The label industry is trending toward diversification. An increasing number of converters are looking at expanding their product portfolios beyond PS labels, and, much like exploring flexible packaging, those that want to be a one-stop-shop for customers are examining the potential of entering the folding carton market.
According to a 2013 study by market research firm Smithers Pira, the folding carton market is growing at 5.1% annually, and will reach $184 billion by 2018. Smithers Pira notes that the market’s growth with be led by increased demand for health care products, cigarettes, dry foods, and frozen/chilled foods, especially in emerging markets. The health care sector, according to the firm, accounts for nearly 10% of folding carton demand, and “will see a call for the development of smart packs able to provide a system for monitoring patient medication. The level of counterfeit goods, and the health threats these products pose, is stimulating demand for sophisticated track-and-trace systems in the form of either 1D bar codes, 2D bar codes or RFID systems.”
Globally, cartonboard production grew by 1.3% in 2012 to reach a total of 42.5 million tons, valued at $37.3 billion, with more than half of this volume located in the Asia-Pacific sector. Total volume of converted folding carton grew by over 1% to reach 47.4 million tons in 2012. The five largest cartonboard converters make up almost 7% of this somewhat fragmented market, while the ten largest converters accounted for more than 9% of the volume in 2012, Smithers Pira reports.
Different, but the same
While on the surface, folding carton converting appears similar to the label printing process – both involve laying ink on paper – there are some key differences that set it apart, namely substrate usage, creasing and diecutting. While the label industry mixes up both paper and film, the folding carton market is all about paperboard. “Paperboard is a commodity product, which is very different from the paperstock used in label converting. Converters need to buy properly to be price competitive,” explains Steve Leibin, executive VP business development for Matik, the distributor of Omet presses in North America.
“Second, the substrate is vastly different which causes a host of production challenges. For example, with thicker cartonboard (over 14 pt), you need a press designed to handle that substrate – proper tension controls, larger idlers, robust press construction, heavier diecutting and creasing capabilities. And diecutting and creasing is critical, since creasing can effect automated fulfillment systems at the end user. In addition, larger dryers are typically required for water-based coating applications, so speed is not limited, but you need a press designed for this product,” Leibin says.
While flexo print quality is widely accepted in the label space, offset printing is the more common and preferred print process in the folding carton market. “This is not to say that flexo cannot compete,” Leibin says. “It does, but there will be culture shock when selling flexo into the folding carton market. Flexo label printers can offer excellent speed-to-market with many value added features – cold foil, hot foil, Cast and Cure, lamination, silkscreen – at a very attractive price, bringing what they do everyday in the label market into the folding carton world,” Leibin adds.
So, though offset printing has traditionally been the dominant print method in the folding carton market, flexo does have its place.
All American Label in Dublin, CA, USA is what its owner Brad Brown calls the “7-11 of printing.” In business since 1995, the company’s tagline is “More than just labels,” and over the last three years has successfully entered the folding carton market, adding to its label, flexible packaging and sign businesses.
All American Label manufactures its folding cartons on a 20" Mark Andy 4150 flexo press. “Think about the label press,” Brown says. “you can have everything done on one press. With offset printing for folding carton, you first print, then take it somewhere for UV, diecutting and gluing – that’s the old school way,” he says, adding that after some relatively simple retrofits, his Mark Andy could diecut inline. “Any label flexo press is built for this – you just have to get the tooling right,” he says.
All American Label is just one of several Mark Andy press users who have successfully penetrated the folding carton market. According to Mark Andy Regional Sales Manager Jerry Henson, Performance Series flexo presses have been successful in producing folding carton applications by accommodating substrates up to 24 pt. He says, “In order to effectively produce folding cartons inline, a press needs to be equipped with increased tension capabilities to accommodate thicker substrates, a special heavy duty diecutting unit, an effective waste removal system, and a shingling/stacking conveyor for the finished product. Mark Andy has committed R&D resources to design and manufacture a robust, quick-change inline diecutting unit to work for the specific needs of the folding carton market,” Henson says.
Expanding capabilities to enter any new market is a decision that requires careful consideration. Explains Henson: “An analysis of current and future demand should be conducted, as well as profitability potential. A consideration of entry would be equipment designed for the increased substrate thicknesses required for most folding carton applications,” Henson says. “Larger servos that allow for the increased tensions required by heavier materials, along with more robust web transportation components are a must for carton presses. Diecutting systems not only need to be heavy duty in design, but they must accommodate the larger diameter dies required by carton production.Where a 13" repeat die may work well for a label application, the increased pressure needed for cutting and creasing folding cartons may require a 26" repeat at two around.
With material cost being a large portion of the cost to produce, Henson says, any waste savings will help the bottom line. “A combination carton/label press may be a good entry-level machine that would allow a label printer to print and convert film and paper PS labels as well as cartons up to 18 pt. This would give the converter the ability to effectively run their existing label work on an efficient platform while providing them with the opportunity to grow the carton business on a machine not solely dedicated to the carton market.”
Folding cartons for pharmaceuticals
While the folding carton market, as a whole, is experiencing only modest growth, one area that stands out as showing particular potential is pharmaceuticals.
“We recently installed a 26" 6-color flexo press with multiple inline operations for a pharmaceutical application in North America,” says Matik’s Steve Leibin. “Omet sees that inline production of folding cartons offers excellent efficiencies and unique packaging capabilities – similar to what label converters do in the label market now,” he says, adding that Omet offers printing presses that can print flexo, offset or a combination of processes and can diecut up to 28 pt board, with a variety of inline value added features.
