Digital Printing Opportunities in the Packaging Segment

Digital print has taken hold in several areas in commercial print and book publishing, driven by the need to maximize the return on the investment (ROI) in print. However, packaging print, book printing, and commercial printing are all very different. Books are printed, sold, shipped, inventoried, and often unsold and returned. Print-on-demand has proven to be an effective way to reduce waste. Variable data printing (VDP) and personalization have been shown to increase the effectiveness of direct mail. Can these value propositions apply to digital print for packaging? If so, why haven't we seen more digital print in packaging?

Packaging includes metal and glass containers, corrugated, folding cartons, and flexible packaging. Corrugated also includes litholam, where a paperboard top sheet is printed, generally offset (litho), and laminated (lam) to corrugated for point-of-sale displays and cartons. The litholam top sheet is typically a coated cover or folding carton grade of paperboard. Packages also have labels, of course, and it is labels that have seen the greatest development in digital print for packaging.

Mark Hanley of IT Strategies explains, "The value proposition is understood to be very high by those who know. In the last five years, the [consumer target] market has fragmented, and one product may be sold in five different versions. This can lead to five runs of 10,000 rather than one run of 50,000, and for some sub-segments, 10,000 is near the break-even point."

Kevin Karstedt of Karstedt Partners advises that, according to their new report, "Is Digital Printing Part of Your Brand or Operational Strategy," "The ultimate success or failure of digital printing in the packaging market depends on how well the three critical legs of the supply chain work together: consumer product company (CPC), print service provider/converter, and technology developer/OEM."

Based on more than 400 interviews with a variety of CPCs, Karstedt concludes that "there is a meaningful business opportunity for the concept of digital printing among a broad cross section of market and customer segments," and adds that "approximately 50 percent of respondents note that their customers demand more customization of products and services."

Karstedt also points out that packaging print can add value in several ways, including product protection, track-and-trace, brand protection, marketing, and brand building (see chart in the upper right tab).

While the potential is understood by more forward-thinking brands and converters, Hanley notes that "variable data, the real value, the real future of digital," has not taken hold yet. So far, the demand for variable data has largely been confined to label and niche opportunities. All too often, the value proposition is not well understood: digital people don't know about packaging and packaging people don't know about digital.

Packaging must protect the product, convey information, and sell the product. This means that package printing is often more demanding than commercial printing, and a number of technical factors have limited the use of digital print for packaging. Since consumer packaging must sell the product, this means high ink coverage. So far, high-speed inkjet has been problematic beyond 40 percent ink coverage. Substrates such as coated papers, heavyweight paperboard, and flexible films also present different challenges for printing. Digital presses at 20˝, or even 30˝, are wide enough for labels but not wide enough for most folding cartons or litholam, and many digital presses cannot handle paperboard as thick as 18 point to 24 point, key calipers for folding cartons. Moreover, most digital presses are not designed to be compatible with diecutting, folding, and converting, and do not offer inline converting systems.

What's ahead

For folding cartons and litholam, applications have generally been limited to niche products and test markets. Kevin Waldvogel, print sales with The Printery, now part of Consolidated Graphics, explains, "Very often buyers don't understand the whole supply chain total system cost."

Labels have taken the lead and demonstrated the potential. Track-and-trace, brand protection, and warehousing and logistics savings have driven the value proposition. Some of these factors could potentially apply in folding cartons and other packaging, but the small format of labels makes them more suitable for inkjet, at least for now.

Peter Chalmers, product manager, Primera Technology, Inc., advises that "there are a number of applications for inkjet labels, including regional markets and seasonal products. A lot of small companies are participating—a restaurant selling its hot sauce, organics, etc." He adds that these applications are driven by short run, print-on-demand, and less waste rather than variable data.

Don Burns, business development director, Kodak Digital Printing and Enterprise, reports that "for NexPress, 14˝ x 36˝ is now our largest sheet size. With maximum thickness at 400 microns (16 point), we have commercial customers who do test packaging and very short run folding cartons." Burns adds that Kodak's hybrid inkjet systems have been used in labeling for more than ten years. "Inkjet print heads can be mounted on any traditional press and make it a digital press."

At HP, the focus on packaging is with HP Indigo Digital Presses. Christian Menegon, worldwide business development manager, HP Indigo, reports that "digital printing is not as well advanced in packaging as it is for labels because of the specification of the machines we had on the market—until now. Digital presses were not the right size for the packaging applications where the print 'is' the package." However, Menegon notes that "our new machines that we showed at drupa close that gap: 30˝ wide for web, and B2 format for sheets." The Indigo 30000 will print on substrates up to 600 microns or 24 point.

Menegon confirms that "variable printing is rare in packaging. It can be used as a marketing gimmick, or for security and authentication, or for track-and-trace." Initially, at least, the main value proposition is quick turn and cost reduction. Cost reduction comes in two forms: less waste and set-up cost in short runs (for the printer), and supply chain savings in inventory and logistics (for the brand owner).

Landa Digital Printing says that its "Nanographic Printing™ press solves most of the problems with digital packaging: size, speed, ink coverage, print quality, and regulatory aspects." Sharon Rothschild, Landa's product line and segment manager for packaging, explains that the Nanographic Printing press lays the water-based ink on a blanket which transfers the ink to the paper. This avoids the problems with large volumes of water going directly onto the paper as with more conventional forms of water-based inkjet. Rothschild believes there are many advantages to digital packaging, not least of which is that it can be a tool for customer relationship management (CRM).

