Data and access to the same are today more essential ever. Fortunately, companies like Smithers, and people like Sean Smyth work every day collecting the needed data from an incredible number of sources. In this (long), but VERY exciting Over the Skype, Sean Smyths share his view on the importance of data and why the data is needed.
As with all our ‘Over the Skype’ interviews, quality is limited to bandwidth, web-cams, and ability to literally LIVE mix the conversations. However, it works, and with Over the Skype, we will bring you more than 20 exciting people, and angles on the industry as it is right now.
This is Morten from INKISH. And yeah, as you can see, I’ve changed my scenery a little bit from last week because with the Coronavirus I think that the biggest travels you can do these days are going from your living room to your kitchen, so that’s exactly what I did. But that doesn’t change the fact that I’m talking to a lot of very interested people these weeks here. So today I had the honor of talking to Sean Smyth from Smithers Pira. So Sean, why don’t you introduce yourself a little bit?
Okay, Morten. Thank you for the introduction. Just to correct you, it’s now Smithers. We’ve dropped the Pira name, and are going under the Smithers Organization. And I [crosstalk 00:00:52].
So I was not even up to date on that. Isn’t that bad of me?
I wouldn’t lose too much sleep on that.
Okay, thank you.
I act as a consultant and an analyst for Smithers. I class myself as a print techy. So I’m a print technologist. I’ve been in the industry, as you can see from the color of my hair, for quite a long time. And I’ve been using technology and talking to providers, users, and looking at some of the interesting things that happen. And we use the technology, along with a whole range of other inputs, to providing a set of forecasts and a set of reports. And I’ve been writing a number of those over several years in conjunction with my colleagues within the Smithers Information Group, and we’re in the process of updating our reports in light of what is currently causing the world to be a very different place to what it was a couple of months ago, which is obviously going to have some changes in there, and so I’d be very happy to let you listen to me, tell you what I think is going to be happening in the world of printing and printed packaging.
Sounds really great. Before we get started too much in those details, I mean Smithers is of course very well known and have very high reputation in the market, but before we talk about some specific details of your work and some of the considerations you have, could you elaborate a little bit what your opinion about the value of having access to datas in more general terms?
Certainly. I think, depending on what you are trying to do as a business, basically the better the information you have, the better the business that you will have. Occasionally you will get lucky, and there may be some niches that you stumble into, but in printing and printed packaging, those are getting very few and far between. There still are some examples of extraordinarily successful printing companies who started lucky, but many of the good ones don’t start lucky. They have a view, they know their marketplaces, and they can put their resources into places that are more likely to succeed. And management of whatever you are, if you’re a business, if you’re an organization, is all about successfully allocating your resources. And if you don’t have access to good information, you may well place your resources in the wrong place, in which case, in the printing and printing packaging market, now you may not be here for very much longer.
So we are great believers in data. If you can measure, then you can act accordingly. If you can’t measure, I suspect that you won’t be acting properly. And Smithers has been riding data for many years. It’s been sold to many organizations across the print and packaging supply chains, suppliers of equipment, supplies of materials, suppliers of consumables, as well as printers, packaging companies, and brands, and publishers, and people that use and define printing sectors.
As you said, because of your color of your hair, you said that you’d been in the industry for some time, and I was just wondering because-
[crosstalk 00:04:40] hair to go white.
Yeah. Because I was just thinking that obviously the industry, the printing industry, and all other industries have changed a lot in the past 10, 20, 30 years. And one of the things that I really like about what you’re saying is that it’s not only the vendors that are acquiring and using the data that you can provide, but also printing companies, but the data that you provide, is that mainly for the ones with the deep pockets, or is that also mom and dad shops, and maybe smaller family owned printing companies who need the advice on how to move on with the business? Or how do you see that?
Sure. Smithers publishes a number of reports. They are regarded as sort of quite high costly items, if you want to subscribe to them, and people continually subscribe to them, so we believe that they are sort of high value added areas. And there’s an awful lot of data within them, and we provide access to companies that subscribe to them. And so, in general, you have a lot of mom and pop shops would be priced out of that if you like, but in the case they will have access to certainly some of the trends and the major things that we think are growing, falling, and declining through releases, through subscribers who may be equipment manufacturers who will parcel up some of the data and show it as they’re providing marketing support, or some of the print organizations from Intergraf.
Yeah, because the latest congestion of data that I saw from your hand, or not maybe your hand personally, but from Smithers, was the report from Intergraf about the status of the European printing industry. So is that a consecutive report where you consolidate data for them? Because there was more sources in it, I was just wondering if that’s the kind of thing that normal people would go and see.
I mean that happened to be an event that we were involved with, and I was in Brussels a few months ago, and delivering, saying looking at the future of commercial printing, and that’s sort of one example of what some of this does in terms of its developing a … or in response to a question, it will provide a cut of the data. We hold a huge database, looking at, I think there are 67 individual countries and regions, and within each of those we try and track … Ultimately there are 18 different product sectors. And within each of those we also try and track, I think it’s 9 or 10 of the print processes. And when you put all that together and you look at it over a period of time with a forecast going ahead, you end up with a large file.
