Why It’s a Great Time to Be in the Packaging Industry

“Our future is looking really good and it is looking good because … there's more investment going into digital printing packaging now than we've ever seen before.”

That was one of the many key points shared by Marco Boer, conference co-chair/vice president, I.T. Strategies, during the opening Keynote session at the ninth annual Digital Packaging Summit. The event, which takes place at a beautiful seaside resort in Ponte Vedra Beach, Florida, began yesterday.

As the largest Digital Packaging Summit to date kicked off, Boer explored the state of the segment, some of the opportunities and challenges that exist, and what it all means for packaging converters looking to remain successful in the years ahead.

Boer shared some initially startling information with the audience: the digital printing industry isn’t growing and it hasn’t been growing since 2012, which Boer admitted seems counterintuitive. However, there is more to the story.

“None of this is actually bad news,” he said. “In fact, that's why I put this slide up here, because at the end of the day, if you're a manufacturer of digital printing equipment, you want to be in a space that's growing. These industrial markets – we include packaging under industrial along with the other non-document market – those are the markets that are growing.”

Diving deeper into the full scope of the industry, Boer shared the state of the digital packaging printing market. For starters, the industry is still experiencing aftershocks from COVID supply chain disruptions and tighter customer budgets.

“[2023] has been soft because of inflationary pressures,” he explained. “Many of the brands are a little bit more risk averse as a result of that. They go back to the classics, they're not as innovative as they once might have been.”

However, it’s a short-term issue, he said. An issue that isn't short-term? The labor issue, which Boer said is getting worse.

“We're starting to find out that when you hire somebody who's not really qualified, they start making mistakes that affect your bottom line, your profit,” he said. “So there's more emphasis these days on investing in anything that can help automate your process, finishing equipment software, workflow software, anything that gets you a quick return investment.”

Compounding the labor and inflationary issues is the demand for flexibility from brands. Brands, he explained, want the ability to “place last-minute orders, shorter-runs, and have faster turnaround.”

‘Daily Challenges Create New Opportunities’

Although we’re still working through the aftereffects of the past few years, there are opportunities that have been created, Boer stressed.

“All of these daily challenges basically open up the door to do business in a different way with your customers,” he said.

For example, brands want converters that are easy to work with, something that is “critical” to a lot of them, Boer said. Some brands that had preferred suppliers were forced to open up relationships due to supply chain issues in order to get the specific substrates they needed.

Another opportunity lies in sustainability. Boer explained that brands want sustainability, but are still somewhat resistant to cost. The overarching message though is that “we have to be mindful of sustainability.”

Competition Necessitates Diversification

Opportunities don’t only exist for companies in the packaging space, commercial printers have started making inroads into the segment. Boer did warn that as this happens, packaging converters face an “urgent need to diversify and expand packaging offerings.” One thing to keep in mind is that when commercial printers move into the folding carton and corrugated spaces, there will be a steep learning curve, which places packaging converters in a “protected” spot.

“The message back to you is you're fairly protected in the business that you're in because of that knowledge,” Boer explained. “But you need to diversify as well. And you need to start thinking about where else [you] can go right before somebody comes into [your] space.”

What’s next on the horizon and where to go were some of the final points Boer made to the audience. He explained that advancements in technology are more predictable; R&D development cycles are getting longer; a core focus will be creating “inks that stick” at heightened running speeds; the next “breakthroughs” in productivity likely won’t happen until 2028; and finally, that the real cost to converters is not technology.

“The real issue is how do I figure out how to get into something that's new to me,” he said. “Whether you're going from being a label converter to a flexible film converter or an offset commercial printer … it's that learning curve to try to figure out how that application really needs to work at its end use level.”

The Bottom Line

Marco finished up the evening’s keynote session by saying that the bottom line is that “our future is looking really good.” He explained that there is more investment into digital printing of packaging; brands are becoming more flexible and innovative, opening up opportunities; and digital printing is a high-value technology that converters can’t live without.

“It's a great time to be in this business,” Boer concluded.

Few Downsides to Digital Adoption

Following Boer’s keynote session, David Zwang, principal at Zwang & Company, moderated a panel discussion about what experienced professionals have learned throughout their journey and adoption of digital printing and how they feel about the technology now.

The consensus? The opportunities available with digital machines are vast, with few downsides.

David Zwang, principal, Zwang & Company, led the keynote panel. From left, Matthew Vickous, manager of label production, Alliance Print Evolved; Katie Putnam, prepress & digital print supervisor, Amherst Label; Chris Martin, president, Creative Labs; and Rob Daniels, digital business manager, Fortis Solutions Group.

According to Katie Putnam, prepress and digital print supervisor at Milford, New Hampshire-based Amherst Label, her company adopted digital printing, and, despite there being a learning curve with training on the presses, getting the machines into full operational mode posed few challenges.

“But I can say that we were actually running real jobs within the first week of implementation of the press,” Putnam said.

She explained that although the company felt like it was behind in implementing digital printing in its operations, there are “no regrets” with getting into digital printing and Amherst Label plans to install its third digital press in January.

Growth — and Digital — are Inevitable

On the other hand, Rob Daniels, digital business manager at Fortis Solutions Group in Marietta, Georgia, said that his interest in digital printing was piqued as early as 2006, when he joined his family’s printing business working with sales.

“Being in sales meetings, meeting with people, I kept seeing the writing on the wall that margins were coming down — they don’t want to pay for plates, they don’t want to pay for tooling,” Daniels explained, “and so how do you change the conversation with brands? How do you make things easier for them? And we rolled the dice and went with digital.”

That chance turned out to be a boon for Daniels’ family business. Before installing a digital press, the company was making about $600,000 in sales each year. Then, in 2021, Fortis bought the third-generation company for upward of $15 million.

For Houston-based Alliance Print Evolved, growth was a main driver of the company’s acquisition of three digital presses about 10 years ago, said Matthew Vickous, manager of label production at the company.

“We actually had a customer recently in … industrial and they were all flexo conventional — that's all they knew — and we presented them some tests off the digital press and supplied them 200,000 labels within a 10-day period of time, and that just blew their minds,” Vickous said.

Across the board, the panelists agreed that it’s important to know your clients so you can make the proper investments. Regardless, it’s only a matter of time before you need to be in digital printing, said Chris Martin, president of Gilroy, California-based Creative Labels Inc.

Making the Most of Partnerships with Brands

In conversation with Packaging Impressions Editor-in-Chief Linda Casey, Ron Burrage, founder and creative director at Courage The Agency based in New York, echoed the panelists’ observations that customers want to work with their print providers to find the best option for their purposes.

“Our procurement team or our R&D and production teams want to make sure that we’re effective,” Burrage said. “So, one of the things that's most important from a relationship point of view is how can I have a partnership with my printers to learn what the technology out there is? What are the things I don't know about it?”

In the same vein, Burrage explained that creatives don’t just want to get the best option for them, they want to make sure their choices benefit their print partners as well.

Burrage also highlighted the best practices for aligning creative vision with capabilities of digital printing. Specifically, he said that it’s important to understand that what one printer can achieve through digital printing is different from what another printer can achieve with the same specifications and machines. To avoid hiccups, there must be clear communication up front so that limitations and expectations are understood by both partners.

Day one concluded, as it does with every passing Digital Packaging Summit, with a lively and congenial networking dinner. Old acquaintances caught up and friendships began over food and drinks as excitement grew for day two of the event.

Opening night concluded with a reception and networking over food and drinks.