In this article, Sean Smyth – Print Consultant with Smithers Pira examines the results of a new report that looks at the growth of Digital Print for Packaging to 2022. This report breaks down the projected growth by packaging application, and shows some surprising results.
In 2016 Smithers Pira published the latest version of what has proved to be a well-received report: “The Future of Digital Print for Packaging to 2022”. It looks at the trends, drivers, applications and new technology that is shaping the future production landscape of packaging and labels, with forecasts of the market development over the next five years. These years will see major changes as digital production goes mainstream that will make many brands and retailers look at packaging in new ways, making converters do different things as new supply chains develop.
In 2017 digitally printed labels and packaging add up to an overall $13.2 billion market globally. The label sector was the early adopter and is pretty mature in most regions. There is very strong growth in corrugated as very high performance single pass presses capable of tens of millions of square meters of output annually are snapped up by converters, cartons, flexible packaging and direct-to-shape, with developments in metal printing. In 2022 the sector will grow to be worth $23.2 billion after five healthy years of growth averaging 11.2% in value terms. Tonnage grows at an average CAGR of 28.1%, as cartons and the corrugated packaging comes on stream. So, no wonder you are reading the article – hopefully considering how your organization can take advantage of this growth. You are not alone.
The $13.2 billion is big, but digital packaging is only 3.33% of printed packaging and perhaps a little over 2.0% of all packaging (as there is so much non-printed). In terms of printed area the equivalent of 163 billion A4 prints is just 1.72% of the total, while the 1.7 million tons of products represents just under 1.03% of all packaging. By 2022 the $23.2 billion digital packaging sector will account for nearly 5.3% of packaging by value, the 334 billion A4 prints will be some 3.2% of the print area output while almost six million tons is also 3.2% of the total. So even after five years of very strong growth digital will still be a tiny minority – hardly the major disruption predicted by some. But it is a significant base that will set the stage for major changes in supply chains, and even the functions of packaging which are developing.
Growth is forecast in different applications and different regions at varying rates as shown in the figure, led by the small flexible packaging, metal and rigid plastics while corrugated, cartons and labels are the drivers of real volume growth.
As more converters get involved and make investments they will find out how the technologies can be used to benefit their customers. There will be new campaigns and these will be copied, and converters will provide new services and response to their customers which will allow significant supply chain efficiencies, some of which are not clear in early 2017, but will open up over the next years to better suit the final packaging consumers. Satisfying buyers is the goal for all parties.
The digital packaging sector is maturing. Around 2010 the big question for brands and converters was: “What can the technology do?”, and what should it do. After seven years of concentrated development the question has changed to: “Where is the application value?” as all parties across the supply chains realize that using digital printing can help make them money. This is the case for brands/retailers (and their agencies including design), as well as for packaging and label converters, some of whom are really prospering. It is also true for the equipment/consumable suppliers as well, although not all have succeeded.
Drupa 2016 saw a real step-change in the quality and performance of digital printing, from established suppliers and newcomers into the digital arena who are experienced in packaging. HP is the market leader with thousands of Indigo presses producing very high-quality labels, cartons and flexible packaging while its inkjet monster presses are making inroads into corrugated. But HP is by no means alone as others push their quality, productivity and improve their cost of production position. There are important breakthroughs in new substrates and surface treatments, in finishing where digital methods are also making progress, and most importantly in workflow improvements.
Sun Chemical’s Color Materials division opened a state-of-the-art, energy-efficient mixing plant in Cologne, Germany. Sun Chemical Color Solutions, the masterbatch business of the Color Materials division, is responsible for the development, manufacture, and distribution of masterbatches to the plastics industry. The new mixing plant enables Sun Chemical to produce more efficiently and meet the plastics industry’s increasing quality requirements. Digitalized and automated processes, along with optimized internal transport routes, allow Sun Chemical to react more quickly to changes in customer requirements. The facility comprises over 1,700 square meters of floor space to ensure an increase in production capacity.
Heidelberger Druckmaschinen AG will be presenting digital printing solutions for the automotive sector at stand 372 at InPrint 2017 in Munich from 14 to 16 November. These solutions help providers from the sector to offer their customers personalized, attractive products – using digitally realized designs that are in ever greater demand given the megatrend of personalization. Using the example of a smart car, Heidelberg will be hosting live demos at InPrint showing how digitization and new printing technologies enable individual small series or individual parts to be quickly and easily realized. The items on show at the trade fair will range from custom-decorated speedometer bezels and ventilation nozzles to alloy rims. The Heidelberg Omnifire 250 4D printing system will be in operation for visitors to see. Click Read More below for additional information.
Congratulations are in store for Scott Pierquet, who was named CFO of the Year by In Business magazine in the large business category. At the inaugural CFO of the Year Awards, In Business magazine celebrates top financial professionals for their role in their organizations' growth, vitality, and future in the Madison market. This award and honor for Scott could not be more well-deserved. Scott has been with Royle for the last 21 years, serving as the Director of Finance and, in 2022, was promoted to CFO.