I can imagine that. Yeah.
If you can’t sleep very much, then looking at this data will be a very good way of helping you to sleep, I think.
So it could be a Corona treat as well. If you’re bored, you could just start reading your reports. Is that what you’re saying?
Well I think then if you start reading the reports, hopefully there’ll be some useful insights that you can take out.
I’m sure about that.
The issue with the data is I could tell you that we think that the print market globally is worth 826 and a half billion dollars in 2019. We think it was going to grow by about 1% globally to get up to 834.2 in 2020, but that’s not going to happen in that, but that’s not a huge amount of use to you.
No, but you mentioned that number, you know I’m going to ask you in a second, but before I do, I’m just wondering how do you accumulate that data? Is that by looking into the books and try to figure out the value? I mean just the fact that you have 250,000 printing companies in India worth $11.6 billion is a big chunk, but if it’s divided on 250,000 printing companies, the number is not that big, right. So I was just wondering how do you accumulate and get accuracy when you have estimates like that?
Okay. I mean this effectively takes sources from a very wide range of activities, and we then have generated this data, and we then publish it, and we get feedback.
Of course. So whenever you say a number, somebody will either question or confirm it, right?
Well before we say the number, we go and talk to people and say if you happened to be selling, let’s say, [gravure 00:10:05] ink into Turkey, then we will have a view on how large the ink market is. Because I’ve been an ink maker many years ago and do things, I’d probably have some contacts and say, “Well I know that you sell probably 50% of your gravure ink in Turkey. We think the total is X liters. We think it’s worth Y dollars, euros, Turkish whatever they are.” And they say, “Well, actually, we think we’ve got 60% and we’re a little bit higher.” And we are continually refining the data.
So that is like putting data in relation. So if you look at the volume in paper, the volume in ink, and the number of machines, and that kind of thing, you can build models around this so you can come with adequate estimations. Is that how you do it also?
Well that’s part of it. I could bore you for a long time on how we generate the numbers. We do original research, we look at forecast, economic forecast, demographics. We also apply some technology developments to it. We look at the unit or the relative costs of production of different printing processes. We see how the technology is developing. And we make views on how technology is going to perform.
That sounds interesting.
We also do some market tracking. So for example, we talk to the leading manufacturers of plates. Each of them sends us their volumes of different categories of plates, where they sold them, we coordinate that data, total it up, and tell company Y they have X percent share in the Middle East, X percent share in wherever they want to know, and see how they are going against the overall market. And we do that for a lot of people, and people are generally willing, if you give them an estimate, they’d probably tell you what their market is and what their values are, but what they will do is they’ll say, “Well, we think you’re too low at one place,” [inaudible 00:12:22]. And this data is out there, and it’s very widely spread, and it’s very rare I get a call saying [crosstalk 00:12:30].
You’re totally wrong.
You’re totally wrong.
Yeah. One of the questions, and I’m very curious about because when you say $819 billion in global revenue in the printing industry, I couldn’t help thinking of I was at Online Print Symposium in Munich in the beginning of March where CEO Rainer Hundsdörfer from Heidelberg, he was pretty solid in his expression about that the global print market has been quite stable over the past years around 400 billion euros. I was just wondering, do you know why there’s differences in how you see the print market? I mean if you are a global leader in the Offset Printing industry, I would think that you have access to at least some of the same data, maybe even subscribing to your data to get an idea about market size.
The whole point of printing is people talk about the market, they talk about the industry. There is not a single print market or single print industry. It is a great continuum [crosstalk 00:00:13:40].
Okay, so that is the diverse of silos and segments that can be talked about.
So it’s everything from newspaper printer to a commercial print shop, mom and pop shop, a signage display printer, a magazine publisher, a magazine printer are going to be very different to a manufacturer of flexible packaging. The Smithers data, the top line includes printed labels and packaging, it includes publications, it includes graphics. We would size the graphical sector of that in 2019 at exactly $400 billion, give or take a few, if I put this down to an area, and it may well be that the manufacturers, whoever they are, talk about their addressable market.
Okay. Of course. So that makes, of course, sense then because I mean it doesn’t make sense to talk about market shares in a market you can’t address anyway, right. So when an audience listening to different people and they said different numbers, for example, when it comes to size of market, it’s more a question about defining what markets in the printing industry you’re basically addressing.
That certainly is an important criteria. And different companies will address different portions of the market. For them, it may be the value of equipment, the value of consumables, the value of everything that goes into the print market, rather than necessarily that factory gate pricing, excluding VAT, how you express it. Are you using constant dollars? Are you using current value? And if it’s in square meters or tonnage. You will get the same data, it can be very different, and I am absolutely not going to say that one is right, one is wrong.
No, that was not my intention. Sorry. That was not my intention with the question. Sorry?
You need to know the definitions.
It’s difficult, so I apologize for speaking over you.
