by Cassandra Balentine
One of the hottest markets in digital print right now is labels. In fact, in Transparency Market Research’s recent Global Digital Label Printing Market: Overview, the firm predicts the digital label printers market to exceed valuation of $8.71 billion by 2023.
Above: Jointly developed by Gallus and Heidelberger Druckmaschinen AG, the Gallus Labelfire 340 inline label printing system features a printing module with state-of-the-art inkjet printheads.
The growing role of ecommerce as well as the need for variable, short-run work continues to fuel interest in digital label production.
“Digital label production responds very clearly to market trends—personalization, mass customization, just-in time inventory practices—that have seen run lengths shorten. While this trend has been under way for a while now, the abrupt changes in consumer behavior brought about by the pandemic made it accelerate dramatically,” says Victor Gomez, director, Industrial Label Products, Epson America, Inc. He adds that turbulent times drive end users—whether small- to mid-sized or large consumer brands—to conserve cash by ordering only what is needed, when it’s needed, as close to the time and place of manufacture of their product. “Label inventory is cash tied up and at risk of spoilage and obsolescence. End users today want to order smaller but more frequent jobs, expecting shorter turnaround times.”
Uwe Alexander, product management, digital, Gallus, says a mix off all topics is influencing respective markets. “Depending on the circumstances one dedicated point becomes more valid.”
He adds that in developed and emerging markets, shorter run length is a major driver of digital label production and will continue to gain relevance.
Market Drivers
As previously mentioned, several drivers make digital an attractive option for label production. “The global mega trends driving the demand for digital label production include increased flexibility and agility, sustainability, cost reduction, higher productivity, and new business models. Specifically, the drivers contributing to the growth of digital labels include faster delivery times, shorter run lengths, multiple SKUs, regulatory compliance, traceability and brand protection, mass customization, and production floor optimization,” says Dean Haertel, business director, Bobst.
Print providers are looking for faster, more efficient ways of printing short- to medium-run, versioned work with high-end graphics. With reduced lead times and staffing challenges, Steve Lynn, director, labels and packaging, Durst Group, says digital allows for jobs to move faster through a print shop with less staff. He points out that growth markets like craft beer and cannabis packaging lend themselves to digital perfectly.
Digital print and finishing technologies present a solution to challenges in analog label production. For example, Juan Kim, CEO, Valloy Incorporation, notes that on demand, short runs must be produced at higher speeds than ever before. Digital is in the position of replacing analog now, beyond just compromising with it.
He says another issue giving digital an edge is manpower. “For flexographic printing and rotary cutting, highly experienced operators are getting older and young people do not want to learn the equipment.
Manpower cost is getting higher. It differs by region but is becoming common in more countries now. Ideally single, young, computer-familiar operation should run a printer and finisher at the same time.”
Gomez agrees, noting that a generational shift is happening in the label industry, with older pressmen—the ones who spent a lifetime learning the art of flexographic printing—retiring without ready replacements. “Years-long apprenticeships with traditional printing presses may not be attractive to young job seekers, but they seem to be ready to work with digital presses. Training someone to run a digital press is much easier and the learning curve much faster than a flexographic press, not to mention the skill level—and pay scale—is different.”
With automated features, a single operator can run multiple digital presses at the same time. “That means converters could face the big print volume spike last year by adding digital print capacity without significantly increasing headcount,” explains Gomez.
Further, the demand for greater shelf appeal is becoming more prevalent. Joseph Sanchez, digital business development manager, Dantex Group – USA, says that as brand owners require impactful designs, label producers must find a way to offer color vibrancy, interesting substrates, and specialty finishes. These are increasingly required in smaller quantities with a variety of product designs and skews in the same print run and within shorter lead times. “Label producers are turning to digital systems that can achieve all of these requirements,” he states.
Eli Mahal, head of L&P marketing, HP Indigo, sees multiple trends accelerating digital demand, including requests for more ecommerce, product versioning, and personalization. Additionally, the rise of craft brands, the need for supply chain agility, and the growing use of variable data publishing for brand protection and tractability attract more users to digital label production.
He adds that some of these movements accelerated during COVID-19, primarily ecommerce and the rise of small brands. “New trends such as in-shoring were ignited, transferring production from regions with relatively low digital penetration.”
Gomez points out that stickers for pre-packaged food in either grab-and-go or for delivery are doing well now that we consume food away from restaurants and cafeterias. These can even be customized and produced in house by dedicated digital label printers. “We also see supermarkets replacing salad and deli areas with the same products in clamshell containers bearing weigh-scale pressure-sensitive labels. But these are now in color to enhance the attractiveness of the packaging, not just the traditional monochrome thermal labels.”
