Greg Hrinya, Editor07.13.20
The label printing industry has been working hard the past few months. While the global population has dealt with the uncertainty of the coronavirus pandemic, label converters and their suppliers have operated on the front lines – serving as essential businesses that are keeping stores, as well as online retailers, well-stocked with products.
COVID-19 has certainly made an economic impact on every facet of the industry. Business has not taken the anticipated path that one would have imagined back in January. There have been ebbs and flows, initial surges and stabilization.
Demand has fluctuated based on application, too. With people quarantined and preparing their own meals, food products have flown off the shelves. Also, cleanliness and hygiene have never been
more important.
Converters have churned to meet label demand for household cleaners, disinfectants, hand soaps, etc. Many label manufacturers have also pivoted from their traditional printing roles, helping produce hand sanitizers, PPE, floor and wall signs and decals, among others. The industry has truly seen everyone step up.
Sustainability, a growing concern for converters and suppliers alike, has seen its position oscillate. In order to meet established safety standards, some brands, such as grocery store chains, have gone away from reusable bags and items.
The economy is in quite a unique position. The last pandemic of this magnitude took place some 100 years ago, and technology has certainly evolved in that time frame.
However, there is no playbook for how to deal with an unknown. Label & Narrow Web checks in with a diverse range of industry experts to see how COVID-19 has impacted their bottom line and
internal operations.
Argent Tape & Label
Argent Tape & Label (ATL), a versatile label converter based in Plymouth, MI, USA, operates in a wide range of markets. These include, but are not limited to, pharmaceuticals, food and beverage, automotive, and industrial. In recent months, ATL has expanded its book of business to better support its community.
During COVID-19, ATL helped produce ARV2019 face shields for personal use that requires contact with, or proximity to, others. Typical applications include front line workers, retail store attendants, restaurant and food preparation personnel, manufacturing employees, and personal errands to the store.
This small, woman-owned company (WBENC certified) empowers every employee to think like an owner. ATL also places a premium on supporting local businesses, including the growing number of minority-owned businesses, while also donating to charities like the Red Cross, Wounded Warriors, and multiple others.
“During the last few months, we have faced COVID-19’s personal and financial challenges with grit, determination and ingenuity,” explains Lynn Perenic, president and CEO of Argent. “The day the shutdown order came down from the governor’s office, Argent Tape & Label immediately turned to work as a critical supplier. Our team of dedicated and skilled press operators produced tens of thousands of labels for hand sanitizers, and we continued to supply medical tapes to area hospitals.”
The company’s newly-formed R&D team led ATL into new markets by engineering various forms of personal protection equipment (PPE), and the management team approved the purchase of state-of-the-art required capital equipment to make PPE.
These products have been developed for manufacturing facilities, salons, barbershops, spas, and the general public. ATL has also been honored to produce face shields to support first responders, who have been so instrumental in helping COVID-19 patients.
“As we embark on a ‘new normal’ and emerge from pandemic-level shutdowns, the priority remains the safety of our families, suppliers and customers,” says Perenic. “ATL has increased our remote connectivity, implemented safety procedures, and monitors all governmental health and safety requirements with our characteristic initiative and spirit.
“As the economy safely reopens and we return to our activities, we continue to enable our team members, suppliers and customers to actively engage while also continuing social distancing and other measures to quell a resurgence of the virus,” she adds.
ATL has established a foundation of family, community and inclusion, all of which are evident in its operations. “Our country’s fabric is stitched with the voices of citizens, who have, throughout history, protested peacefully to address and significantly change social, cultural and criminal injustices,” states Perenic. “We applaud the thousands of peaceful protesters nationwide, and we denounce racial injustice and incidents of police brutality. Joining fellow citizens in peaceful assembly or protest is at the core of the First Amendment. Equal Rights is not just a catch phrase, and both are critical to a functioning democracy. It’s time for real change and decisive actions.”
ATL will continue to drive innovation and provide answers to its customers’ most demanding challenges. “It has been our privilege to support many of our customers during this global pandemic and to help them successfully navigate a variety of new challenges,” concludes Perenic.
Avery Dennison
Avery Dennison Label and Packaging Materials, a substrate and adhesives supplier based in Mentor, OH, USA, has gotten creative to better support and communicate with its customers. Avery Dennison scheduled multiple webinars designed to educate the industry on the latest trends, and the company has significantly invested in research to provide its customers with the latest data.
“The state of the label industry is continuing to evolve with a lot of changing dynamics,” notes Anh Marella, director of marketing, specialty, at Avery Dennison. “The megatrends of digitalization, e-commerce and sustainability are exciting opportunities for new and disruptive innovations within our industry.”
The pandemic has impacted Avery Dennison similarly to others in the industry. “We are focused on ensuring the health and safety of our employees and our commitment to servicing our customers,” says Marella. “I am proud of how our teams have demonstrated our core values of courage, teamwork and integrity in these uncertain times.”
The company is also a believer in continued product development and enhancement, even in challenging times. “We need to continue to invest in our business even more so in times of uncertainty to position ourselves for growth when the economy stabilizes,” she explains. “We have made many investments in the past couple of years in our manufacturing capabilities, have made business acquisitions in adjacencies to enhance our business portfolios and will continue to look for growth opportunities.”
In order to accommodate demand like never before, Avery Dennison has emphasized communication throughout the organization. “We have a regular cadence of virtual town halls and communication with our employees and customers to keep them informed of how we’re doing, actions and processes established to ensure employee safety as they return to work, and working across our supply chain to be as agile as possible to meet the surge in labeling demand of essential items,” she adds.
Avery Dennison has also analyzed how the greater label industry will react in the future. According to Laura Noll, market research manager, and Michelle Bober, market research analyst, consumers have shifted to products promoting health and wellness – both from a physical, mental and emotional standpoint. Bober states that 57% of consumers want to improve their overall health and well-being, and they’re looking to brands providing total solutions.
“Consumers are becoming more aware of their products and what goes into them,” says Bober. “With COVID-19, we’re seeing this trend amplified, as well as the supply chain and where these products are coming from.”
In addition to health and safety, convenience has also driven the latest packaging trends. With people avoiding public places, e-commerce is thriving. According to Avery Dennison, e-commerce was expected to account for 8% growth by 2023. The pandemic, however, has seen e-commerce sales surge by over 300% since April. This has necessitated a greater need for tamper-evident labels, which are commonly found with foods, and more delivery services.
“Since COVID-19, almost every order has some sort of tamper-evident seal because safety is top of mind for consumers,” adds Bober. “Over time, we expect these channels to maintain some of their growth as they gain and keep new users.”
Pharmaceuticals and smart labeling will continue to serve as focal points for Avery Dennison. “In the pharma area, RFID is going to be increasingly huge. Pre-COVID-19 reports showed high teens, low 20s growth in different areas using RFID. I think it’s going to be even higher as we go forward,” Noll explains.
Colordyne Technologies
Colordyne Technologies, a digital printing specialist located in Brookfield, WI, has positioned itself for future success. The company’s forward-thinking has enabled it to withstand the challenges of COVID-19.
“In tough market conditions, well-managed companies adapt to change and find ways to run their businesses amidst uncertainty,” explains Taylor Buckthorpe, director of sales, Colordyne Technologies. “The label industry is no different. It is bold to make a statement about the entire industry, but we can find similarities in what we are experiencing. From a capital equipment perspective, we are seeing companies continue to invest, but with increased caution around the total expense, purchase timing and return on investment.”
According to Buckthorpe, the food and beverage sector, which relies heavily on digital printing, felt the initial impacts of COVID-19. Both staffing and the supply chain were affected. The food and beverage market is an essential industry, so its experience was different from others without this categorization.
“Our customers, both brands and converters, serving this market found the early environment changes challenging to navigate,” notes Buckthorpe. “Most managed to get through this initial impact with smart and efficient management. Successful companies were proactive with accounts and got in front of potential supply chain issues. Forward-thinking brands and converters already using digital printing technology were better able to manage the supply chain disruption and adapt at a faster speed. We see consumer trends that require shorter runs, like personalization, versioning and customization, retaining – if not increasing, in interest and demand because of COVID-19. This holds true for most industries, especially those serving customers through an online experience.”
Colordyne has responded positively to these challenges. If anything, the company has actually improved its response times, especially as customers require faster turnarounds to keep up with changes and increased demand. It has also seen customers using the quarantine period as an opportunity to research new technologies and familiarize themselves with the inner workings of digital printing.
“Over the past 45 to 60 days, the potential customers contacting us are more engaged because they have had time to research the technology,” states Buckthorpe. “Plus, with more stringent requirements for capital equipment spending, potential clients have stronger justification for their application and investment prior to contacting us. Colordyne continues to advance inkjet, and we are working with more companies than ever before to integrate this technology into their equipment.”
The company has also established a new division focused on print engine development. The business unit, which commemorates 10 years of business in the label and tag market, targets strategic integration partners (SIPs) interested in adding inkjet to their portfolio.
“During the pandemic, we were able to launch a dedicated division focused on this goal,” he adds. “This is because companies impacted continue to see the value of digital printing. They may have pushed some of the capital equipment spend to Q4 of 2020 or early 2021, but the demand for inkjet technology remains.”
In order to support its customers, Colordyne has seen a surge in web-based meetings and demos. This time frame has prompted the company to invest in solutions that create stronger virtual connections and deliver the same quality communication as Colordyne did in-person.
“Working in our favor is also the fact that we have been serving customers across the world for years,” explains Buckthorpe. “Our service and sales teams were prepared for virtual calls and quickly transitioned to using this as their main form of communication. Additionally, all of our printers, presses and print engines have remote access that makes it possible for our service techs to log on within minutes and support each customer with their request.
“Consumer packaging trends are unchanged in that buyers want a tailored experience, so increasingly large brands are evaluating this technology to meet this demand,” he concludes.
Delta ModTech
Delta ModTech specializes in the design, implementation and service of motion-controlled converting and packaging systems. To continue with these initiatives during these uncertain times, the Minneapolis-based company leaned on its product development capabilities and culture to service its customers.
“Overall, our business has remained strong,” states Amy Elfering, marketing coordinator at Delta ModTech. “Many of our customers remained open as essential providers of PPE, medical device, wound care and pharmaceutical products.”
In order to support customers in a wide variety of industries – many of whom ventured outside of their comfort zones to aid those on the front lines – Delta ModTech relied on strategies that began long before the pandemic.
“We implemented several infrastructure upgrades over the last year to our network and phone systems, allowing our non-essential staff to seamlessly transition to working remotely during the statewide lockdown,” explains Elfering.
Internally, the company allowed its essential production staff to continue working at the plant while honoring travel bans, social distancing and sanitization policies. Delta ModTech also analyzed how it was utilizing its time, especially as it related to popular industry events like Labelexpo Americas, Dscoop and more.
“Many of the tradeshow and industry events where we planned to exhibit were canceled, rescheduled or postponed,” she adds. “We used this time to reach out to existing clients and ensure that they were receiving the support they needed.”
Delta ModTech also thought outside the box to reach its customers. It has been using virtual meetings, online machine connections through VPN, and Microsoft HoloLens mixed reality goggles to establish conncetions with customers in a range of locations. “We’ve supported our clients with remote process support, machine installations and upgrades,” concludes Elfering.
