Inkjet was also being developed for the printing of address labels and for envelope addressing.
Around the same time, digital black-and-white toner technologies using laser, ion deposition and electron beam were being introduced for document and label – printing. These new digital printing machines had no levers, no gears and no oil baths like a regular printing press. They were totally enclosed with just a computer monitor to control them; they could provide high quality printing in shorter time frames. Today they can even become a part of a network and be used to send and receive data from any part of the world, as well as giving a visual picture of how the image or label will look.
Certainly digital black-and-white toner printing was already being widely used for the printing of labels, tickets and tags by the mid-1980s. It was used for printing all the mail bag tags for the US postal Services; it was being used to print variable data, text, codes, dates and other information onto labels predominately by the business forms industry. Label converters did not seem to regard the printing of black-only variable information as a key market for them at this time.
However, the introduction in the early 1990s and at drupa in 1995 of machines that could produce labels printed-on-demand (POD) in full color digital printing soon began to change the perceptions of label converters towards this new technology and the first installations of digital liquid and dry toner presses into label converting plants began to take place in 1996. Today there are well over 2,000 or so such machines in daily operation in label converting and a much smaller number of package printing plants worldwide. Various estimates indicate that the volumes of full color digitally printed labels have been growing at around 30 percent to 40 percent year on year (albeit from a small base). This is against a global growth of around 4 percent annually for conventionally printed labels.
So what are the market trends, market benefits and market applications for full color digital label and package printing that continue to prompt so many converters to invest in this technology? And what is starting to create a similar interest and growth for digital printing in the flexible packaging and folding carton markets?
MARKET BENEFITS OF DIGITAL PRINTING
Well, according to a survey of brand owners and key end users undertaken by Labels & Labelling Consultancy the key supply chain reason for using digital printing was for the speed of response that digital can offer.
As can be seen in Figure 10.1 this was followed by reduced inventories, on-demand delivery and promotional possibilities, mass customization and short-run capabilities.
Figure 10.1 - Label user ratings for the supply chain benefits of using digital label printing
Similar analysis of brand owners’ supply chain needs optimization also provided a key list of requirements:
Faster reaction to demands
When label converters are asked to rank the importance of the various market factors that led them to buy or consider investing in digital full color on-demand label printing then the market and investment decisions are slightly different – but nevertheless lead to much the same conclusions, but presented slightly differently. This can be seen in Figure 10.2 based on studies by InfoTrends and Labels & Labelling Consultancy. These indicate that the growing need for short runs of prime product labels is seen as being ‘very important’.
Figure 10.2 - Market factors for investment in a full color digital label press in order of importance
The key marketing message with all digital label (and package) printing seems to be to forget thinking solely about the volume of labels to be produced, forget about the cost per label or pack – think instead of ‘profit per job’. Look at the added value from service, from uniqueness, from undertaking work that cannot be produced cost-effectively using conventional printing technology.
The overall value of digitally printed lobs is much higher than a printed cost alone. This can be seen in Figure 10.3 based on industry estimates which indicate that digital is currently only about 2 percent of all printed jobs by volume, but makes up some 18 percent of all print jobs by value.
Figure 10.3 - Its not about volume; it's about value
Undoubtedly one of the keys to the sales and marketing of digital printing, whether for labels or printed packaging, is to focus on the added-value benefits that digital can offer the brand owner, retail group, or industrial manufacturer.
These benefits come in a number of areas, with the ability to provide a seamless, integrated, digital workflow as one of the keys to creating opportunities and achieving customer benefits. This then follows through into production and marketing benefits for the customer. These benefits and opportunities can be seen in the table above.
It is these opportunities and benefits that need to form the key basis of marketing and selling digital print. It is all about what digital can do for the customer in terms of saving time, cutting stockholding, selling more products, enhancing their image, bringing products to the market, etc. If the customer can get excited about what digital can do for them, then price becomes less important in the overall sales and marketing mix.
The digital printer of labels and packaging then needs to understand what end-user markets and applications can most benefit from what digital can offer. So let’s start with labels, where there is the most historic information that can be analyzed.
END-USER MARKETS FOR DIGITALLY PRINTED LABELS
What then are the key end-user sectors in which the production, marketing and supply chain benefits and have to-date proved to be essential for those investing in digital label printing? Indeed, what are the main market applications for digital printing in the label and package printing sectors today? Well, when you survey label converters with digital toner presses, the top five applications that most of them come up with are:
Health and Beauty/Cosmetics
Household cleaning and industrial products
This list is of course not exhaustive, but these five main applications by far dominate the historic total list of sectors in which digital label printing is currently used. They also tend to be the main sectors that have been found in the HP Indigo annual label awards competitions, with superb examples of digitally printed labels being submitted from around the world. An indication of the relative importance of these sectors can be seen in Figure 10.4 based on responses from digital label converters. Converters may of course be undertaking work from more than one sector.
