Betting on Digital…and Winning

Atrait most successful enterprises share is a willingness to take calculated risks, such as investing in new technologies and tackling new markets. Label and packaging converter Innovative Labeling Solutions (ILS) has shown that willingness for years now by making a deep commitment to digital press technology and by adding applications and markets in the process. ILS was featured in packagePRINTING in July 2008. At that time, ILS was an established label converter using narrow-web flexo printing, but it also had three years of experience using HP Indigo color digital presses. Now, with another solid three years behind them, we've gone back to ILS to ask again about the company's digital printing business. There's a lot to tell, not only about what ILS has done, but about how they've done it and what the future might hold.

First off, ILS in 2012 is a big shop, and not just for digital. The company's 65,000-square-foot facility is home to more than 58 staff, including client managers, a full-service graphic design/prepress department, director of innovation, and both dedicated flexographic pressmen and HP-certified digital press operators. ILS still operates four narrow-web flexo presses and related finishing lines. Complementing them, though, are three HP Indigo WS6000 digital presses and three related finishing lines, two by AB Graphic and one, installed just last year, by Delta Industrial.

ILS is something of laboratory for color digital printing, and almost literally so. Its digital presses and finishing are all in a dedicated, 10,000-square-foot "digital room," a gleaming space that's busy for three shifts, five days a week. An HP Indigo WS6000 (13˝ webs, 98 feet per minute), which was first commercially available in 2009, was operating as a beta unit in this room two years earlier, one of the first HP Indigo WS6000 installations worldwide. This year's addition of the Delta Industrial finishing line was a first, because it is a unique hybrid unit, one that can operate in-line with the HP Indigo or off-line, as needed. The ILS digital room also holds the only North American installation of an AB Graphic Digilam system for laminating narrow-web packaging materials for eventual conversion into bags, pouches, and sachets on site. Around these systems are still other technologies that ILS is putting to good use: a seaming machine and sheeting machine, both for shrink sleeves and both by Karlville; and design and workflow software by EskoArtwork and LabelTraxx.

ILS is still operating a highly successful narrow-web flexo business, but color digital presses and related technologies have helped the company grow the label printing services and features that they offer, and also expand into adjacent applications such as flexible packaging and folding carton. New approaches and strategies have been key.

"With digital webs, consumer product companies can expand their thinking beyond conventional design limitations and standard go-to-market strategies," said Jay Dollries, ILS CEO and president. "There's a lot of opportunity in the market now that was just not there five years ago, because of the advancement of HP Indigo digital press technology." Dollries made several points to support this observation.

• The HP Indigo WS6000 has made short-run printing more efficient and economical, attracting brands that want to deploy programs with many versions or SKUs.
• Any job less than 20,000 linear feet goes to the digital room, freeing ILS's narrow-web flexo presses to concentrate on the long runs they excel at.
• Many digital print runs at ILS are not short. Jobs from 70,000 to more than 100,000 linear feet are common, especially ones that gang many SKUs—even 50—into one job.

On the last point, ILS has even run digital print jobs of more than 450,000 linear feet. While ILS itself is thus an advanced user of digital presses, one point ILS made is that the market around it has also advanced.

"We have a good share of clients now who better understand digital's full benefits," said Kathy Popovich, ILS's marketing director. "They are realizing the supply chain benefits, the ability to target markets, and of course, the higher level of graphic quality." Dollries, echoed that, noting that ILS now has multiple clients who specify digital printing, especially to achieve high-quality graphics treatments like vignettes and small text, and iconic photographic images. He cited health and beauty brands and also wine producers as examples.

Another spur for clients has been digital printing's ability to print just what's needed, when it's needed, cutting waste and improving supply chains. "Our clients want to be lean in everything they do. With color digital presses we can print on demand, in response to more accurate near-term forecasts, versus traditional make and hold," added Dollries.

"Adjacent" applications

ILS not only prints labels, but packaging also, and this newer business all takes place in the ILS digital room. What's the status of the two applications that are often call "adjacent" for label converters—folding cartons and flexible packaging? "Both these applications are profitable for us now, and not just for prototypes," Dollries said. "There's opportunity in each, but of the two, flexible packaging has been the source of more business. We have multiple jobs per week in that category, and the potential is quite large."

Dollries explained that while format is a constraint for digital in each case—both flexible packaging and folding carton images are bigger than most labels—flexible packaging has a subset of single-serve versions that are normally small and that impose easily on the HP Indigo WS6000's 13˝ web. "Single-serve coffee and other food products, also single-use shampoo and other personal care goods, work well for us in flexible packaging," Dollries said.

Is ink contamination a concern? Dollries said that there is no direct contact between the ink and the contents of the flexible packaging that ILS prints. "We use the HP Indigo WS6000 to reverse print, and then we laminate to a barrier film, so the ink is sandwiched between the two materials," Dollries explained.

ILS prints folding cartons for customers, but not with the same frequency as flexible packaging. The single-serve format that spurs flexible packaging jobs for food and personal care products does not have the same role for folding cartons. Also, even small folding cartons, when unfolded, can take up substantial space. "Because of size, we often print cartons one-up," Dollries said. "Don't mistake me on this, though, folding cartons are a digital opportunity, just not as big." ILS is able to use the same AB Graphics finishing line it uses for labels for embossing, hot stamping, diecutting, and varnishing/laminating.

Shrink sleeve

A third application that has been a digital success for ILS is shrink sleeves. While technically labels, shrink sleeves are a special type, one that benefits from brand owners' growing focus on distinctive shapes as a way to sell bottled products. These shrink films are printed with the same resolution and color capability as the label facestocks; for finishing, ILS uses the Karlville seamer and sheeter, as needed.

As with prime labels, digital printing of shrink sleeves gives customers flexibility. "If a brand owner pre-prints a big run of bottles or cans, that company is hostage to the cost of the container and the decoration—you use it all or lose it to obsolescence," said Kathy Popovich. "With digital shrink sleeves, though, you print just what you need, when you need it, from a very short run to a very long one."

Partners help

We asked ILS advice for other converters, and also about the future. On the advice, Dollries noted that from its first use of digital presses, ILS has needed new workflow strategies and tools to meet the changing mix of orders that digital printing has spurred; in particular, more customers with more frequent orders, or individual jobs with many SKUs. He credits workflow management software and collaboration with LabelTraxx and EskoArtwork for making the job easier.

"This has been a true team effort. Our equipment and software suppliers have all been part of developing solutions that meet the demands of this evolving segment," Dollries said. "Looking ahead, digital printing will grow as the technology continues to evolve and improve, as well as the understanding by brand owners. The consumer market is shifting and I believe the words of Benny Landa some 15 years ago will soon come to fruition, 'Everything that can become digital will become digital. And printing is no exception.'" pP