Cleaning up
‘Diversification’ is a word that is thrown around a lot in our industry.
Whether it is a manufacturer championing the benefits of how a new
machine can help open up new markets, or a successful company explaining
how it achieved record revenue, it seems that it is ‘diversification or
bust’ for many firms throughout the industry.
One of the main areas that has been mentioned a lot in recent times
among the good and great of the print industry is the opportunities
around the labels market, with many companies having already branched
out into the sector. After all, there is always likely to be a call for
this type of printing, given the widespread use of labels across various
industries.
With this in mind, what other opportunities can this busy sector offer
to companies thinking about diversifying their business? Major
diversified print technology developers such as EFI and Epson have
certainly seen a niche to be developed, as they are able to cross-sell
both their wide-format and digital label printing equipment to the same
commercial print customers.
In EFI’s case it has come to market with its Jetrion 4900, which has ML
and M-330 variants, as well as the 4950LX. Each offers different levels
of productivity, quality output specification, and industrial scale. And
as the company states, each has been developed with diversification
very much in mind: “Now, you can pick up more jobs by doing short-run
printing, labels, packaging, and direct mail jobs. The systems and inks
also allow you to expand into premium margin applications, such as
one-to-one marketing, ‘track and trace’, anti-counterfeiting and brand
protection.
“The versatile Jetrion family even lets you to tap into lucrative
services, such as shrink sleeves, localization, regionalisation and
personalised marketing. The systems lower your bottom line by
eliminating plates, reducing labour and waste costs, alleviating
inventory pressure and shortening turn-around times.”
Similarly, Epson has made a foray into the label market, and made a very
bold pledge to be number one in the sector over the next decade. Its
cornerstone technology is the SurePress L-6034 and L4033AW presses.
With a very strong presence in the wide-format print market, Epson has
now set its cap at the label printing market as a diversification avenue
for its customer. Pictured: The L4033AW carries green and orange inks
for added graphics ‘pop’
“Epson’s strategy is quite simple–but very ambitious,” says Phil
McMullin, sales manager ProGraphics, Epson UK. He adds: “We want to
provide the market with the best combination of printer and ink
technology to deliver high quality, superb reliability and the best all
round return on investment for the broadest range of professional print
applications.”
So with these two juggernauts both throwing their considerable research
and development weight behind the sector, with a core customer base of
commercial and graphics print-service-providers, then it is certainly
worth finding out why.
Busy market
Another key international player heavily involved in this sector is
Fujifilm, which has a host of solutions on offer. James Whitehead,
product manager of Fujifilm Graphic Systems UK, says the market is
currently busy across all sectors—but there is great interest in how to
address short-run production.
He explains: “It’s certainly an interesting market with many sub
segments. Opportunities for niche labelling are probably of most
interest as margins tend to be stronger here. Although as ever with
niches, finding potential customers is harder to do.
“At Fujifilm, we have seen customers who buy products from else-where in
the Fujifilm portfolio being interested in the FFEI Graphium digital
inkjet press to serve the requirements of their existing customers. It
is a simple-to-use entry point into the label market.”
Manufactured by FFEI, Fujifilm’s Graphium digital inkjet press is
regarded as an entry-level device for those in the label printing sector
Drawing on this, Whitehead goes on to explain more about the Graphium
digital inkjet press. Manufactured by FFEI, he says the digital device
is ‘simple’ to use compared with the skills required to learn and equip
for a flexo production capability.
Whitehead continues: “The Graphium produces labels which have the same
physical properties as those printed with UV flexo inks. Furthermore, it
is a modular press and is capable of being extended to support inline
UV flexo, perhaps for a post print varnish, as well as inline finishing
which is common in the conventional label market. Features such as
lamination, cold foiling or die-cutting can also be integrated to
Graphium to produce a complete inline label press.
“The fully integrated Graphium press, based on Edale’s new FL3 press is
state-of-the-art and simple to use, and allows production of short-run
digital labels to the same standard as an established label convertor.