Domino
Domino and its converter partners have not slowed down in the face of COVID-19. The influx of panic buying orders at the beginning of the pandemic has ramped up production, and this digital press and printer manufacturer sees brand owners in the food, beverage, and pharmaceutical sectors busier than ever. Therefore, their suppliers are busier, as well.
“We hear that many label manufacturers are producing record numbers of labels and getting them out the door as quickly as they can,” states Bill Myers, marketing manager, Digital Printing, at Domino. “In turn, the adoption of digital printing by many label manufacturers is more important now than ever, with brand owners needing multiple SKUs and variable data printing. Digital printing has been a great asset to those label manufacturers that realize that digital is a wonderful complementary technology to their flexo presses.”
The ability for converters to recognize the right tool for the job is critical, as well. As Myers says, one SKU for a long run can go on flexo. Multiple SKUs and changeovers for short- and medium-runs are perfectly suited for digital. Meanwhile, embellishments, varnish, cold foil and spot colors might benefit from a hybrid press. Delineating between these variables can help converters better meet demand for their customers.
“Choosing the right press for the job is key in being productive and efficient, and the health of the label industry is being tested,” says Myers. “Those label companies that can pivot quickly and provide labels to brand owners in the quantities they need, when they need them, they will be the ones who are most successful.”
In-house, Domino put a plethora of health and safety processes and procedures into place. These measures have helped promote safety throughout the supply chain. “The health and safety of our employees, customers and visitors continues to be a priority for our Domino team,” notes Myers. “Most of our employees are working remotely from home. However, our digital printing samples and demo team are still in the office, producing samples as needed – even providing demonstrations virtually. We are making certain that we have only the appropriate number of people in the office at any one time.”
According to Myers, Domino has seen a surge in orders for the Domino K600i digital UV inkjet printer for label manufacturers that want to add variable data to their flexo-printed labels. The company also continues to receive strong interest in the Domino N610i digital UV inkjet label press. While converters remain cautious about how they spend their money, investing in new technology can serve as a means to drive additional revenue. “In addition, we have received several emails from customers expressing how Domino Digital Printing has been key to their business, as well as letters of appreciation for our service team, who have provided timely service and support, even with the risks associated with travel,” says Myers. “We have service engineers who have used creative ways to travel to customers, taking additional levels of protection against COVID-19.”
Domino has recently worked with Abbott Label, International Label & Printing, Misco, ProLabel, and several others.
DeAnna Papachristopoulos, regional sales director of International Label & Printing, says, “A customer who produces cleaning products needed labels fast due to COVID-19. They had been working on formulas for a sanitizer, disinfectant spray and disinfectant wipes. We were able to produce our customer’s request in record time. Our CEI BossJet Powered by Domino hybrid press plays a key role in helping us provide our customers what they need, when they need it.”
Meanwhile, Greg Hinkley, service technician at Domino, drove to Miami with his caravan to avoid air travel and hotels. Ramon Fernandez, president of ProLabel, shared his appreciation for Hinkley’s dedication. “I want to tell you how grateful we are to Greg for taking the initiative to drive down here in his own vehicle to help us out with an LED upgrade on our Domino N610i. It is even more impressive, considering the current situation with COVID-19. A professional to the end, he gave me his word he would not leave until this machine was operational. It took nearly a week, but he did it. Greg demonstrated the ability to adapt and overcome, working late into the night – and even Saturday and Sunday – to accomplish what he promised. It’s a real pleasure to deal with a person whose word means something.”
As companies continue to navigate uncertain times, Myers believes in collaboration and positive attitude to better support each other moving forward. “Fluctuations in the stock market, lockdowns easing up, questions such as ‘Will there be a second wave?’ and more are at the foremost of everyone’s mind,” he says. “What’s important to remember is to focus on the things that what we have control of, the things we can do to be productive and helpful. Be respectful of others, help others and be positive. We will get through this, but we’ll get through it better if we all work together.”
FLAG
Flexo Label Advantage Group (FLAG) has a unique perspective on the label industry’s economic conditions. John McKay, president and founder, works with more than 100 member companies. FLAG originated as a buying group for its members, but it has diversified its offerings to include label sales growth tools, catastrophic recovery plans, and technical and business support. Meanwhile, vendors gain access to members, which offers a way to expand revenue growth.
“The world has turned upside down in a very short period of time,” notes McKay. “While so many Americans are out of work and scrambling to hang on to their businesses, parts of our industry have never been busier. Most states have designated label converters as essential businesses, allowing them to keep producing labels critical to our entire supply chain. Converters in flexible packaging, food, pharmaceuticals and household and personal care are running at full capacity.
“Over the last few months I have spoken with many independent label converters, who are members of the FLAG community. Our members have been communicating directly with each other, as well, learning how their peers are addressing the current issues and hurdles. While business has been good for most converters during this crisis, coming out of this period and what the future holds for everyone is in question, including talk of a recession or worse,” he adds.
FLAG was quick to act when COVID-19 started to spread. McKay and his team made a host of of solutions readily available to members, including a COVID-19 support group and a remote sales training series.
“We recognize the uncertainty that coronavirus is causing for our members and their businesses, their employees and their customers,” says JC McKay, VP of business development at FLAG. “To be proactive in supporting our membership, we’ve organized a member-to-member support group in North America, helping our members communicate a plan of action to their teams and customers.”
According to FLAG, the label business seems to be slowing down from the initial spike. “It’s yet to be seen whether the slowdown will just bring things to previous normal levels or actually be a much deeper dive,” says John. “When COVID-19 started, consumers were buying their products in bulk and hoarding was commonplace, as they were afraid to run out of the things they needed at home. Whether or not everyone has gone through his or her stash of products will play a factor in the slowdown, as well as the fact that so many people are now out of work with limited budgets. Many converters are benefiting from the PPP loans to help them through this slowdown.”
There have been positives, too. Many FLAG members are now producing new products for the first time, such as hand sanitizers, while embracing new channels for conventional products like restaurant food items sold “to-go.”
“Right now, the overall state of the industry is still good, and I believe cautious optimism is winning the day with thoughts that the slowdown is temporary,” adds John. “We are starting to see some customers bring their business back to the USA from China and Europe for more local production, which is a good sign. There are indications that the recovery may be real and sustainable. One thing we all know is that more sales fix everything.”
Label companies will need to embrace the “new normal” to succeed further into the future. FLAG has already begun planning for these realities, which include working from home and utilizing virtual technology. The newer generations graduating from college will no longer be expected to move to a big city to find work, says John, as many of those companies will have them working from home.
“Many companies have found that they can even reduce costs without losing productivity by utilizing technology,” he notes. “In fact, some FLAG members report that productivity has actually increased with virtual production meetings versus meetings at the plant. Some innovative suppliers have even found that preliminary virtual service calls for equipment issues or Lean audits may not only speed up resolutions to issues but also reduce travel costs. Sales representatives are also utilizing virtual meetings with prospects and customers, which actually take less time than in-person visits and save on travel costs, as well. While nothing can replace the in-person relationship building that drives our industry, this is certainly one way to maintain contact. As these virtual capabilities are further improved, there will certainly be new ways to make the most of them because there is no doubt that our industry is very creative and adaptable.”
There are questions that will need to be answered in the future. Will furloughed employees return or will their positions be downsized? Will companies embrace investments into new technology? How fast will converters be paid for the emergency work they completed, and will there be losses due to companies going out of business? John notes, too, that now might even be a good time to make a capital equipment investment.
With a broad view of the industry, McKay has been impressed by how all segments have responded. “I applaud our industry – converters and suppliers alike – as they juggle production, scheduling, supply-chain, work from home employees, finances and more. You are all heroes, along with the healthcare workers, truckers, food suppliers and others. It’s been said that not all heroes wear capes. I am sure it hasn’t been easy and just want you to know that what you do is greatly appreciated by our industry, our customers, their customers and the final consumer.”
Flexo Wash
Flexo Wash, a key supplier to the label and package printing industry, reacted and adapted quickly to its customers’ needs during the COVID-19 pandemic. The global anilox cleaning specialist has been committed to providing consistent performance on-press, even though this crisis has generated anything but predictability.
In the eyes of Patrick Potter, president of Kentucky-based Flexo Wash LLC, business has stabilized after months of ebbs and flows. “Currently, from our perspective, the state of the label industry is stabilizing after massive changes during the pandemic,” he says. “While the vast majority of converters saw rapid demand increases, others slowed down substantially. Many in our industry were able to pivot and produce new and vital products for the pandemic such as hand sanitizer labels and face masks.”
Flexo Wash instituted a host of measures designed to protect its employees, customers, and the general public. Internally, Flexo Wash first set out on the path of protecting people by ensuring the facility and its operations were clean and safe. The company also suspended travel for all sales and service employees.
“Flexo Wash set out on the new normal of operating a fully-functional business during a pandemic,” explains Potter. “We certainly heard from our customers that they are looking to operate as efficiently as possible and many have moved new projects forward in order to streamline their operations. Flexo Wash’s customers were experiencing massive surges in demand and production needs, many with labor shortages. After communicating with customers, Flexo Wash maintained and ensured a steady inventory and supply stream to meet the industry’s increased needs. Knowing that it would be difficult to have in-person meetings, we began offering virtual meetings for both service and sales. This has proven to be popular, particularly for service, and we do not see that changing as the economy reopens.”
According to Potter, the industry’s workforce challenge has further necessitated the need to automate as many redundant but necessary processes as possible. There are multiple reasons for undertaking this initiative, which can ultimately benefit the bottom line.
“If you face increased production demand and decreased labor, our cleaning systems can help optimize your production and print quality,” says Potter. “Meanwhile, if you face slower times, automating this cleaning process frees your labor force to be utilized in other areas of the business. The ROI is very quick and usually the deciding factor for companies looking to purchase the machine.”
Potter also credits the industry’s ability to adapt, especially as these essential businesses were forced to meet surging demand while dealing with the crisis’ uncertainty.
“Companies learned very quickly how to adapt their products and their customer service into the virtual and digital modes. Flexo Wash adapted right along with them,” he states. “We now offer virtual demos, virtual service calls and customer service all done over the phone or video. Learning how to operate without face-to-face contact is going to be the new normal for all of us in this industry.”
Grace Imaging
Grace Imaging, a Perrysburg, OH-based label converter, was quick to react to the spread of COVID-19. As a TLMI member, Robert Petrie, founder and CEO of Grace Imaging, utilized much of what he learned at the March Converter Meeting to institute safety practices and procedures at his company.
Like many label converters, Grace Imaging noticed a powerful surge in March and April, and Petrie now describes the industry’s health as “stable” following tremendous demand. The company saw a rush in label orders for foods, hand sanitizers and cleaning products. Petrie also notes that over-the-counter products and remedies, like CBD, have also increased, especially as the public has been quarantining and staying away from doctors.
“We’ve definitely had an increase in business because of COVID, for sure,” he explains. “If you had asked me 2-3 weeks ago, the increase was on a very high trajectory growth. I think what we’re seeing now is essential products catching up to demand, so I’d say the industry is stable. Obviously, some segments are in demand more than others.”
