All Digital Printing

Even in tough economic times, there are always bright lights shining through. In the package-printing arena, one of these bright spots is digital printing. This new printing technology appears to be well past the critical-mass tipping point.

The number of package printers that are adding digital printing capabilities is increasing steadily. Many of the printers are using digital printing to augment their traditional capabilities in flexo, offset, or gravure printing. Some are taking a different approach and focusing entirely on digital printing.

One such company is Denver, Colo.-based Lightning Labels (www.lightninglabels.com). The company was founded in 2002 by Peter Renton, director of business development, as an all-digital label printer. Lightning Labels' founding as an all-digital printer was based on Renton's belief that very few label companies were focusing on short-run, 4-color process labels. He saw digital printing as a "perfect fit for short-run printing, with the ability to provide high-quality graphics with very quick production and product delivery," he says.

Renton started investigating available digital technology in 2001, and decided to invest in Indigo technology. (Note: Hewlett-Packard (HP, www.hp.com) acquired the Indigo business in the 2002 time frame and today it is HP Indigo.) "We chose Indigo because we felt its quality and overall capabilities were a good fit for our needs," he says. "We have never regretted that decision. We have only ever purchased HP Indigo presses; HP has been an excellent partner and we are committed to its technology."

Short runs, fast turnarounds

Lightning Labels operates from one facility in Denver with 24 employees. It operates two HP Indigo ws4500 digital presses, supported by a total of three finishing lines from both Rotoflex (www.rotoflex.com) and AB Graphic International (www.abgint.com).

According to Renton, the company puts all its efforts into the printing of pressure-sensitive labels for the short-run label market. "However, our target market is very broad," he reports. "We don't focus on just one or two industries. Examples of markets that we supply to include food, beverage, wine, promotional products, bath and beauty, candles, and nutraceuticals."

One expectation of short-run printing is the ability to turn jobs around fast. "Our standard turnaround on all jobs is three days from proof approval, and most jobs ship in just two days," notes Renton. "On average, we print around 200 different label jobs every day, and this lightning-fast turnaround is only made possible due to our unique mutuality, customer service philosophy."

This customer service philosophy is built on the idea that Lightning Labels doesn't try to be all things to all people, says Renton. In addition, the company works closely with its customers so that it can serve them better.

"The more effort our customers make to send us print-ready graphic files, the better we are able to serve everyone in a speedy manner," he says. "We say to our customers, 'You help us be more efficient and we will help you by providing good pricing and the fastest turnaround in the label industry.'"

Another example of doing what it does best is Lightning Labels' very limited offering when it comes to substrates. It provides labels using just ten substrates, with more than 60 percent of its business being run on white BOPP. As with the great majority of substrates printed on HP Indigo presses, the substrates need to be top-coated before printing. "We outsource our top-coating to Masterpiece Graphix (www.mgxdigital.com) in St. Louis," reports Renton. "They order uncoated material from the material vendors, coat it themselves, and then ship to us. It is a system that has worked well for many years."

Peripheral processes

It is readily apparent—as Renton recognized when he started the company—that digital printing has a clear advantage when it comes to short-run, fast-turnaround demands. But speed and effectiveness on the press requires a specialized printing work flow—both upstream and downstream from the press.

Renton feels that Lightning Labels has a built-in advantage "because we started as an all-digital operation we never had to adapt existing systems to cope with digital. As an example, we have always used a custom IT solution that was developed in-house. I think it's important to have systems that are tailored to your workflow and not the other way around."

On the downstream side of its presses, Renton points out that finishing has often been a bottleneck "simply because our run lengths are so short. Our average job is less than 400 feet of material, and every day we do some jobs that are less than 50 feet. This is why we have three finishing presses for our two ws4500s."

Weathering the storm

Lightning Labels' quick start out of the gate established it as one of the largest all-digital label printers in the country and directly led to its acquisition by Cenveo, Inc. 
(www.cenveo.com) in 2008. Cenveo is one of the largest graphics communication companies in North America with a broad portfolio of services and products for commercial printing, envelopes, labels, packaging, publishing, and business documents.

