Recently, Smithers Pira sat down with print and packaging expert, Sean Smyth, co-chair of Digital Print for Packaging USA to discuss the importance of the event to the industry, assess opportunities and challenges, and find out what is really happening in the industry.
Smithers Pira: Why is Digital Print for Packaging USA important to the industry?
Sean Smyth: In the current media environment, one of the brightest spots in the printing industry is digital packaging printing. You can get credit card or bank statements on your laptop, your daily newspaper and magazines on a tablet or mobile phone – but you can’t get milk from an iPad! Packaging cannot be substituted by another media channel. Plus, with a market valued over $10 billion and an expected CAGR of near 14% to 2020, digital packaging is one of the hottest industry sectors around.
Its why the equipment suppliers are developing new equipment for cartons, flexibles, rigids and particularly corrugated. This year’s drupa was the digital packaging show - announcement after announcement focused on digital and packaging – new technologies for new applications, new orders being taken and lots of focus on the sector. Most of the flexo and litho leaders in packaging showed digital solutions – they see the way the wind is blowing!
So in that context, Digital Print for Packaging USA provides a really great opportunity to begin the conversation around what is real and what is really happening in the industry. The audience we’ve traditionally attracted to this event has been leaders and decision makers across the entire supply chain – that helps attendees figure out where and how to spend this time and energy, not to mention resources. Their experiences and successes are shaping the future of the whole packaging sector.
Smithers Pira: What are the biggest challenges facing the industry right now?
Sean Smyth: The biggest challenge is how digital print fits into the packaging ecosystem. There are lots of nice print engines but this is not enough! The industry is realizing that it needs workflow, substrates and access to solve pain points in the supply chain. There are also compelling applications where brands can do more with their packaging, adding value and providing new engagement. We need to see more brands and retailers embracing the technology. Their willingness to share is probably one of the biggest hurdles we face.
Other concerns include finishing and color management. You also have major concerns around food contact and the testing as it relates to regulatory bodies. You’ve got major concerns around packaging converters and their consideration – often disinterest – in changing things. If you consider a lengthier print run, digital is more expensive than flexo… so little incentive to change.
Smithers Pira: What about opportunities in the industry?
Sean Smyth: Consider the landmark Share-a-Coke with . . . campaign. Even though it cost four to six times as much to make a personalized label, sales in regions where that campaign took place were higher than sales where there was no campaign. That kind of engagement sells, hence the repeat campaigns and this summer’s version with song lyrics on labels. Engagement is critical, and there will be lots, lots more
The changing food trends – millennials shopping every day rather than weekly, snackifacation, the push toward fresh and premiumisation are great for digital printing. How brands tap in to these changes is enlightening, with upstart brands pushing the status quo while the megabrands track these changing scenarios and they react. Cereal packaging has moved from just cartons, even Campbell Soup is available in pouches. Some of the greatest opportunities are personalization options with digital, versioning options - think of all the Oreo brands that are out there with more every week it seems – shorter print runs, fast turnaround times, direct to pack opportunities… really the opportunities only require the insight to exploit them, selling more product – often at significantly higher pricing.