Petrie was proactive in response to the pandemic. “One key step that we took early on – about mid-March – was beefing up inventory,” says Petrie. “That was a really good move because I find that a lot of label companies got caught. At least one supplier was not even shipping products, so we were fortunate to get out ahead of that. It’s an investment I made and it really paid off because we were able to ship a lot of product because we had the materials on the floor. Other people couldn’t get materials.”
Grace Imaging also benefited significantly from the TLMI Converter Meeting. During the early March event, TLMI leadership held roundtables and brainstorming sessions on how to prepare for COVID-19, including the establishment of contingency plans.
“TLMI was a tremendous help,” says Petrie. “Early on, we put all the precautions in place. We’re a smaller business with 12 people, and one thing I did was overcommunicate, which I’ve learned is one approach to working through crisis. I gathered my team and told them how critical it is to keep the outside on the outside. I was one of the first to stop letting people in, and that took place right when we got back from TLMI. We put in measures with our drivers, and it was great to be honest with my team. If you are in a situation in your home where you have outside people coming in, let’s say your children, that work in essential jobs, be open with me and we’ll make the proper arrangements to deal with it properly. This might include working from home, checking temperatures, wearing masks and more.”
As a smaller company, Grace Imaging did not separate shifts or miss a day due to the virus. The company was required to operate on weekends, and the employees stepped up to work extra hours to meet the initial surge in demand. Petrie also offered his label printing services to others in the industry, in the event they needed help to keep operating, but that support was not required.
“I have friends and connections at TLMI whom I can call and lean on, and we helped each other,” he notes. “I put together this binder called ‘The COVID Procedures for Grace Imaging,’ and I documented everything. We did have one person get tested, so that was a little stressful when you have customers and demand. I was prepared to shut down for two weeks.”
While Petrie did not need to shut down, he did receive job requests from new customers because their current label printers did in fact close their doors.
COVID-19 has not hindered Grace Imaging, though. The label converter remains on a strong growth path, as Petrie is expanding his facility and in the process of hiring. Grace Imaging will add 33% more facility space and recently secured a new director of marketing. Petrie continues to look at new technology, and he and his team have been active in virtual demos. “One step we’re taking with the new addition is to invest in a virtual training/conference center to keep up with the changing times,” states Petrie. “I think virtual is here to stay, maybe forever. Even with our customers now, we do a lot of enhancements on labels, and I plan on doing much more virtually with them to showcase our embossing and foiling effects. It’s amazing because when customers come in to our facility, they say they didn’t realize we have all these capabilities. Well I can go to them now since they’re more open to virtual.”
There are several unknowns for the future, though. The virus and a potential second wave, protesting and riots, M&A activity, and the impending election could all have an impact on the label economy in the coming months.
Great Lakes Label
Great Lakes Label, a converter based in Comstock Park, MI, has excelled during the pandemic, and the principles of Lean Manufacturing and forward-thinking have played a key role.
Tony Cook, CEO of Great Lakes Label, established a business plan seven years ago that laid out requirements for which end uses to target. “Years ago, I felt like I had always been too heavy in the wrong industry at the wrong time,” explains Cook. “So, we really didn’t want any one industry – not just customer but industry itself – to be more than 20% of our portfolio, and then no one customer to be any more than 20% within that industry segment. This actually paid off pretty well during this pandemic because we would’ve been in a very difficult situation if we were solely in one field like automotive.”
Great Lakes Label added people and equipment during COVID-19. As other label companies laid off employees during the economic downturn, Cook brought some of those employees to Great Lakes Label to help with the spike in business. He also added a KTI turret rewind system to help streamline operations and increase throughput. Internal changes included a remapping of the company’s production floor to better adhere to social distancing mandates.
“Everything we do, we look at how can we do it more efficiently,” says Cook. “We reorganized the production floor because the rewinding was too close, and that required a sizeable investment. We made changes with lighting and replumbing all the air, plus moving a lot of heavy equipment around.”
As part of Lean Manufacturing, Great Lakes Label undertook a pre-qualification plan for all of its customers’ materials. The company pre-qualifies a second material supplier, and changes in the supply chain necessitated those procedures.
“We had to enact those supply chains because we did have quite a bit of disruption,” he explains. “Some mills handled the rush better than others. If we hadn’t done the pre-testing – which can take months to do – we would’ve been in trouble with some of our suppliers. By the time we would have gotten the supply, we couldn’t have run enough volume to ship nationally for all our customers. We had to use a second supplier probably a dozen times through the first eight weeks. Some of the raw material suppliers have actually lost pieces of business with us for good because we moved the jobs and had to recalibrate printers across the country for people, and they don’t want to go through that again.”
Great Lakes Label has picked up new business at existing accounts, where these accounts had multiple suppliers unable to meet demand. “Other suppliers couldn’t deliver because they were pushed out by their supply chain. And they weren’t small pushes either, they were 3-4 weeks,” states Cook. “It was happening every week, where it would be moved back by another week, which made it hard to plan for. This would go on 3-4 weeks in a row, and we’re used to waiting days for material, not weeks.”
Certain industries have remained slow, though. While food and grocery, personal care and hygiene, hand sanitizers, etc. have buoyed the label industry, others have reached a crawl. “We’re starting to see some orders from appliance manufacturers, office furniture manufactures and automakers, but it took 75-90 days of not ordering anything,” notes Cook. “And the orders that are coming in don’t reflect a pent-up demand, they’re very small orders that are starting to trickle in.”
Despite fluctuations in business, Cook has not become shy about pressing forward and making calculated business decisions. “For me, I’m not as reluctant to invest, but I’m going to invest in things that are going to reduce costs in the long run,” he says. “I plan for the worst with the economy, even though my gut tells me it’s going to come right back. What I’ve learned is that planning doesn’t mean cutting back everything so far that you can’t function properly, because you’ll live there forever. Right now, my mode is to double down on my sales efforts, including costs, and double down on technology investments, like the new turret winding investment, and that will drive costs down.
“I’ve tried different reactions to catastrophic events, and the reaction to go full throttle and try to grow during the time everybody else is hunkering down and trying to stay alive leads to a lot better end result. It sounds counterintuitive, because you feel like you should save every penny, but it’s not necessarily what I would do. I think you’ve got to take a chance, but it’s got to be calculated.”
I.D. Images
I.D. Images, a trade-only printer with a strong position in the variable information (VI) market, offers a range of products, including thermal labels, printers and ribbons, laser labels, and integrated labels and cards on various substrates like papers and films. In addition, the company provides custom label capabilities, including spot and digital printing, flexographic printing, multi-web laminations and custom diecutting.
According to Brian Gale, president and CEO, the industry has been resilient in the face of crisis. “Overall, I think the industry is doing reasonably well,” he says. “The supply chain had some challenges during the first few weeks of the crisis, but I believe we have solved those issues. Given labels are essential for virtually every product, I believe most businesses stayed operational during the shutdown.
“Prices stayed steady during the crisis, with some films going up due to lack of supply and an increase in demand,” he adds. “Things are stable now, though. We do see companies competing on price, which is all part of the game, but it is nothing extraordinary.”
I.D. Images saw a surge in business for logistics and food applications during the first part of the crisis. This occurred as the industrial economy essentially shut down.
“Fortunately, we service a diverse customer base and were able to keep busy during most of the shutdown,” says Gale. “As things have started to open up, we are seeing an increase in activity.”
I.D. Images was quick to implement multiple processes and procedures. Due to concerns about the supply and potential disruptions due to illness, the company extended its lead times for custom products when the crisis began. I.D. Images also began building its inventory, making sure it was well stocked at multiple facilities in the event of a disruption in one of those locations.
I.D. Images has invested in equipment that will help improve efficiency, which will help the company cope with spikes in demand.
“We continue to invest in automation and in better equipment,” explains Gale. “We had significant capital expenditure plans prior to the crisis, and we are still executing them. If you do not invest in your business, you will quickly become irrelevant. We are now a relatively large company in our industry, but it applies to us even with revenues that exceed $60 million. It is becoming increasingly hard for small companies to operate in the overall economy and in our industry. Compliance issues, customer demands and customer consolidation are making it more challenging than ever for small companies. I expect to see more small companies be acquired or even shut down in the next few years.”
Additionally, I.D. Images is well positioned to handle issues involving workforce and sustainability. Gale has been active in promoting the industry to younger generations, and the company has enjoyed success thus far.
“We get labeled as printers and people think print is dead,” states Gale. “That is far from true. We have had success recruiting recent college graduates by explaining our industry. I think our industry can do a better job working together to promote career opportunities that exist. In terms of sustainability, most companies want to be sustainable as long as it costs less and does not require a change in their operations, such as new equipment, due to different material calipers. In my opinion, government regulation will be necessary to create widespread sustainability.”
QSPAC
QSPAC Industries, a global supplier of self-wound lamination, can take a broad view of the label economy. Based in Santa Fe Springs, CA, QSPAC boasts over 100,000 square feet of warehousing at four strategically located converting and shipping facilities – located in Los Angeles, CA, Chicago, IL, Dallas, TX, and Charlotte, NC.
With multiple vantage points of the country, the company has seen how COVID-19 has affected different regions. As an essential industry, Howard Shen, director of the overlam division at QSPAC, has seen the best of labels on display.
“I would say that the label industry has been fortunate during this pandemic,” explains Shen. “Each product has to be packaged and labeled. Some converters are doing better than others due to the markets that they serve, but the majority of converters that we work with are doing well. I am sure that some converters are probably having record sales this first six months.”
According to Shen, markets in the US, Canada and Mexico have been strong and steady. Latin America, on the other hand, has taken more of a hit as numerous markets have faced stricter shutdown measures. However, they are expected to bounce back.
QSPAC’s core business is split into two categories: overlam and packaging products. “We have experienced a significant growth in overlam for the label industry, but our packaging products have taken a hit,” notes Shen. “Overall, our business is balanced and healthy.”
QSPAC was prepared to deal with the ramifications of the pandemic. The majority of the company’s inventory emanates from countries outside the US, and it routinely holds 2-3 months’ worth of inventory on the floor. By stocking up on inventory, QSPAC was well-suited to service its customers.
“We were able to meet our customers’ demands and not run out of products,” says Shen. “We have also added capacity in our production to meet customers’ requests. Our sales, customer service, technical and production support teams were all there to help.”
In response to customer behavior, Shen also notes, “We have always experienced price adjustment requests. It’s the nature of the competitive business that we are in. We sell on quality and service, and our converter customers appreciate what we do for them. The pandemic has created more demand and converters are now shopping around more.”
Shen adds that QSPAC will continue to invest internally in the company’s employees, which will better serve the industry in the long run. The biggest concern for QSPAC is finding and retaining quality employees, which is a challenge on the manufacturing side, so the company will support its employees with increased training and higher wages.
K Laser Technology
K Laser Technology, with USA headquarters in Santa Ana, CA, is a supplier of lamination film, transfer film, hot stamping foil, cold foil, textile foil and holographic labels. K Laser’s products target counterfeiting, product branding, ID protection, and supply chain security, all of which have become pressing topics throughout the pandemic.
