Digital printing and marketing technology is making a significant play into the packaging market and will continue to evolve into this sector due largely to the competitive pressure on sales in retail. The packaging sector itself makes up for the largest sector of industrial print. With a current estimated value of $45 Billion and representing approximately 45% of the total market, InPrint research partner, I.T. Strategies rate that digital printing for packaging could grow from a relatively low $0.15 Billion in 2012 to over $7 Billion by 2022. Driven, we think, by the desire for brand and retailers to win their respective sales battles, which has intensified on the shop floor since 2008.
After the 2008 economic crisis and the ensuing downturn, many brands contracted their budgets and focused upon measurable and ‘essential’ media. This was largely at the expense of traditional media such as commercial print as marketers strived to prove an improved return on investment. In that sense online and in-store media both produce a measurable return and have grown as a result.
Packaging has always had a very practical role to play with product and brand production, but it is its promotional purpose that brand owners and retailers are looking to develop. Innovative packaging can grab attention and communicate powerfully in an in-store environment. In a fiercely competitive market where speed to delivery will make the difference between winning and losing, digital technology can be extremely helpful.
Packaging production is unaffected by the rise of online and it is to some extent proving an effective dual marketing platform for online and in-store marketing to work together to good effect. We talked to Chris Tonge, Sales & Marketing Director at one of the UK’s leading packaging printing companies, Ultimate Group. Chris has led the development and growth of both Ultimate Packaging and been the major driving force in creating digital print business Shere Print and digital media business Sharp Iris.
Chris believes that packaging is the last real ‘interruptive’ media. As a result, brands are searching for methods to grab attention and inspire a purchase, utilising all that digital technology can provide. So we asked Chris a few questions.
Tell us about Ultimate Group
“Ultimate Packaging is traditionally a flexo-based packaging printer. The Ultimate Group of companies provides a complete flexible packaging solution from creative design, photography, 3D/visualisation, digital print and flexographic print to food brands and retailers. The 3 divisions combined provide a unique offering to the market place. Employing 280 staff, Ultimate manufactures between 60-70 million metres of quality food packaging every month.”
Interestingly Shere Print, the digital arm of the Ultimate Group was launched by Chris 3 years ago and we asked him a few questions about the journey for a traditional print company going digital.
What drove your decision to go digital?
“The whole world is digital. Everything that can become digital will and packaging printing is no exception. Packaging is the only interruptive media left and global brands are starting to recognise this and they can see that digital print facilitates a two way conversation with the consumer and allows you to engage in so many unique ways.
Why launch Shere Print, a Digital packaging print business?
“Shere print is the digital part of the Ultimate Group, so we have not really changed the flexo business and we have continued to invest. We were never intending for existing business to migrate as the target was new additional business in different market sectors. The investment you need to make in digital doesn’t pay off immediately, unlike perhaps a new flexo machine might, but the potential is huge and the future payback significant.
Digital technology creates a completely new set of rules and it is a completely different cost model. As it is a new technology model it requires a fresh and clean approach. It enables a different type of conversation with your customers as you begin to talk about strategic marketing campaigns with brand owners rather than only talking price and production with packaging print buyers with flexo-print.”
The Ultimate Group, led by Chris, has put together a complete web to print solution to enable brands to immediately enter the digital flexible packaging market. Shere Print was created to be a world leader in delivering digitally printed food approved flexible packaging. A major investment and development programme has resulted in a new portfolio of exciting products that allows brands to connect with their customers like never before.
Based alongside Shere Print in the newly created Digital Centre is Sharp Iris whose creative talents are supported by a unique digital system called Smart-flow that delivers both design files to the press and allows customers a link to other digital platforms, e-commerce, social media etc.
This added value means that clever marketing campaigns are managed by Sharp Iris and Shere Print so the customer can deploy all of the elements of digital personalised packaging print, without having to work with a number of different suppliers.
This means you can get great results and high impact campaigns. At the PIRA Conference back in December 2013, Chris invited all delegates to take a ‘selfie’ then upload it onto a specific web portal. This immediately placed your particular photo into a specific artwork design that was then printed onto a packet of popcorn then mailed in the post. Fun, innovative, personalised and current.
