The objective of this article is to shed some light on how companies in these three categories are faring now that we are a full five years into the new century. (Five or six, depending on when you personally feel the new century commenced.)
Who were they?
As described above, there were three types of companies, as this author sees it. First we had the trade shops that were born out of the commercial offset service bureau business as they saw that market change. That change evolved over many years but culminated in the internalizing of prepress and platemaking at the printer level. Due to the nature of the offset business and the standardization that had taken hold with industry printing standards such as SWOP and the like, the demand for an outside prepress service provider to handle intricate operations, mechanical art requirements and so forth diminished. The proverbial nail in the coffin really came with the adoption of desktop publishing and the flood of enhancements that were developed in a relatively short period of time to enable a computer operator to perform the same functions heretofore possible only with contact frames and the watchful eye of color retouchers and strippers.
Those who watched this occur - who watched their businesses erode and did nothing about it - were left in the ditch along the technological highway and either went under or were fortunate enough to have had some value left to sell to an interested buyer.
Those who saw this scenario developing and simultaneously recognized that their survival would only be a result of their own investment lasted longer. Morover, they might have developed into a more specialized service provider such as an ad agency, high end color separator or even a printer in their own right.
Those who chose an alternative path and opened their eyes to a totally new market found that the packaging business was a good move and would allow them to be positioned in a more technically demanding prepress market where they could focus on their core competencies and develop the skills and understanding of the new market's prepress requirements.
So that establishes who the offset-conceived packaging prepress provider typically was.
There were others in the packaging prepress business that were born from the need for specific prepress service requirements of the existing package printing industry and had no business base in the offset industry, but were formed by those entrepreneurial individuals who had found themselves as the skilled labor casualties of the offset industry shift to internalization.
Who are they?
For the next many years the packaging trade shop went on its merry way and established a value proposition to the package print community based on the expertise required to service the prepress requirements of this print process. What made it different? All sorts of things, but this brings to mind a quote I heard many years ago about the packaging industry: "The only thing consistent about the package print industry, especially the flexo segment, is the inconsistency of the variables." Fundamentally, this is the nature of the value proposition of the packaging trade shop. Because of the intricacies of packaging graphics and the challenges we face in developing printable graphics for a wide variety of substrates and print processes, the trade shop could afford the investment required to address these disparate needs. It could perform the magic required to make the printer successful. This capability has kept the trade shop in good stead for many years, but it began to change in the early 1990s.
As the prepress technology established in the offset arena, now having been fine tuned and pretty well standardized in its application, began to spill over into the packaging industry, many software developers saw this as the next emerging market ripe for their focus. So they pounced on it and drove the development and found not only an approachable trade shop market but a receptive printer community on a very basic level as well.
As with the commercial offset printing business, the packaging service bureau industry was about to go through another step change in its life cycle. Fortunately the packaging prepress requirements were more complex than those of the commercial offset market, so a longer term value proposition could be developed and sustained.
Who will they become?
The changes happened and a push by the software manufacturers and the developers began to drive prepress technology into the printer/converter's shop. During those early times, the prepress build-out would involve not only prepress image assembly but also film output and platemaking; not a light hearted decision. Offset package printers took this to the level of computer-to-plate early on as CTP had been established in the commercial and publication segments, but the challenges were formidable and only a few packaging printers had the financial wherewithal to fund their way to the level of implementation that was sustainable.
Gravure printing remained a safe place to be if focused on the packaging market. Capital investment to bring the prepress production capability into the converter end of the business would be prohibitive, so this would ensure the gravure prepress service provider a strong future.
The flexo print providers, on the other hand, were another ripe target. Narrow web printers had begun to adopt and implement prepress capabilities since the early '80s with varying degrees of success. The trade shop segment was no longer heavily involved with supplying the narrow web business. Most packaging trade shops focused on larger volume wide web flexible packaging and folding carton opportunities for traditional prepress services. Wide web printer/converters began to investigate and some adopted an approach to internalize prepress and platemaking over the years. Some have been successful and have reduced their cost base by taking this step. The ongoing issue with this is that the investment required to keep pace with changing technology is difficult to fund on an annual basis for these companies. Therefore, these earlier adopters for the most part have basic capabilities to support their direct client base, but have not been able to fund the fast paced automation based workflow enhancements that have been developed in recent years.
So the trade shops had to adapt or find themselves in the same predicament as their offset trade shop predecessors 25-plus years ago.
In recent years, many changes have occurred in this market segment. And as the trade shop segment has evolved we have seen an emergence of those who have reinvented themselves in areas of specialization. Unfortunately we have also witnessed those who sat on the sidelines in the past 10 years, and their complacency has driven them into extinction or at the very least they have been reduced to a static business with no true growth potential.
But for those who planned ahead and paid attention to the shifts in the market dynamics the future continues to look bright. The evolution is happening and the new value proposition is sound and sustainable. The trade shops in this model have pursued a direction to position themselves as brand managers as opposed to plate makers and prepress providers. The value proposition promoted by these providers is that they will serve their target market - consumer product companies - as the organizers, the coordinators of all branded packaging graphics across all packaging components in order to deliver consistent color and graphic reproduction to the consumer interface.
In this fast paced digital age, the brand management posture will enable the trade shop company to participate further upstream in the brand development process, managing color standardization across all packaging components as well as extending their reach into complimentary areas such as point of sale and trade marketing in an effort to bring a consistent image to all aspects of the brand recognition continuum.
The entire service structure is evolving with emphasis on brand asset management and digital file management. Print providers will continue to receive digital files for output through their CTP devices for flexo and offset as well as for use in the digital print environment.
Entrepreneurial thought will continue to be the key to the success of the packaging trade shop as its role in the package print process continues to evolve. We're in very exciting times with many opportunities to pursue.
So think about it: Is it just a long strange trip, or do you have a strategic direction to follow?
As we enter 2007, I would like to solicit the readers' input to my selection of topics to research or develop for this column. Please send your ideas and opinions to me at firstname.lastname@example.org.
Have a happy and prosperous new year!