K Laser has not seen any slowdown during the pandemic, says Richard Jackson, director of sales. “We have seen an increase in orders and have been fortunate to have both our Florida and California facilities running at full capacity,” he says. “Most of our customers and new business clients are experiencing an increase in activity, too.”
K Laser wasted no time in adapting to this rapidly evolving situation, either.
“Our internal sales and customer service began operating out of their homes,” says Jackson. “It has been a very smooth transition for them with very few issues. We have been very fortunate in that none of our production crews have been affected by the virus and we are fully staffed.”
While K Laser has navigated this pandemic, Jackson worries that not all companies will be as fortunate.
“Outside of our services and products we supply, a concern is the amount of small businesses considered non-essential that may be forced to close, forcing unemployment to increase,” he adds.
UPM Raflatac
UPM Raflatac, a label material supplier based in Mills River, NC, USA, has been an active advocate for the label industry supply chain during the COVID-19 pandemic. In addition to partaking in a well-attended Label & Narrow Web webinar regarding the health and safety of the supply chain, the company has been transparent about its measures to help gets materials to converters in challenging times.
Most prominently, UPM Raflatac saw increased demand from converters in the package delivery/logistics, food safety labeling, beverage and healthcare industries, as well as personal care, hand sanitizer and household cleaning products.
“The overall state of the industry continues to signal growth, and we are thankful to be in a more resilient industry,” explains Tim Kirchen, senior vice president, Americas, UPM Raflatac. “As we enter summer, demand for pressure sensitive labeling materials remains steady. Supply chains were stretched because of increased demand due to consumers stocking up on various supplies. Consumers had to become accustomed to purchasing certain items, regardless of brand name, but we are beginning to see grocery store shelves return to pre-pandemic levels with adequate supply of consumer preference brands.
“The COVID-19 pandemic has had an overall positive effect on our business,” he adds. “We saw record demand for our materials covering numerous segments.”
The demand for UPM Raflatac’s labelstocks reached “unprecedented” levels. The company’s sourcing team has been instrumental in keeping supply levels steady. Kirchen also describes UPM Raflatac’s operators as “true heroes” for quickly adapting to new policies and procedures to safely fulfill orders in a timely manner. UPM Raflatac also noticed increased demand for security and tamper evidence. The company, however, saw a decrease in demand in segments tied to more discretionary-type spending from the consumer, including automotive, durable goods, transportation and leisure.
While business has been positive, UPM Raflatac first placed an emphasis on the safety of its employees, their families and the communities in which the company operates. “We took aggressive steps early on to protect our workers, factories and terminals, which have remained in operation to fulfill increased demand throughout the pandemic,” says Kirchen. “We have put in place a number of improvements to keep our office workers protected once they are able to safely return.”
UPM Raflatac’s flexibility has enabled its success through the pandemic. Its sales team shifted to a web-based virtual approach when engaging with customers, which proved to be very stable and highly effective.
“We’ve placed a high priority and truly taken to heart understanding our customers’ needs and how their businesses have been affected by this unprecedented situation, and we are committed to working with them in every way we can. These are true partnerships, and we strive to help them succeed, serve their customers and grow their businesses.”
As part of the economic recovery, Kirchen sees sustainability as the path forward in a “Green recovery.” “The rebuilding of coronavirus-ravaged economies presents an opportunity to tackle the even greater threat – climate change. Sustainable labeling solutions were a hot topic in the pre-COVID world, and now that we’re starting to emerge out of the initial lockdown phase, we are seeing renewed interest from customers and brand owners to discuss sustainable labeling materials. Innovation has not stopped, and UPM Raflatac has recently announced a number of new sustainable labeling solutions over the past few months, including UPM Raflatac Forest Film and UPM Raflatac PP PCR.”
By Rock LaManna
Times are harsh. If you’re not leading, you’re losing. That’s not some pithy aphorism. It’s a fact. If there’s one thing you should know about Rock LaManna, I will tell you the truth no matter how uncomfortable.
If you want to win, here are 14 truths that should be part of your road map in the M&A environment:
Number 1: It’s not the car, it’s the driver.
This car won’t drive itself. Your fancy business is nothing without someone to lead it.
Number 2: Stay the course.
This is not the time to lay back and see what others are going to do. You’re taking up space and using up resources.
Number 3: More than The 24 Hours of Le Mans.
There’s no finish line in sight. Expect to drive for three to five years. Recovery in 18 months is a myth. No one will have it easy. It’s going to be a long grind.
Number 4: Leading takes guts.
Leadership goes beyond your business. Personal leadership. Integrity. Instinct. Action. Perseverance will win.
Number 5: You WILL run out of cash.
Auto racers pit to refuel in the long races. You will have to pit at some point, so plan now to refuel your cash reserves. Line up credit with your bank. Make arrangements with suppliers. Talk to family members. Look at your personal wealth and property.
Free money from the government will go away. Our industry relies on the global business environment. Money and goods are interconnected. Countries will go broke. The stock market will sputter and surge, affecting confidence. Closures will beget more closures. The business climate will suffer.
Number 6: Good people will leave.
Employees will go where they can find stability. If your future is tied to their future, they’re watching you. If you’re in trouble, good employees will go work for your competitors and help them win. Leadership and training masters.
You can’t let up on attracting and retaining talent. Your people matter – now and in the future.
Number 7: Will anyone desire your business?
Thinking about selling your business? Sounds good, doesn’t it? You should have been planning this a year ago, when I was telling you the market is hot.
This is not about the past. Not last year or the past 40 years. This is the new reality. Everything is negotiable.
Yes, buyers are still buying, but they want innovative companies with growth potential. Private equity groups have talent, strategy, execution and cash. They make lists of top acquisition targets. Have you vowed you would never sell to private equity? Unless you’re a winner, they don’t want you either.
Number 8: The best leaders are hyperreal.
In racing, the top drivers stand out for breathtaking inspiration and an elevated ability to assess risk-reward in a split second.
The most admired musicians go beyond what everyone else is doing and unleash parts of their brain and soul. Jazz legend Miles Davis said, ”If anybody wants to keep creating, they have to be about change.”
This kind of improvisation can be off-putting, even frightening. Humans crave sameness. But disruption is how change wins.
Number 9: Growth happens outside the lines.
Do you think the top racers stay inside the lines? Winners know the lines are merely suggestions. To grow, you can buy another company. Or, you can double down on sales. Know when to shift gears to high performance.
If you’re in it to win, though, you’ll have to look way beyond your core competencies – even beyond manufacturing – to reach your destination. Do not expect print to stay in favor. You will have to pivot. Investment means time and commitment. Are you prepared to compete in the next generation of top leadership?
Number 10: Build your team.
Drivers who work as a team – with everyone in the right roles – have the best odds. They have money, technology, resources and tools. They have the best trainers in the world. As a team, they execute on the master plan.
As a business owner, you cannot be a silo. When you started your business you had guts, instinct and energy. You relied on yourself because you had to. Now, you’ll need talent scout abilities and the will to pass to others, as you focus with the end in mind.
Big thinkers have a can-do attitude and lots of connections. You will need to network outside the industry. Find allies who are strong, trustworthy, worthy of respect, and then treat them as you would like to be treated. Remember, you are on their team as much as they are on yours. Prove you are a winner to keep pace with winners.
Number 11: Control is an illusion.
All it takes is one spin out or a pileup on the roadway, and you’re out of the race or disqualified. Am I talking about death? Death is reality. You will die someday. Have a succession plan for your business. Know all of your critical numbers and make sure you are measuring the right things. Visit my website to access a free business valuation with my personal assessment of you and your business performance history.
If the concept of releasing control is foreign to you, start small. Identify talent inside your organization and cultivate those people. Find people who are not exactly like you. “Yes Men” will only get you more of what you have now. In diversity there is strength.
The days of hoarding power and the almighty owner are so outdated it has become a cartoonish concept, a stereotype. If you’re running your company that way, you will lose. You need to educate, encourage and empower. Work with advisors and allies who follow the 3 E’s, as well.
Build a culture of winning and innovation, and like-minded people rush to meet you.
Number 12: Learn from your time at the wheel – don’t waste the lessons.
I know plenty of smart people. They’re smart in business and smart in life. My parents and my 10 brothers and sisters, for example. I love talking with them. I get excited about what they know and how they see things. But do they know everything? Of course not.
Yet there are many owners in our industry who think they have the final answer. It goes back to power and control, yes, and also fear. When you open your mind to all that is changing in our world, it can be scary. You realize you’re not so smart.
When it comes to change, do you think racers drive the way they did 40 years ago? Engines improve, technology changes, new people bring new ideas. Racing is a field of continuous improvements. It’s all about adjustments that can put you ahead by microseconds. To be in a state of constant learning means you have to be ready to reject and discard old thinking. Winners make micro changes and shed what doesn’t work.
Number 13: Everybody knows everything.
You want to sell your business? Fine. You want to whisper in my ear that you’d be open to offers? Great. You think no one knows you’re considering it? Wrong.
They know. They notice how you get real quiet whenever the subject comes up. Or how you hem and haw when your vendors ask when they’re going to get paid. Everybody knows everything.
If you don’t have the guts to sell, don’t call me pretending you do. I’m busy with deal flow – on the buy side and sell side. Your indecision will only turn off buyers – especially private equity – and give you a bad reputation as a tire kicker.
Number 14: Integrity STILL matters.
Win, yes. At any cost, no. You will have many opportunities to take the high road or the low road. Integrity accelerates champions.
Are you ready for the time and commitment it will take to be at the wheel? I’m putting together lists of companies that want to grow or sell – while deals are flowing and buyers are buying. Smart money is king – and available. If you want to be on the winning side of this amazing moment in history, prepare to maximize your racing.
Due to HP’s global presence, the company has remained committed to supporting its employees and customers across the world. HP’s ability to offer remote support, especially with its focus on transporting data to the cloud, has been a boon during these challenging times.
As part of HP’s latest drupa portfolio, which would have been highlighted in Dusseldorf at the now-postponed event, the company has placed a large emphasis on infrastructure. The ability to automate and connect with customers around the world, relying on the cloud, has allowed HP to anticipate problems and troubleshoot. This has boosted the company when combating COVID-19 while adhering to social distancing guidelines and stay-in-place orders. HP has the ability to perform analyses with artificial intelligence and big data, and get feedback back to the user. The company has made a big bet on infrastructure, and the crisis has seen HP’s ability to keep customers up and running without actually visiting them on-site. “I think it’s going to make customers more comfortable, where I don’t have to send my training operator to a plant in Barcelona; we can do it virtually,” former GM Alon Bar-Shany told L&NW. “I don’t need to get a service engineer to fix everything. We can do a lot of that by remote. I would say people are leveraging a lot more remote capabilities around service. This is actually a big advantage for us because we’ve built a system where all of our presses are connected online to the cloud, and we can monitor, track, and fix most of the problems remotely.”
HP has coordinated a plethora of webinars and Zoom conference sessions to deliver as much information as possible to their customers and clients. HP’s message has largely centered on the brand and possible campaigns with digital printing. HP has also used the 2009 recession as a reference point for how to manage through trying times. In fact, HP Indigo launched the 6000 platform, which has recently evolved to the HP Indigo 6K digital press, during the economic downturn in 2009. “I do refer back to 2009, which was the last time we had a big recession, and the fact that the customers who were willing to think 4-5 years ahead and were willing to invest are doing great now,” said Bar-Shany.
