By Mark Hanley
This is a review of the status of industrial digital print markets as of September 2016. It is intended to define, size, project, and provide examples of the development of markets for digital print technology beyond the office and consumer sectors.
Define Industrial Digital Print
Industrial digital print is defined by I.T. Strategies as digital production printing under two sub-headings—industrial-scale print: digital production graphics; and manufactured products which are printed: digital production specialty.
When referring to industrial-scale print: digital production graphics, industrial can mean any markets which have scaled up significantly beyond the small-scale technology we are used to seeing in the office and consumer sector, including communications print or “print media” as the analog print industry calls it, as well as packaging. These markets have a focus on print graphics and communications as either their main product or else deploy it as an extraordinarily important component of the product, as in packaging.
For manufactured products which are printed: digital production specialty, industrial generally means a specific set of markets and applications for print and patterning of manufactured products like three-dimensional (3D) objects, architectural surfaces, ceramics, textiles, electronic circuits, creation of 3D rapid prototypes, and custom parts to name some of the better known. Here print is defined separately as a true sub-component of a larger manufacturing process. Accordingly, print systems have to conform to unique requirements unusual for the graphics print industry.
People are mostly interested in the specific industrial markets under digital production specialty above, but it is important—at least at first—to consider digital production graphics and its print communication or document and packaging printing markets as well because they are technology platforms for the development of systems that are already being adapted to true industrial markets under production specialty.
Finally, the markets under either of the two sub headings above are also commercial markets where printed product is re-sold to users. This is also new for digital printing and defines these markets in itself as separate.
Industrial Value Propositions
Digital print in true industrial markets is not called on to do a better job of what analog print already does. Analog print does a great job in terms of product quality and cost against a huge variety of specifications. In fact, the direct costs of analog printing are now so low that they are probably as direct costs for just the print process unattainable for digital, and in fact they do not need to be so attained. There are some things only digital can do well, and those are the building blocks of parallel and new markets in the industrial segment. Furthermore, digital print generally affects a much larger value/cost chain than just the print process inside the industries where it is applied.
Table A depicts what are already today perceived as unique digital print value propositions in the industrial segment. They are ranked in descending order of importance according to I.T. Strategies’ user research in early industrial implementations.
To provide a couple of examples of what this can mean in real life, in the case of cost reduction, this has meant so much to the ceramics tile printing industry that they have already gone substantially towards full substitution of analog with digital systems. In this case it has to do with a very expensive and cumbersome imaging system in analog print, and one that required an integrated kiln line to be interrupted in its normal production rhythm, which can cause substantial damage to the line if not closely managed. Digital removed these issues at a stroke.
Fast response in turn is a massive advantage to the fashion printed apparel industry where under normal conditions analog print can involve a six month lag between design presentation and arrival of saleable product at the retailer—and that in an industry where fashion is the driver and timely response is directly measured in higher prices and volumes. Digital production apparel print can bring that lag down to two weeks.
3D creation of manufactured objects using digital printing in its turn allows customized and small-volume manufacturing of functional objects previously out of economic reach for the new users 3D printing is drawing in. That is nothing less than a new and potentially very large user group leveraging what are in effect new products. The same is true of the digital photo album, which is unobtainable except via digital printing. It has in some ways supplanted the old 4×6-inch photo market, and at very high consumer pricing values. In a similar way, display graphics available to the local retailer in minimal quantities is also a new product and market among people who did not buy graphics before—in this case a new market that grew to exceed $45B in retail revenues for print after only 20 years from scratch.
But perhaps the biggest long-term value proposition for digital industrial printing is in the packaging sector. The ability over time for digital printing to provide custom content in the brand identity communications market, which is what packaging really is, is to bring the massive packaging conversion market into synchronization with increasingly fragmented demand patterns. While the packaging conversion industry worldwide has spent 30 years perfecting higher integrated print/manufacturing volumes at lower costs, the pattern of demand has been going in the opposite fragmenting direction. The meaning of this trend for brand owners of consumer goods is incalculable over the long term.
Packaging is the biggest industrial digital printing target of all and will likely be its most profitable field.
Digital Print Technology
The two major digital print technologies are inkjet and electrophotography (EP). Both technologies have a place in industrial print.
EP is mostly available in dry toner format, but HP Inc.’s Indigo is liquid format Electroink. Liquid EP is said to be and by many believed to be potentially faster and higher quality due to the technology’s capability to develop an ink film close in its characteristics to analog ink films. Within the production markets under discussion in this analysis, Electroink from HP is dominant in EP.
On the inkjet side, most available inkjet deploys aqueous inks with very high water content and low viscosity dictated by printhead construction and design. There is UV-curable inkjet technology, but it has not been developed to the print quality levels of EP or aqueous inkjet yet and is available from few sources. Inkjet in general is perceived correctly to be simpler than EP and more easily capable of deploying extended widths and attaining higher speeds—with the implications of lower costs. However, given that most industrial markets are very new and capacity utilization of digital systems is minimal, that speed disadvantage of EP may take a while to assert itself.
