Getting Down with Digital
There’s a problem many brand owners are facing: They need high quality short-run packaging at a desirable price point. The solution could be digital printing, but the biggest hurdle for converters is educating brand owners on the technology’s benefits. With price being one of the biggest driving factors behind production runs, some brand owners have resorted to sending jobs overseas, unaware of the possibilities that are available domestically. As more converters adopt digital technology, it’s imperative that they demonstrate the advantages it could provide to brand owners.
It’s not as though brand owners are hesitant to try a new printing process. Jennifer Dochstader, founding partner of LPC, Inc., explains that brand owners aren’t picky about how converters are printing their packaging, as long as it matches the expected quality and a desired price point. Robert Ludlow, owner and chief chocolatier at Fleurir Chocolates, is one example of a brand owner who was able to achieve these benefits through digital.
“If someone told me they could produce the same quality product for cheaper [with a different printing process], then sure I would give it a shot,” explains Ludlow. “I don’t exactly see that happening with everything I’ve learned about digital. It’s so personal and simple. … Having something that works and you don’t have to worry about is invaluable.”
Alexandria, Va.-based Fleurir has worked with Cleveland-based Tap Packaging Solutions to create customized folding cartons for its line of regional chocolate bars. Being a small chocolate company, Fleurir only requires short runs of packaging and Ludlow explains that after experiencing six-to-eight-month lead times and color inconsistency when sending jobs to China, which he describes as an “atrocious” process, it was time to find an alternative solution.
Ludlow traveled to Tap Packaging Solution’s facility to see the capabilities of the company’s HP Indigo 30000 digital press. Although he admits he doesn’t understand the intricacies of the printing process, the quality, turnaround time, color flexibility and price point of the digital press were what won him over.
“I love the fact that digital printing allows me to say, ‘This is what I imagine, can you produce it for a reasonable sum?’” he says.
Ludlow isn’t alone as a brand owner who has turned to China for a cheaper solution. Nuts About Granola, a York-Pa. based granola company, also sent production runs to China, but found that with plate charges, freight expenses and lead times of 10 to 12 weeks, the more economical price didn’t last.
Nuts About Granola had used flexographic technology to meet its short-run needs in the past, but was up against challenges resulting from its high volumes of inventory and waste from packaging design and product changes.
The company was introduced to Middleton, Wisc.-based ePac, a digital only joint venture of Emerald Packaging, that runs two HP Indigo 20000s. When Nuts About Granola approached ePac, it was the price, print on demand capabilities, low minimum order quantities and a lead-time of two weeks that cinched the deal.
“We were a little apprehensive at first, but as the technology evolved and we started to launch new items … we wanted to test the market,” Sarah Lanphier, CEO of Nuts About Granola, explains. “We were looking at digital from an aggregate cost savings to where it saved us thousands of dollars because we didn’t have to invest in plate charges or minimums.”
As Nuts About Granola works to transition all of its packaging to digital, Lanphier says that the turnaround and setup times have been reduced to the point where products are launched to market faster and more efficiently, changes can be made to its packaging based upon consumer input and there is greater flexibility in color choices leading to increased creativity.
Fleurir has experienced similar benefits. “When we were first starting out, we had to choose from limited colors, so to be able to do full-color at reasonable rates and short runs has allowed Fleurir to get really creative with design,” Ludlow says.
A Growing Demand for Digital
Expedited delivery times, shorter run sizes, high quality, low inventory and a low price point are the key drivers in the shift to digital. Additionally, brand owners not currently utilizing digital capabilities want to have the option in the future.
“We have seen a tipping point in the last six to 18 months where we have seen an increase in the percentage of brand owners [specifically in labels] demanding or requiring their label converters to have digital press production capacity in-house, even though they’re not buying digital labels from them,” Dochstader says. “It’s a huge shift.”
Labels are currently the most embedded in digital packaging growth, but there is a market for flexible packaging, folding cartons and corrugated. Although in general, she says flexible packaging growth rates are the highest, she points out that less than 2% of the segment would be justified for digital because the run sizes are still so large. However, she says that drupa 2020 may turn out to be a pivotal point for the burgeoning technology.
“We are going to see some inroads made in flexible packaging and folding carton technology,” she says. “It’s going to get faster.”
Ludlow cites versatility and the ease of ordering as a catalyst to shift to digital. The company currently has seven different varieties of chocolate bars for which it has seven uniquely designed packages of the same shape and size. Ludlow explains that the company only needed to order approximately 20,000-25,000 packages.
“What I love about it is that when we order bars, we have seven different designs, but because it’s digital, I just order a particular quantity of each type and they’re all counted as part of a lump sum because they’re all the same shape,” Ludlow says.
From a converter perspective, Carl Joachim, CTO of ePac, says there has been a rapidly increasing demand from CPGs since the company began commercial operations in May 2016. As brand owners begin to learn more about the advantages of digital technology, they are excited by the myriad possibilities.
“Several customers have gone through the process of contacting us, asking for a quote, sending artwork, and when they deplete their inventory, we have it ready to print on demand,” he says. “So the ramp up time from initial contact to production is pretty quick.”
Spreading the Word
As beneficial as digital packaging could be for some brand owners, it’s not universally understood and accepted yet. There is an opportunity for printers and converters to reach out to brand owners and describe the advantages to going digital.
“We have a job ahead of us to articulate the value proposition of digital, why and where it is a more economical solution and how it can benefit a brand owner from a marketing perspective,” Joachim says.
He explains that there needs to be a shift in how packaging is perceived and purchased. The brand owner should be aware of its uses, such as promotions, test marketing and sales samples. For example, if a brand reaches out to a big retailer, such as Costco, to pitch a new brand to execs, it’s helpful to have the product’s packaging to show them, rather than a mock-up.
However, even though customer demand is growing and brand owners are learning the benefits of transitioning to digital, adding digital packaging capabilities isn’t for every converter. ePac’s all-digital model began when Emerald Packaging installed the first HP Indigo 20000 in North America, but soon realized that developing the market for digital would require a clear strategy, focus and dedicated resources. Emerald’s infrastructure, specifically its downstream processing, was set up for long runs. Emerald Packaging then turned to Joachim and his partners at Arion Partners LLC, an investment advisory services firm focused on the flexible packaging market. ePac was launched a short time later, with the intent to serve an untapped digital market. With a focus on digital, in addition to CPGs, ePac has developed relationships with converters seeking a partner to outsource short run jobs.
“Since we are 100% digital and have no plans to move upstream into longer runs, the converters that work with us see ePac as a true partner as opposed to one day serving as a threat,” he says.