Although Cenveo completed the acquisition just as the bottom dropped out of the worldwide economy, Lightning Labels hasn't disappointed its parent company. While it has felt the impact of the downturn, Renton feels that its diverse customer base has allowed it to weather the storm better than most converters. As a matter of fact, he says that its 2009 sales grew by five percent and the fourth quarter was its best ever.

According to Renton, Lightning Labels deals mostly with small, start-up companies, so it does very few jobs on credit terms. "In fact, we insist on upfront payment—usually by credit card—for all new customers," he says. "With the economic downturn, we have witnessed more of our customers maxing out their credit cards and have experienced more card declines this past year."

Customer price sensitivity is an issue that virtually all package printers are facing, and Lightning Labels is no different. However, it has a very transparent price quoting system that it uses to its advantage. "We have had online price quoting on our Web site since 2003, so our prices are open for everyone to see," notes Renton. "We don't try and compete on price, we don't match competitors pricing; we focus on our print quality and very fast turnaround with no rush charges."

It's a digital future

Renton sees a bright future for the use of digital printing in packaging applications. "Digital printing is perfect for any retail industry where there are many small, entrepreneurial companies that only need short runs," he says. "This is why digital is making big inroads in wine, food and beverage, bath and beauty, and the promotional products market."

However, he predicts that personalization will be an even bigger driver in the future. "The ability of a consumer products company to have many different labels for a single product is new and something that will take off in the coming decade. There are also more companies leveraging their brands by allowing the consumer to design and order their very own packaging for their product. This is also a trend that has only just begun."

Clearly, digital printing is on the move. And, because it is such a relatively new technology, it has a lot of potential upside. It is also a growth segment for companies that are supplying digital printing technology, so funding for developments should keep a steady stream of improvements in the pipeline for years to come.

Renton offers three issues that, when addressed, will further the growth of digital printing presses in the packaging segment: cost, speed, and complexity.

"These machines are expensive and a big risk for a company that doesn't focus on short runs," he says. "Some new inkjet technology is reducing the cost of entry which is helpful, but for the leaders—HP Indigo, Xeikon (www.xeikon.com), and efi Jetrion (www.efi.com)—these machines are several hundred thousand dollars."

The speed of digital presses has been on the low side when compared to the well-developed traditional printing technologies. Renton points to the success of the HP Indigo ws6000 introduced last year as an example of how improved speed will further entice printers to get into digital printing. "The HP Indigo ws6000 can can print 4-color process labels at 100 fpm," he notes. "Even though this is an expensive press, it has sold very well in the midst of the worst economic downturn in a generation. This tells me that label converters value speed. When we get to 200 fpm, flexo manufacturers are in big trouble."

Complexity is the third area that Renton feels must be addressed to make digital printing more mainstream for package printing. "The presses from HP Indigo and Xeikon are complex machines that take a great deal of training to operate well," he cautions. "It is not a simple matter of putting a flexo operator on a digital press and letting him print." On this issue, Renton notes with interest, the recent influx of inkjet presses. "The new inkjet presses are far easier to learn, which is one of the reasons people are buying them," he says.

It is interesting to note that print quality is one key requirement that doesn't appear on Renton's wish list."Quality is no longer an issue," he believes. "Digital printing—at least from HP Indigo and Xeikon—has reached offset quality as far as the naked eye can tell."

Bold predictions

Because Lightning Labels is totally committed to digital printing, it is not surprising that Renton sees great things for the future of digital printing in the packaging arena. "In ten years, I see digital as being the dominant technology in package printing," he predicts. "HP is already one of the top press manufacturers and the technology is only going to get better, faster, and cheaper. It may be decades before all product packaging is printed digitally, but within ten years I expect flexo and traditional offset printing to become niche industries, with the vast majority of labels and packaging being printed digitally." pP