Package Printing — Packing It In

People still have to eat and drink, in good times and bad. That's something technology is not likely to ever change. This means, by extension, there will always be a need for packaging.

While oversimplified here, some variation of that argument is often made in support of commercial printers diversifying into package printing. Why shouldn't shops dive right into the market? All that is required is a press capable of handling heavier stocks, right? Not exactly.

A lot of different products and processes used to produce them tend to get lumped together as "package printing." The level of opportunity each represents can vary greatly.

Printers currently serving the label market, for example, are grappling with strong competition, cost pressures, overseas production and changes in the nature and use of the final product. Sounds all too familiar.

Flexible packaging is widely predicted to have a bright outlook, with double-digit growth, due in large part to expanding use of pouches for food products. Too bad this printing is done via flexography.

The folding carton market is bearing the brunt of that shift to alternative packaging, while also facing foreign competition. Speaking at the Print Outlook 04 conference, Newth Morris III, president of Dixie Printing and Packaging, reported he had seen the number of folding carton shops in the Baltimore area drop from 15 down to two in recent years. "Prices haven't gone up in the past three years," he added.

Good and Bad News

The bad news: Folding cartons are the most natural fit with the capabilities of commercial printers. The good news: The Paperboard Packaging Council reports the industry is experiencing a "robust" recovery in 2004, with shipments up 4.7 percent through June. Further, the folding carton market isn't homogeneous and, in fact, contains pockets of opportunity that commercial printers are finding they can exploit.

More than 30 years after 'The Graduate' movie made "plastics" the word for the future, Color Ink Inc., in Sussex, WI, found that business advice still rung true. About three years ago, the commercial printer—and more—added a six-color KBA Rapida 105 sheetfed press with in-line UV capabilities to enable its move into plastics and some heavier paperboard printing, reports Jay Zawerschnik, vice president of operations.

"The market was changing at that point, with the traditional commercial print market eroding," he says. "We looked for other opportunities to grow the business. The gap on this press enables us to print up to 49-pt. stock, and in-line UV helps in printing plastics."

Started in 1985, the company grew from a color art studio to offering extensive prepress, printing, finishing and fulfillment capabilities. Design services have remained an integral part of the operation, which also features an in-house digital photography studio.

"A printer could do packaging work without in-house design, but it provides an advantage in getting your arms around the customer and bringing full value to the project," Zawerschnik says. "For customers, it means being able to hand off jobs in the now-cliché 'one-stop shop' scenario."

At a minimum, diecutting and folding/gluing capabilities are a must for packaging work, and really need to be in-house, Zawerschnik asserts. Color Ink has multiple solutions for folding/gluing and diecutting, he says. It does vend out its diemaking, however.

Some of the company's finishing capabilities are housed in a dedicated packaging department, which is situated with the fulfillment operation in a building across the driveway from the printing plant. All work passes through the same prepress and press departments.

"We don't break people out as packaging specialists in production, in part because we have a limited number of personnel here. There has been a learning curve for the company as a whole," Zawerschnik notes. "We can call in our engineers from the packaging department to consult on a design and production."

Some knowledge Color Ink gained the hard way as it started doing packaging work. Learning about die lines, requirements for gluing and coating areas, managing moisture content in substrates and dealing with grain direction are just some of the issues that become more critical in packaging work, he reveals. Having a suitable proofing solution is another concern.

"The work is totally different in terms of how packaging is designed, its architecture and how things have to lock together," Zawerschnik observes.

Yet, he believes packaging still could provide an opportunity for other commercial printers to diversify their services, if they can meet the minimum requirements. "Not every printer is created equal when it comes to types of equipment, prepress capabilities and the knowledge base," Zawerschnik says.

Neither is all packaging equal, he agrees. Color Ink isn't interested in competing in the mass market packaging arena, with its runs in the millions of pieces and customers focused on cents per package. "We don't bring any added value to that type of work," he adds.

