by Cassandra Balentine
We can’t stop talking about labels—and for good reason. According to ResearchandMarkets, the global digital label printing market size reached U.S. $25.21 billion in 2021. Looking forward, the analyst firm expects the market to reach $38.75 billion USD by 2027, exhibiting a compound annual growth rate of 7.43 percent during the forecast period of 2021 to 2027.
Above: Epson offers its SurePress line of digital label printers.
By eliminating plates, digital print technologies are more cost effective for shorter runs, driving increased demand for reduced inventory, versioning and micro versioning, as well as shrinking turnaround times.
On the Horizon
Several trends impact the demand for digital printing technology for the label market. These include environmental, security, variability, and advancing digital and hybrid printing technologies.
Converters see smaller, more frequent label orders. Mike Pruitt, product manager, SurePress, Epson America, Inc., expects continued growth in digital label printing throughout the industry and across applications.
“Companies from all areas of the market are interested in investing in digital technology that can help to drive their businesses forward. Over the next five years, I think we will see an increased emphasis on cost benefit with regards to the environmental impact, such as wash-off labels or ocean plastics,” says Pruitt.
“Considering environmental issues, wrap around or shrink labels will grow,” predicts Juan Kim, CEO, Valloy Inc.
Jay Larsen, GM/director of R&D, digital hardware division, INX International, sees a shift towards inkjet labels printed directly onto products and packages. “This technology will replace labels in certain high volume and lower quality situations to begin with, especially in cases where variable data is used for printing with special techniques for product security and anti-counterfeit measures,” he comments.
Ink considerations are also worth noting. “Undoubtedly, digital label printing is a huge and important growth segment in our industry, and as a result, the number and type of applications is constantly increasing,” offers Dan Maurer, VP, digital print, Heidelberg USA. “In terms of what we’re seeing today, the most important trends include foldable ink for folding boxes, the use of low migration inks—particularly in cosmetics and food, and UV ink for standard labels.”
Hybrid options are also available, often offering digital print capabilities with inline finishing.
“The combination of high-quality digital technology and the flexibility of flexographic printing, finishing, and embellishments all performed inline together at high speeds is fueling this transfer. Like many businesses, the ability to be more efficient and automated to drive costs lower is a key element in a consolidating market,” says Matt Bennett, business unit zone director, labels and narrow web, Bobst.
New digital and flexographic combination technology allows for unique and differentiated opportunities in the prime label markets. “As more digital presses are sold into the market, machines like our DM 340 all-in-one presses with inline finishing and embellishments will become more applicable and show faster growth than standalone digital presses that need to be processed further in a separate finishing device,” adds Bennett.
Shrink sleeves and pressure-sensitive labels are recognized as contenders for continued growth in the next several years in the digital space.
Pressure-sensitive labels continue to be a strong growth area for digital label production. Russell Doucette, product marketing manager, Konica Minolta Business Solutions U.S.A., Inc., says this is increasingly the case as manufacturers explore the benefits of printing in house. “As companies see how quickly different label designs can be created, printed, and tested, we expect more targeted label campaigns to emerge. Flexible packaging will become more interesting and expansive as manufacturers test and certify media that run on their digital presses,” he adds.
Kim says general, self-adhesive labels are an easy target for various digital printing solutions to be applied. “I believe digital printing will still grow by printing on self-adhesive labels in the coming years.”
Steve Lynn, director, labels and packaging, Durst North America, also sees the heaviest growth in digital label printing coming from pressure-sensitive labels. “Digital has traditionally only produced short run or variable label work due to cost and speed constraints, so most pressure-sensitive label work has been produced on flexographic equipment. Now that high-speed, 1,200 dpi inkjet solutions can rival flexography in terms of speed and quality with less material waste and simpler operation, we will see heavier adoption of digital to replace flexographic production.”
Interest in digitally printed, pressure-sensitive labels is fueled by the transition from flexography to digital along with brand owner requirements for sustainability. “Applications like sleeves and wrap arounds will also be growing when the technologies have matured. These segments will be mainly driven by market trends like versioning and perhaps also sustainability,” says Søren Ringbo, GM, digital products, Nilpeter A/S.