COVID-19 has certainly made an economic impact on every facet of the industry. Business has not taken the anticipated path that one would have imagined back in January. There have been ebbs and flows, initial surges and stabilization.
Demand has fluctuated based on application, too. With people quarantined and preparing their own meals, food products have flown off the shelves. Also, cleanliness and hygiene have never been
more important.
Converters have churned to meet label demand for household cleaners, disinfectants, hand soaps, etc. Many label manufacturers have also pivoted from their traditional printing roles, helping produce hand sanitizers, PPE, floor and wall signs and decals, among others. The industry has truly seen everyone step up.
Sustainability, a growing concern for converters and suppliers alike, has seen its position oscillate. In order to meet established safety standards, some brands, such as grocery store chains, have gone away from reusable bags and items.
The economy is in quite a unique position. The last pandemic of this magnitude took place some 100 years ago, and technology has certainly evolved in that time frame.
However, there is no playbook for how to deal with an unknown. Label & Narrow Web checks in with a diverse range of industry experts to see how COVID-19 has impacted their bottom line and
internal operations.
Argent Tape & Label
Argent Tape & Label (ATL), a versatile label converter based in Plymouth, MI, USA, operates in a wide range of markets. These include, but are not limited to, pharmaceuticals, food and beverage, automotive, and industrial. In recent months, ATL has expanded its book of business to better support its community.
During COVID-19, ATL helped produce ARV2019 face shields for personal use that requires contact with, or proximity to, others. Typical applications include front line workers, retail store attendants, restaurant and food preparation personnel, manufacturing employees, and personal errands to the store.
This small, woman-owned company (WBENC certified) empowers every employee to think like an owner. ATL also places a premium on supporting local businesses, including the growing number of minority-owned businesses, while also donating to charities like the Red Cross, Wounded Warriors, and multiple others.
“During the last few months, we have faced COVID-19’s personal and financial challenges with grit, determination and ingenuity,” explains Lynn Perenic, president and CEO of Argent. “The day the shutdown order came down from the governor’s office, Argent Tape & Label immediately turned to work as a critical supplier. Our team of dedicated and skilled press operators produced tens of thousands of labels for hand sanitizers, and we continued to supply medical tapes to area hospitals.”
The company’s newly-formed R&D team led ATL into new markets by engineering various forms of personal protection equipment (PPE), and the management team approved the purchase of state-of-the-art required capital equipment to make PPE.
These products have been developed for manufacturing facilities, salons, barbershops, spas, and the general public. ATL has also been honored to produce face shields to support first responders, who have been so instrumental in helping COVID-19 patients.
“As we embark on a ‘new normal’ and emerge from pandemic-level shutdowns, the priority remains the safety of our families, suppliers and customers,” says Perenic. “ATL has increased our remote connectivity, implemented safety procedures, and monitors all governmental health and safety requirements with our characteristic initiative and spirit.
“As the economy safely reopens and we return to our activities, we continue to enable our team members, suppliers and customers to actively engage while also continuing social distancing and other measures to quell a resurgence of the virus,” she adds.
ATL has established a foundation of family, community and inclusion, all of which are evident in its operations. “Our country’s fabric is stitched with the voices of citizens, who have, throughout history, protested peacefully to address and significantly change social, cultural and criminal injustices,” states Perenic. “We applaud the thousands of peaceful protesters nationwide, and we denounce racial injustice and incidents of police brutality. Joining fellow citizens in peaceful assembly or protest is at the core of the First Amendment. Equal Rights is not just a catch phrase, and both are critical to a functioning democracy. It’s time for real change and decisive actions.”
ATL will continue to drive innovation and provide answers to its customers’ most demanding challenges. “It has been our privilege to support many of our customers during this global pandemic and to help them successfully navigate a variety of new challenges,” concludes Perenic.
Avery Dennison
Avery Dennison Label and Packaging Materials, a substrate and adhesives supplier based in Mentor, OH, USA, has gotten creative to better support and communicate with its customers. Avery Dennison scheduled multiple webinars designed to educate the industry on the latest trends, and the company has significantly invested in research to provide its customers with the latest data.
“The state of the label industry is continuing to evolve with a lot of changing dynamics,” notes Anh Marella, director of marketing, specialty, at Avery Dennison. “The megatrends of digitalization, e-commerce and sustainability are exciting opportunities for new and disruptive innovations within our industry.”
The pandemic has impacted Avery Dennison similarly to others in the industry. “We are focused on ensuring the health and safety of our employees and our commitment to servicing our customers,” says Marella. “I am proud of how our teams have demonstrated our core values of courage, teamwork and integrity in these uncertain times.”
The company is also a believer in continued product development and enhancement, even in challenging times. “We need to continue to invest in our business even more so in times of uncertainty to position ourselves for growth when the economy stabilizes,” she explains. “We have made many investments in the past couple of years in our manufacturing capabilities, have made business acquisitions in adjacencies to enhance our business portfolios and will continue to look for growth opportunities.”
In order to accommodate demand like never before, Avery Dennison has emphasized communication throughout the organization. “We have a regular cadence of virtual town halls and communication with our employees and customers to keep them informed of how we’re doing, actions and processes established to ensure employee safety as they return to work, and working across our supply chain to be as agile as possible to meet the surge in labeling demand of essential items,” she adds.
Avery Dennison has also analyzed how the greater label industry will react in the future. According to Laura Noll, market research manager, and Michelle Bober, market research analyst, consumers have shifted to products promoting health and wellness – both from a physical, mental and emotional standpoint. Bober states that 57% of consumers want to improve their overall health and well-being, and they’re looking to brands providing total solutions.
“Consumers are becoming more aware of their products and what goes into them,” says Bober. “With COVID-19, we’re seeing this trend amplified, as well as the supply chain and where these products are coming from.”
In addition to health and safety, convenience has also driven the latest packaging trends. With people avoiding public places, e-commerce is thriving. According to Avery Dennison, e-commerce was expected to account for 8% growth by 2023. The pandemic, however, has seen e-commerce sales surge by over 300% since April. This has necessitated a greater need for tamper-evident labels, which are commonly found with foods, and more delivery services.
“Since COVID-19, almost every order has some sort of tamper-evident seal because safety is top of mind for consumers,” adds Bober. “Over time, we expect these channels to maintain some of their growth as they gain and keep new users.”
Pharmaceuticals and smart labeling will continue to serve as focal points for Avery Dennison. “In the pharma area, RFID is going to be increasingly huge. Pre-COVID-19 reports showed high teens, low 20s growth in different areas using RFID. I think it’s going to be even higher as we go forward,” Noll explains.
Colordyne Technologies
Colordyne Technologies, a digital printing specialist located in Brookfield, WI, has positioned itself for future success. The company’s forward-thinking has enabled it to withstand the challenges of COVID-19.
“In tough market conditions, well-managed companies adapt to change and find ways to run their businesses amidst uncertainty,” explains Taylor Buckthorpe, director of sales, Colordyne Technologies. “The label industry is no different. It is bold to make a statement about the entire industry, but we can find similarities in what we are experiencing. From a capital equipment perspective, we are seeing companies continue to invest, but with increased caution around the total expense, purchase timing and return on investment.”
According to Buckthorpe, the food and beverage sector, which relies heavily on digital printing, felt the initial impacts of COVID-19. Both staffing and the supply chain were affected. The food and beverage market is an essential industry, so its experience was different from others without this categorization.
“Our customers, both brands and converters, serving this market found the early environment changes challenging to navigate,” notes Buckthorpe. “Most managed to get through this initial impact with smart and efficient management. Successful companies were proactive with accounts and got in front of potential supply chain issues. Forward-thinking brands and converters already using digital printing technology were better able to manage the supply chain disruption and adapt at a faster speed. We see consumer trends that require shorter runs, like personalization, versioning and customization, retaining – if not increasing, in interest and demand because of COVID-19. This holds true for most industries, especially those serving customers through an online experience.”
Colordyne has responded positively to these challenges. If anything, the company has actually improved its response times, especially as customers require faster turnarounds to keep up with changes and increased demand. It has also seen customers using the quarantine period as an opportunity to research new technologies and familiarize themselves with the inner workings of digital printing.
“Over the past 45 to 60 days, the potential customers contacting us are more engaged because they have had time to research the technology,” states Buckthorpe. “Plus, with more stringent requirements for capital equipment spending, potential clients have stronger justification for their application and investment prior to contacting us. Colordyne continues to advance inkjet, and we are working with more companies than ever before to integrate this technology into their equipment.”
The company has also established a new division focused on print engine development. The business unit, which commemorates 10 years of business in the label and tag market, targets strategic integration partners (SIPs) interested in adding inkjet to their portfolio.
“During the pandemic, we were able to launch a dedicated division focused on this goal,” he adds. “This is because companies impacted continue to see the value of digital printing. They may have pushed some of the capital equipment spend to Q4 of 2020 or early 2021, but the demand for inkjet technology remains.”
In order to support its customers, Colordyne has seen a surge in web-based meetings and demos. This time frame has prompted the company to invest in solutions that create stronger virtual connections and deliver the same quality communication as Colordyne did in-person.
“Working in our favor is also the fact that we have been serving customers across the world for years,” explains Buckthorpe. “Our service and sales teams were prepared for virtual calls and quickly transitioned to using this as their main form of communication. Additionally, all of our printers, presses and print engines have remote access that makes it possible for our service techs to log on within minutes and support each customer with their request.
“Consumer packaging trends are unchanged in that buyers want a tailored experience, so increasingly large brands are evaluating this technology to meet this demand,” he concludes.
Delta ModTech
Delta ModTech specializes in the design, implementation and service of motion-controlled converting and packaging systems. To continue with these initiatives during these uncertain times, the Minneapolis-based company leaned on its product development capabilities and culture to service its customers.
“Overall, our business has remained strong,” states Amy Elfering, marketing coordinator at Delta ModTech. “Many of our customers remained open as essential providers of PPE, medical device, wound care and pharmaceutical products.”
In order to support customers in a wide variety of industries – many of whom ventured outside of their comfort zones to aid those on the front lines – Delta ModTech relied on strategies that began long before the pandemic.
“We implemented several infrastructure upgrades over the last year to our network and phone systems, allowing our non-essential staff to seamlessly transition to working remotely during the statewide lockdown,” explains Elfering.
Internally, the company allowed its essential production staff to continue working at the plant while honoring travel bans, social distancing and sanitization policies. Delta ModTech also analyzed how it was utilizing its time, especially as it related to popular industry events like Labelexpo Americas, Dscoop and more.
“Many of the tradeshow and industry events where we planned to exhibit were canceled, rescheduled or postponed,” she adds. “We used this time to reach out to existing clients and ensure that they were receiving the support they needed.”
Delta ModTech also thought outside the box to reach its customers. It has been using virtual meetings, online machine connections through VPN, and Microsoft HoloLens mixed reality goggles to establish conncetions with customers in a range of locations. “We’ve supported our clients with remote process support, machine installations and upgrades,” concludes Elfering.
