Digital Printing for Consumer Packaged Goods Companies

According to the U.S. Department of Commerce’s Bureau of Economic Analysis, a downturn in retail trade was one of the four leading contributors to the slowdown in U.S. economic growth in 2008. While it is unfair to hold any one industry segment more accountable than another for the sustained economic crisis, there is an opportunity for companies heavily dependent on the retail marketplace, such as consumer packaged goods companies (CPGs), to refine the ways they bring their products to market with technologies that will deliver results faster and more cost effectively.  One such technology is digital printing, which offers greater flexibility in terms of turnaround times, SKU management and the overall supply chain for product labels and packaging. 

So why should designers and CPGs care about how their labels and packaging are printed?  Cost is certainly important, but there are also the strategic brand factors related to CPGs being able to differentiate themselves to maintain or grow sales, market share and profits. Labels are a central part of a CPG’s brand position, and digital printing enables a brand to get out faster than the conventional flexographic printing many CPGs purchase from their suppliers.

In an environment where capturing consumer attention is of paramount importance, the ability to respond quickly to market needs is essential for success. Digital allows companies to respond quickly to changes in the competitive marketplace, or even to new legislative or legal requirements. Plus, digital printing is the most efficient production route for multiple-SKU requests within a single-product label design project.

There are also the advantages of keeping lower inventory. Today, CPGs have to store label inventory, as well as throw some of their stored label inventory away because of obsolescence. Digital, on the other hand, can make CPGs more nimble in their approach to inventory, ensuring that the characteristics of the brand and the accuracy of packaging information are current and compliant.

For global brands, digital offers a level of consistency than can be especially useful. With digital workflows and production, color, quality and, ultimately, a product’s brand equity, can be consistent from label to label, from run to run and from press to press, regardless of whether a label is printed in Tucson or Thailand.

Given these benefits, why is there not more awareness about digital printing as a true alternative to flexography? Digital has long suffered from the inaccurate perception that it is too expensive and only suited for smaller quantities of labels and packaging used in prototypes and samples. This is a perception that is out of date. In truth, digital is suited for full production runs and is cost-competitive with flexography One digital press on the market is designed to be more cost-effective than flexography for 80% of the jobs that label converters typically print.

Label converters have taken note—sales of digital presses for label production are now on par with sales of flexographic presses. And, some of the CPGs that converters serve are also taking notice. In fact, a global packaging executive from Procter & Gamble, in a 2009 article in Packaging News, was quoted telling label converters at a conference, “Anyone who wants to work with us should definitely buy a digital press, or they will find it an uphill struggle in the future.”

The good news is that digital is offered by a wide variety of label and packaging converters, so CPGs need not look far to find a provider. They will find it at small, family-owned label printers, all the way up to large label and packaging firms that handle the world’s biggest brands. For many of these providers, digital just comes as part of the expected duties in servicing a brand.

Converters often avoid specifically talking about digital, instead discussing solutions for competitive pricing with reduced inventories. In some cases, the talk is not about the label itself, but about the supply chain system that can be established for CPG clients. But make no mistake, it is often digital printing capabilities that are at the heart of new, streamlined supply chain services coming to market.  

At a time when every industry and every business are seeking ways to become more efficient, innovative, cost-conscious and customer-centric, digital printing is poised to deliver measurable results and success.

Digital printing veteran Alon Bar-Shany is vice president and general manager of HP’s Indigo digital press division.