Label and packaging market looks forward to 2015
As 2014 draws to a close, suppliers and partners from across the label and package printing industry share their predictions for the next 12 months.
Ahead of the dawn of the new year, Labels & Labeling asked a number of suppliers and partners across the label and package printing supply chain to look forward to 2015, and highlight some of the trends and topics they expect to influence business in the next year.
2014 has been another fascinating year for the label and package printing industry, with developments such as the REVO Digital Flexo project and the establishment of FTA Europe working to advance analog processes, and Heidelberg taking full control of Gallus before entering into the field of digital label printing with the launch of the Gallus DCS 340 hybrid platform.
More of the big headlines from 2014 will be featured in the final Label News of 2014, which will be distributed on December 23. Click here to register to receive it, and to other e-newsletter covering the world of label and package printing, such as Label News India, Label News Latin America and Packprint World.
Below is a list of the authors/companies that have contributed predictions for 2015, grouped by topic (click their name or the topic to go directly to the relevant content):
Stefan Heiniger, Gallus | Jakob Landberg , Nilpeter | Uffe Nielsen, Grafisk Maskinfabrik
Cindy White, Channeled Resources | Micheal Lane, Lofton Label | Dr Adrian Steele, Mercian Labels
Jules Lejeune, FINAT | Ian Lifshitz, Asia Pulp & Paper | Brian Hurst, Yerecic Label
Gerry Mulvaney, Landa Digital Printing | Andy Cook, FFEI | Ranesh Bajaj, Vinsak
After reading the predictions for 2015, read what the industry thought would be big in 2014 here and let us know what you think by emailing editorial@labelsandlabeling.com.
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Stefan Heiniger, Gallus, label business chief operating officer
The megatrends that we’ve seen in previous years are set to continue apace in 2015 and carry on influencing our business. What this means is that globalization, individualization and across the board pricing pressure will have a bearing on our industry throughout 2015 and beyond.
Pricing pressure on labels will remain significant and may even intensify further. To continue operating successfully on the market, our customers will have to work ceaselessly on improving their processes and also ensure their market positioning is sufficiently clear.
Brand trust on the part of the consumer when it comes to low interest products will, as we have seen in the past, continue to wane. Yet, purchase decisions are increasingly being made at the shelf at the point of sale. This presents a clear argument in favor of attractive, high-finish packaging and therefore for the kind of innovative printing press systems that Gallus offers.
Increasing individualization is set to exert an even greater influence on packaging design. Time-limited ranges, and regionally adapted and specialist product offers are resulting in run lengths becoming even more variable than in the past. Due to these developments, the pressrooms of label and packaging printers need to feature the right balance of digital printing and conventional in-line technology presses. To put it simply, what’s needed are technological solutions that meet specific customer requirements perfectly. Gallus is one of the few press suppliers on the market that offers all printing and finishing processes on its machine systems.
This is now the case in digital printing too with the new Gallus DCS 340 digital converting system that will be available from Labelexpo Europe 2015 in Brussels and will set new standards in terms of quality and profitability in digital printing including inline processing – from the roll to the finished label in a single production step.
www.gallus-group.com | @Gallus_Group
Jakob Landberg, Nilpeter, sales director
We have witnessed caution in investments during recent years caused by the financial environment – many investments in narrow web printing production equipment have been postponed for a long time. Supposedly, we are now close to a stage where equipment is exploited to its max. This fact will result in increased investments, which again will probably entail an increase in prices, giving first-mover advantage.
Another contributing factor is the rise in other types of labels demanded by retail, such as shrink sleeves, wrap-around labels and pouches. Label converters have a natural advantage in this market as experts in short runs – compared to wide width flexo and gravure converters in the flexible packaging industry.
For 2015, we also expect press configuration complexities to increase, alongside converters’ quest for specialization.
We also see a continued consolidation of the entire business value chain.
Moreover, we must anticipate that new technologies will gain a footing. The challenges we see with low migration inks and UV-curing will bring forth LED technologies.
The limited production capacity offered by off-line digital equipment – with separate printing and conversion equipment – will be challenged by in-line options based on UV inkjet combined with various forms of embellishments.
