manufacturers responding to trends they see in the needs of their customers—converters.

"Printers want better registration, faster speeds, and quicker changeovers—all related to increased productivity," said Ken Daming, director of product management at Mark Andy. "They are really examining their own production flows and finding where the waste is. All of these needs are being supplied in today's markets by press manufacturers that design better equipment with higher technology."

Printers also need to be flexible in terms of running multiple processes on one press. Daming said, "This could be various substrates or even different printing and converting processes. By having the ability to run flexo, screen, cold and hot foil stamping, diecutting, and even inkjet printing all on the same press, and being able to vary the location of each of these processes depending on the particular job, it gives the printer the tools required to go after new markets."

Flexo is advancing to eliminate the "human error factor" from the printing equation, said Jon Guy, president of Gallus Inc. "One of the major industry trends is the removal of variables to production-automating to eliminate human error through a digital workflow process, which builds consistency and repeatability," Guy said. "This will eventually include the integration of the press into the digital workflow. The major benefit that a completely digital workflow addresses is it enables printers to complete a job with consistency when the brand owner requires them to break up the job into smaller runs instead of one big run."

Innovations in narrow-web flexo presses permit more printing and converting stations to be run in-line and, nowadays, often include servo drives and UV technology. Such equipment has opened many doors for converters, said Mac Rosenbaum, VP sales and marketing, Aquaflex.

"UV capability is a market trend that has gained momentum because of better technology in UV curing systems and better ink technology," he said. "Converters are seeing the advantages that are inherent with printing in UV from both the quality of print to the production advantages."

In addition, he said, "Servo technology is not just a buzz word any more, but a reality. True servo technology is a technology our market is embracing with open arms."

Under pressure

Narrow-web flexo converters are being hit with competitive pressures from every side. Digital and inkjet printing, though still new, are already taking some of the spotlight from flexo due their quality and personalization capabilities, Schmidt said.

In addition, wide-web gravure and offset printers "looking at either trying to compete in the medium- to short-run markets with their current capabilities or even to start offering narrow-web flexo as an option" are looking to take market share from narrow-web flexo converters, Leibin said.

The competition doesn't end there. A new pressure that's emerging comes from commercial printers. Guy said, "[Narrow-web flexo converters] need to watch out for commercial printers that are getting into the narrow-web market. There is a greater number of commercial printers crossing over, and narrow-web printers need to get a jump on that competition. Commercial printers have had to be more efficient and force out waste and costs, and to fully utilize workflow systems. They know how to go after new business and get it, and they have already had to live with the smaller margins that people in this industry are facing today."

The narrow-web flexo industry is also experiencing internal pressures. "Manpower costs are growing faster than the rate of inflation," Guy said. Expert flexo press operators are getting harder to find as fewer young people take an interest in the industry, and printers are competing hard with each other to recruit and retain the best. "We all need to get more young people excited about printing, and specifically label printing if we are to change this trend," Guy said.

Other forces in action include inventory, or the need to get rid of it. Just-in-time delivery is a desired service and press makers are also feeling the pressure. "The need for reduction in production time has put pressure on press manufacturers to improve their products for faster job set-up, quicker job changeover, and reduced waste during the set-up and running of the new, shorter run job," Schmidt said.

Luckily, said Eric Hoendervangers, managing director of MPS Systems BV, there is an upside to this situation. "Narrow-web printers are geared to small order volumes with a high degree of quality and innovation," he said. "Narrow-web printers are dynamic and driven to solve problems. This culture will definitely create an opportunity for them to take orders from the packaging market—the orders which are too small and or too complicated to run."

Looking ahead

If industry experts are correct, narrow-web flexo converters face a bright future, in spite of competition. The variety of substrates converters' equipment can run is increasing, especially unsupported films, opening new markets for narrow-web flexo converters. "Simply, they are more geared to it and today, the presses can easily change from self-adhesive to unsupported and back again," said Hoendervangers.

Furthermore, the industry may be looking at standardization in repeat and substrate widths (13˝ and 20˝), Guy said, cutting out the extra tooling costs involved in setting up for different repeats. "We anticipate greater standardization," Guy said. "It will be easier for everybody. It will make it easier to fulfill just-in-time orders."

By Kate Sharon

Associate Editor