White paper for xeikon cafe 2015 final bob

Analysis
March 2015
Brands and Packaging in Europe:
The Digital Print Advantage

A White Paper Prepared for The Xeikon Café

ANALYSIS Brands and Packaging in Europe: The Digital Print Advantage
© InfoTrends 2015 2

Table of Contents
Introduction ............................................................................................................................ 4
Research Summary ................................................................................................................. 4
Major Findings .................................................................................................................... 4
Companies Surveyed........................................................................................................... 5
Results for Key Questions ................................................................................................... 6
Conclusions and Recommendations................................................................................... 10
About the Author..................................................................................................................... 12
List of Figures
Figure 1: Vertical Industries of Brand Owners Surveyed ....................................................... 5
Figure 2: L&P Examples: Primary Label, Folding Carton, Flexible Packaging ..................... 6
Figure 3: Needs Most Likely To Cause New Designs for Packaging, Labels.......................... 6
Figure 4: Digital Presses Print Variable Data for Codes and Personalization ....................... 7
Figure 5: Features and Services for Which Brand Owners Will Pay a Premium................... 8
Figure 6: Improvements Needed in Color Digital Printing (Means) ..................................... 9
Figure 7: Worldwide Color Digital L&P Press Value of Print by Application (Millions of Dollars) 10

Introduction
In Week 11 of 2015, Xeikon, a major supplier of digital printing technology, is hosting a
gathering of print service providers, brand owners, and technology partners at its Lier,
Belgium manufacturing plant to highlight advances in digital printing for packaging and
labels. This “Xeikon Café” event is a neutral platform organized by Xeikon, one giving
suppliers in the realm of digital production the chance to present their products; it will be an
environment for people to learn and understand the benefits of digital solutions and in turn
to make well informed decisions. Following partners are participating at this edition :
 Under the software category: Advance Track & Trace, CERM, CHILI Publish, Esko, Hybrid
Software, Label Traxx, OneVision Software, Four Pees
 Under the equipment category: AB Graphic International, Bograma, Esko, Grafisk
Maskinfabrik A/S, Highcon, Kurz, MBO, Meech International, MOSS, Rietstack,
Schobertechnologies, Seilaser, SMAG Graphique, Tronics, Zünd
 Under the consumables category: ACTEGA Terra, Kurz, Michelman, RotoMetrics
 Under the print media category: Avery, Metsä Board, Stora Enso, Taghleef, Treofan Group,
UPM Raflatac
InfoTrends, a consulting firm based in Boston, USA, is participating in Xeikon’s event and has
contributed to it a presentation of its recent research into the opinions of brand owners on the printing
of packaging. The following report describes the key points of that presentation.
Research Summary
This consulting research aims to give insight into European brand owners’ opinions about the printing
of consumer packaging and labels, and about how those opinions point to current and future needs,
ones that digital printing technology can address with existing products and with new ones.
InfoTrends used a mix of research methods to meet the objectives of this project, including: (1) a
survey of 265 brand owners and also of 100 packaging and label converters, all located in Europe; (2)
personal interviews with selected European brand owners and converters; and (3) desk research into
trade press, conference presentations, and company websites.
Major Findings
The following items are major findings from the collective research:
 There is a growing trend among brand owners in Europe to manufacture and market short runs of
products, and that trend in turns spurs short run printing of packaging.
 Driving that short run growth is the brand owners’ need to target markets and to be lean and
efficient, particularly regarding their inventories and supply chains.
 Further driving short run growth are Europe’s fragmented demographics, its many languages, and
its growing number of rules about print for food and drug packaging.
 The short runs printed are often new versions of existing products, the better to target markets by
gender, age group, language, or some other criterion.
 Also, a whole segment of versioning comes from private labeling, mainly for retailers aiming to
capture greater margin by marketing their own brands.
 Color digital printing is an established tool for achieving short run printing objectives and other
objectives, and the need for it is growing.