What’s more, inline finishing facilitates production planning, reduces
waste and minimises total job time compared to off line digital
alternatives.”
EFI’s Jetrion series of label printer has been designed to allow
printers to tap into lucrative services, such as shrink sleeves,
localisation, regionalisation and personalised marketing
Although having championed the labels sector, Whitehead does issue a
warning to companies thinking about moving into the market and advises
that they think carefully about their own capabilities.
“The nature of label production is perhaps different to the type of
print that your business carries out at present,” Whitehead advises,
adding: “Label production is about more that simple flat print and often
requires conversion processes, not only embellishments to the print but
conversion from web to saleable product.”
Label production is about more that simple flat print and often
requires conversion processes, not only embellishments to the print but
conversion from web to saleable product”
Let’s get digital
Elsewhere, inkjet and laser print specialist Domino Printing Sciences is
also championing the labels market. Philip Easton, director of the
firm’s digital printing solutions division, has picked out a number of
sectors in particular that are currently popular in the labels market.
Easton comments: “Digital printing is definitely the fastest growing
technology in the labelling market, and now represents approximately 25
percent of new label presses sold. The flexible packaging and folded
carton markets are also growing in prominence, although these markets
are more concentrated and have higher investment requirements and
barriers to entry.
“Any commercial printer already making some commercial print sales into
the labels and packaging sector would be at an advantage, as it is then
about selling different products to your existing customers, rather than
penetrating new markets with new products.
“Although printing skills are transferable, for printers looking to
diversify into the labels market, there are a still a lot of new skills
to develop. Labels are increasingly being printed with digital
technology and run lengths get forever shorter. For digital printing,
the skill is more in the pre-press area and colour management with very
little on-press interaction. For this reason, printers with colour
management expertise may be better placed to enter this market.”
With this in mind, Easton picks out a number of products Domino has on
offer to support label printers. He claims the Domino N610i is the only
digital colour ink jet label press that combines the productivity of
flexo with the flexibility offered by rapid job change digital
technology. The device offers 600 x 600dpi native print resolution and
operating speeds of up to 75m per minute.
In addition, the K600i offers a monochrome option with high resolution
of 600dpi. Easton says the device is well suited to digital variable
data printing across the full web/sheet width such as codes, barcodes
and 2D codes. Both devices also feature Domino’s i-Tech intelligent
technology, which Easton says offers features designed to optimise print
performance and maintain high levels of productivity.
Investment is key
Another industry heavyweight that is also committed to the labels sector
is Xeikon. Filip Weymans, director segment marketing and business
development labels and packaging, says the sector is much busier than
its sister markets of commercial or document printing.
Filip Weymans, director segment marketing and business
development labels and packaging at Xeikon, says the labels sector is
much busier than the commercial or document printing market
Weymans comments: “The product that label printers and converters make
are items used in manufacturing processes, so the value of the output is
over and above that of a regular communication vehicle.”
O Factoid: During
Coca-Cola’s incredibly successful ‘Share a Coke’ special label
campaign, over 1,000 different names were printed on the labels of
bottles that were sold in shops across the UK. O
However, when quizzed about potential diversification into the sector,
Weymans issues a warning to companies considering such a move: “Unless
you are planning to invest in people and equipment, it is not a good
move. You also have to have a great appreciation of technical sales.
However, if you are looking to diversify your business, spread the risk
over a different market, and make the all round investment needed, then
it could be a good decision.”
“This market is certainly not just about printing,” emphasises Weymans,
adding: “These printed products are pieces of art, but art that must
perform in both packaging and filling lines. Therefore a certain
knowledge level is required which can either be acquired through
acquisition or by education of staff. Several organisations provide good
education info, such as Finat and BPIF Labels.”
In addition to this sound advice, Weymans goes on to highlight a number
of Xeikon products that could help a potential move into the labels
sector: “The Xeikon 3000 Series is a complete family of equipment that
includes entry level products, such as the Xeikon 3030, and top of
class, very productive presses such as the 3300 or the 3500 models.
