It started with toothpaste. We’ve always been fond of a particular brand, but over the past decade or more that brand has introduced extra whitening, tartar control, baking soda, Scope, and a few other enhancements to its offerings. Add to that the heartache of having to decide among the 6.4 ounce and the 8.2 ounce size (coupon shoppers will understand) and you might begin to see the problem, if you don’t have it yourself already. Today, as I enjoy the early years of my 60s, the SKU proliferators have done a fine job stalling my energetic sprees in the household products aisle, the bread section, the yogurt shelves, and the juice domain. The other day I caught myself muttering in public as I hunted for cranberry juice: up and down, back and forth, respiration increasing, labels everywhere, mine not included.
The proliferation of SKUs is a fact of life. Consumers must be loving the seemingly endless choices, because they just keep coming. Complainers such as myself, however, are not alone in feeling some pain over this amazing product and packaging bonanza. It turns out that converters also are struggling with it. We’re talking here about short runs.
“What Do Converters Want?” is the title of a new report from InfoTrends, a market research and consulting company based in Massachusetts that focuses on printing, packaging, graphic arts, and related fields. Researchers at InfoTrends sought input from 228 converters: 104 in the label business, 67 in folding carton, and 57 in flexible packaging. It is well known that short runs have changed the production landscape for the label converter, but it came as a bit of a surprise to learn that the flexible packaging and folding carton folks are sweating through the SKU expansion themselves, and would like some relief. (Did I mention cat food bags? Yikes. Kitten, adult cat, mature adult, senior, hairball treatment, light, indoor, immunity support, sensitive stomach. You get the picture.)
Bob Leahey calls them “pain points,” those areas of frustration in manufacturing. Leahey, associate director for InfoTrends’ Color Digital Label and Packaging Service, headed the research project. “We saw things that we didn’t expect to see,” he says. “The concern about and frustration with short runs is about as high in folding carton and flexible packaging as it is in the label world. Those two categories to us connote much longer runs than in the label industry. Even a small rise in short runs can be a pain when you’re using gravure presses and cylinders. There are very few digital presses in those areas.”
InfoTrends’ research involved personal interviews with converters as well as structured survey forms. “ ‘Short runs are killing us, especially in prepress.’ We heard that from many of the carton and flexible packaging converters,” Leahey adds. “The lesson here is that concern about short runs is all over the packaging industry; it’s related to what brand owners want to do. The brand owner wants to be timely with new versions, for competitive reasons, and also wants the supply chain to not be loaded with inventory but be trim and lean. That comes through not just to label converters but to all who help create those products. We are just in the mix in packaging and labels, we are supporting players, pulled along by that. From what we learned in the study, it sounds like other types of packaging are pulled along as well.”
Pain relief, says Leahey, can come in the form of digital presses, as it has for the label converter. The steady growth of digital color printing in the label arena over the past decade and a half has given the printer the means to produce short runs with less waste, faster changeovers, streamlined prepress, and more efficient overall operation.
Flexible packaging and folding carton converters don’t yet have access to powerful digital presses that print in widths that they require for boxes and bags and sleeves of all sizes. Instead they have large investments in midweb and wide web presses, along with requisite converting machinery, that has served well for years. Soon, however, that will change.
“We found the interest in digital print options to be just as high among flexible packaging and folding carton converters as it is among label converters,” notes Leahey.
Over the next two or three years, digital presses will be introduced – most notably by HP Indigo – that are wider and designed not only for label printers but for the folding carton and the flexible packaging producers as well. The presses will have a material width of about 29", the equivalent of B2 width under ISO 216. It is expected that these presses will have a price tag north of $1 million, possibly around $1.5 million. Are the wider web printers looking at these with interest?
“We asked explicitly about the next generation of presses, which will be more than twice as productive and dedicated to flexible packaging and folding carton,” Leahey says. “The answer is yes, they are interested, but willingness to pay can be a problem. I didn’t name the number in the survey, but in interviews I mentioned $1.5 million. Who could buy this? The answer: not many, at least not to start with. For that money they could buy a really good conventional press on the used equipment market.
“My prediction is that we will have a modest number of placements of this new generation of printers. I think it will be in the low tens of units per year placed in the world in the second year, which will be a few years from now. That total will grow each year, but it will still be in the tens of printers for the world, at least for the first few years of availability.
“But,” Leahey emphasized, “the ones that are placed will be used heavily and will produce a lot of value in these newer applications, mostly in folding carton and less in flexible packaging.”
InfoTrends estimates that 2011 billings from the three types of converters for color digital printing totaled $2.75 billion globally, and forecasts it at more than $5 billion by the end of 2016. It must be remembered, Leahey says, that color digital printing still has low penetration in the packaging market: Less than 10 percent of labels for consumer goods and below 1 percent of folding cartons and flexible packaging are now printed digitally.
The legacy and the power of conventional presses cannot be overlooked in the enthusiasm about digital printing. The majority of labels, folding cartons and flexible packaging are now and will be for the next decade produced on flexo, gravure and offset presses, InfoTrends believes. They will share the burden of packaging output with their new digital counterparts to greater and lesser degrees.
Analog presses (never thought I’d be typing that phrase, but there it is) are great machines and are getting better all the time. There remains the question of capacity, which exists in fair supply these days, and a slowdown in new acquisitions during the recession, but these big boys are the backbone of the label industry.
And there’s another issue that the InfoTrends researchers encountered in their talks with converters about digital and analog processes: obsolescence. It goes something like this: “I can spend a lot of money on digital equipment to do a really great job with short runs, and take even more work off of my flexo press, which eventually I could sell. Meanwhile, this costly digital press … Is it going to be declared obsolete by another model three or four years from now?”
The author is president of Jack Kenny Media, a communications firm specializing in the packaging industry, and is the former editor of L&NW magazine. He can be reached at firstname.lastname@example.org.