Brands around the world are waking up to a new dawn in packaging production. Digital printing, it seems, is the solution of the future, offering a wealth of brand benefits, enhanced consumer experiences, and a reduced carbon footprint. But digital printing is nothing new. It’s actually been in use for over 20 years. It’s only now, however, as a number of forces converge, that it’s gaining a competitive edge with its efficiency, speed-to-market and personalization options. Over the next few years, brands from all industries are expected to decrease their use of analogue and increase digital-only production. That being said, analogue printing in packaging is still predominant when it comes to overall volume.[
In its recent study, The Future of Digital Print for Packaging to 2024, Market research firm Smithers pointed out that “in a total market for printed packaging worth nearly $420 billion in 2019, digital printing represents a relatively modest but fast-growing segment.” It went on to say that, valued at $18.6 billion in 2019, digital packaging print is expected to grow to $31.6 billion by 2024, at an “impressive” CAGR of 11.1%. Sectors such as corrugated, cartons and flexible packaging are following the lead of labels, which was the early adopter of digital.
Six cutting-edge technology developments for label printing
As far as label printing, Smithers revealed that “the global market for label printing valued at $36.98 billion in 2017, will continue to increase at an annual average growth rate of 4.1% in value terms to reach $45.22 billion by 2022.” According to its new report The Future of Label Printing to 2022, six major technology advancements are significantly disrupting the market. These include: smaller, more lightweight labels; increasing recyclability of packaging; greater automation; more ‘premiumization’ (where the perceived quality of a product can be enhanced by using expensive-looking labels or packaging); the emergence of more anti-counterfeiting solutions; and the inevitable move to digital printing. “With opportunities for customization from printers, developments in the digital (toner and inkjet) printing processes are attracting the highest levels of investment,” Smithers-Pira added.
Digital printing: Dynamic and agile
So why the sudden shift to digital in packaging and labels? “There are several forces at play here,” according to Renée Walsh, Vice President of Sales & Marketing at Toronto-based TI Group. The company (a successful integrated print-service provider that also helps clients better connect brands with consumers) is uniquely qualified to assess the current packaging and label landscape, both as a marketing agency and more importantly, as a print provider.
“Digital package printing offers better management of the supply chain, when multiple short runs replace one big order, Walsh said. “As a commercial print provider, TI Group traditionally offered services to retailers and brand owners that included litho printing with ‘overs’ – that require warehousing for future fulfillment. Our clients are seeking better overall supply-chain solutions to get to market sooner, with a unique presence, while containing costs.” The company’s solutions now allow them to not only mass-produce litho packaging and topsheets for corrugated packaging or displays, they can also provide digital, on-demand short-run packaging without sacrificing quality. This allows them to customize the messaging regionally, while reducing waste from print overs and storage. This approach has been a significant contributing factor to TI Group’s growth over the past two years.
“As was the case with print advertising and currently with in-store signage, messaging and graphics are all about customer intimacy,” she added. “Many forms of print and online advertising have perfected localization messaging based on language, demographics and buying preferences. Packaging is no exception – whether it’s in the form of a subscription box delivered to your home, a retail display, a ‘pop-up’ experiential brand activation, or primary packaging on a retail shelf.” In addition, the TI group is a G7 colour-certified printer. This is important because matching brand colours today is essential. “We can successfully interchange work amongst print devices and methodologies to ensure brand-colour matches, which is essential for a cohesive go-to-market strategy with any brand,” said Walsh. “Skeptics will claim that digital print quality can’t compare with traditional methods. With high resolution, precise registration and a wide colour gamut, including unique inks, there’s now no doubt that digital can certainly compete.”
Barriers and growth
For many companies, the higher cost of digital has been the main obstacle to wider use. While it can be more expensive than analogue methods, estimates often don’t take into account the savings that can be made on direct and indirect obsolete packaging inventory. Production timelines can also be reduced, helping to get products onto retail shelves faster. Overall, taking the entire lifecycle into account, digital can actually help to contain costs, according to Walsh.
“With the proliferation of SKUs in the marketplace, many large consumer goods brands can’t seem to gain an advantage,” said Doris Brown-McNally, WW Brand Innovation and Partner Development Manager at HP. “In fact, over the last decade, many incumbent/heritage brands have been consistently outmaneuvered by innovative start-ups. To join the ranks of the growth leaders, consumer goods companies must create an agile growth environment. That starts with bringing their entire organization, from marketing to production, into an integrated organism. The results can be impressive. In product lines where this agility is used, companies have seen as much as a 400% increase in revenues. Plus, the time it takes to get new marketing ideas in front of customers has gone from several weeks or months, to less than two weeks. Advancements in packaging and digital print are at the core of many companies that are succeeding today.”