Domino
Domino and its converter partners have not slowed down in the face of COVID-19. The influx of panic buying orders at the beginning of the pandemic has ramped up production, and this digital press and printer manufacturer sees brand owners in the food, beverage, and pharmaceutical sectors busier than ever. Therefore, their suppliers are busier, as well.
“We hear that many label manufacturers are producing record numbers of labels and getting them out the door as quickly as they can,” states Bill Myers, marketing manager, Digital Printing, at Domino. “In turn, the adoption of digital printing by many label manufacturers is more important now than ever, with brand owners needing multiple SKUs and variable data printing. Digital printing has been a great asset to those label manufacturers that realize that digital is a wonderful complementary technology to their flexo presses.”
The ability for converters to recognize the right tool for the job is critical, as well. As Myers says, one SKU for a long run can go on flexo. Multiple SKUs and changeovers for short- and medium-runs are perfectly suited for digital. Meanwhile, embellishments, varnish, cold foil and spot colors might benefit from a hybrid press. Delineating between these variables can help converters better meet demand for their customers.
“Choosing the right press for the job is key in being productive and efficient, and the health of the label industry is being tested,” says Myers. “Those label companies that can pivot quickly and provide labels to brand owners in the quantities they need, when they need them, they will be the ones who are most successful.”
In-house, Domino put a plethora of health and safety processes and procedures into place. These measures have helped promote safety throughout the supply chain. “The health and safety of our employees, customers and visitors continues to be a priority for our Domino team,” notes Myers. “Most of our employees are working remotely from home. However, our digital printing samples and demo team are still in the office, producing samples as needed – even providing demonstrations virtually. We are making certain that we have only the appropriate number of people in the office at any one time.”
According to Myers, Domino has seen a surge in orders for the Domino K600i digital UV inkjet printer for label manufacturers that want to add variable data to their flexo-printed labels. The company also continues to receive strong interest in the Domino N610i digital UV inkjet label press. While converters remain cautious about how they spend their money, investing in new technology can serve as a means to drive additional revenue. “In addition, we have received several emails from customers expressing how Domino Digital Printing has been key to their business, as well as letters of appreciation for our service team, who have provided timely service and support, even with the risks associated with travel,” says Myers. “We have service engineers who have used creative ways to travel to customers, taking additional levels of protection against COVID-19.”
Domino has recently worked with Abbott Label, International Label & Printing, Misco, ProLabel, and several others.
DeAnna Papachristopoulos, regional sales director of International Label & Printing, says, “A customer who produces cleaning products needed labels fast due to COVID-19. They had been working on formulas for a sanitizer, disinfectant spray and disinfectant wipes. We were able to produce our customer’s request in record time. Our CEI BossJet Powered by Domino hybrid press plays a key role in helping us provide our customers what they need, when they need it.”
Meanwhile, Greg Hinkley, service technician at Domino, drove to Miami with his caravan to avoid air travel and hotels. Ramon Fernandez, president of ProLabel, shared his appreciation for Hinkley’s dedication. “I want to tell you how grateful we are to Greg for taking the initiative to drive down here in his own vehicle to help us out with an LED upgrade on our Domino N610i. It is even more impressive, considering the current situation with COVID-19. A professional to the end, he gave me his word he would not leave until this machine was operational. It took nearly a week, but he did it. Greg demonstrated the ability to adapt and overcome, working late into the night – and even Saturday and Sunday – to accomplish what he promised. It’s a real pleasure to deal with a person whose word means something.”
As companies continue to navigate uncertain times, Myers believes in collaboration and positive attitude to better support each other moving forward. “Fluctuations in the stock market, lockdowns easing up, questions such as ‘Will there be a second wave?’ and more are at the foremost of everyone’s mind,” he says. “What’s important to remember is to focus on the things that what we have control of, the things we can do to be productive and helpful. Be respectful of others, help others and be positive. We will get through this, but we’ll get through it better if we all work together.”
FLAG
Flexo Label Advantage Group (FLAG) has a unique perspective on the label industry’s economic conditions. John McKay, president and founder, works with more than 100 member companies. FLAG originated as a buying group for its members, but it has diversified its offerings to include label sales growth tools, catastrophic recovery plans, and technical and business support. Meanwhile, vendors gain access to members, which offers a way to expand revenue growth.
“The world has turned upside down in a very short period of time,” notes McKay. “While so many Americans are out of work and scrambling to hang on to their businesses, parts of our industry have never been busier. Most states have designated label converters as essential businesses, allowing them to keep producing labels critical to our entire supply chain. Converters in flexible packaging, food, pharmaceuticals and household and personal care are running at full capacity.
“Over the last few months I have spoken with many independent label converters, who are members of the FLAG community. Our members have been communicating directly with each other, as well, learning how their peers are addressing the current issues and hurdles. While business has been good for most converters during this crisis, coming out of this period and what the future holds for everyone is in question, including talk of a recession or worse,” he adds.
FLAG was quick to act when COVID-19 started to spread. McKay and his team made a host of of solutions readily available to members, including a COVID-19 support group and a remote sales training series.
“We recognize the uncertainty that coronavirus is causing for our members and their businesses, their employees and their customers,” says JC McKay, VP of business development at FLAG. “To be proactive in supporting our membership, we’ve organized a member-to-member support group in North America, helping our members communicate a plan of action to their teams and customers.”
According to FLAG, the label business seems to be slowing down from the initial spike. “It’s yet to be seen whether the slowdown will just bring things to previous normal levels or actually be a much deeper dive,” says John. “When COVID-19 started, consumers were buying their products in bulk and hoarding was commonplace, as they were afraid to run out of the things they needed at home. Whether or not everyone has gone through his or her stash of products will play a factor in the slowdown, as well as the fact that so many people are now out of work with limited budgets. Many converters are benefiting from the PPP loans to help them through this slowdown.”
There have been positives, too. Many FLAG members are now producing new products for the first time, such as hand sanitizers, while embracing new channels for conventional products like restaurant food items sold “to-go.”
“Right now, the overall state of the industry is still good, and I believe cautious optimism is winning the day with thoughts that the slowdown is temporary,” adds John. “We are starting to see some customers bring their business back to the USA from China and Europe for more local production, which is a good sign. There are indications that the recovery may be real and sustainable. One thing we all know is that more sales fix everything.”
Label companies will need to embrace the “new normal” to succeed further into the future. FLAG has already begun planning for these realities, which include working from home and utilizing virtual technology. The newer generations graduating from college will no longer be expected to move to a big city to find work, says John, as many of those companies will have them working from home.
“Many companies have found that they can even reduce costs without losing productivity by utilizing technology,” he notes. “In fact, some FLAG members report that productivity has actually increased with virtual production meetings versus meetings at the plant. Some innovative suppliers have even found that preliminary virtual service calls for equipment issues or Lean audits may not only speed up resolutions to issues but also reduce travel costs. Sales representatives are also utilizing virtual meetings with prospects and customers, which actually take less time than in-person visits and save on travel costs, as well. While nothing can replace the in-person relationship building that drives our industry, this is certainly one way to maintain contact. As these virtual capabilities are further improved, there will certainly be new ways to make the most of them because there is no doubt that our industry is very creative and adaptable.”
There are questions that will need to be answered in the future. Will furloughed employees return or will their positions be downsized? Will companies embrace investments into new technology? How fast will converters be paid for the emergency work they completed, and will there be losses due to companies going out of business? John notes, too, that now might even be a good time to make a capital equipment investment.
With a broad view of the industry, McKay has been impressed by how all segments have responded. “I applaud our industry – converters and suppliers alike – as they juggle production, scheduling, supply-chain, work from home employees, finances and more. You are all heroes, along with the healthcare workers, truckers, food suppliers and others. It’s been said that not all heroes wear capes. I am sure it hasn’t been easy and just want you to know that what you do is greatly appreciated by our industry, our customers, their customers and the final consumer.”
Flexo Wash
Flexo Wash, a key supplier to the label and package printing industry, reacted and adapted quickly to its customers’ needs during the COVID-19 pandemic. The global anilox cleaning specialist has been committed to providing consistent performance on-press, even though this crisis has generated anything but predictability.
In the eyes of Patrick Potter, president of Kentucky-based Flexo Wash LLC, business has stabilized after months of ebbs and flows. “Currently, from our perspective, the state of the label industry is stabilizing after massive changes during the pandemic,” he says. “While the vast majority of converters saw rapid demand increases, others slowed down substantially. Many in our industry were able to pivot and produce new and vital products for the pandemic such as hand sanitizer labels and face masks.”
Flexo Wash instituted a host of measures designed to protect its employees, customers, and the general public. Internally, Flexo Wash first set out on the path of protecting people by ensuring the facility and its operations were clean and safe. The company also suspended travel for all sales and service employees.
“Flexo Wash set out on the new normal of operating a fully-functional business during a pandemic,” explains Potter. “We certainly heard from our customers that they are looking to operate as efficiently as possible and many have moved new projects forward in order to streamline their operations. Flexo Wash’s customers were experiencing massive surges in demand and production needs, many with labor shortages. After communicating with customers, Flexo Wash maintained and ensured a steady inventory and supply stream to meet the industry’s increased needs. Knowing that it would be difficult to have in-person meetings, we began offering virtual meetings for both service and sales. This has proven to be popular, particularly for service, and we do not see that changing as the economy reopens.”
According to Potter, the industry’s workforce challenge has further necessitated the need to automate as many redundant but necessary processes as possible. There are multiple reasons for undertaking this initiative, which can ultimately benefit the bottom line.
“If you face increased production demand and decreased labor, our cleaning systems can help optimize your production and print quality,” says Potter. “Meanwhile, if you face slower times, automating this cleaning process frees your labor force to be utilized in other areas of the business. The ROI is very quick and usually the deciding factor for companies looking to purchase the machine.”
Potter also credits the industry’s ability to adapt, especially as these essential businesses were forced to meet surging demand while dealing with the crisis’ uncertainty.
“Companies learned very quickly how to adapt their products and their customer service into the virtual and digital modes. Flexo Wash adapted right along with them,” he states. “We now offer virtual demos, virtual service calls and customer service all done over the phone or video. Learning how to operate without face-to-face contact is going to be the new normal for all of us in this industry.”
Grace Imaging
Grace Imaging, a Perrysburg, OH-based label converter, was quick to react to the spread of COVID-19. As a TLMI member, Robert Petrie, founder and CEO of Grace Imaging, utilized much of what he learned at the March Converter Meeting to institute safety practices and procedures at his company.
Like many label converters, Grace Imaging noticed a powerful surge in March and April, and Petrie now describes the industry’s health as “stable” following tremendous demand. The company saw a rush in label orders for foods, hand sanitizers and cleaning products. Petrie also notes that over-the-counter products and remedies, like CBD, have also increased, especially as the public has been quarantining and staying away from doctors.
“We’ve definitely had an increase in business because of COVID, for sure,” he explains. “If you had asked me 2-3 weeks ago, the increase was on a very high trajectory growth. I think what we’re seeing now is essential products catching up to demand, so I’d say the industry is stable. Obviously, some segments are in demand more than others.”
