The Packaging and Label Industry: Trends, Tips, and the Future

With continued convergence throughout the printing industry, it’s only natural that packaging and label production would be of interest to companies looking for growth.

Linda Casey, editor-in-chief of Packaging Impressions, and Cory Francer, analyst at NAPCO Research, discussed the opportunities for growth in the package printing industry during the Packaging Impressions Forum at PRINTING United Expo 2024 in Las Vegas, Nevada.

Trends Driving the Packaging Industry

According to a 2023 NAPCO Research report, “Digital Packaging: Opportunities to Thrive,” digital printing technologies are used at similar rates as conventional technologies in the packaging segment. While 39% and 37% of respondents reported using narrow-web and wide-web flexography, respectively, 33% said they used digital inkjet.

“What we're starting to see here is this combination strategy,” Francer said. “It's a two-pronged approach from the industry, in that flexographic and offset conventional technologies are being utilized for some of the longer-run, high-volume stuff, but there is this great need for digital for all of the short-run, quick-turn, versioned and customized packaging that we're starting to see in increasing quantities in the packaging space.”

The increased uptake in digital technologies is coupled with several other trends in the industry.

Sustainability

According to Francer, sustainability is “arguably the No. 1 priority for the packaging segment.”

“Sustainability has really become a non-negotiable in the packaging space,” he said. “We see that backed up in legislation and in mandates coming from some of the largest retailers out there — like the Walmart goal for private brand packaging recyclability and compostability by 2025; they want all of their store brands to be fully recyclable or compostable by next year.”

However, when surveyed as part of NAPCO Research’s digital packaging report, a third of brand owners said sustainability was within their top 5 challenges. This is an opportunity for packaging providers to support their customers’ environmental goals; digital printing, in turn, can help packaging providers do this.

SKU Proliferation

Also driving growth in the packaging industry is versioning and the proliferation of Store Keeping Units (SKUs). Because brand owners have responded to customer demands for more variety in their products, 41% of brand owners said they’ve grown their SKUs over the past 24 months, per the digital packaging report.

Notably, 60% expected the quantity of their SKUs to grow in the coming 24 months. Digital printing techniques can help support this growth in a cost-effective way.

E-Commerce

According to Francer, e-commerce was increasing ahead of the pandemic, at which point it grew rapidly due to stay-at-home orders. While that growth trajectory has not continued since then, e-commerce has remained relatively consistent since the lockdowns.

“What's interesting from a packaging perspective is that the data provided in an e-commerce channel gives brands and package printers those opportunities to personalize and customize their packaging,” Francer explained. “Shipping containers can be customized using data provided by the consumer, and can be a way to extend that brand experience to the recipient.”

Continued Convergence Into Packaging

While convergence may have started as a trend, it has become a necessity, with diversification helping printers stay relevant.

This is especially true for commercial printers. While their segment remains strong, it is saturated with competition, so diversifying into packaging and labels offers a stable and growing opportunity for business expansion.

Case in point: 40% of commercial printers surveyed in PRINTING United Alliance’s “Print Business Outlook Series, Commercial Printing Report – Spring 2024” have entered or are interested in entering labels, while 37% reported the same for folding cartons, 32% reported the same for flexible packaging, and 29% reported the same about corrugated.

Wide-format print providers reported interest in and convergence into packaging and labels at similar rates, with 38% of those surveyed saying they were interested in or had already entered labels, while 32% reported the same for folding carton, flexible, and corrugated.

Tips for Adding Packaging and Label Offerings

Whether you’re tacking on a new offering to your existing packaging and label portfolio, or you’re totally new to the packaging and labels segment, there are many things to consider. Here are just a few that will get you started on the right foot.

Plan for Continued Marketing Education

Not only is continuing to learn about the packaging market crucial for those converging from the commercial and other parts of the industry, it gives those already in the business a leg up against competitors.

Casey relayed her own family’s printing businesses experience with this. “We would expand into new businesses, and a couple years later, we see the businesses begin to falter,” she said. “And so it'd be like, ‘OK, we expanded into this type of printing work, and the business was coming in hot and heavy, and it hasn't afterwards’ — because the market changed, and we weren't changing with it.”

She recommended all printers and converters look into associations they can join, publications they can read, and research and networking opportunities they can participate in.

Refer to Your Existing Customer List

It’s likely that many of the customers you already serve would benefit from whatever packaging offering you’re looking to add to your portfolio. It only makes sense, then, that you’d reach out to these customers first before seeking out new ones.

“You do that because you discover the customers that you need for your new capabilities, but you also strengthen your original business, because you strengthen that relationship with that customer,” Casey said. “If you own two parts of their business, they're a heck of a lot more loyal to you.”

Evaluate Skills, Training, and People

When adding a new offering, it’s important to evaluate the resources you have on hand. This extends from the equipment you already have, to staff skills and workload.

“If your people can't take anymore — if they're not willing to take on another shift, if they are going to break if you ask them to do more OT — you've got to know that,” Casey said. “So you definitely want to review your current workload.

“You want to engage your team,” she continued. “So when you ask them the questions about their current workload, you want them to get excited. You want to ask them, ‘Is this something you'd want to do? Is this something you're interested in?’”