Figure 10.4 - Main applications for digitally printed full-color labels
Far smaller by volume at the present time are a variety of other sectors, such as computers, peripherals and supplies, oil and petroleum products, automotive, white home goods appliances, home maintenance, pet foods, sports goods, garden products, other retail and consumer electronics.
Nevertheless, these smaller sectors are important in the overall mix of digitally printed labels and are amongst the fastest growing markets for the new generations of inkjet presses, together with the printing of blister pack foils. As inkjet installations continue to grow it seems certain that this applications mix for digital will grow substantially, with the toner technologies and inkjet complementing each other and conventional analog printing.
When looking at the top five applications it is important to have some understanding of where and how digital printing, and various finishing requirements fit in. This is amplified below.
As can be seen from the list, food labels of all types represent one of the main markets for digitally printed labels. Mostly self-adhesive – with some overlap into sleeving, wet glue or occasionally in-mold – food offers the converter a lot of varieties and variations, all ideal for digital. This sector tends to have quite a lot of different varieties and variations, with the labels predominately printed in 4/5 colors (sometimes more) plus a varnish.
Short lead times, promotional possibilities, different varieties, seasonal or event versions, printing on metallic substrates, etc, are common factors that govern the choice of digital in this sector.
WINES, SPIRITS, BEERS AND SOFT DRINKS
Wine labels have proved to be a particularly successful area for digitally printed labels. Look at the many examples successfully produced on HP Indigo and Xeikon presses and you see run lengths of 5,000 labels, 3,000 labels, 15,000 labels, 7,000 labels, 2,000 labels, 8 X 1,000 labels, 18 versions, etc, in anything up to 7 colors. All ideal for digital printing. For small wineries especially, digital printing offers a label quality that is extremely high when compared to, say, flexo. The range of substrates used is also quite varied: antique, metallic, linen finish, matt, high gloss, eggshell, etc.
However, it should be noted that a very high proportion of digitally printed wine labels are finished with hot foil and/or embossing, plus varnishing – so attention needs to be paid to the finishing options and finishing technology when investing. Sequential numbering also appears to be frequently used.
In the beer market, Heineken has successfully utilised digital printed labels, with customers creating their own label designs and having these printed digitally. A number of breweries have also introduced digitally printed labels for limited edition beers.
Most recently, Coca-Cola has revolutionized the world of promotional marketing with the launch of an initiative which saw many millions of labels printed with customized data by a network of digital and conventional printers across Europe.
The project saw Coca-Cola marketing departments in more than 30 European countries supplying the most popular local names, together with a range of slogans based around sharing Coca-Cola with friends and family. The names were printed randomly for 0.5L and 375ml bottles.
Consumers were then encouraged to seek out bottles with their own or friends, names in store, sharing and swapping bottles with friends and family.
HEALTH AND BEAUTY/COSMETICS
Like wines and spirits the health and beauty and cosmetics sector frequently requires digitally printed labels for short runs, for multiple designs and variations, in sets, for exceptional print quality, on a range of paper, films and metallic substrates, and with a high usage of hot stamping and/or embossing.
The ability to produce different designs in one production run has been a useful sales tool. Printing may be in anything up to 7 colors. Gloss or matt varnishes/lacquers are also frequently used, sometimes clear film lamination.
The pharmaceutical sector took quite a long time to accept digital printing to meet all the security requirements of 100% validation of all the print on the labels. Now, however, the sector is a major user of digital printing, with labels often incorporating RFID tags and mass serialization, sequential numbering, Data Matrix codes and brand protection features. Finishing technology is therefore again an important consideration when investing in digital printing of pharmaceutical labels.
The ability to produce multiple designs of small quantity labels in one production run is often cited by customers as a reason for using digitally printed labels. The capability of printing fine text in different languages, including Chinese, has also been a feature of digital printing for the pharmaceutical sector.
HOUSEHOLD CLEANING AND INDUSTRIAL PRODUCTS
Again, often characterised by a requirement for short runs, many variations, different designs, a variety of substrates – including synthetics and metallic – the household cleaning and industrial products sectors can provide valuable market potential for digital printing. Predominately printed in 4 or 5 colors, but maybe up to 7, household and industrial products frequently require over-varnishing or occasionally laminating for protection and extended performance.