The turbulent global situation has had a limiting effect on the expected market development in 2014, but despite the turbulence, we have seen a market increase, which is expected to continue into 2015.
I predict that the label industry will remain the most innovative part of the graphic trade – even in an unstable world.
Uffe Nielsen, Grafisk Maskinfabrik, managing director
Based on trends I see in the market the future of labels is shaped by automation and digitalization. Grafisk Maskinfabrik has in the past 12 months built more ‘lean’ machines than ever before. Every minute matters in an increasing competitive world. So my words of wisdom is invest in something smart and compact that is built to last if you want to stay in the label market.
Cindy White, Channeled Resources, president and chief executive officer
The global economy continues to hinder growth in the US. I predict that the US economy will continue to sputter as long as Europe struggles. Combine low growth with potential deflation in many EU countries and you get ramifications felt around the world. As Thomas Friedman said, ‘the world is flat’.
The domino effect from Europe’s slow down and financial crises hit the US, Asia and South American economies with lower demand. On top of that, the strong dollar makes it difficult for exports. While foreign companies have an advantage importing into the US with cheap products due to the high value of the dollar.
Many economists say they expect the US economy to grow three percent next year. In our world of labels, I think we will be lucky to see two percent growth. Our only chance to really grow is to continue to innovate: replace glue applied labels, find new applications with specialty products and expand our product capabilities to new types of printing technologies. Being a ‘me too’ company won’t work anymore. We all need to differentiate with new, improved and unique product offerings.
Micheal Lane, Lofton Label, chief executive officer
Without question digital label printing technologies will continue to provide excellent growth opportunities for converters. The range of digital technology options provides an entry point for converters regardless of their revenue base. Those converters who choose to remain on the digital sideline will find themselves ever more marginalized by their customer base.
Regardless of stock market volatility and newspaper headlines we are in a growth market albeit a slow one. The rate at which an economy can pick up steam at this point in the economic recovery cycle will surprise those converters who believe sluggish conditions are the norm. Business growth will quickly drive interest rate increases that will be the basis to create an inflationary environment. Management must hone up on the skills required to succeed when inflation rears its ugly head.
Margin pressure is nothing new to converters who’ve been operating in this highly fragmented market. 2015 will present a new wrinkle as demand heats up and input cost pressures come to bear.
Your supplier base is the source for innovation. Leverage their expertise to educate your sales force to maximize revenue growth.
Lean is not an option – it is about survival – it is about profitability. If you aren’t lean learn the techniques and get to work implementing the ones that are at the center of a core lean operational focus. It is not rocket science – it is about commitment to step-by-step improvement.
Dr Adrian Steele, Mercian Labels, managing director
2015 will see continued consolidation amongst converters as the investment costs of both productive high-end flexo and digital equipment needed to grow market share exceed the resources of many smaller converters.
Digital label converting will grow in complexity, capability and cost as more value is added to digitally printed labels through finishing than maybe even the digital printing itself.
We think the electrophotography-inkjet debate at Labelexpo Europe 2015 will move on from a speed/cost crossover to use of the appropriate technology for the application. Electrophotography will increasingly secure market share from top-end flexo for the usual reasons, but UV inkjet will find new and cost effective applications where its lower image quality is ‘fit for purpose’ and cost effective. It seems unlikely that UV inkjet will make the quality leap required to be comparable to electrophotography in 2015, but the technology is moving fast.
Substrate innovation is still key as converters and brands struggle to differentiate in a cost effective manner.
It should be a good year if you are invested in the new technology and are holding on for the ride.
www.mercianlabels.com | @MercianLabels
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Jules Lejeune, FINAT managing director
The world of labels and packaging is undergoing dramatic change and innovation in materials and formats, printing technologies, equipment and brand owners’ requirements. FINAT, representing the entire label supply chain, is very active in this challenging arena, in a converting industry that must now concentrate on delivering service, keen pricing, innovation and a cost-effective response to the increasing base of international regulations and certification standards.
Labels and packaging play a transient role in a product’s life, so sustainability and recyclability gain importance every day.
A key 2015 FINAT initiative is to engage an expert external consultant to create methodology and metrics for the lifecycle assessment of a pressure-sensitive, self-adhesive, roll label substrate, so suppliers and converters can calculate accurate carbon footprints for specific label constructions.