Adds Henson, “The pharmaceutical market has experienced growth in the past several years and is ideally suited for inline flexo printing and converting. With common die/carton sizes, short run requirements and the need for low waste and rapid changeovers, the economics of flexo for the pharmaceutical market are compelling.”
According to Kevin Kenjarski, VP of sales and marketing, Clondalkin Pharma & Healthcare, a market-specific packaging group. “We anticipate moderate growth over the next few years and are monitoring future expectations to impact folding carton production. Key areas include FDA impacts; customer and supplier consolidations; developments in contract packing; the aging population driving product developments, particularly in OTC products; healthcare funding; development of additional government industry standards; preventative medications; expanding markets due to patent expirations; continued combatting of counterfeit products; paperboard cost volatility; reduced package size and multi-purpose packaging.”
Kenjarski adds that environmental sustainability is also a key driver of the folding carton market. “There is a trend toward thinner materials driven by the associated cost of waste to landfill. Recyclable materials and those that facilitate segregation at the end of the life cycle are also important,” he says.
Shorter runs point to digital
As the folding carton market trends towards shorter runs, and with an increasing number of label converters accustomed to and capable of meeting short runs needs, digital printing is a natural fit for folding carton converting.
Filip Weymans, director – segment marketing and business development, Labels & Packaging, for Xeikon, says, “Driven by a demanding end user market with consumers that appreciate a personal approach, brands are generating a larger amount of shorter-run, just-in-time decoration and packaging jobs.”
Weymans emphasizes it makes sense for label converters to look into this market, as brand owners are looking for more than labels. “If they have a strong relationship with a customer, printers should look how they can serve this client even more with other products. Certainly, when it comes to digital printing, the labels can be used for several versions and test marketing. Why not offer, for example, the labels, the box and the promotional material, which all can be printed on one Xeikon press,” he says.
Xeikon 3000 Series presses have the ability to print on folding carton material – up to 350 gsm/18 pt board. “Packaging printers who want to meet the demanding requirements of the folding carton market need more than just a typical print engine with spot color capabilities,” Weymans explains. “Printing is just one part of the production process. You need to have a complete digital production solution to achieve all the benefits.”
To optimize folding carton production, Xeikon has created the Folding Carton Suite, which addresses all aspects of the production process – print, software, print media, consumables & tools and equipment. Print capabilities are provided by the Xeikon 3000 Series, where the 3050 and Xeikon 3500 are well positioned due to their 20" width. As part of the Suite, the Xeikon X-800 digital front end workflow handles job preparation. For materials, Xeikon has tested and qualified paperboard materials from Stora Enso, MWV, Iggesund, MM-karton, all of which are standard materials that do not require pre-coating.
“With regard to consumables, Xeikon’s QA-I toner, which meets US FDA guidelines for food contact, is the ideal candidate for this market,” Weymans says. “In addition, Xeikon has also developed a durable clear toner which can be applied in the last print station. This toner is used as a spot varnish, which is often required in the folding carton market. Having a rollfed press is the ideal press technology. It will minimize the carton material waste as the press cuts the exact sheet size needed.”
The HP Indigo 30000
David Murphy, HP’s Graphic Arts director of marketing, echoes the sentiment that the trend that is driving digital demand is run length reduction. “In the last two years, the average run length of a folding carton job has decreased by 10% to 20%,” he says. “About 30% of all folding carton print jobs have run lengths of less than 5,000 sheets. On short runs of less than 500 sheets, market testing of new products and end-of-life management creates the need for tighter inventory control, quicker turns, as well as reduced time and materials waste. Special editions, seasonal packaging promotions, and localized versioning are also driving down run lengths.”
While the market opportunities for digital are improving, brands and converters are not lowering their expectations of quality, Murphy says. “They remain unyielding in their demand for ultra-high quality: dead-on PMS color matching, the broadest color gamut, and consistent, accurate tones. To achieve this, the folding carton industry is more frequently adopting digital printing technology and finishing equipment to produce these new, unique applications with customization using variable data print.”
To specifically serve the folding carton industry, HP has launched the HP Indigo 30000 Digital Press. This 7-color press has a maximum sheet size of 29.5 x 20.9 inches, delivering production speeds up to 3,450 sheets per hour (4,600 in Enhanced Printing Mode). Handling substrates from eight to 24 pt, Murphy says this press captures more than 90% of folding carton applications printed today. “The press can print on virtually any substrate,” he says, “including any off-the-shelf paperboard and plastics. The HP Indigo 30000 also offers features an inline sheet-priming unit, a one-shot print process for perfect multi-color registration, a robust print server powered by Esko, and an inline selective coating unit.”
The press helps converters address increased demand for shorter, more frequent print runs, seasonal redesigns and faster turnaround times. “Instead of turning down small jobs, using combo-printing, or printing-to-inventory, converters can print what they need when they need it, while maintaining high print quality that meets or exceeds offset,” Murphy says. “The press also allows converters to develop new high-value business concepts such as just-in-time delivery, automatic ordering or re-ordering, web-to-print and true print previews.” Sustainability is also an advantage of the HP Indigo 30000. Its setup process eliminates plates and minimizes waste, translating into cost and time savings. “While there is no ‘easy’ entry into a new market for any company, folding cartons certainly occupy the converting space most adjacent to labels and flexible packaging,” Murphy concludes. “This adjacency, along with potential leverage points like shared buying contacts and logistical fulfillment requirements, make the entry into this market logical, attractive and manageable.” lnw