Driving factors like sustainability and variability impact various markets differently. Segments including industrial, security, household/chemical, pharmaceutical, cosmetics, and food and beverages all benefit from digital printing.
While digitally printed labels are expected to grow among nearly all markets and applications in the next few years, what is more important is that as digital label printing becomes more cost effective it expands into longer run jobs. “This is compounded by the labor challenge of operators for traditional presses, which will drive more work to digital,” explains Maurer. “As we continue to remove barriers and make these more accessible, there is no doubt that digital printing will become more competitive and widespread in all segments. However, digital labels leveraging low migration inks—particularly in cosmetics and food, and UV ink for standard labels—will represent significant and immediate growth for the industry.”
The combination of advancements in digital printing technology for quality, application range and substrate range, total cost of ownership (TCO) improvements on digital presses, shorter job lengths and multiple SKUs or life of a product, simplicity of workflow, and the challenge of the labor force driving the need to move to digital printing are all making this growth possible. “Some of the key advantages of digital labels and packaging—for example providing the versatility to respond to trends and market changes—have truly come to the forefront in recent years. However, we are really seeing innovation in the digital sector driving accessibility and opening these opportunities to the wider market. Now, with the introduction of inkjet presses such as Gallus One, we are finally able to address the TCO issue and provide high-quality digital labels at the right price point. For the first time, we’re seeing Gallus One unlocking this huge growth segment, lowering run lengths, driving increased supply chain efficiencies, and enabling big sustainability gains,” shares Maurer.
Lynn stresses the importance of labor shortages in relation to the adoption of digital. “Converters that face major challenges getting staff—a skilled flexographic operator leaving/retiring can create a major problem. There are also material supply challenges, so it is critical waste is kept at a minimum. Sustainability is a major focus for the industry in general. Digital offers solutions to each of these challenges.”
The desire to reduce inventory and product handling costs is another consideration, as is the ability to serialize for product security and to create customer-specific product variants, shares Larsen.
“The supply chain issues everyone saw as COVID hit caught manufacturers by surprise and brought to light the need to look at their supply chain and have contingency measures in place to avoid a disruption in their distribution. As inflation persists, consumers may be looking at alternative brands to adapt to surging prices. This creates opportunities for additional products and brands to meet this new, cost-minded consumer,” offers Doucette.
In terms of specific markets, Pruitt expects to see the most success in the same industry it has seen tremendous growth over the last five years—food and beverage. “The growth of labels in food and beverage is mostly driven by brand competition and demographic changes, which pushes the need for updated labeling. A label is the very first interaction a consumer has with a product. So, it is no surprise that consumers often ignore or gloss over products with dull and ordinary labels. Generally, there is a lack of interest and response to older-generation branding.”
Ringbo sees promise in craft beer, personal care, and some distinct pharmaceutical or nutraceuticals markets, mainly driven by market trends like versioning and differentiation as well as sustainability.
“Label converters can save money by digital printing in short runs, so food, beverage, and cosmetic markets are suitable,” agrees Kim. He notes that customers in these markets ask for variance in content and color, which is a big burden to print by rotary or flexographic processes. “Digital printing can meet any variance of design and color for those customers in small volumes.”
Cannabis/CBD is thriving with digitally printed labels. Doucette believes this will continue as more states allow the sale and marketing of these products.
“Industrial, household, and chemical markets will also grow as manufacturers see the value of producing everything in house and marketing to new millennial consumers,” says Doucette.
Segment Challenges and Solutions
Regulatory compliance is an important consideration for some market segments, specifically food and beverage. This is especially true in terms of food safety and is perhaps the biggest challenge for the food and beverage industry, says Pruitt.
When it comes to inkjet devices, the types of ink used is obviously an important consideration. This is in regards to its performance on certain substrates. This can be challenging and requires extensive testing. “The same applies to food safety testing,” says Larsen.
“Legislations are the biggest challenges,” asserts Ringbo. He says changes in chemical ink compositions driven by either legislation or good manufacturing processes affect label production.