Petrie was proactive in response to the pandemic. “One key step that we took early on – about mid-March – was beefing up inventory,” says Petrie. “That was a really good move because I find that a lot of label companies got caught. At least one supplier was not even shipping products, so we were fortunate to get out ahead of that. It’s an investment I made and it really paid off because we were able to ship a lot of product because we had the materials on the floor. Other people couldn’t get materials.”
Grace Imaging also benefited significantly from the TLMI Converter Meeting. During the early March event, TLMI leadership held roundtables and brainstorming sessions on how to prepare for COVID-19, including the establishment of contingency plans.
“TLMI was a tremendous help,” says Petrie. “Early on, we put all the precautions in place. We’re a smaller business with 12 people, and one thing I did was overcommunicate, which I’ve learned is one approach to working through crisis. I gathered my team and told them how critical it is to keep the outside on the outside. I was one of the first to stop letting people in, and that took place right when we got back from TLMI. We put in measures with our drivers, and it was great to be honest with my team. If you are in a situation in your home where you have outside people coming in, let’s say your children, that work in essential jobs, be open with me and we’ll make the proper arrangements to deal with it properly. This might include working from home, checking temperatures, wearing masks and more.”
As a smaller company, Grace Imaging did not separate shifts or miss a day due to the virus. The company was required to operate on weekends, and the employees stepped up to work extra hours to meet the initial surge in demand. Petrie also offered his label printing services to others in the industry, in the event they needed help to keep operating, but that support was not required.
“I have friends and connections at TLMI whom I can call and lean on, and we helped each other,” he notes. “I put together this binder called ‘The COVID Procedures for Grace Imaging,’ and I documented everything. We did have one person get tested, so that was a little stressful when you have customers and demand. I was prepared to shut down for two weeks.”
While Petrie did not need to shut down, he did receive job requests from new customers because their current label printers did in fact close their doors.
COVID-19 has not hindered Grace Imaging, though. The label converter remains on a strong growth path, as Petrie is expanding his facility and in the process of hiring. Grace Imaging will add 33% more facility space and recently secured a new director of marketing. Petrie continues to look at new technology, and he and his team have been active in virtual demos. “One step we’re taking with the new addition is to invest in a virtual training/conference center to keep up with the changing times,” states Petrie. “I think virtual is here to stay, maybe forever. Even with our customers now, we do a lot of enhancements on labels, and I plan on doing much more virtually with them to showcase our embossing and foiling effects. It’s amazing because when customers come in to our facility, they say they didn’t realize we have all these capabilities. Well I can go to them now since they’re more open to virtual.”
There are several unknowns for the future, though. The virus and a potential second wave, protesting and riots, M&A activity, and the impending election could all have an impact on the label economy in the coming months.
Great Lakes Label
Great Lakes Label, a converter based in Comstock Park, MI, has excelled during the pandemic, and the principles of Lean Manufacturing and forward-thinking have played a key role.
Tony Cook, CEO of Great Lakes Label, established a business plan seven years ago that laid out requirements for which end uses to target. “Years ago, I felt like I had always been too heavy in the wrong industry at the wrong time,” explains Cook. “So, we really didn’t want any one industry – not just customer but industry itself – to be more than 20% of our portfolio, and then no one customer to be any more than 20% within that industry segment. This actually paid off pretty well during this pandemic because we would’ve been in a very difficult situation if we were solely in one field like automotive.”
Great Lakes Label added people and equipment during COVID-19. As other label companies laid off employees during the economic downturn, Cook brought some of those employees to Great Lakes Label to help with the spike in business. He also added a KTI turret rewind system to help streamline operations and increase throughput. Internal changes included a remapping of the company’s production floor to better adhere to social distancing mandates.
“Everything we do, we look at how can we do it more efficiently,” says Cook. “We reorganized the production floor because the rewinding was too close, and that required a sizeable investment. We made changes with lighting and replumbing all the air, plus moving a lot of heavy equipment around.”
As part of Lean Manufacturing, Great Lakes Label undertook a pre-qualification plan for all of its customers’ materials. The company pre-qualifies a second material supplier, and changes in the supply chain necessitated those procedures.
“We had to enact those supply chains because we did have quite a bit of disruption,” he explains. “Some mills handled the rush better than others. If we hadn’t done the pre-testing – which can take months to do – we would’ve been in trouble with some of our suppliers. By the time we would have gotten the supply, we couldn’t have run enough volume to ship nationally for all our customers. We had to use a second supplier probably a dozen times through the first eight weeks. Some of the raw material suppliers have actually lost pieces of business with us for good because we moved the jobs and had to recalibrate printers across the country for people, and they don’t want to go through that again.”
Great Lakes Label has picked up new business at existing accounts, where these accounts had multiple suppliers unable to meet demand. “Other suppliers couldn’t deliver because they were pushed out by their supply chain. And they weren’t small pushes either, they were 3-4 weeks,” states Cook. “It was happening every week, where it would be moved back by another week, which made it hard to plan for. This would go on 3-4 weeks in a row, and we’re used to waiting days for material, not weeks.”
Certain industries have remained slow, though. While food and grocery, personal care and hygiene, hand sanitizers, etc. have buoyed the label industry, others have reached a crawl. “We’re starting to see some orders from appliance manufacturers, office furniture manufactures and automakers, but it took 75-90 days of not ordering anything,” notes Cook. “And the orders that are coming in don’t reflect a pent-up demand, they’re very small orders that are starting to trickle in.”
Despite fluctuations in business, Cook has not become shy about pressing forward and making calculated business decisions. “For me, I’m not as reluctant to invest, but I’m going to invest in things that are going to reduce costs in the long run,” he says. “I plan for the worst with the economy, even though my gut tells me it’s going to come right back. What I’ve learned is that planning doesn’t mean cutting back everything so far that you can’t function properly, because you’ll live there forever. Right now, my mode is to double down on my sales efforts, including costs, and double down on technology investments, like the new turret winding investment, and that will drive costs down.
“I’ve tried different reactions to catastrophic events, and the reaction to go full throttle and try to grow during the time everybody else is hunkering down and trying to stay alive leads to a lot better end result. It sounds counterintuitive, because you feel like you should save every penny, but it’s not necessarily what I would do. I think you’ve got to take a chance, but it’s got to be calculated.”
I.D. Images
I.D. Images, a trade-only printer with a strong position in the variable information (VI) market, offers a range of products, including thermal labels, printers and ribbons, laser labels, and integrated labels and cards on various substrates like papers and films. In addition, the company provides custom label capabilities, including spot and digital printing, flexographic printing, multi-web laminations and custom diecutting.
According to Brian Gale, president and CEO, the industry has been resilient in the face of crisis. “Overall, I think the industry is doing reasonably well,” he says. “The supply chain had some challenges during the first few weeks of the crisis, but I believe we have solved those issues. Given labels are essential for virtually every product, I believe most businesses stayed operational during the shutdown.
“Prices stayed steady during the crisis, with some films going up due to lack of supply and an increase in demand,” he adds. “Things are stable now, though. We do see companies competing on price, which is all part of the game, but it is nothing extraordinary.”
I.D. Images saw a surge in business for logistics and food applications during the first part of the crisis. This occurred as the industrial economy essentially shut down.
“Fortunately, we service a diverse customer base and were able to keep busy during most of the shutdown,” says Gale. “As things have started to open up, we are seeing an increase in activity.”
I.D. Images was quick to implement multiple processes and procedures. Due to concerns about the supply and potential disruptions due to illness, the company extended its lead times for custom products when the crisis began. I.D. Images also began building its inventory, making sure it was well stocked at multiple facilities in the event of a disruption in one of those locations.
I.D. Images has invested in equipment that will help improve efficiency, which will help the company cope with spikes in demand.
“We continue to invest in automation and in better equipment,” explains Gale. “We had significant capital expenditure plans prior to the crisis, and we are still executing them. If you do not invest in your business, you will quickly become irrelevant. We are now a relatively large company in our industry, but it applies to us even with revenues that exceed $60 million. It is becoming increasingly hard for small companies to operate in the overall economy and in our industry. Compliance issues, customer demands and customer consolidation are making it more challenging than ever for small companies. I expect to see more small companies be acquired or even shut down in the next few years.”
Additionally, I.D. Images is well positioned to handle issues involving workforce and sustainability. Gale has been active in promoting the industry to younger generations, and the company has enjoyed success thus far.
“We get labeled as printers and people think print is dead,” states Gale. “That is far from true. We have had success recruiting recent college graduates by explaining our industry. I think our industry can do a better job working together to promote career opportunities that exist. In terms of sustainability, most companies want to be sustainable as long as it costs less and does not require a change in their operations, such as new equipment, due to different material calipers. In my opinion, government regulation will be necessary to create widespread sustainability.”
QSPAC
QSPAC Industries, a global supplier of self-wound lamination, can take a broad view of the label economy. Based in Santa Fe Springs, CA, QSPAC boasts over 100,000 square feet of warehousing at four strategically located converting and shipping facilities – located in Los Angeles, CA, Chicago, IL, Dallas, TX, and Charlotte, NC.
With multiple vantage points of the country, the company has seen how COVID-19 has affected different regions. As an essential industry, Howard Shen, director of the overlam division at QSPAC, has seen the best of labels on display.
“I would say that the label industry has been fortunate during this pandemic,” explains Shen. “Each product has to be packaged and labeled. Some converters are doing better than others due to the markets that they serve, but the majority of converters that we work with are doing well. I am sure that some converters are probably having record sales this first six months.”
According to Shen, markets in the US, Canada and Mexico have been strong and steady. Latin America, on the other hand, has taken more of a hit as numerous markets have faced stricter shutdown measures. However, they are expected to bounce back.
QSPAC’s core business is split into two categories: overlam and packaging products. “We have experienced a significant growth in overlam for the label industry, but our packaging products have taken a hit,” notes Shen. “Overall, our business is balanced and healthy.”
QSPAC was prepared to deal with the ramifications of the pandemic. The majority of the company’s inventory emanates from countries outside the US, and it routinely holds 2-3 months’ worth of inventory on the floor. By stocking up on inventory, QSPAC was well-suited to service its customers.
“We were able to meet our customers’ demands and not run out of products,” says Shen. “We have also added capacity in our production to meet customers’ requests. Our sales, customer service, technical and production support teams were all there to help.”
In response to customer behavior, Shen also notes, “We have always experienced price adjustment requests. It’s the nature of the competitive business that we are in. We sell on quality and service, and our converter customers appreciate what we do for them. The pandemic has created more demand and converters are now shopping around more.”
Shen adds that QSPAC will continue to invest internally in the company’s employees, which will better serve the industry in the long run. The biggest concern for QSPAC is finding and retaining quality employees, which is a challenge on the manufacturing side, so the company will support its employees with increased training and higher wages.
K Laser Technology
K Laser Technology, with USA headquarters in Santa Ana, CA, is a supplier of lamination film, transfer film, hot stamping foil, cold foil, textile foil and holographic labels. K Laser’s products target counterfeiting, product branding, ID protection, and supply chain security, all of which have become pressing topics throughout the pandemic.
K Laser has not seen any slowdown during the pandemic, says Richard Jackson, director of sales. “We have seen an increase in orders and have been fortunate to have both our Florida and California facilities running at full capacity,” he says. “Most of our customers and new business clients are experiencing an increase in activity, too.”