For those of you who want to check this out go to http://smart.sharp-iris.net/basicdemo/
So what has been the advantage of going digital?
Chris explains “It has opened up the world to us and allowed us to engage with global brands on personalisation and customisation projects on flexible packaging. Every major brand and retailer wants a piece of the digital action now.”
What has been difficult?
“It has been a longer game than we are used to. With wide web flexo we put a press in and fill it from day one with millions of pounds worth of revenue. Plus we had to develop brand new markets because of the width and print speed of the HP press.”
With these technical limitations, how big a role will digital play in the future – will everything in packaging be digitally printed in the future?
“Over the next few years the major markets will be driven by brand marketing teams and the revenue stream will be from advertising budgets. Actual print volumes will be small and main stream business will not be affected. Brands will get used to throwing away the old print and packaging rule book! It will be an exciting place to be. Eventually as digital print on flexible packaging gets faster digital will totally replace conventional print. As the inspirational Steve Jobs has said, “The people who are crazy enough to think they can change the world are the ones that do."
Bold investment and an astute strategic plan with a desire to embrace and develop new technology has opened up both existing and new markets to the Ultimate Group and given it a unique position in UK, Europe and beyond.” Concludes Chris.
A business in the flexo market, just like any traditional market is not normally in favour of changing. What we can see here is an entrepreneurial business, willing to alter their model, lead from the front, embracing new technology and delivering exciting options for their clients. It isn’t surprising that they are doing well – with this entrepreneurial energy, passion and enthusiasm as well as creative flair the business is bound to continue to go from strength to strength.
What is also interesting from this example is that a different approach to producing digital print has led to completely different communication dynamics. The digital business has led Shere Print to communicate strategically through a digital business committed to innovation and a marketing agency style of approach which is clearly what marketers want. The fact is that traditional print companies do not tend to have strategic conversations; they tend to take orders and compete mainly on price. This isn’t a criticism, but more of a fact.
What I felt was interesting seeing Chris present, was how brands are starting to use digital print for packaging. Chris explained how Walkers produced personalised crisp packets for their 2,000 top online Facebook ‘likers’ for Christmas 2013.
Taken from the Pepsico website itself here is what they had to say about the campaign:
Walkers UK has delivered personalised bags of crisps to 2,000 of their biggest fans, helping them say something special just in time for Christmas. The initiative was part of an exclusive offer, and the brand put to use exciting new digital printing technology for the first time. By signing up to the Walkers website earlier this year, fans could submit personal messages to be printed on a bag of their favourite crisps.
Romance was also in the air, as 12 separate fans used the personalised bags to propose to their loved ones. Special notes also included "Happy 80th Birthday" and "For my amazing mum."
Pete Charles, Walkers Marketing director, said, “It’s the holiday season, and we wanted to have some fun giving something back to our loyal consumers. Walkers is a fabric brand of Britain, and consumers were delighted to be able to get a special message on their favourite crisps. It really helped make Walkers even more loved.”
Innovation, as Steve Jobs also said, clearly distinguishes you between a leader and a follower. And Ultimate seem to be leading the field in creativity when it comes to digital print for packaging and their business is expanding into Europe and beyond.
And as Chris said to me, he doesn’t see the flexo industry per se following suit. “We see a future where our competition will come from outside of the traditional flexo industry as brands want to be able to talk to companies about solutions for marketing. The flexo industry is so well established it is structurally disinclined to engage in this type of conversation, such is its focus.”
So for those happy to evolve with time, there is an opportunity to be had. Although a commitment to trying something different, having the patience and the capability to be able to talk at a different level, with a different type of individual will be essential.
At InPrint we saw a whole host of different technologies available for use within their complex sphere of packaging and the future looks as though many more will be launched to fulfil a need for personalised and prototyping technologies for packaging.
One thing is for sure. The fight for the consumer £, $ and € will not go away, it will only intensify, and with it so too will the need for technology that places any campaign at an advantage.
For digital print for packaging the future is bright. It is only up to the imagination of the marketer to grasp this opportunity – getting there first will place the brand in the leadership position.
And those that think they can change the way things can be done generally do.