Inkjet printing has been finding an increasing market for industrial and automotive labels where the ability to print on a wide range of performance substrates, with UL approval, has proved to be an advantage.
RUN LENGTH AS A GUIDE TO DIGITAL LABEL PRINTING
There have been a number of studies looking at run lengths of labels printed both digitally and conventionally; one of the most recent surveys just a few years ago. This showed that some 65% of digital label jobs on digital presses at that time were less than 10,000 run length; run lengths traditionally considered as the main domain of digital printing.
However, it also found that 95% of all four color digital label printed jobs were less than 50,000 run length. These results were all based on the previous generations of HP Indigo and Xeikon presses and, up until 2009, were considered the key target run length markets for digital printing.
Today, the new generations of digital label presses are even more targeted towards run lengths that can be as high as 50,000+. It is therefore interesting to see that similar studies of conventional label printing jobs indicate that 57% of all jobs printed on conventional roll label presses, analog presses, are in fact, under 25,000 run length. See Figure 10.5.
Figure 10.5 - Comparison of run lengths for digitally and conventionally printed labels
Indeed, something over 70% of conventional printing label jobs on analog presses are under 50,000 run length, and again that is within the target range that converters are looking at with the new digital presses.
That’s not to say that 70% of existing jobs on conventional label presses are going to migrate to digital, because there are many label jobs under 50,000 run length that still cannot be done on digital presses: jobs where there’s a lot of metallic inks for example, you still really want the conventional technologies there. There are jobs where a combination of printing process are required for effects; where really thick images using screen printing technology are required. But nevertheless, there is still a big proportion of current jobs on conventional presses which could immediately translate to digital printing – or even to hybrid conventional/digital presses.
So, in summary, the key points about run lengths of digital and conventional label printing are:
Certainly the breakeven or crossover point between digital label printing and conventional label printing has extended considerably in recent years, with more than two-thirds of all label jobs now having the potential to be digitally printed. This can be seen in figure 10.6, courtesy of HP Indigo.
Interestingly, when talking with some of the key label printers today they say that run lengths with digital are now actually starting to come down again as customers increasingly see the benefits of printing small quantities and having the flexibility to update, alter, add flashes, create new versions, etc, almost on demand.
Figure 10.6 - Comparison of run lengths for digitally and conventionally printed labels
How counterfeiters work to defraud manufacturers of genuine goods and deceive the purchaser or general public at large
DIGITAL PACKAGE PRINTING
While there is now a long history of the key markets and applications for digital printing in the label sector, it is still very early days to really understand where digital will fit in best in the folding carton and flexible packaging markets, However, the label experience indicates that it will be the same or similar markets that develop for the package printer. After all, the factors that have driven digital label growth – time to market, versions, variations, personalisation, mass customization, etc., in the food, drinks, pharma, industrial, health and personal care markets.– will most likely be the same factors that drive digital package printing growth.
Already, package printers and brand owners alike are becoming increasingly familiar with the exciting opportunities offered by the latest wider-web machines and B1/B2 sheet-fed digital print technology, especially in the, still fast growing, market for printed packaging. The advantages are pretty clear: the ability to print the precise quantities the customer needs, and precisely when they need it; the ability to run multi-language programs cost effectively; and the ability to respond instantaneously to a given marketplace and support regionally targeted campaigns. In addition, digitally printed packaging satisfies the 'green' environmental strategies of both printers and brand owners, and amongst other advantages, offers sustainability through reduced materials wastage and the elimination of chemicals, plates and plate processing.
It therefore comes as no surprise to see the interest in digital printing of packaging products. With the folding carton market showing year on year growth, but with product packaging becoming increasingly fragmented, we are left in a world of decreasing run lengths. In recent years, technology improvements in pre-press and offset presses has enabled printers to satisfy these reducing run lengths, but increasingly, brand owners are demanding customized print to engage their customers with more relevant or unique content. It is this trend towards customization, personalization, and shorter runs that is driving the need for digital package printing.
Already a number of narrow-web digital label converters that have produced shorter-run editions and variations of shrink sleeves, sachets and small-size cartons, and the benefits they have shown their customers will undoubtedly extend to more and more brand owners and their printed packaging requirements.