He also points to the elimination of mercury lamps, which will broadly affect the label market.
Bennett says food safety and sustainability are huge factors driving change across the label space, not just digitally. However, a move towards water-based ink technology, which provides a dual purpose of food safety and environmental friendliness are receiving tremendous developmental attention.
Kim agrees, noting that some water-based inks and dry toners can be applied for direct contact.
“We see education as a challenge as more manufacturers look into becoming printers themselves,” shares Doucette. He says that education on label and packaging processes are becoming a necessary addition during sales, installation, and training tasks.
Maurer agrees, noting that despite being around for several years, the digital label is still in its infancy, because until today, there hasn’t been a technology to compete with conventional presses for anything beyond short runs. “At Gallus, we call this the expectation gap—the promise of digital versus the reality—and that’s what we set out to solve with Gallus One. The job now is to evangelize the huge opportunities that digital labels unlock for converters and brands.”
Another of the biggest global challenges faced by the industry today is labor shortages, which are hampering converters across each of these segments alike. “Fortunately, however, hand-in-hand with today’s digital transformation is a shift towards digital automation, providing smart solutions that give a more hopeful picture for the industry’s future,” adds Maurer.
Both toner- and inkjet-based print engines exist in the digital label print space, this is along with traditional analog and hybrid solutions.
Maurer anticipates digital label production growth across the board. “From our perspective, both conventional and digital presses have their place in the label market, however, it is no secret that inkjet is on an extremely positive trajectory, bolstered by key innovations in this field. It’s also important to recognize the potential of hybrid solutions, i.e., digital presses combined with flexography, screen, foil printing, or inline punching, which bridge the gap into the label and packaging market of the future.”
“We expect continued growth in UV inkjet and hybrid systems that may, for example, incorporate a traditional overvarnish for durability or safety reasons,” states Larsen.
In the digital label and packaging space, Maurer sees inkjet as the right strategic direction over toner and liquid EP technology, and says most manufacturers are going this way due to the stability and simplicity of the printing process, resulting in less maintenance and higher press up time.
Given these low cost and reliability benefits, Pruitt also believes inkjet will have the most significant growth over the next five years. “Converters have always focused on creating high-value labels as efficiently as possible. That has become an even greater focus recently as label and packaging converters have experienced the upset of global supply chain disruptions. Converters have been busy getting work out the door and locating sources of media supply. With converters and print service providers having issues getting substrates and ink, it’s important to use materials on hand and get the greatest value from the resources available. Digital solutions that can print on almost all flexographic substrates without primer, as well as on unsupported films such as candy wrappers, shrink, in-mould labelling, and coffee/cosmetic web, are ideal for those looking to get the most out of raw material. Digital is the answer to the shorter run, to more frequent orders with faster turnaround times and to the larger variety of print applications,” he adds.
Quality and speed advancements in inkjet enable it to rival flexography, offering quality that only toner digital could previously provide. “We will see inkjet replace flexographic and toner, it will become the dominant print technology in label production,” predicts Lynn.
Ringbo adds that inkjet technology is accessible for all machine vendors and the technology is easy scalable in terms of web widths and speed.
Kim points out that UV inkjet will drive the growth, but this technology is typically found in high-end machines due to the high manufacturing cost of single-pass engines, whereas laser or water-based inkjet can be applied to middle- or low-end solutions. “So the next driving technology will be cost-effective UV inkjet solutions—and we are working on a desktop UV inkjet single-pass solution now.”
“Today digital inkjet technology will be the predominant industrial printing process for the foreseeable future and many have committed millions of development dollars to that end,” concludes Bennett.
Doucette says dry toner technology will continue to be relevant and grow as printers understand and trust this proven technology to be reliable and consistent day after day, job after job.
Labels for All
Digital label systems continue to push their way forward. As the technology continues to advance in terms of speed and quality, it becomes more attractive. Further, cultural changes have manufacturers wondering why not bring the technology in house?
For more on digital label printing check out our January webinar on the topic as well as a web series dedicated to product highlights and trending volume segments.
Jan2023, DPS Magazine