These should be combined with a DCoat series product for converting the
printed material into self-adhesive labels.”
Xeikon says its 3000 Series features a number of entry-level products, such as the Xeikon 3030 and 3300 models
Saturated market
While manufacturers are unsurprisingly upbeat about the sector, what
about the companies on the frontline of label printing? One firm that
has taken full advantage of the kit on offer from Xeikon is label
manufacturer Peter-Lynn. Victoria Waine, sales and marketing manager at
the company, says although the firm will achieve further growth this
year, the labels market as a whole has become saturated.
Waine enthuses: “This year will see another significant increase in
turnover for PeterLynn and a lot of that will be digital work.
(Above and below) Examples of some of the labels produced by Xeikon customer PeterLynn
“The labelling market in general however has become quite saturated and
this has caused pressure on margins which will not be sustainable for
some businesses. If you were to come to the market now as a potential
competitor, it would require a huge investment in new equipment and a
very steep learning curve in terms of getting up to speed with how to
operate it.
“The labels market has made huge advancements and is very technology-led
now. It isn’t like it was 25 years ago where anybody could put a label
press in their garage and manufacture blanks labels.”
With investment in mind, Waine goes on to explain how PeterLynn recently
upgraded from a Xeikon 3030 to a 3300 label press in order to help the
firm cope with increased demand.
Waine explains: “The Xeikon 3030 proved to be hugely popular within our
existing customer base and with new customers in emerging markets like
the micro-brewery industry. We quickly reached full capacity and needed
to take the next step to help us sustain our growth. The natural
progression was to take the speed upgrade, which allowed us to continue
our expansion plans.
“The main four points that any company should consider when thinking
about making an investment like we did would be; do we have a loyal and
competent team who can be trained to use an advanced piece of technology
like the Xeikon press? Do we have work that can be easily migrated to
digital? Do we have a strong enough financial footing to get through
those first few months when the machine is not paying itself back? Do
the costings and figures stack up in terms of price point and margin?
Can we be competitive with the rest of the market place?”
Specialist sectors
Elsewhere in this arena, family-owned label printing business Hibiscus
is another firm to have taken advantage of the different work available.
According to director James Killerby, the company is enjoying the
benefits of working in a niche sector of the market.
Killerby explains: “We work in a very specialist area of the label
printing market, which needs knowledge and expertise. We don’t just
print labels; we advise companies on what they need to have on their
labels to comply with the law. Although it is a very busy market at the
moment and companies might see an opportunity, they need to be able to
provide the advice to be able to succeed, as well as specially designed
and tested products.
“It is a busy time for us in the chemical label printing market at
present as there are major legislation changes coming in to force next
year. The deadline for the new CLP Regulations on the classification,
labelling and packaging of mixtures is June 1st, 2015, which will be
used globally.
“It is a positive change for the industry and will encourage and
facilitate the international trade in chemicals, as well as ensuring the
protection of human health and the environment across the globe.”
Hibiscus first entered the labels market in 1982 under the leadership of
Killerby’s mother, father and grand-father—all of whom had links with
either print or chemicals. Now, having established itself as one of the
major players in the market, the company is reaping the benefits. With
this in mind, Killerby has some words of wisdom for those companies
considering diversification into this sector.
“Understand the market that you are proposing to print labels for,”
Killerby says, adding: “Each market requires a different style of label,
containing different information. By knowing the market, you will be
able to provide companies with expert advice, which will keep you ahead
of the game and customers returning to you for all their labelling
needs.
By knowing the market, you will be able to provide companies with
expert advice, which will keep you ahead of the game and customers
returning to you for all their labelling needs”
“We provide labels for lots of interesting jobs, many of which you
wouldn’t even think of. From cosmetics companies to car manufacturers,
and just the general haulage of chemicals and dangerous goods, no day at
Hibiscus is ever the same when it comes to our clients labelling
requirements.”
So, the message from those in the labels market seems to be that while
there is plenty of work available, any move into the sector should be
properly considered and carefully planned out. After all, you want your
business to have a positive label of its own.
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