The company's niche is the medium and smaller run, Zawerschnik says. In a typically scenario, it will produce a prototype package and then print 20,000 to 50,000 pieces, or even up to 500,000 sheets for a large run.

"Color Ink's customers tend to be businesses that require a lot of different types of packaging. Our ability to turn jobs around faster is one of the biggest benefits of doing business with us," Zawerschnik claims. The shop generally produces a job from scratch in seven to 10 days, or quicker if the customer comes in with a design.

All of the company's services are sold under the "Color Ink" umbrella, rather than being set up as separate divisions or brands. Many clients do buy both its commercial and package printing services, although often this means working with two different people at the client.

For its part, the printer does have a subgroup of its sales team that focuses on packaging. This group provides support to other team members as needed to avoid having more than one sales rep calling on a client.

Zawerschnik says it took Color Ink a couple of years to learn the packaging process and market. "We're still learning," he admits. At this point, packaging accounts for about 25 percent of the shop's business.

Servicing the packaging market has been a natural evolution for Salem Printing in Winston-Salem, NC. The family run business has been providing commercial printing services for about 17 years, and has been making a push into packaging for the past couple of years.

Philip Kelley Jr., general manager, and his father, vice president, both worked for a flexo printing company before starting Salem Printing. Janette Kelley, mother and wife, respectively, joined the company more recently and now serves as president as well as a co-owner.

The two men's previous experience led them to add a flexo press (six-color Mark Andy) early on primarily to do label work. "That has been an integral capability for us in servicing the market," the younger Kelley says. "We've found that customers who buy (offset printed) packaging also buy flexo products."

As part of a past plant upgrade, the company added a MAN Roland 300 press (it has since installed a second machine) and a folder/gluer. "As a result, we realized we had the print, diecut and fold/glue capabilities needed to start getting into packaging," Kelley notes.

Looking for the Right Fit

Like Color Ink, Salem Printing isn't targeting the market for multimillion-run pieces. All of its presses are in the 23˝ to 29˝ size range.

"Originally, we had a hard time getting packaging customers to consider us because they would say, 'You're not a full-size printer.' What they came to realize is, if you're doing 100,000 pieces and print it six-up, that's only 16,000 press sheets on our presses," Kelley says. "We can crush a large-format press cost-wise in those kind of quantities. Our cost structure fits shorter runs much better."

One of the ways the market has come toward Salem, its general manager says, is because companies are segmenting their packaging runs more. "They may still do 1 million pieces, but they'll print different designs," he explains. "They're producing lots of 100,000 each with different designs."

Packaging is by far the fast growing segment of Salem's business. It primarily produces what he calls "light packaging," which involves printing up to 24-pt. board stock, then diecutting and in-line folding/gluing the sheets. The shop's commercial work runs the gamut, from booklets and brochures to posters and POP/POS materials.

"Over the past year we have been able to go out and sell as a packaging printer only," Kelley says. "We have no intention of going from being a commercial shop to all packaging. We don't want to have to depend just on packaging work, and definitely don't want to end up competing with the full-size printers."

Kelley agrees with the assertion that a commercial printer will have a lot to learn to compete in the packaging market. He says Salem opted to train is existing staff—sales and production—to handle both applications, rather than hiring or developing specialists.

Production is laid out in two wings, the general manager notes. Packaging work flows from press down one aisle, while commercial jobs go down another aisle, he explains. Starting with the MAN Rolands, the shop's plan has been to have presses well suited to produce both applications.

"As we gain ability to run thicker and thicker board stock, we don't want to lose any ability to print thinner, standard sheets," Kelley says. "We're already looking to our next press purchase, which will probably happen by the end of this year. We want to go beyond handling 24-pt. board, probably up to 40-pt., but still not give up the ability to do commercial printing."

Packaging remains an opportunity for the right company, Kelley believes. He estimates that about 10 percent of commercial shops may already be in a position to capitalize on the market. As a final thought, though, the general manager cautions there is another requirement for market entry that commercial printers may not fully appreciate—the volume of materials and work in process that must be stored.