The FINANCIAL — Demand for customization and on-demand solutions is driving the worldwide label and packaging (L&P) press market. According to new research from International Data Corporation (IDC), total L&P Press shipments grew 27.5% in 2014, and IDC has forecast the market to expand to 627 shipments by 2019, growing at an 8.7% compound annual growth rate (CAGR) and representing $507.5 million in value of shipments. Both Electrophotographic (EP) and inkjet devices will continue to gain traction throughout the forecast period.
“The growth opportunity for digitally printed labels and packaging is substantial and represents a sure bet,” said Amy Machado, senior research analyst, Hardcopy Peripheral Solutions. “L&P will not be impacted by some of the challenges faced by traditional document printing. For example, the L&P market will not be disrupted by e-presentment or the emergence of mobile technologies. The worldwide appetite to purchase goods of all types — products that need to be labeled and packaged — shows no sign of abating.”
The omnichannel transformation has led to brand owners utilizing “big data” more and more. IDC is seeing an increase in the number of SKUs. And the need for variable data is increasing. It has led to manufacturers demanding more “on demand” or “just in time” solutions. And this transformation impacts not only prime label/packaging but secondary label and packaging as well.
Hardware vendors are not only finding growth in shipments but also continual ramp in print volumes coming off their presses. Increasing volume translates to a growing annuity stream of consumables/services revenue, and every production-class hardware vendor should be serious about entering the L&P segment.
Additional findings from IDC’s research include the following:
HP was the worldwide market share leader with a commanding 62% share in 2014, followed by Xeikon, EFI, and Epson.
Newer entrants into the worldwide L&P market include Screen, Durst, Delphax, Founder, and Fujifilm.
As customers/consumers become more enabled through the omnichannel, they also become more demanding of the supply chain.
Customers are demanding more personalized offerings and expecting more personalized products targeting them directly.
Brand owners at manufacturers are also using customized messaging to their own marketing advantage, to grow brand awareness, gain new customers, and retain brand loyalty.
One of the biggest threats to digital print in L&P is still the traditional flexographic process, but digital adds value beyond cost. Hardware vendors that have spent a great amount of R&D on technology development must now also invest in sales and solutions, ensuring that everyone — the brand owner and the converter/commercial printer — fully realizes the value-add of digital.