The first Landa B1 size sheetfed presses will be delivered in late 2013 to beta customers. The company says it has "hundreds of letters of intent, with a significant part for the packaging presses shown at drupa." There is a lot of interest from packaging converters for applications including flexible packaging, folding cartons, and labels. The Landa press will use ordinary, untreated paper and plastics.

Océ also has a new digital packaging press—the InfiniStream, which is specifically targeted at the folding carton segment. In a presentation at a drupa follow-up event in Poing/Munich, Roland Stasiczek, Océ director marketing InfiniStream technology, highlighted the need for increased versioning, shorter turnaround times, and rising demand for personalization. Stasiczek also noted track-and-trace, CRM, and brand protection. Océ reports that "the new liquid toner technology enables variable imaging on standard carton board, with thickness up to 600 microns (24 point) with the look and feel of offset printouts." A modular print tower allows up to seven colors on a 28˝ wide web resulting in up to 14,400 B2 sheets or 7,200 B1 sheets per hour. The first installations are planned in 2013 and commercial availability is planned throughout 2014.

Carl Joachim, senior partner of Caslon and Co., a consulting firm promoting adoption of digital print and innovation in packaging, advises that brand owners are rapidly seeing the advantages digital brings to packaging as part of the marketing mix. "Manufacturers and packaging converters are all eyeing short-run, market-specific packaging as the 'next big thing' in packaging," says Joachim.

For example, ProLabel, Inc., a Miami, Fla.-based high-quality manufacturer of labels founded by Ramon Fernandez in 1995, recently added a Xeikon 3030 digital press to accommodate a growing demand for shorter runs. ProLabel's customers needed shorter label runs produced in quicker turnaround times and at lower cost. Joachim explains, "In addition to meeting current customer needs, short-run labels represented a significant growth opportunity for Fernandez's business. The flexographic technology that ProLabel had initially built its business on required much longer runs to be cost effective, and longer lead times, compared to digital technology."

Sharon Eucce, sales and marketing for Utah Paper Box (UPB), a producer of litholam and folding cartons, says that UPB looked into digital at drupa 2012 with the idea that it would be useful for customer presentations and short-run and regional jobs. But according to Eucce, UPB didn't find anything that fits its needs: offset quality using the same stock and the same suppliers as for offset papers.

One issue is format; most of its customers buy the large-format boxes that they print offset. She adds that their converting is not always cost effective with digital and can require separate workflows. They need coating, finishing, folding, scoring, and gluing, and digital equipment doesn't do it. "It is inefficient at best to put small digital packages on large finishing equipment."

Montreal printers Pazazz and PDI (Phipps Dickson Integria) print for folding cartons and litholam, but generally print offset. Warren Werbitt, Pazazz president, reports that Pazazz does commercial printing plus displays, folding boxes, and set-up boxes. He adds that Xerox is promoting digital packaging, and Pazazz uses an iGen for digital print, but the 14.5˝ x 20.5˝ sheet size limits them to smaller packaging and niche opportunities with folding cartons. He also reinforces the message that digital presses are generally not compatible with the folding, diecutting, and gluing operations that packaging requires. Pazazz often prints short runs of larger formats using offset, and partners with converters.

At PDI, a new 26˝ NexPress can handle calipers to 18 point and is big enough for some packaging applications, but most packaging is still offset. They see no need for variable data print for packaging, so the only rationale for digital would be short run. Louise Kralka, vice president, sales, advises that they also do litholam with a box company—they print, and the box company laminates. Print is all done on a 56˝ offset press, as most displays need the large size. Kralka notes that she does not see a need for short run or variable data print for litholam, and adds that most litholam is well in excess of 40 percent ink coverage. This becomes problematic for water-based inkjet. They prefer the NexPress because "it offers a much wider range of substrates that can be used to obtain high-quality results."

Landa's Rothschild does see the need for VDP emerging, and says, "Packaging is always on the cutting edge, and will continue to be. The opportunities go beyond cost reduction, and even beyond VDP for security, brand protection, track-and-trace, or RFID—it is in producing high-value pages, new pages, and new business."

Rothschild adds that there is even more potential with Web-to-print. "Web-to-print has changed the world of commercial print during the last few years, and is expected to do the same for packaging." Customers can order from a template. With digital packaging print there is no prepress, setup is automatic, and versioning is cost effective. She adds, "One small customer has 30 versions."

Now that it is possible to order products online, companies can get information about their customers, and build brand loyalty with personalized packaging. Companies as diverse as Lego, Heineken, and Kiss My Face have found that when this is combined with social networking via Twitter or Facebook, the marketing effects can be powerful. Companies are learning the potential for enhanced CRM.

The potential for digital packaging is great, and while we have noted that there are many obstacles, these can all be overcome. As the value proposition becomes better understood, digital print can be expected to make greater and greater inroads in packaging.

About the Author—Jack Miller is principal consultant at Market-Intell, a supplier of strategic consulting and "Need to Know" market intelligence in paper, print, and packaging. Formerly, Miller served as the senior consultant, North America, with Pira International and was also director of market intelligence at Domtar. pP