K Laser wasted no time in adapting to this rapidly evolving situation, either.
“Our internal sales and customer service began operating out of their homes,” says Jackson. “It has been a very smooth transition for them with very few issues. We have been very fortunate in that none of our production crews have been affected by the virus and we are fully staffed.”
While K Laser has navigated this pandemic, Jackson worries that not all companies will be as fortunate.
“Outside of our services and products we supply, a concern is the amount of small businesses considered non-essential that may be forced to close, forcing unemployment to increase,” he adds.
UPM Raflatac
UPM Raflatac, a label material supplier based in Mills River, NC, USA, has been an active advocate for the label industry supply chain during the COVID-19 pandemic. In addition to partaking in a well-attended Label & Narrow Web webinar regarding the health and safety of the supply chain, the company has been transparent about its measures to help gets materials to converters in challenging times.
Most prominently, UPM Raflatac saw increased demand from converters in the package delivery/logistics, food safety labeling, beverage and healthcare industries, as well as personal care, hand sanitizer and household cleaning products.
“The overall state of the industry continues to signal growth, and we are thankful to be in a more resilient industry,” explains Tim Kirchen, senior vice president, Americas, UPM Raflatac. “As we enter summer, demand for pressure sensitive labeling materials remains steady. Supply chains were stretched because of increased demand due to consumers stocking up on various supplies. Consumers had to become accustomed to purchasing certain items, regardless of brand name, but we are beginning to see grocery store shelves return to pre-pandemic levels with adequate supply of consumer preference brands.
“The COVID-19 pandemic has had an overall positive effect on our business,” he adds. “We saw record demand for our materials covering numerous segments.”
The demand for UPM Raflatac’s labelstocks reached “unprecedented” levels. The company’s sourcing team has been instrumental in keeping supply levels steady. Kirchen also describes UPM Raflatac’s operators as “true heroes” for quickly adapting to new policies and procedures to safely fulfill orders in a timely manner. UPM Raflatac also noticed increased demand for security and tamper evidence. The company, however, saw a decrease in demand in segments tied to more discretionary-type spending from the consumer, including automotive, durable goods, transportation and leisure.
While business has been positive, UPM Raflatac first placed an emphasis on the safety of its employees, their families and the communities in which the company operates. “We took aggressive steps early on to protect our workers, factories and terminals, which have remained in operation to fulfill increased demand throughout the pandemic,” says Kirchen. “We have put in place a number of improvements to keep our office workers protected once they are able to safely return.”
UPM Raflatac’s flexibility has enabled its success through the pandemic. Its sales team shifted to a web-based virtual approach when engaging with customers, which proved to be very stable and highly effective.
“We’ve placed a high priority and truly taken to heart understanding our customers’ needs and how their businesses have been affected by this unprecedented situation, and we are committed to working with them in every way we can. These are true partnerships, and we strive to help them succeed, serve their customers and grow their businesses.”
As part of the economic recovery, Kirchen sees sustainability as the path forward in a “Green recovery.” “The rebuilding of coronavirus-ravaged economies presents an opportunity to tackle the even greater threat – climate change. Sustainable labeling solutions were a hot topic in the pre-COVID world, and now that we’re starting to emerge out of the initial lockdown phase, we are seeing renewed interest from customers and brand owners to discuss sustainable labeling materials. Innovation has not stopped, and UPM Raflatac has recently announced a number of new sustainable labeling solutions over the past few months, including UPM Raflatac Forest Film and UPM Raflatac PP PCR.”
By Rock LaManna
Times are harsh. If you’re not leading, you’re losing. That’s not some pithy aphorism. It’s a fact. If there’s one thing you should know about Rock LaManna, I will tell you the truth no matter how uncomfortable.
If you want to win, here are 14 truths that should be part of your road map in the M&A environment:
Number 1: It’s not the car, it’s the driver.
This car won’t drive itself. Your fancy business is nothing without someone to lead it.
Number 2: Stay the course.
This is not the time to lay back and see what others are going to do. You’re taking up space and using up resources.
Number 3: More than The 24 Hours of Le Mans.
There’s no finish line in sight. Expect to drive for three to five years. Recovery in 18 months is a myth. No one will have it easy. It’s going to be a long grind.
Number 4: Leading takes guts.
Leadership goes beyond your business. Personal leadership. Integrity. Instinct. Action. Perseverance will win.
Number 5: You WILL run out of cash.
Auto racers pit to refuel in the long races. You will have to pit at some point, so plan now to refuel your cash reserves. Line up credit with your bank. Make arrangements with suppliers. Talk to family members. Look at your personal wealth and property.
Free money from the government will go away. Our industry relies on the global business environment. Money and goods are interconnected. Countries will go broke. The stock market will sputter and surge, affecting confidence. Closures will beget more closures. The business climate will suffer.
Number 6: Good people will leave.
Employees will go where they can find stability. If your future is tied to their future, they’re watching you. If you’re in trouble, good employees will go work for your competitors and help them win. Leadership and training masters.
You can’t let up on attracting and retaining talent. Your people matter – now and in the future.
Number 7: Will anyone desire your business?
Thinking about selling your business? Sounds good, doesn’t it? You should have been planning this a year ago, when I was telling you the market is hot.
This is not about the past. Not last year or the past 40 years. This is the new reality. Everything is negotiable.
Yes, buyers are still buying, but they want innovative companies with growth potential. Private equity groups have talent, strategy, execution and cash. They make lists of top acquisition targets. Have you vowed you would never sell to private equity? Unless you’re a winner, they don’t want you either.
Number 8: The best leaders are hyperreal.
In racing, the top drivers stand out for breathtaking inspiration and an elevated ability to assess risk-reward in a split second.
The most admired musicians go beyond what everyone else is doing and unleash parts of their brain and soul. Jazz legend Miles Davis said, ”If anybody wants to keep creating, they have to be about change.”
This kind of improvisation can be off-putting, even frightening. Humans crave sameness. But disruption is how change wins.
Number 9: Growth happens outside the lines.
Do you think the top racers stay inside the lines? Winners know the lines are merely suggestions. To grow, you can buy another company. Or, you can double down on sales. Know when to shift gears to high performance.
If you’re in it to win, though, you’ll have to look way beyond your core competencies – even beyond manufacturing – to reach your destination. Do not expect print to stay in favor. You will have to pivot. Investment means time and commitment. Are you prepared to compete in the next generation of top leadership?
Number 10: Build your team.
Drivers who work as a team – with everyone in the right roles – have the best odds. They have money, technology, resources and tools. They have the best trainers in the world. As a team, they execute on the master plan.
As a business owner, you cannot be a silo. When you started your business you had guts, instinct and energy. You relied on yourself because you had to. Now, you’ll need talent scout abilities and the will to pass to others, as you focus with the end in mind.
Big thinkers have a can-do attitude and lots of connections. You will need to network outside the industry. Find allies who are strong, trustworthy, worthy of respect, and then treat them as you would like to be treated. Remember, you are on their team as much as they are on yours. Prove you are a winner to keep pace with winners.
Number 11: Control is an illusion.
All it takes is one spin out or a pileup on the roadway, and you’re out of the race or disqualified. Am I talking about death? Death is reality. You will die someday. Have a succession plan for your business. Know all of your critical numbers and make sure you are measuring the right things. Visit my website to access a free business valuation with my personal assessment of you and your business performance history.
If the concept of releasing control is foreign to you, start small. Identify talent inside your organization and cultivate those people. Find people who are not exactly like you. “Yes Men” will only get you more of what you have now. In diversity there is strength.
The days of hoarding power and the almighty owner are so outdated it has become a cartoonish concept, a stereotype. If you’re running your company that way, you will lose. You need to educate, encourage and empower. Work with advisors and allies who follow the 3 E’s, as well.
Build a culture of winning and innovation, and like-minded people rush to meet you.
Number 12: Learn from your time at the wheel – don’t waste the lessons.
I know plenty of smart people. They’re smart in business and smart in life. My parents and my 10 brothers and sisters, for example. I love talking with them. I get excited about what they know and how they see things. But do they know everything? Of course not.
Yet there are many owners in our industry who think they have the final answer. It goes back to power and control, yes, and also fear. When you open your mind to all that is changing in our world, it can be scary. You realize you’re not so smart.
When it comes to change, do you think racers drive the way they did 40 years ago? Engines improve, technology changes, new people bring new ideas. Racing is a field of continuous improvements. It’s all about adjustments that can put you ahead by microseconds. To be in a state of constant learning means you have to be ready to reject and discard old thinking. Winners make micro changes and shed what doesn’t work.
Number 13: Everybody knows everything.
You want to sell your business? Fine. You want to whisper in my ear that you’d be open to offers? Great. You think no one knows you’re considering it? Wrong.
They know. They notice how you get real quiet whenever the subject comes up. Or how you hem and haw when your vendors ask when they’re going to get paid. Everybody knows everything.
If you don’t have the guts to sell, don’t call me pretending you do. I’m busy with deal flow – on the buy side and sell side. Your indecision will only turn off buyers – especially private equity – and give you a bad reputation as a tire kicker.
Number 14: Integrity STILL matters.
Win, yes. At any cost, no. You will have many opportunities to take the high road or the low road. Integrity accelerates champions.
Are you ready for the time and commitment it will take to be at the wheel? I’m putting together lists of companies that want to grow or sell – while deals are flowing and buyers are buying. Smart money is king – and available. If you want to be on the winning side of this amazing moment in history, prepare to maximize your racing.
Due to HP’s global presence, the company has remained committed to supporting its employees and customers across the world. HP’s ability to offer remote support, especially with its focus on transporting data to the cloud, has been a boon during these challenging times.
As part of HP’s latest drupa portfolio, which would have been highlighted in Dusseldorf at the now-postponed event, the company has placed a large emphasis on infrastructure. The ability to automate and connect with customers around the world, relying on the cloud, has allowed HP to anticipate problems and troubleshoot. This has boosted the company when combating COVID-19 while adhering to social distancing guidelines and stay-in-place orders. HP has the ability to perform analyses with artificial intelligence and big data, and get feedback back to the user. The company has made a big bet on infrastructure, and the crisis has seen HP’s ability to keep customers up and running without actually visiting them on-site. “I think it’s going to make customers more comfortable, where I don’t have to send my training operator to a plant in Barcelona; we can do it virtually,” former GM Alon Bar-Shany told L&NW. “I don’t need to get a service engineer to fix everything. We can do a lot of that by remote. I would say people are leveraging a lot more remote capabilities around service. This is actually a big advantage for us because we’ve built a system where all of our presses are connected online to the cloud, and we can monitor, track, and fix most of the problems remotely.”
HP has coordinated a plethora of webinars and Zoom conference sessions to deliver as much information as possible to their customers and clients. HP’s message has largely centered on the brand and possible campaigns with digital printing. HP has also used the 2009 recession as a reference point for how to manage through trying times. In fact, HP Indigo launched the 6000 platform, which has recently evolved to the HP Indigo 6K digital press, during the economic downturn in 2009. “I do refer back to 2009, which was the last time we had a big recession, and the fact that the customers who were willing to think 4-5 years ahead and were willing to invest are doing great now,” said Bar-Shany.