Daniel Maurer, VP, digital print Americas, Heidelberg points out that hybrid printing systems are also gaining interest due to benefits of digital with the embellishment and finishing of flexo presses, which also leads to better economies in larger runs on digital.
Alexander adds that hybrid, or inline production, is becoming more popular. “As almost all labels require at least die cutting, it gives you the possibility to produce finished labels in a single pass.”
Top Adopters
Many industries utilize labels, however certain markets benefit more from the value of digital print and finishing technologies.
“The ability to go from concept to production in days is now possible. Niches develop for product labels for special events and even personalization,” shares Maurer.
“Labels are on every primary and secondary package and container, across every market segment. But the largest segments in North America are beer, wine, and distilled spirits, which thrive on distinctive, high-quality design to stand out on a liquor store or supermarket shelf,” offers Gomez.
He points out that the same can be said of food and non-alcoholic beverage labels, or labels on health and beauty aids. “Recent times have also brought the household chemicals segment to the forefront, with demand surging for hand sanitizer and cleaners. Digital production works well in all of these sectors because SKU proliferation is driven by the need to address consumer demand for variety. A brand wants to offer as many options as there are customers—juice with pulp, some pulp, or no pulp? Calcium added? No sugar? Organic? The shampoo aisle is filled with options meaningful only to a small—but valuable—customer niche. And every product iteration must be offered in multiple packaging options to suit the use. SKU proliferation atomizes label orders into relatively small jobs that only digital printing can address cost effectively, with quick turnarounds that help brand speed-to-market requirements.”
In addition to high-end prime applications, a label—in color or monochrome—is a key component of warehouse operations, logistics, manufacturing, retail, and healthcare. “Consumers working from home have turned to ecommerce for many purchases they would have made in person at malls, convenience stores, or even supermarkets. The new trend has accelerated the move towards ecommerce dedicated packaging,” comments Gomez. Parcel logistics presents brand owners with new vehicles for messaging.
The shipping label itself, up until now a utilitarian space served by monochrome thermal transfer, becomes prime territory for color, custom printed with an on demand color inkjet device to include marketing or promotional content. Packaging tape on the corrugated box similarly offers branding opportunities. “Ecommerce gives the brand owner direct access to the consumer without the intermediation of a retail store. That opens up opportunities for customization not just to a niche market, but down to the level of the individual. SKU proliferation can reach its zenith when each label is targeted to an individual e-shopper.”
Geography is another consideration. Digital print trends drive jobs from the conventional sweet spot into digital’s sweet spot, across many regions. Mahal admits that Asian markets are a step behind in the adoption of digital technology. He says this is primarily due to the ability of Asian converters to maximize the lifetime of their aging conventional presses, including letter press and relatively lower labor and tooling costs. “However, this install base of aging presses will be replaced, and digital equipment benefits from the massive upgrade.”
Kim points out that digital migration has expanded from signage and graphics to commercial printing, packaging, and now textiles. He says in packaging, the label industry is leading but digitalization is expanding to flexible package and carton box too. Here printing is not enough. Digital migration requires various digital finishing solutions together for different industries.
Regulatory changes also increase the demand for digitally printed labels due to the ability to include variable security elements, with emerging block-chain technology to support complete traceability and offer a higher degree of consumer protection, he adds.
“However, it is important to acknowledge that conventional and digital technologies need to coexist, and that label printers should equip themselves so they can always use the right machine for the right job,” stresses Haertel.
He admits that most markets have already adopted digital labels and the technology is quite well established, but we will see the volume ramp up considerably over the next five years. “With the new generation of UV inkjet and highly automated all-in-one machines now coming to market, even more jobs will move to digital. The main sectors are food and beverage, household, healthcare, cosmetics, industrial, and automotive as all these markets benefit greatly from inkjet technology.”
Sanchez agrees, noting that digital has been an intrinsic part of the printing industry for a long time, but over the last few years UV inkjet has advanced and matured, increasing the demand to adopt digital printing in the label industry. “Digital UV inkjet enables label printers to take on ever-changing market conditions while allowing them to be more efficient and profitable.”
Leveraging Labels
Digital label printing systems offer print providers and label converters a solution for short runs, personalization, and even security functions, often all in one device. Due to evolving expectations of brand owners and print buyers, digital presents high-quality and appealing options for a range of label applications.
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Jan2022, DPS Magazine
