The Future of Digital Printing for Packaging, PIRA Report

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The global market for digitally printed packaging and labels is projected to reach US $2.4 billion in 2009. Expanding by nearly three times, this market is forecast to grow by an overall 182% and a healthy CAGR of 23% to reach close to US $6.8 billion by 2014, according to a new study by Pira International.

Based on primary research and expert analysis, the report breaks down the global market by packaging type, end-use market, application, geographic region and production process, with forecasts to 2014. In addition, the study aims to clearly lay down the strengths and weaknesses associated with digital print for packaging over the 2009-14 period. The study also provides a detailed overview of key demand drivers and trends, along with an analysis of the competitive landscape for the industry and the business opportunities for equipment and consumables suppliers.

A major driver for digital printing in the packaging and label segments is the need for customisation and shorter press runs, in order to limit the amount of dormant inventory. Digital, on-demand printing of labels and packages has now become critical in the context of the current economic downturn and waste reduction initiatives, since less material, energy, and inks are used.

Digital artwork files in standard - editable as well as PDF - formats (Quark, Adobe Illustrator, PDF, Adobe InDesign and EskoArtwork) can be received online and run after a quick preflight and imposition. Thus, jobs that used to take a few days earlier can now be turned around in an afternoon, in keeping with the just-in-time supply chain sought by brand owners.

Digital printing also allows converters to become ‘print service providers,’ and offer a wider range of digital services, alongside traditional printing operations. Customer relationship management (CRM) support, internet distribution, and digital picture library management are now among the services being tendered by printers and converters. Digital printing’s ability to do variable data printing (VDP) and enabling the production of unique products, is perhaps its greatest asset.

Among other things, it enables coding and barcoding (one and two dimensional), numbering, the inclusion of brand integrity devices, and the production of limited editions of different language versions.

With regard to the global market for digital printed packaging and labels by sector, Pira expects digital usage in flexibles to grow by four to five times during the 2009-14 period, driven by the brand owners’ search for innovation and the converters’ desire for faster press speeds. Some of the growth may however come at the expense of folding cartons, whose growth has slowed over the past few years, with brand owners switching to purely flexible packaging options in some cases.

In the end-use segments, food and beverages has been the strongest performer because of lower digital penetration levels earlier. Penetration is expected to rise in the near future due to growth in general production packaging and labelling. According to Pira’s forecast, in 2009 the sector will generate US$ 606 million in global sales, and this will rise to US$ 2.1 billion by 2014, growing appreciably at 28% annually in constant terms.

The study goes on to add that the largest application for digital print in packaging market is general production, highlighting the fact that, even though discussions of proofs, prototypes, samples and testing dominate the literature, the traditional production function continues to be the most significant. This is especially relevant for labelling as compared to packaging. According to Pira, digital general production packaging and label printing is projected at $931 million in 2009, and this is forecast to climb to $2.45 billion by 2014.

Geographically, the market for digital print for packaging is roughly divided along developed and developing country lines, with western Europe and North America witnessing the lowest growth rates, and Asia-Pacific, eastern Europe, South America and the Middle East and Africa the highest. According to Pira’s forecast, the range of average growth rates for the period 2009-14 would be between 19% (for North America) and 33% (for eastern Europe, though from a low base with strong growth expected beyond 2011.)

With regard to advances in digital print systems, some of the latest systems include in-line systems for varnishing, coating, stacking, conveying, and die-cutting. Digital lines that include folding, gluing and filling machinery allow the whole printing and packaging process to take place on the same site, further reducing the number of logistical and transportation steps in the supply chain. The Future of Digital Printing for Packaging is available now for £3,500 from PIRA.

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