The global packaging printing market faces five major challenges
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The packaging industry plays an important role in the entire printing industry, and in an increasingly digital world, packaging printers have sufficient and stable growth opportunities. Although the packaging industry has maintained a good momentum of development, packaging printers have presented some new challenges in assessing their business operations. Recently, the US authoritative printing magazine "Packaging and Printing" released a new research report "Research and Reduce the Great Challenges of the Packaging and Printing Market". The sample of the report comes from a survey conducted by Packaging and Printing magazine and NAPCO Research Institute on more than 150 printing and packaging companies from January to February this year. The report details and analyzes the challenges faced by the packaging industry. The report pointed out that the main challenges facing the global packaging printing market are divided into five aspects: sales and profit growth are not proportional, labor shortage, digital printing trend, enterprises are facing expansion, and the whole industry is facing integration.
Although each area of the packaging and printing industry has its own unique processes, it faces different challenges, but according to research, there are some commonalities between all market segments, because issues such as customization have affected the whole Packaging industry. Although the results of this study are not evenly distributed across the various packaging segments, the number of company samples in each area is sufficient. And the survey results show that packaging printers are moving between these market segments, blurring the previously defined market segments.
Challenge 1 Sales increase profit reduction
The common challenge for all companies is the increase in sales, and the challenge of “increased sales” is surprising. The reason is that because of the increase in sales, profits have decreased. One-third of the respondents said that this is the business challenge that has the greatest impact on the company in 2018. The increase in sales is the most concerned issue for respondents, and this challenge is not the same within each company. When asked to elaborate on specific challenges in printing, production or operational efficiency, more than half of the respondents said that keeping up with the speed and expansion of the industry is one of the major challenges they face. Over the years, as brands continue to expand their product lines, a trend to “produce more products in lower quantities” has emerged in the packaging and printing arena. The number of products on the shelves remains the same, but the variety of products is more.
According to the report, various brands are expanding their product lines and demanding shorter packaging time. However, due to the frequent replacement of the printing press, the production speed of the packaging printer has decreased. At the same time, representatives of other companies surveyed said that reducing the scale of operations would give them additional capacity to fill sales. A person in charge of the interviewed company also said: "In terms of sales, quantity is not necessarily a problem, and profitability is the key." Many representatives of the companies surveyed said that price competition is their biggest concern. As the head of a company interviewed said: “Sales have increased, but due to pressure from brand owners, profits have not kept up.”
Challenge 2 lean labor shortages
In the entire manufacturing world, labor shortages have always worried companies. Experienced technical staff are facing retirement, while younger employees are looking for other forms of employment, and the packaging and printing industry is not immune to this trend. In addition to technical issues and changes in the consumer environment, one of the most alarming business challenges facing packaging printers is the emergence of a labor shortage.
The existing workforce is reaching the end of their careers, and companies are trying to find new people to take over their jobs. According to the survey, 28% of respondents cited the attraction, recruitment and hiring of new production employees as the first challenge. Similarly, 25% of representatives surveyed said that the ageing or retirement of employees in the industry is their primary challenge. In the report's analysis of the challenges, the labor shortage is only behind the sales and production challenges, which shows a new trend, suggesting that it may soon become a bigger dilemma for the industry.
Challenge 3 Digital printing brings production change
It may be related to more product categories, and more than half of the respondents said they have invested or are considering investing in digital printing. The results of the report indicate that more product categories mean shorter and faster operations, which means that press downtime increases, which leads to waste. As this challenge becomes more prevalent throughout the industry, it will require companies to use new devices that are more suitable for this reality.
Therefore, when asked to choose actions to solve these production problems, 53% of respondents chose to invest in digital printing technology, which makes sense. Since its inception, digital printing has been seen as an effective solution to the short-term production of the packaging and printing industry. Although only a small portion of product packaging is currently done by digital printing, there is reason to believe that this number will increase in the near future.
Challenge 4 Seeking expansion Increase revenue
While the report shows that improving internal practices and sales processes is a key factor in overcoming the challenges of the packaging printing business, increasing sales and expanding customer base are also key objectives for packaging printers. Not only do they need to increase sales in top-level business challenges, but representatives of respondents say they are looking for new customers in current market segments and new market segments.
When asked about actions to address these business challenges, 51% of respondents said they were tapping new customers in traditional markets, and 51% of respondents said they were exploring new customers in new markets. This suggests that packaging printers are trying to increase their workload by exploring new customers to increase revenue.
5 Challenge competition to speed up integration
Another external factor affecting the packaging and printing industry is increased competition. Advances in technology have undoubtedly made it easier for companies to promote their products. The report shows that as commercial printers seek to expand their capabilities and extend their reach to other packaging sectors, the entire printing industry is integrated. Regarding whether this trend is worrying or not, there are differences of opinion among enterprises. 52% of the respondents indicated that the increase in competition is worrying, and 48% of the respondents indicated that they are not worried.
Of those companies that believe this convergence is a threat, 66% of respondents said the threat came from commercial printers entering their traditional applications. At the same time, 18% of representatives surveyed said they only felt threats from other segments, while 16% of respondents said it was only a threat from commercial printers. While this trend may be shocking for some packaging printers, it also shows that packaging and printing companies have the opportunity to prove why they are best at their work, or expand their business by identifying packaging opportunities and technologies.