 The need to meet sustainability goals is entrenched among European brand owners, and a
mandatory focus for converters and their technology suppliers.
 Brand owners want consumers to be personally engaged with their products, and brands use social
media and other digital strategies to achieve that end.
 Security is a focus for some brand owners, especially drug companies, due to concern about
counterfeiting and also diversion into unintended channels.
 Both engagement and security goals spur some brands to adopt new electronic options for
packaging (Near Field Communications, Augmented Reality, etc.).
Companies Surveyed
The chart below (Figure 1) segments by vertical industry the brand owners surveyed. As seen in the
chart, 67% of the companies surveyed are food brands, with beverages and personal care products tied
for second place at 12% each. While the brand owner survey sample is thus heavily weighted toward
food and beverage brands, these two segments make up the majority of Europe’s “fast moving
consumer goods,” and they are thus vital to the printed packaging and label markets there. We also
note that one important vertical industry, pharmaceuticals, is only 2% of the sample; the dearth of
drug companies in the survey is due mainly to the pharmaceutical industry’s reluctance to allow
managers to participate in independent market research studies.
Figure 1: Vertical Industries of Brand Owners Surveyed
Source: InfoTrends
Not charted here is the segmentation of our 100 converter respondents, i.e., the companies that print
packaging and labels for brand owners. Most converters surveyed print more than one application,
such labels plus flexible packaging, but each converter company was able to cite one application as its
main one. For the 100, the main applications cited were: label, 43%; folding carton, 31%; flexible
Food
67%
Health and beauty
12%
Beverage
12%
Durable goods
3%
Pharmaceuticals
2%
Maintenance
products
1%
Other
3%
Q81: Which of the following best describes your company’s main vertical industry?
N = 265 Respondents that are brand owners in Europe

ANALYS
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and smaller g
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esearch. As s
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ely to cause your cust
ely to cause your com
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rs whose ma
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ollowing char
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arkets. Regar
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tomers to make new
mpany to make new o
Print Advanta
in applicatio
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mary Label
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rt (Figure 3),
likely to cau
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he need mos
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%
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60% 80%
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%
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Brand Owne
or packaging or label
for packaging or labe
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ANALYS
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Figure 4: D
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ackaging des
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f converters
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to
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ackaging conv
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to pay a prem
wo groups of
nmentally frie
value of digi
aluable to bra
cate that con
ort runs and
b for 50 or m
(45%, 36%)
runs, and esp
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ing in Europe
ge, gender, s
production t
egulations” a
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rand owners
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or which secu
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getting attent
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respondents
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tal printing.
and owners;
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7

have made color digital printing into an important tool for packaging and label converters in
Europe.
Figure 5: Features and Services for Which Brand Owners Will Pay a Premium
Source: InfoTrends
Results to two other survey questions are also representative of the whole research project. One asks
converters which vertical industries are most likely to be sources of short run print jobs, and the other
asks them which features of digital printing need the most improvement. Regarding vertical industries,
the food, beverage, and health and beauty segments are the ones that are the most likely to drive the
printing of short runs. Results for a few other categories—household chemicals, pharmaceuticals, and
durable goods round out the list of top vertical industries. In each case there is a related consideration
for manufacturers of digital print technology, such as the need to have toners and inks that are safe for
use with food products, or that yield long lasting images for use with household chemicals and durable
goods.
Regarding the most wanted improvements to color digital printing, the research again gives the
opinions of converters, as seen in the following figure, which charts results from a survey question on
this topic. Image quality, compared to analog printing, leads the list, closely followed by “Ability to
match specific corporate colors.” Regarding “ability to print white” and “inks or toners for food
packaging,” the results for these criteria are nearly neutral, indicating that they are a fairly small
concern only, at least compared to image quality and corporate color matching.
13%
41%
29%
45%
36%
45%
68%
11%
36%
41%
45%
47%
57%
64%
0% 20% 40% 60% 80%
None of the above
1 print job for 50 or more product versions
Electronic security features such as RFID
1 print job with less than 200 labels or packages
Variable data printing for personalized print
Variable data printing for track and trace codes
Environmentally friendly paper, film, or board media
Converters
Brand Owners
Multiple Responses Permitted
Q72: For which of the following would your customers be willing to pay a premium?
Q40. For which of the following would your company be willing to pay a premium?
N = 100 Converters
N = 265 Brand Owners