Cannabis: A new frontier for Canada
As the Cannabis Act came into effect in October of 2018, many organizations wanted to capture their share of this lucrative, game-changing market. “Our clients needed compliant packaging solutions,” said Gail Aker, Account Executive with the TI Group. “The cannabis regulations created challenges for large-run printing, in particular to lot-level data that included variable information such as THC and CBD amounts, lot numbers and packaging dates. Coupled with the rotation rules for warning indications and highly-templated design restrictions, digital printing proved to be an ideal production method,” she added.
With more and more retail locations opening across the country and the introduction of cannabis edibles, digital packaging solutions are now in high demand for a variety of purposes – including retail propping, new-format ideation and consumer research. So the TI Group had to introduce itself to this new market as a full-service provider that included 3D renderings, creative and photography, production art, prototypes, mock-ups, prepress, finishing, kitting and fulfillment, and of course, print production. It also had to deal with common packaging and label-printing issues such as cracking on folded edges, legibility of small and reverse type, and overall print quality. For this, the shop turned to its HP Indigo Digital Press. The B2 sheetfed can match or surpass offset quality. This is a clear example of emerging industry needs driving key changes at print providers.
Sustainable solutions
We mentioned earlier that, according to Smithers-Pira, sustainability was one of six emerging trends that can significantly disrupt the label-printing market. Well, according to the TI Group, as a result of bulk production methods, more than 30% of brand inventory is destroyed annually. It’s also clear that this level of waste is unsustainable for our planet. So, brands are now beginning to understand the importance of a reduced carbon footprint and renewable energy resources. What’s more, sustainability is also beginning to play an important role in customer engagement. An increasing number of consumers now seek out brands and companies that show a genuine commitment to protecting the environment. In fact, according to a 2018 study for Futerra, 88% of UK and USA respondents said they’d like brands to actually help them to be more environmentally friendly and ethical in their daily life.
The power of personalization
Digital package printing is also creating more possibilities when it comes to consumer interactivity and brand engagement. Manufacturers are now able to get closer to their customers and engage at a more personal level, thanks to advances in product customization. Research suggests that more than 50% of millennials and Gen Z consumers are interested in brands that offer personalized products or services. Today, digital production presents possibilities that even a decade ago were considered impossible. According to HP Brand and Agencies Lead, Guillermo Font: “When consumers are involved in the packaging design co-creation, a key outcome is the social-media sharing that the campaign has. We’ve seen quite a few cases where this form of earned media has increased to a 30% reach, which is fantastic coverage that would require a very high investment if it were achieved through other media such as TV, for example.”
Today, personalization can occur in many ways – including the tracking of browsing habits, presenting related ads as browser views on other online sites, or a retailer leveraging its loyalty programs by sending a direct-mail message after noticing a recent purchase history (and perhaps offering a special discount on a related product as well). Not surprisingly, one of the most common ways today’s brands can personalize customer interactions is through packaging and labels. Subscription-based services have the mission of connecting the right people with the right products at the right time, along with the most relevant peer-to-peer recommendations. In other words, forward-thinking brands want to unlock the power of advocacy through influencers to build so-called ‘social currency’.
Options have emerged in co-creation, where brands and consumers can join forces to design unique packaging, event or occasion-driven projects that are tailored to marketing opportunities – and even mass variable-imaging capabilities where every package is different! By taking a customized approach to every touchpoint – including displays and primary packaging – any business can disrupt an established industry, according to the TI Group. A case in point includes some of the work it’s produced with a company that presents a platform for consumers based on product discovery and reviews. Brands that partner with this platform have samples of product sent directly to members who are already interested in a particular category, or represent a certain demographic or lifestyle profile. “The real value is in delivering personalized packaging for that ‘unboxing’ moment,” Walsh said. “We combine this with customized collateral for a complete and engaging experience. Brand owners also want access to online portals that drive our print-on-demand engines, to create content that translates into targeted messages that improve results.”
Is digital the future of packaging and labels?
