Four key trends transforming the digital print for packaging market

The latest exclusive market research from Smithers Pira has identified a series of major changes set to transform the use of digital printing across the packaging and labelling industry.

In its latest market report – The Future of Digital Print for Packaging to 2020 – Smithers Pira confirms growth will continue in this segment for both toner and, especially, inkjet systems. Competitive digital equipment print will continue to expand across several lucrative pack format segments, offering many advantages to converters, packaging buyers, and retailers eager to satisfy consumer demand.

Smithers Pira’s exclusive data shows a total world market valued at $10.5 billion (€9.3 billion) in 2015, with the equivalent of 107 billion A4 prints produced on digital presses. Over the next five years the volume of packaging printed on digital equipment will more than double, generating a market forecast to be worth $19.8 billion in 2020.

This highlights the fact that digital print for packaging is one of the most rapidly growing arenas of print. As this expansion happens, a number of key trends will be realised creating a landscape in 2020 that is significantly different to that in 2015. The analysis in The Future of Digital Print for Packaging to 2020 identifies these as:

Inkjet will become the dominant digital technology

Today the majority of the market is accounted for by electrophotography presses printing with liquid or powder toner. Toner printing can be very high quality and is widely used in label production in cut-sheet, but principally narrow web formats.

The alternative process is inkjet. It is non-contact, using liquid inks ejected from precision heads onto the substrate that then dries using one of several mechanisms. It also offers several advantages for print service providers and converters in the packaging, which will help it displace electrophotography equipment.

First non-impact inkjet processes are more suited to printing larger formats on a wide range of substrates making it more suited to packaging, and it can be integrated into existing conversion lines more easily than toner systems.

In terms of volume of packaging substrates printed, electrophotography is still ahead today, but the rapid increase in inkjet means that by 2018 it will account for the majority of digital’s use in packaging. 

Inkjet volumes will overtake toner print in 2018 – Source: Smithers Pira

Digital’s use with other packaging formats will erode the dominance of label presses

Smithers assesses the relative market growth across six packaging formats – labels, corrugated, folding cartons, flexibles, rigid plastic and metal.

Labels was the first sector to use digital printing. This is because most self-adhesive labels are printed in narrow web on lightweight substrates well suited to the process. Equipment suppliers, notably HP Indigo and Xeikon, recognised the opportunity early, and introduced technology dedicated to label production.

In 2015, labels account for 80.5% of total global market value and 93.5% of the printed volume. Across the study period labels are forecast to remain the majority of the sector, but all other segments are growing more rapidly – with corrugated, cartons, and flexibles becoming significant markets before 2020.

Equipment suppliers are developing new presses as they strive to establish an early footprint in these less developed segments. Several high-profile examples are set for their first installations in 2016, and other systems will debut at drupa 2016.

In the former category it was announced in December that DS Smith will take delivery of the first PageWide Web Press T1100S made by HP in spring 2016. Specifically designed for high-volume corrugated print, this 2.8m-wide inkjet press is built in cooperation with KBA. It will offer a top speed of 183m per minute, equivalent to 30,600m2 per minute.

In the folding carton segment, Landa is planning to have its first Nanography presses in operation in 2016. These will look to increase the run length across which a digital press can compete cost effectively with existing analogue units.

As part of its comprehensive approach to this key future market, Smithers surveyed delegates to its Digital Print for Packaging 2015 conference in Berlin on 8-9 December. In all 33% of respondents identified flexible packaging as the substrate for which there is the greatest opportunity for digital print. This was followed by corrugated and folding cartons on 27% each; only 13% of respondents voted for the current market leader – labels. 

Shortening run lengths will aid the switch to digital

Digital print is typically more expensive than proven analogue platforms. This increased cost needs to be set against a benefit; like improved consumer engagement as witnessed in Coca Cola’s trail-blazing “Share a Coke” campaigns.

Significantly the economics and productivity of digital technology is continuing to improve, making it increasingly price-competitive against analogue printing processes for more than just short runs. Eliminating plates, many prepress processes, and simplifying press make-ready times means digital methods are much lower cost to set up than analogue alternatives. While the unit cost of print is then higher, overall digital jobs are lower cost for short runs.

While dedicated high-volume digital systems will increase the run lengths at which digital can match analogue, changes in demand from print buyers towards shorter runs will also benefit adoption of the new generation of inkjet and toner machines.

In 2015, average run lengths are falling, as brands introduce more varieties and pack sizes to increase market appeal. This trend will continue through the five-year Smithers study period, and accelerate as variations in more languages, colours, flavours, fat/sugar/salt/gluten/allergen-free varieties are commissioned by brands.

This will receive a further boost from new legal requirements for printed viable data track-and-trace marks on individual packs for high value goods, like pharmaceuticals. In future it will be possible to enhance these with varnishes laid down to give innovative tactile and haptic finishes.

Digital print’s supply chain will start to diverge from a traditional model

Adoption of digital print will also have a direct effect on the business market in which print service providers operate.

In future greater flexibility and more simple supply chains will mean packaging can be printed on digital machines more quickly. This will be aided by the increasing availability of web-to-pack portals that will reduce the administration and prepress costs of producing press-ready artwork – shaving the cost of digital labels and packaging. By 2020, this type of online ordering may become the preferred method, even for medium length runs.

Online ordering and the declining cost of digital presses means a threat will develop for print service providers. It will become increasingly possible to fit and remotely control printers at the manufacturer’s own facilities, regional distribution centres, or even retail outlets – providing a more responsive business model, producing bespoke packaging for promotional purposes on site.

These and further insights, along with comprehensive data for all key global markets in this blossoming segment, are available in full in The Future of Digital Print for Packaging to 2020 from Smithers Pira.