The merge of analog and digital print will continue apace, and FINAT will support its members with the new European Label Forum in June and with focused events, webinars and publications to facilitate bringing new and efficient possibilities to meet end-user demands for shorter-run, JIT-delivered, multi-versioned labels, as well as long-run budget label print for the private retailer brands.
Our industry support role also has a broader horizon in that, as a key enabler for the L9, as well as the European National Associations Board, the ‘umbrella’ for the world’s label associations, FINAT must equally serve the needs of an increasingly global marketplace, and the local and regional converters who support it.
Ian Lifshitz, Asia Pulp & Paper, director of sustainability, Americas
At Asia Pulp & Paper (APP) we see three significant sustainability trends that will impact packaging and label base papers in 2015: growing consumer demand for sustainable products, demand for supply chain transparency and increased adoption of zero deforestation policies by brands and corporations.
1. The growing importance of sustainability
According to a recent survey conducted by APP, more than half of Americans (56 percent) indicate that they would like to have more sustainable packaging when they purchase products. Additionally, 42 percent of Americans are willing to pay more for sustainable packaging options.
2. The demand for supply chain transparency
Supply chain transparency is a critical area that convertors, corporations and brands must prioritize in 2015 if they hope to avoid potentially costly environmental and legal infractions that could damage corporate reputation and overall relationships with customers and various stakeholders.
3. Increased adoption of zero deforestation policies
The zero deforestation movement, evidenced by the signing of the New York Declaration on Forests at the UN Climate Summit 2014, will grow as more and more companies demand that their suppliers adhere to policies that forbid the use of high conservation value natural forests. These groundbreaking market-based policies can help provide the sustainably sourced products that modern-day consumers are demanding more and more.
The above trends are not intended to provide an exhaustive list of the many developments that will occur within the packaging and paper industry in 2015, but we hope that the trends identified above can serve as an effective framework of what convertors, corporations and brands should continue to be mindful of and prioritize in the year ahead.
www.asiapulppaper.com | @AsiaPulpPaper
Brian Hurst, Yerecic Label, vice-president of operations
The momentum for sustainability in the label industry grows significantly each year.
LIFE by the Tag and Label Manufacturers Institute is a great way to jump start a company’s sustainability journey in 2015. Implementing an environmental leader or committee within your business helps to rally the troops and lead the charge in waste elimination. In 2015, I hope that more label converters and suppliers take the challenge to become LIFE certified.
One of the biggest deterrents keeping companies from going green is cost. However, getting started down the road of sustainability requires much less time and effort than many think. There is power in numbers. If more companies utilize green resources, supply will increase and lower prices.
In 2015, there should be higher utilization of resources to assist your company going green. The Sustainability section on the TLMI website features resources to calculate your greenhouse gas emissions, eliminate ink waste or even find locations for matrix recycling. Almost every supplier carries a green product, which is better for the environment. Utilization of these resources in 2015 will be a huge determinant in achieving higher sustainability as an industry.
What is the next level of sustainability after achieving LIFE certification? Getting your facility certified by a third party as landfill free. In 2015, I would like to see the TLMI Sustainability committee embrace this next step by backing a landfill free certification program. With assistance from trade organizations, more companies could work towards this impressive achievement.
In the New Year, do your best to contribute to a better world by making steps to become a more sustainable company. Through your efforts we can make these hopeful predictions a reality in 2015.
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Gerry Mulvaney, Landa Digital Printing, regional sales - Europe
I have often found when reviewing previous new year predictions that hindsight is a wonderful asset but not as useful as foresight. However, one thing that I am sure about in 2015, is the commercialization of our single-sided Landa S10 Nanographic Printing press.
In addition, we will closely work with our partners to make our presses part of a highly automated end-to-end workflow that will seamlessly fit into the businesses of our customers. Much work will continue with our existing partners, but I also foresee new partners who will be leading experts in their respective fields, just as Komori, EFI and AVT are experts in their respective fields of paper handling, digital front end technology and inspection.