The most pressing issue for the perceived technology of the future, as aqueous inkjet in particular might be described, is its ability to print at high speeds at high coverages (40%+) on closed-surface substrates like film and coated paper if it is to make serious progress in document and industrial markets. It may be four to five years until the issue is behind us. This will not stop aqueous inkjet for industrial markets, but it will cause a slow level of adoption in any markets not using uncoated paper, which is where it is now successful on an industrial scale in books and transactional markets. In fact, while inkjet can and will resolve its issues, as of today it could be five years or more until aqueous inkjet reaches the print quality and performance parity with either EP or say, offset analog print. That is like saying it is not a player yet. This may also be pessimistic, but the history of production digital printing suggests conservatism.
An exciting but hard-to-assess alternative to EP and inkjet is Nanotechnology from Landa. Without getting into too much detail here, this technology is essentially a form of inkjet with highly specialized integration and chemistry that claims to be capable of mid-range speeds by analog standards and eliminates the water issues of inkjet while still using aqueous inks. It is a kind of “ink lamination.” If this technology works it could be a serious challenge to aqueous inkjet. If Landa succeeds technically before aqueous inkjet has resolved its parity issues, it will alter all of the rules unfavorably for aqueous inkjet by leapfrogging to a very high quality and throughput specification.
Market Size and Projection by Industrial Application
Tables C and D are a simplified overview of digital print vendor revenues—hardware and consumables, not including media, priced to the first customer of the technology systems vendor in the two major sectors of production digital print—production graphics and production specialty. These are carefully tracked statistics of some accuracy, which show a developed market based on value over volume, and showing remarkable diversity in its applications coverage. At the same time when related to analog markets digital production print is only at the beginning of its development.
EP digital presses mostly includes HP Indigo, but some contribution also from Kodak, Xeikon, and Xerox Corporation. Lite color production multifunction systems are a kind of low-cost competition to digital presses, but not in fact their functional equivalent, even if close in quality now. Continuous feed inkjet is used in direct mail, transactional, and books, but mostly in monochrome and low coverage so far, well out of true graphic arts specifications in real applied markets. EP and UV inkjet label is the established EP and UV inkjet label market for prime label printing—an example of nesting real digital production printing within an old-line conservative analog market, though it has taken more than 20 years. EP folding carton and flexible packaging are HP Indigo’s early forays into folding carton and flexible packaging—small as yet, but very well received, especially in flexible packaging where all the money, savvy, and daring is in packaging.
Ceramic tiles is a self-explanatory category, mostly exploited by ceramics-industry insider vendors.
Textiles high-end roll to roll (R2R) involves the printing of fashion apparel where speed to market in the fashion world is a demand driver, but a complex supply chain is a dampening factor. Textiles low-end R2R is serial printing, mostly dye-sublimation systems, in the fast-growing active fashionwear market, as well as the longer established soft signage market. Wide format graphics (WFG) refers to local display graphics at retail—the longest established and largest of all production digital markets in terms of vendor revenues, and based on a complete fragmentation by digital at massively elevated relative prices of a previously centralized and commoditized market.
The market is split into WFG low end with a R2R printer component and WFG high end with flatbed oriented components, as they have substantially separate channels, and the upper channel is getting into serious volumes of production in UV flatbed. Direct to garment is where mostly small printers print t-shirts, though this market has never really competed well against screenprinting.
Finally, we include piezoelectric inkjet coding. The coding market using inkjet is much bigger, but is an old continuous format in decline. Only piezoelectric represents innovation and growth in coding.
Digital Production Specialty Market Subset
Table E is a review with a little more detail using different measurements about production specialty markets under the heading of decorative markets. There is some crossover to the immediately preceding statistics here, but it includes some additional data about product marking, direct to shape, flooring, and wallcoverings, for example. These are all very diverse and some of them small markets with specific problems in development in some cases, often due to narrow supply chains dominated by a few large suppliers.
We tend to pay most attention to larger markets and broader opportunities looking at things from our professional perspective, that sometimes ignores critical activities taking place on a small scale—especially in Europe. These smaller markets develop new small businesses, a good thing in its own right. There are perhaps in excess of 750 companies worldwide who can be classified as inkjet integrators for example, just as there are hundreds of companies working on inkjet applications internally in a closed loop, confidential format. It may be that many of these initiatives will individually not succeed, and that closed loop work is often highly inefficient not to say in some cases naïve, but the good part of the experience is not lost, nor is the raised awareness. On top of that, some of today’s small operations may indeed become tomorrow’s widely known successes. There are those who say, and we are included, that many of the really good new things only come from the new companies. It is hard to track, but important to travel the world of conferences and shows around digital industrial print in order to keep the finger on this pulse as well as a kind of separate market with its own separate reason for existence at this time. DPS
Mark Hanley, president, I.T. Strategies, has over 20 years of experience in the electronic printing industry. He specializes in identifying new markets for digital color printing technologies. In addition to conducting research and consulting, he travels extensively around the world, facilitating partnerships and strategic alliances between manufacturers in Europe, Japan, and the U.S.
Prior to co-founding I.T. Strategies, Hanley organized the European operations of CAP International, subsequently known as BIS Strategic Decisions. From 1990 to 1992, he was services director at BIS, responsible for the management and growth of electronic hard copy information services in Asia-Pacific, Europe, and North America.
Dec2016, DPS Magazine