Print 13 and CPP Expo recently concluded in Chicago, and the trade show validated something many of us have been saying for years: The label industry is a very good place to be.
Print 13 is geared mainly toward commercial printers. This year Print 13 co-located with the Converting and Packaging Printing (CPP) Expo, which is an indication that people are starting the growth potential of “logistics.”
Logistics, as defined by Ed Gleeson, director of economic and market research at the Printing Institute of Americas, includes converters, label and wrapper printing, as well as packaging printing.
The economists and industry gurus who spoke at various seminars were forecasting growth in the “logistics” industry, and there were also some exciting new technologies on the Print 13 – CPP floor.
Logistics on the Rise
The decline of print has been well documented in the industry, but Frank Romano of RIT really put it into perspective in his presentation on the Future of Print. He noted that in 1995, the printing industry had reached a peak of 65,000 printing companies.
Coincidentally, that was also the year that Netscape launched its IPO, and the industry has been in a downward spiral ever since (or at least part of the industry). Romano estimated that the number of printing companies would bottom out at around 30,000, when we’ve reached a point when technology cannot replace the printed product.
Ed Gleeson showed that while the number of printers has declined, there is growth. In his slide on growth rates from 1999 to 2010, the growth rate in logistics persevered through the recession.
Romano expanded on this trend, estimating likely scenarios through 2021, which have logistics leading the pack with an increase of annual printing shipments of 3%, followed by marketing at 2%, and the “inform/communicate” bucket slipping to -4%.
Upon hearing this, you’d think most of the commercial printers at Print 13 would be scratching their heads and wonder how they could pry their way into your business. Some will, without a doubt. The smart ones will figure out how to tap into their existing client base and satisfy their needs for label printing. But many still cling to their sinking ship, waiting for the glory days to come back.
These are the folks that believe it was the recession of 2008 that sealed their fate. I think otherwise. To Romano’s point, I believe it was that Netscape IPO that started print’s downward spiral.
Machines and Technologies Making a Difference
Let’s circle back to Romano’s 30,000 companies. This was the number of printing companies that would remain once we reached the point where printed products could no longer be replaced by some other technology, as we’ve seen the Internet replacing printed communications.
The label industry is full of these irreplaceable printing products. Bottles, food packages, pharmaceutical labels – the labels for these products need to be printed, and thus, the industry will enjoy growth.
To meet that growth, several companies from Print 13 and the CPP Expo will be leading the charge:
INX – I spent some time with Jim Lambert, INX vice president and general manager of their Digital Division. Jim worked with his team to develop the NW140 inkjet UV digital narrow press.
The printer produces UV-LED cure single pass output up to 80 feet per minute on label. The real beauty is the fact that the machine combines printing and conversion by using the Spartanics X140 laser diecutting station. Through a glass panel, you can watch the laser light show as the machine cuts label; it’s worth the price of admission.
The focus is on speed and technology, and Lambert believes the 5-inch web width will eventually expand due to additional Xaar 1001 print heads. The company also announced that Komori will serve as the sole national dealer of the machine in the US.
Esko – I next spoke with Ian Hole, Esko vice president of market development. Ian explained Esko’s amazing Full HD Flexo printing process. Full HD Flexo allows you to achieve amazingly smooth, sharp images with an expanded tonal range. The technology utilizes high-resolution imaging, round top and flat top dots and microcells to create stronger looking images without requiring an increase in ink printing levels or additional inks.
As Ian explains, in the typical 175 dpi printing job, full HD Flexo adds appropriate numbers of microcells per each dot size. These incredibly tiny, but numerous, additions prevent ink from pooling (reticulation) and create extremely vibrant colors without requiring additional ink units.
This eye-popping technology will likely soon become the standard for many flexible and label printers, as 70% of all imaging devices worldwide are Esko CDIs, and 35% of all Esko devices already use Esko HD Flexo.
Allen Datagraph Systems, Inc. – I next visited with Allen Datagraph Systems, Inc. who showcased its iTech AXXIS HS Digital Label System. A lower-priced model than the INXS system, the label system includes a printer and a finisher.
The iTech AXXIS HS Digital Label printer includes an LED toner roll-to-roll printer, producing colors at 1200 dpi X 600 dpi, at speeds up to 30 feet per minute. It also boasts high definition printing with four-color stochastic screening along with the ability to print variable data.
The printer is paired with the roll-to-roll iTech AXXIS HS Digital Label Finisher. The machine laminates and contour cuts labels of any size and shape on-demand, without a die, albeit minus the Star Wars laser technology of the INX machine.
The system is ideal for running smaller quantities of labels with typical jobs being 2000 linear feet and less. With a low economic investment, it’s for printers looking to service companies with smaller runs.
Which Way Will You Go?
These new machines and technologies are incredible, but should you chase them? It all depends where you are financially and operationally. For example, some of the most successful companies out there aren’t chasing the latest trends. In Ed Gleeson’s presentation, he showed how profit rates were the highest among printers with either a specific vertical-industry niche or a product niche. They saw profit rates as a percentage of sales in the 7.9 to 6.5 range respectively. By positioning yourself correctly, you can radically improve your chances for success.
So what is the moral of this story? Let me once again defer to a piece of wisdom from Gleeson. I asked him, with all these choices in machines and technologies, how can a printer decide where to go strategically? “Look at your numbers,” Gleeson said. He emphasized that the places where you’re the most profitable will be a good indication where you should focus.
He also said that the best place to start in terms of market expansion is with your own customers. Find out what they need, where they’re struggling, and get a toehold in that business. Then once you’re good at it, roll it out to other clients.
For label printers, this might not be as high a priority as it is for struggling commercial printers. But be forewarned: If the printing industry continues to suffer, commercial printers will undoubtedly start knocking on your client’s doors.
When that happens, will you be ready to offer all the services they offer? Have you also been expanding your own capabilities? If you have, then you’ll be far more likely to fend off the competition, and keep right up with the label industry’s upward trend.
Rock LaManna, President and CEO of LaManna Alliance, helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic path.