On a personal note as a Nottingham Forest fan, a season that started out so full of promise has got somewhat bogged down in draws and my bet on us winning the Championship looks a bit of a lost cause.
www.landanano.com | @Landanano
Andy Cook, FFEI, managing director
As we look to 2015, it’s important to first reflect on the past year – 2014 has been quite a year for the digital inkjet label market.
The arguments for digital print and drivers for its place in the label market, are now well conversed and have been recycled in predictions for several years. Brand owners and retailers desire shorter production runs of their multi-versioned products, delivered more frequently. It is the speed, flexibility, and shorter-run capability of digital print that has proved it benefits beyond expectation.
The attraction of digital has always been closely associated to the breakeven point. The higher the breakeven point, the more reason to print digital. We have seen digital presses printing way beyond that in certain applications. Likewise some flexo systems are capable of entire color changes in less than 10 minutes. We have also seen much shorter runs on analogue technologies – but this is more a sign that many digital systems simply don’t have the tools to convert a full range of label applications.
The reason analog is still used on many shorter run jobs, is related to the market sector and application. In order to enhance the brand experience products need to jump out from the shelves. In other sectors legislation requires more information on labels. Transcending boundaries of countries and migration of people, mean multiple languages are not border specific.
Depending on the applications labels may benefit from or require high gloss metallic finishes, time-temperature indicators, holograms, special varnishes, electronic devices, Braille, tactile finishes, security and anti-counterfeit features. Protective coatings, laminates are all part of the converting mix.
Furthermore we are seeing a trend for web purchasing, often-customizable products with very high run lengths. Or standard products where production is ultra-short run, with production accomplished post sale rather than pre-sale (thus inventory and waste minimal).
Looking to 2015, we will see a need for digital with a twist on analog. Safety signs, ticketing, cups, store cards, credit cards, vouchers, pouches for niche/personalized products, security features, logistics labels, asset and manufacturing tags all lend themselves to digital yet all require many analog processes as well to make them fit for purpose.
It is this diverse range of run lengths coupled with how cumbersome current solutions for bridging the cross over point between digital and analog are that will drive convertors to look towards an entirely new category of press.
This digital hybrid category is targeted at the cross over point where digital meets analog. When the most cutting edge digital and analog machinery are combined in a single press the benefits of each are used to offset the limitations of analog and digital alone.
In doing so manufacturing efficiency is increased, a higher volume of chargeable product is produced per shift and at higher margin too. Products that could never have been produced with the benefits of digital now can.
Digital hybrid systems address the widest range of applications and most common run lengths in the market. It’s true that attempts at this concept have occurred over the last several years, but were held back by digital, particularly inkjet, still needing to mature and gain market acceptance. Today digital inkjet print has matured, with reliability, good digital white inks, and inter-compatible UV inkjet and UV flexo inks being available. Digital hybrid is certainly the next logical step, and will trend in a big way during 2015. The benefits are so huge we believe it will continue to do so with announcements continuing from all the major players. The digital systems designed truly as hybrid will become the most hotly tipped platforms of converting lines of the future.
Ranesh Bajaj, Vinsak, director
Smithers Pira’s The Future of Digital Printing for Packaging to 2018 report examines the key drivers for label demand and looks at how new innovations in the printing technology are opening up new sectors and the digital printed applications rapidly gaining ground.
The world market for digital packaging and labeling is forecasted to be valued at 8.02 billion USD in 2014, as per reportbuyer.com, but the real growth is forecast over the next five years.
Digital printing is now well established in label production, where security printing and variable data printings applications are forecasted to reach over 28 percent in 2018, as per the Smithers Pira report. Moreover, digital printing technologies also allow for print on-demand which has become critical in the context of the current economic downturn. As per the current scenario, print-on-demand is in demand. Many survey respondents flagged the growing trend of inkjet technology for short-run, on-demand work, and personalization of labels which is being facilitated by advances in digital printing technology.
High volume printing will decrease over time as more prints are produced on demand. Carton production is also fast moving into digital and so is flexible packaging and you will see all of this change the way we look at print in 2015.
