Converter Perspectives: 
Digital Printing in Packaging

In late 2009, InfoTrends, Inc. (www.infotrends.com), a market research and strategic consulting firm, conducted a Web-based survey of converters about the role and prospective role of color digital printing in their operations. packagePRINTING magazine contributed to that effort by inviting subscribers to participate in this effort. InfoTrends is grateful to the many packagePRINTING subscribers that supported the survey. This article provides key results from the feedback.

Respondents and their companies

There are 375 total respondents to the survey, almost all from North America. By type of business, label converters account for about half the sample (182 respondents); folding carton converters (98), and flexible packaging converters (95) account for 26 percent and 25 percent respectively. Label converting companies responding are on average much smaller than the folding carton and flexible packaging converters.

Label converters in the survey report average annual revenues of $18.5 million; only about 10 percent claim annual revenues of $50 million or more, and the same share say annual revenues are less than $500,000. Respondents at flexible packaging converters report an average $36.3 million for their companies, with 43 percent reporting $50 million or more; respondents from folding carton converters report nearly the same as those in flexible packaging.

Where does color digital printing fit at these companies? Compared to conventional press technology such as flexo, offset, gravure, and litho, color digital is still small. Taking into account all possible digital print methods, 36 percent of converters have some type of color digital printing. One of the survey questions asks about ownership of "any type" of color digital printing equipment, which encompasses not just high-end color digital presses such as HP Indigo and Xeikon, but also wide-format inkjet and low-end tabletop color label printers. The proportion with some kind of digital printing capability is highest among label converters, at 47 percent, with folding carton converters following at 31 percent, and just 19 percent of flexible packaging converters.

These results highlight a central theme of the survey—that the adoption of color digital printing is much stronger among label converters than it is among folding carton and flexible packaging converters. The main reasons likely have to do with format size and the incidence of short runs. Prime labels' small format makes their imposition on a digital frame fairly simple; most label converters work with narrow flexo webs to begin with, so the print width of color digital presses is not very restrictive. By comparison, folding cartons and flexible packaging images usually are much bigger than prime labels—when laid flat, the converter of folding cartons and flexible packaging may be able to impose only 1, 2, or 3 images at a time on a color digital press, while that same space could hold 10, 20, or more prime labels. Regarding run lengths, there has been a groundswell among product marketers that favors short runs of prime labels. So far, though, there has not been a similar upsurge of short runs in folding carton and flexible packaging.

Figure 1 focuses on the 36 percent that say they have some kind of color digital printing capability, and asks them what digital equipment they have. Stand-alone, full-color electrophotographic (EP) press, i.e., either HP Indigo or Xeikon, is the most chosen option at 51 percent. For label converters with color digital capability (85 out of 182 total), 45 percent say their companies have these color EP presses. Of the flexible packaging converters with color digital presses, 44 percent have color EP; for folding carton converters with digital capability, 73 percent have EP systems. It is important to note that these results for folding carton and flexible packaging are based on small samples (30 for folding carton, 18 for flexible) and that they are not representative of the broader market. High-end color EP presses are still rare among companies that are primarily in flexible packaging and folding carton converting.

High-end, full-color EP systems are the leading digital technology for converters, especially label converters, but other types of color digital printing have significant roles at companies with digital capabilities. Among companies that employ digital printing of some type, wide-format inkjet is a part of the equipment for 35.3 percent of label converters, 38.9 percent of flexible packaging converters, and 50 percent of folding carton converters. Wide-format inkjet devices vary greatly in nature, from low-end proofing devices (most numerous, with Epson and HP being top examples) to very high-end systems such as Inca and Mimaki. InfoTrends believes that among converters with digital technology, wide format is a fairly common choice. Main applications are for proofing, as well as for applications unrelated to converting (graphics, other commercial printing). Also, in some cases wide format is used for short production runs of labels.

After wide-format inkjet, there are three other color digital technology types to consider, starting with low-end, full-color label printers. These are printers by companies such as AstroMed, DeGrava, Primera, and VIP Color, mostly for use in printing very short runs (tens or hundreds of labels). They are owned mainly by small label converters (37.6 percent of the 85 label converters here), and also by some small manufacturers, such as gourmet food companies.

Also included in Figure 1 are conventional presses with a full-color inkjet module attached (12 percent of 133 total companies with digital). This category refers to big systems from Agfa and one or two other vendors that combine a single pass CMYK inkjet module with flexo or other analog print stations. In fairness, actual installed base of such machines in North America is so small that the survey results likely include some repeat responses from particular companies.

Finally stand-alone, full-color inkjet digital color presses (such as EFI Jetrion) are quite small in the sample—just 2.3 percent of the 133 respondents. While this category of color digital technology is still young compared to high-end EP color presses, InfoTrends believes that such equipment, such as the Jetrion 4000 and 4830, is more common than the survey sample indicates.

Respondents at companies with high-end color print-on-demand (POD) presses, whether EP or inkjet, estimated the narrowest and widest dimensions of media used with that equipment. On average, the narrowest media used was 9.1˝, the widest was 13.2˝, and an overall average was 11.7˝. There is little variance from these averages for different converter categories, which is understandable given the prevalence of the HP Indigo and Xeikon equipment that mostly accommodates this range.

One item worth noting is that the maximum width cited from all respondents in folding carton converting is 24˝. This refers to the Agfa :Dotrix Modular system, which is placed in a very small number of folding carton converting sites and which has a maximum print width of about 25.6˝, far more than other high-end color digital press options. Agfa's success in folding carton converting is instructive: its comparatively wide digital web makes it a better fit for applications that have large image sizes, such as folding cartons and flexible packaging.

