EDITOR'S notebook
2005 PI 400 Ranking: Industry in Transition
Welcome to our 22nd annual "Printing Impressions 400 & Who's Who in Printing" issue. Aside from ranking the 400 largest printers in the U.S. and Canada based on sales, this special year-end edition also forecasts major print segments for the coming year. Providing an industry snapshot of which companies are soaring, which ones are just treading water and those that are sinking, the PI 400 is increasingly conspicuous by the venerable establishments that no longer appear on our list—usually the result of having been acquired by another company. And some privately held shops won't divulge their sales. This special issue also reveals some continuing trends, including:
* Big fish are devouring smaller ones to bolster revenues and gain market share. Industry behemoths like RR Donnelley, Consolidated Graphics and Deluxe Corp. continue to grow through acquisition. During the past 12 months, Donnelley acquired U.K.-based The Astron Group to bolster its global document-based outsourcing business, and later purchased catalog and direct mail specialist Spencer Press. Consolidated Graphics kicked off 2005 with a blockbuster deal for Kelmscott Communications and then closed out the year by buying a trio of affiliated companies, including Nies/Artcraft. Check and forms printer Deluxe Corp. spent 2005 assimilating its earlier purchase of New England Business Service (NEBS). And last month EarthColor snapped up Applied Printing Technologies. These M&A transactions illustrate, though, just how difficult it is to grow organically in the printing industry today. Look for some other whopper deals in 2006 among PI 400 printers, and don't even rule out hostile takeover attempts of struggling companies—like Robert Burton's successful, but ugly, quest to assume control of Cenveo Inc.
* Our global march continues, and China isn't the only threat. Like it or not, we're no longer just competing with the competitor across town, or even across the country. Digital file transfer has removed geographical barriers. North America's largest printers heading our rankings have extended their platforms into Europe, Latin America and the Far East. Even so, partnerships with offshore printers are more likely options for most U.S. establishments. China may be capturing all of the headlines today, but countries like Korea and India are also looming print providers. There will always be lower cost print producers, so the key is to maximize the competitive advantages of short runs, reduced cycle times and integration with other media. Smart printers realize clients need multi-channel marketing communications that call for printing, database management, mailing and fulfillment, as well as creative services, Website hosting and personal URLs, e-mail marketing and even call centers. Control the content and you control the customer.
* Digital printing incorporating full color and variable data has gained traction. While still miniscule compared to the overall web and sheetfed offset printing market, double-digit growth rates for digital color will flourish. In response, we've added digital printing as a new primary specialties category on this year's PI 400 ranking. Marketers, it seems, are finally grasping the power of personalized communications and have developed more sophisticated databases to help drive higher response rates. Web-to-print, promotional transactional printing, one-to-one marketing/cross-media publishing and digital books have become hot applications, along with more hybrid products that incorporate digital personalization on offset printed shells. Just as lithographic printers are morphing into other value-added services, the real money in digital printing may not be in the printing itself. It can be found in providing ancillary services like database creation/hygiene and Web-to-print implementations.
As we close out 2005, our entire Printing Impressions family extends warm holiday wishes to all of our readers. It's been a memorable year for our industry—and nation—complete with natural disasters, escalating energy costs and postal rate uncertainties. Next year may also prove to be a roller-coaster, but let's all look forward to the ride.