While analogue print in packaging and labels still occupies the vast majority of output by volume, digital print is gaining in momentum for all the reasons outlined previously. “There’s no better time for this forward-thinking, sustainable solution to become the industry gold standard – giving brands the ability to better respond to consumer demands, improve customer engagement, and obtain better results for their businesses,” Walsh emphasized. “As the advantages continue to stack up, and more companies make the change, digital printing is increasingly looking to be the future of packaging production. In addition to supply-chain and sustainability benefits, on-demand printing also presents opportunities for printers to build an entire business around this approach. It allows them to specialize in using digital presses to offer quick and affordable options for producing high-quality commercial print, but also to dive into the growing market for personalized printed packaging and labels. Brands worldwide are looking to shorten lead times, ensure best-in-class quality reproduction, and stand out from a saturated market as best they can. These challenges are all best answered by digital.”
Helping small brands “think big”
Today’s packaging and labels landscape is alive with vibrant, wonderfully creative examples of consumer engagement. This includes the use of augmented reality and 3D printing, in addition to digital print (and all its tactile and eye-catching embellishment options). Many of these, to their credit, are smaller brands. According to HP, we’ve entered a ‘Renaissance Period’ wherein small brands, as well as agile established companies, are transforming the consumer ecosystem by appealing to customers in bespoke ways. One of the most important technologies enabling this trend is the digital printing press. Consumers today have an increased desire to connect with brands in more personalized, experience-led and interesting ways. Whereas this sort of customization was once a difficult chore for brands of any size, digital technology and nimble print service providers have leveled the playing field, allowing anyone to compete for consumer loyalty. Indeed, much as the birth of the original printing press helped shape the European Renaissance of the 14th century, modern printing solutions are influencing the ‘Renaissance’ of the 21st century – enabling dramatically faster time-to-market, and more customization and versioning in packaging and labels.
Small brands race to market
Not long ago, average product lifecycles – the span from an item’s introduction through its growth, maturity and decline – could last quite a while depending on the industry. It remained that way for years. Then, smaller, digital-first companies entered and upended this tradition. They’ve been able to implement user feedback much more quickly and adapt the products they offer accordingly. Big brands must forecast and plan for much shorter product-life expectancies as a result of this shift. From a print standpoint, said HP, this means tapping into the ability of digital presses to churn out large or small runs of packages or labels quickly and affordably. Some large brands are doing this effectively, but interestingly, so are many up-and-coming small brands that are working with digital printers.
HP cited craft beer as one of the best instances of this transformation. For example, Leuven Brewery caught people’s attention when it worked with Brazilian printer Indemental Graficos to produce a 17,000-label run for its Dragon Beer. The labels were printed on holographic polyester film with a multi-coloured reflection with gloss lamination. The initial limited run was coupled with an augmented reality app that brought the dragons to life on mobile smartphone screens. For these smaller breweries, competition demands that their branding must stand out. Amid the rapid growth of this sector, many breweries have tapped into their packaging printing partners to find ways to be more cost-effective and unique as they evolve.
Getting personal
Personalization can occur in many ways – including marketers automatically tracking your browsing habits and presenting related ads as you view other online sites, or a retailer leveraging their loyalty programs by sending someone a direct mail communication after noticing their recent purchase history and offering a special purchase price on a related product. And one of the most common ways that brands can personalize customer interactions today is through packaging.
For example, when New-York-based Care/of Vitamins launched, it did so not just with custom vitamin selections, but also with personalized packaging. Each daily pack of supplements featured a friendly message with the customer’s name. Before launching in 2016, the company amassed $3 million in funding. The following year, that funding ballooned to $14 million. By taking a hyper-customized approach across every touchpoint of their business, including packaging, the small start-up helped to disrupt the well-established vitamin industry.
Quality print jobs
Another advantage, according to HP, is that smaller brands today have the ability to access a much wider array of quality materials – something once reserved for mature companies with larger budgets. Today’s digitally-enabled print service providers can leverage their digital presses and finishing equipment to combine plastics, foils, adhesives, rubber, liners and amazing colours to create seemingly new products by ‘refreshing’ their packages and labels. For instance, Anstadt Communications (an integrated marketing and graphics communications company in York, Pennsylvania) helped Ellicott & Company (a high-end boutique) appeal to savvy, young consumers. Using digital presses, it printed 16 different multi-sensory classic cocktail recipe cards made from silver foil and polymer. The gift items were produced on an 80-lb. Verso Blazer Digital Satin Cover and embellished with digital technology. They proved so successful that the business continued making the cards beyond a limited first run.
As we navigate this new ‘Renaissance Period’, it’s important to recognize the opportunity that modern graphics solutions, supported by digital presses, offer for competitive differentiation. By working with a skilled print service provider, even the smallest brand can look like a major player to experience-hungry consumers.
How printers are deploying new strategies and technologies in packaging and labels
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