Figure 6: Improvements Needed in Color Digital Printing (Means)
Source: InfoTrends
A final summary finding from the research is that while the market for color digital printing of
packaging and labels is growing, and has good reason to grow, the fastest growth will be in applications
that are either very young or even embryonic today. Of the main applications for digital printing in
consumer products, the digital label application is long established. By comparison, though, folding
cartons and flexible packaging are tiny, young digital applications, but ones that will soon have new
color digital presses dedicated to them, systems that will cause strong growth in these uses of digital
printing. The gross billings from converters for these three applications, printed on color digital
presses, are estimated and forecasted in the chart below (Figure 7).
Besides these additions to the folding carton and flexible packaging markets, though, there are two
other digital applications that really are just now beginning and that have exciting possibilities. One is
the full color digital printing of corrugated to create highly decorated secondary and even primary
packaging. The other is the “direct-to-shape” full color printing of can and bottles. Each of these uses
of digital printing will benefit brand owners in the near future, addressing for them the same basic
needs that digital printing addresses now in more established applications.
3.1
3.2
3.6
3.8
1 2 3 4 5
Inks or toners for food packaging
Ability to print white
Ability to match specific corporate colors
Image quality, compared to conventional print
N = 100 Respondents that are converters

Figure 7: Worldwide Color Digital Label and Packaging Press Value of Print by
Application (Millions of Dollars)
Source: InfoTrends
Conclusions and Recommendations
InfoTrends has a number of conclusions and recommendations based on the research. The
overarching conclusion is that color digital printing for packaging is a tool that addresses key needs of
European brand owners—for short runs that are cost effective and timely, for efficient management of
supply chains and inventories, and for new printing designs and techniques that will allow them to
target markets with great precision. The main recommendations are different depending on the
general type of company:
For converters:
 For converters that have color digital presses today, study the needs of end users and educate
customers about how digital printing will meet their needs.
 A key message to brands should be that digital printing makes converting flexible
and integrates well with all parts of the production process, from design to finishing.
 Emphasize that a digital press is a complete system, with special toners and other
features that allow it to offer new functionality and benefits to brand owners.
 In addition to customers, your own staff must be a focus of your outreach, because
they also need to understand digital printing and the impact it can have.
 For packaging converters without color digital presses today, consider investing in this technology,
in particular as one that will complement existing analog presses.
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2013 2014 2015 2016 2017 2018
$M Label Flexible Packaging Folding Carton
CAGR, 13‐18 16.1% 38.5% 58.3% 18.9%
Total

For brand owners:
 Seek converters that have color digital printing capability and work with such companies to refine
and improve the printing they do for your company.
 Educate marketing staff about the special capabilities of digital printing, such as
personalization and the option to print tests and short runs easily and cheaply.
 Consider color digital printing as a security tool, one that can support serialized and
random codes, as well as on-line authentication programs.
 Study the stories of brands that have benefited from digital printing, such as from
one-to-one marketing, rapid response to market changes, and innovative designs.

Disclaimer
This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of
information generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of
information on which our material is based are reliable and we have applied our best professional judgment to the data obtained.


About the Author
Bob Leahey is Associate Director at InfoTrends for that company’s Functional and Industrial Printing
Service. He has over twenty years’ experience as a consultant to suppliers for digital printing
technology, in particular for industrial printing applications. For several years he has focused on color
digital printing technology for packaging and label printing and creates detailed information about
that market each year for his clients. Mr. Leahey is a frequent speaker at print industry conferences in
Europe, North America, and Japan.

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