Bob Leahey is the Director of Color Digital Label & Packaging services at Keypoint Intelligence and probably one of the most knowledgeable persons in the global printing industry understanding where digital label & packaging is and where its heading. In this second Keypoint Intelligence TV episode Bob Leahey share his insights – and in our opinion genuinely great.
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I’m Bob Leahey and I am the director of the color digital label and packaging service here at Keypoint Intelligence. I’ve been here for many years and I have many clients who are makers of digital printing equipment. Our clients are the companies that make the technology that does the printing. The digital technology. Digital printing of packaging is actually very, very small as a share of all packaging. Analog presses print almost all packaging today but the very small percentage that is digital adds up to many, many millions of dollars in printers, supplies and software dedicated to the digital printing of packaging.
Digital printing for packaging is tied to the one printing market that is growing worldwide and will grow worldwide for the rest of our lives. That of course is packaging. So it’s not subject to electronic displacement. Meanwhile there are forces at work in the world that make digital printing an especially valuable help in meeting the needs of brand owners. It is a small part but it’s a small part of a very, very big market. Hundreds of billions of dollars of packaging are printed every year overwhelmingly by analog but that small part that is digital is also in the billions of dollars. The forces in the world that are spurring the use of digital printing include the world’s wish for mass customization. In other words, to allow brand owners to target markets precisely who in turn tend to order print more frequently in smaller amounts. Those smaller runs are ones that digital can print efficiently and in a very timely way. So digital printing has become a compliment to analog presses and is a welcome help in the printing of packaging.
It will be side by side for a long, long time to come. I have great respect for the analog print processes which excel at printing long runs, but digital printing is now placed often side by side with analog printing. That really is what the future is. The more use of digital printing side by side with analog. This is an era when the term “short run” has become sort of a mantra for people in the printing industry, and that applies to the packaging industry as well. Again, digital printing does excel at printing those short runs.
Depends who you are and what you’re printing. So, I can’t say with precision that digital printing is always more profitable but I do know that digital printing very often is doing the premium jobs, premium jobs that are of higher value because they include individualized or even personalized content. They may include some security features that can only be printed by digital printing. They may be in runs that are too short to print efficiently with analog but that can be printed very easily with digital and for which you may be able to charge extra.
There are print runs that are required by brands that are either extremely difficult to print with analog or impossible and just are impractical. So, a tiny print run or a run of tests or prototypes. That type of printing becomes very tedious when you have to make plates for a run of one or a run of 10. Digital printing can do that pre-press electronically and can do the printing immediately. One of the features of digital printing in the current era for packaging is that the available systems now include some really big digital systems. So, you’ve mentioned very high speed single pass printing of corrugated. Some of the machines that are involved there are high in cost, many millions of dollars, and very high capacity. There are also machines that are able to gang together 50 jobs in a row and print all those together in very high speed. So, as time has gone on, the list of printers, digital printers that have become available to the market include some that are indeed able to print long runs.
Lots of different things go into my work. I’m attending all the main trade shows, for instance, so I see the vendors there. I visit converters in their operations to see how they use the equipment and how much they use it, what their experience is with different technologies. I also correspond with 20 to 30 vendors of digital printing equipment every year to gather up information about placements, install base, the rate of use, the price of the equipment.
So a key part of my function and the function of other practice areas here at Keypoint Intelligence is to figure out the market size in terms of how many digital printers are operating, what they’re actually doing, and then to predict the future. So, a core deliverable for me is to write a market estimate and forecast for the next few years. So all those inputs go into the creation of that document. Meanwhile I also do writing about key product developments, key corporate developments and so on. Those often have some bearing on what the market’s status is and what its prospect is.
They use it, I believe, to observe the status of their company and their products in the market. So, versus all the units that Keypoint Intelligence has defined and all the activity that we’ve figured is occurring, the clients are able to understand in what their status is. They also are able to understand how much is the market growing around them? How much is competing technology growing? So, another technology. Inkjet rather than EP or EP rather than inkjet. What’s the value of a output of equipment in different categories in a year? Such things I think are helpful. They may figure in the pricing of the equipment and its service in maintenance.
This information is helpful to companies that want to know what the future is. In fact, there are basically two things that KPI does. One is we give insight about what the future is. The other thing is we help clients in any way we can to know what they need to sell more product. The first one is the focus in my reporting and that is what is the future? If you are in the digital printing of labels, you should know about the digital printing of flexible packaging also because it is also a web based printing application. If you are in digital printing for commercial printing, you probably should know about the printing of folding cartons which is sheeted media and it’s a good market, and there are a number of companies that are very accomplished suppliers already for digital printing equipment in that field. So we’re in a position to give insights about what’s on the ground now and also what’s coming. Those sorts of things, I believe, are helpful.
We are consultants mainly to vendors of digital printing technology. The printers, the supplies, the software. We are in contact with the print service providers. We’re serving them. We’re observing them. But they are not the focus of our consulting so much. It’s more at a market perspective. So, we are not … This division of Keypoint Intelligence is not an engineering consulting division, so we are not chemists, for instance. We’re electrical engineers, but we are very steeped in understanding which companies are in the market? What types of products do they have? What technologies are they developing? What are the capabilities of those technologies? What do those technologies cost? What does it cost to run them? Those are the sorts of insights that we’re able to offer.
Our work is growing. We have longstanding clients. We have new clients. We have clients who are subscribers to our services on an annual basis. We also have clients who hire us for one off custom consulting projects that are proprietary to them. So, we deliver subscription services, custom consulting services and publications to the market. So we have sort of three ways of offering our services to the community. We get the message across in a number of ways. We give presentations at industry events. We offer some content on a free basis, usually in the form of a blog, either our own or what they think or some other platform. So, we are in the market to be observed that way and that’s how people become aware of us, I think.
Perhaps it seems that way. I have a lot of information that’s given to me on a nondisclosure basis where I learn the placements and install base of many vendors and many of those vendors require me not to disclose that specifically but they do allow me to use it to roll up what the whole picture is. I actually see patents and intellectual property as a vital part of the market. A company that’s going to invest in the development of an ink or an inkjet head or some other technology invests heavily to do that and should be able to protect that investment.
Good question. I can’t say that I know the answer to that with any precision, but you’re correct. Unlike the analog world, you tend to be tied to your digital printer vendor in terms of the marking materials, the toner or the inkjet ink because of the very fine chemistry that’s involved, and it is patented. So, is it a limitation for digital? It is, but the vendors of equipment don’t want to discourage the use of their equipment, so they price to make a profit but not to inhibit the market.