High-speed printing and sustainability open up new possibilities for wide format digital printing and are new fields constantly being explored by printer and ink manufacturers. High-speed printing definitely increases productivity and therefore is more cost effective. Inkjet printing was selected as the method for creating the pattern because of its versatility. Food grade inks for inkjet will suddenly open up a huge market for digitally printed packaging and this is one space we need to watch out for.
Inkjet will surely eat away market share from the traditional printing processes including flexo.
On a personal note, a lot of customers in India feel that my relocation to the UAE will impact my attention into the Indian market. But quite the opposite , with the markets in India riding on a wave of confidence with the new government. Vinsak’s focus in 2015 will be on the Indian business while we continue to grow geographically across the globe.
We are all waiting for 2015. Bring it on and we are sure it will be fun, and let us all ‘digitally stick together’.
Marcelo Akierman, HP Indigo, EMEA labels and packaging marketing manager
Usually when I need to explain to my friends and family what I do for living I choose to do it using a wine bottle and label as an example. If 2014 was a wine I would define it as an excellent year, with the time spent perfecting our preparation methods (R&D) and the right aging (huge install base) delivering a very good wine.
In my opinion it was a year of digital technology consolidation, not only among label converters but especially among brands.
Small and local brands embraced digitally quickly in the past benefiting mainly from short runs – a very important pillar for digital printing but definitely not the only one.
Two years ago the Share a Coke campaign ignited something unique and proved with honors how digital technology can help brands to reach out to the market and increase sales. The soft drink giant was an early adopter but since then that particular campaign has been expanded globally and new opportunities followed as many other global brands in many different segments understood the huge potential, and during 2014 embraced HP Indigo technology or are preparing to do so in the following months.
For us in Europe, 2015 is a Labelexpo year and we are getting ready for the ‘Labels and Packaging Olympics’.
Now going back to the wine, let me raise my virtual glass of virtual wine and wish you all a truly and non-virtual happy and prosperous 2015.
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Marcus Tralau, Kama, chief executive officer
One of the last bastions of the graphics industry is going to fall in 2015: the market with the highest demands in terms of quality – the market for folding carton production – is going to open up to digital printing.
The trend towards short production runs, which are needed to handle the packaging for versioning and mass customization, is unstoppable and the demand for smaller SKUs is growing. Kama, as a developer and manufacturer of finishing systems, has been preparing for this development for years now and we are the only manufacturer that can offer an end-to-end workflow.
For cutting and creasing, Kama has decided to keep the tried and trusted tool (the steel rule die) since that ensures highest quality and delivers the best possible value for money with repeat jobs. No further tools are necessary as all stripping of small windows, hanger holes and blank separation is carried out on our patented in-line stripping and blanking unit.
We presented the final element in this workflow to an international industry audience in Dresden a few weeks ago with the Kama FlexFold 52 with automated set-up. Extremely fast changeovers from one job to the format of the next makes it ideal for short runs.
Driven by the spirit of kaizen, which means avoiding any kind of waste and continually optimizing production processes, Kama now also offers the Cockpit 76 CPX. It interfaces our finishing systems with the customer’s IT network (electronic job ticket) and additionally speeds up the positioning of dies and clichés for high quality finishing results.
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The board of the EFIA, which represents the entire flexo supply chain from designer to retailer, believes we will continue to see a further upturn in the fortunes of the sector and continuing consolidation of the print industry in 2015, as those who failed to invest in the recession are unable to compete in this new fast track economy.
With the advent of high-definition printing, flexo printers are able to compete head on with gravure, driving further success and recognition of the technology on a global scale. Digital will also continue to make further inroads. However, our members continue to use the technology in a complementary, rather than replacement, manner.
2015 is an exciting year of change at EFIA. With new investments in training and education in The EFIA Academy and Leeds Beckett University management training programs, EFIA is working to close the skills gap so evident in the UK print industry.
In addition, the prestigious EFIA Annual Print Awards gala dinner will be held at a new location and the board will be appointing a new chairman imminently, as Dr David Galton stepped down at the recent October 14 AGM. The board is therefore excited about the future of the association and its new membership services for 2015 and beyond.
If you are involved in the label and package printing supply chain and would like to contribute your thoughts on the next 12 months, please email dpittman@tarsus.co.uk with 150-200 words to be included.
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