OPPORTUNITIES IN BRAND PROTECTION AND SECURITY
Fakes, counterfeits, pirated goods; they are all terms used to describe merchandise that has been copied and sold somewhere in the world without the consent of the brand owner. It’s a global problem. Global lost revenues due to counterfeiting are currently in the region of 654 billion dollars a year, or about 7-8% of world trade. It is said that if this figure gets near to 10% of world trade it will start to de-stabilise global economies.
In addition there are something like 200,000 jobs a year lost world wide because of counterfeiting; in other words if you aren’t selling the genuine products then you don’t need the same number of people. And there are also hundreds of people who literally die or are injured each year through using counterfeit products – that’s everything to using counterfeit or fake medicines, which either don’t do their job or possibly kill instead of cure.
Fake medical products, fake automotive parts (like fake break linings that wear out after two or three applications); fake ointments or fake washing powders – both products that may cause skin complaints or even dermatitis.
So counterfeiting is a major issue today, particularly in the pharmaceutical and high added-value markets. Just take a look at some of the products that are most commonly counterfeited:
Cigarette and tobacco products
Sports clothing, sports shoes and sports products
Computer equipment and accessories
Automotive and aeronautical parts
Games and business software
Indeed, almost anything that has any kind of significant value in the market place.
How do these counterfeiters actually work? What are the real issues? How do they de-fraud manufacturers? Well, in quite simple ways, and by using a number of different possibilities. These can be seen in the table above.
So what can the label and package printing industry – particularly those with digital printing technology – and brand owners do to help authenticate products, reduce counterfeiting, enhance brand security and minimise theft or product tampering?
Well, there are a number of possibilities:
Wherever possible, build counterfeit deterrence, product authentication and brand protection technologies into the design of the label or pack from the very beginning:
Combine different technologies to provide the most effective overall solutions
If possible, make each label/pack unique
Keep ahead of the counterfeiters by changing the solutions used on a frequent basis
The interesting thing with digital printing, certainly when compared to conventional printing using analog printing techniques, is that digital printing offers a number of perceived benefits and opportunities for the printing of labels and packs used for brand protection and security printing. These benefits include:
Unique or sequential codes
Random or sequential numbering
Custom and variable images
Variable design or graphics
Hidden or invisible images
What we are looking at is a whole new element where the label and package printer can begin to look at how digital printing can offer products and services that competitors cannot provide with other printing or security technologies – or can do them better than other technologies. Products and services that substantially enhance the potential to make the label or pack more secure and to make it more difficult to counterfeit and also much easier to authenticate or track and trace. Think of the opportunities and potential that digital printing and finishing offers compared with other security technologies when talking with customers.
The message to label and pack converters and their brand owner customers is not to just think of doing digital for primary labels, for printing pretty pictures, but think of the many brand protection and security solutions that can be done with digital to add value, to authenticate, to provide new levels of service, to track and trace goods. There are many things that can be done with digital that the label and package printing industry has not been able to offer before. New solutions that are not that expensive to do but the converter can add them or stitch them together to enhance the security possibilities.
The end result is that the digital printer can make labels and packs quite complicated, in short runs, so that counterfeiting simply becomes unprofitable for the criminal.
The concept of layered security is a great one because simply by adding a digital print, a logo which you can change, a fluorescent ink that, say, can be changed every month in terms of the color, plus some sort of secure date code – the converter now has an extremely secure brand protection solution for a relatively inexpensive price.
Inkjet technology also offers a range of security-related solutions. Tagged and security inks, fluorescent inks, invisible inks. By being creative, by using digital technology in combination with, e.g. substrates, or in combination with special decoration technologies, converters are able to create unique levels of brand protection; to create label/product differentiation and security.
However, what the digital printer should understand is that if customers do not know about any of these new brand protection and security technologies available with digital printing, they will never ask for them. The awareness of what can be achieved has to be promoted and marketed by the label converter and package printer.
HAVE A MARKETING STRATEGY
What is important is that label and package printers enter the digital market with a defined market or marketing strategy for digital printing before they buy a press and finishing line. They need to define what sectors they are, or want to be, involved in; the run lengths they already have on their conventional analog presses and the target run lengths they are looking at for digital; the benefits they want to market and sell against. Whether they are also going to offer brand protection and security solutions.
When a converter says ‘Should I buy a digital press?’ the first questions he should ask himself are ‘What am I going to use it for?’ ‘Will it better service my customers?’ ‘Do I have the right personnel to produce, market and sell digital?’ ‘How will I market it?’ ‘Will it make a profit?’
When they have the answer to these questions then they are in a better position to go out and buy a digital press, invest in any necessary additional finishing equipment, review their whole MIS and workflow, and look to a successful digital future.