Run length

Respondents were asked to describe their analog press printing jobs in terms of run length. Runs of fewer than 5,000 feet are fairly common, more among label converters than among folding carton converters and flexible packaging converters. While some share of those jobs is repeat use of an existing plate or cylinder, for advocates of color digital presses in converting, the opportunity is clear—there are a good number of short runs in all three applications, and these runs are a natural target for digital printing.

As seen in Fig. 2, users of high-end color digital presses such as HP Indigo and Xeikon do in fact use those devices mainly to print short runs. The collective response from 80 total users indicates that 74 percent of those color digital runs are fewer than 5,000 linear feet. It is important to note, though, that both EP and inkjet solutions can be cost-effective for print runs that are much longer. HP Indigo, for instance, says that its highest capacity system, the ws6000, is competitive with analog systems for runs up to 13,000 linear feet.

Sources for short runs

Where do short runs that are so suited to color digital printing come from? For label converters, food products that are specialized to some extent are cited as the top source by 17 percent (Fig. 3). The strongest advocates for these short runs are companies with less than $1 million in revenues (26 percent) and companies with $1 million to $4.9 million in revenues (23 percent). This category (specialty foods) is followed closely by private label foods for retailers, where the strongest advocate for these short runs is the largest companies (more than $5 million in annual revenues) at 18 percent.

Regarding further choices (2nd, 3rd, etc.), specialty food and private label food continue near the top of list. The sources of short runs most often ranked second by label converters are: private label food (15 percent); specialty food (12 percent); and all other food (12 percent).

For converters of folding cartons and flexible packaging the best sources of short runs are slightly different. For folding carton converters, the sources most often cited first are: personal care products, 20 percent; other consumer dry goods, 12 percent; pharmaceuticals, 11 percent; and food—gourmet, other specialty foods, 11 percent for each. The sources of short runs most often ranked second by folding carton converters are: personal care products, 17 percent; food—private label for retailers, 14 percent; pharmaceuticals (over the counter), 13 percent; and medical products, 10 percent.

For flexible packaging converters, the choices are, not surprisingly, intensively from the food industry, particularly for private label products. The sources most often cited first are: food—private label for retailers, 23 percent; food—gourmet, other specialty foods, 21 percent; food—all other, 13 percent; other consumer dry goods, 8 percent. The sources of short runs most often ranked second by flexible packaging converters are as follows: food, private label for retailers, 24 percent; food—gourmet, other specialty foods, 16 percent; personal care products, 12 percent.

The future

The survey results also give insight about what converters plan to buy and other predictions and preferences for the future. While InfoTrends is a strong advocate for digital printing, in fairness the survey points out that many converters do not use color digital at all. For these non-users, the survey asks when they expect that their companies will use color digital to produce full-color prime labels or folding cartons or flexible packaging. As seen in Figure 4, the answers vary by type of converter, with label converters the most likely to say 2010 or 2011 (a total of 30 percent) and flexible packaging converters the least likely (a total of 14 percent). At the same time, the share that say color digital printing will begin “later than 2012” or “never” climbs from 49 percent of non-users at label converters to 69 percent and 81 percent respectively among non-users at folding carton companies and flexible packaging companies.

Among companies that have some type of color digital as part of their production now, and that plan to purchase new or replacement equipment in the next 12 months, stand-alone EP presses such as HP Indigo or Xeikon are the top choices for label converters. As seen in Figure 5, 42 percent of those that expect to make a purchase say they expect it to be a high-end color EP press. While the sample is small—just 26 companies, with multiple responses were permitted—it is notable that inkjet alternatives are much less often chosen, with 2 votes each (7.7 percent) for stand-alone inkjet presses and conventional presses with color inkjet module attached. For folding carton converters and flexible packaging converters, the numbers of companies planning to buy new or replacement color digital equipment are too small to be statistically useful except for anecdotal guidance. Again color EP systems lead, cited as a planned purchase by 11 out of 15 folding carton converters (73 percent).

A final way to look at the future is to gauge sentiment around topics where color digital printing is an important option or a basic consideration. The figure below charts the level of agreement or disagreement with each of four statements, based on responses from all 375 converters. We intentionally made the statements fairly bold, as seen in Figure 6, with the expectation that they would provoke strong opinions, and they did. Overall, the converters tended to disagree with the statements, but at the same time, a significant minority either agreed or strongly agreed, specifically:
• 32 percent, that as a share of all jobs, short-run jobs are growing strongly, at least 10 percent per year;
• 31 percent, that digital process color is good enough for at least 50 percent of all jobs;
• 25 percent, that there is growing support for print to support interactive marketing (personalization, prize drawings, etc.);
• 26 percent, that at least 15 percent of customers require them to meet some kind of “green” standards regarding recyclability or sustainability.

Who are these converters, who tend to agree or strongly agree with the statements? They come from each of the three types—label, folding carton, and flexible packaging—but they are more likely to be label converters than the other types, even accounting for the fact that label converters are the largest group in the survey. Similarly, not all of those in agreement with the statement are users of color digital for production purposes. Again, though, converters that use color digital—especially high-end systems, whether EP or inkjet—are more likely to agree with each of the statements than converters with only conventional processes.

The four statements, of course, all take aim at key trends in the world, ones that will have some bearing on the future of packaging and labels. Color digital print has particular virtues that link it to these trends—in terms of short runs, high-quality color, minimal waste, and even variable printing for potential interactive applications. Based on the survey results, we expect the number of converters who use color digital to grow, in particular as more and more of them use color digital printing to address the market’s current and future trends. pP