Understanding what people are talking about and the criteria that they are using when they make market definitions is important. The other thing I always sort of bring up when people ask me about data is my father was an economist. I have inherited many things to my father, but I am no economist. But he always liked to talk about Milton Friedman, the great us economists who had some fantastic sayings for everything. And he said that economists give their predictions because they are asked what their predictions are, not because they know. So I’m very aware that people will have different views on market figures. Smithers has been doing this for a long time, I’ve been spending quite a long time on it, and I have a lot of background and developments in how we think the market is going. And generally we have a pretty good track record.
Yeah. But I also think that … Sorry, but I think that one of the things that are quite interesting with Smithers is basically, I guess, that the mythology that you have used over the years are more or less the same. So that means that you can track the changes when, for example, it goes from a litho offset to digital inkjet, or whatever, because you’re using the same measures in your reports, right?
We use the same measures. Yeah, absolutely we do. But they tend to change. So 15 years ago, or whenever we started doing this, there was no inkjet textile printing. Now there is a lot of inkjet textile printing. Within our data, we avoid the value of industrial printing for fabrics, for garments, for carpets and various other things, but we would include soft signage. Now soft signage market and a lot of textile printing have basically coalesced together. You cannot say where one starts and one finishes. So although the methodology has been broadly consistent, it changes hugely. It’s interesting when we look at the printing processes. We defined inkjet, fairly obviously, as things that that use non-contact printing through inkjet. Is Landa an inkjet process, or something different? In Smithers world, it’s an inkjet process, but that’s possibly because I … but you need to understand the definitions.
Right. It’s also funny that you mentioned this because I remember, I think maybe two or three years ago at one of the print shows in Chicago, I had a conversation both with Ron Gilboa and with Frank Romano, because that was the time where this new print was quite a lot in the media. And one of them, I think it was Ron, he said, “Yeah, but it’s funny with the new print because there’s nothing new print, it’s just changing from being some technology to some other technology because we have always been printed on garments, and things like that. Now it’s because it’s coming into the more conventional printing company sphere that now we start to think of it as a new print,” which is kind of what you’re saying here when you’re talking about this, right?
Absolutely. It’s definition. So the numbers that I’m going to be talking about do not include the value of printed tiles and ceramics, which is an important sector. It does not include printed electronics.
Yeah. Which are both exciting areas to look into in the future. I don’t know about what you think about, because as you introduced yourself, you are a print technologist as well, right, or nerd, or geek, or whatever, and I was just wondering, I think that some printing companies might consider some of the new print areas, like print electronics, or printed garment, maybe also print electronics, but do you think … 3D print. Do you think that is something that naturally belongs to the conventional printing industry or how do you look at that?
Well, it belongs to certain sectors of the printing market. In the ’90s, I was the technical director at Rexam Printing. And we were a 200 billion … Sorry, a £2 billion company in those days. We owned a company on the Isle of Wight in the south of the UK, NFI, who did exactly that. So they printed using silk screen, the various analytical testing mechanisms for blood sugar levels in glucose. They printed keyboards for IBM. They printed some of the dashboard components of cars. They were part of a group. We probably didn’t treat them as well as we might have done. But absolutely. Printing companies will spot opportunities. We talk about disruption, and we’re in an hour, nobody knows what’s going to happen. Hopefully the medical people will sort this out, and the packaging people will help us get the necessary vaccines and treatments and things to support it, but we don’t know exactly how long it’s going to take, and we don’t know what the economic damage is going to be before it ends, but at some stage there is going to be the day after tomorrow.
100% sure, yeah.
Absolutely. But some printing companies will not be there. Other printing companies will be very strong. If you happen to be printing packaging for box deliveries, I suspect that you have been printing for 24 hours a day as much as you can. I hear that some of the brands in China are being more trusted now, and people are moved away from non-packaged goods, and this has put a huge pressure on packaging and label printing companies. [crosstalk 00:00:22:37].
That is the curse of Skype interviews, right? No. My question is do you think that when you start looking into the numbers of the industry, do you think that it will be something that you can see relatively fast, or is that more something that comes over a period?
I think it comes over a period, but I think what will happen is that a traditional printing company that may have had one or two litho machines, it may have had a digital press, and it may have been producing a wide range of things, we’ll see a lot more non-ink on paper, non-ink on substrate added value opportunities, whether that be very fast turnaround, whether it be doing design, partnering with clever finishing companies and doing a range of things. And that’s been happening forever. And more and more of the companies, when I go and see them, they’re not just printed product providers. They do events, they do all sorts of strange things, and I think that will accelerate. And I think you’ll see a lot more partnering sort of going forward.
And I think businesses that historically have focused on being extremely slick, clever print providers are going to have to start doing other things as well, and they’re going to have to start partnering. And instead of trying to do a wide range of things for a few customers, and stopping those customers going to other printing companies, I think you’ll see a slight change, and there will be a rebalance of supply to whatever the final demand is. But I think you’ll see a lot of innovation and variation in what companies do, and what they regard as being the traditional markets. And there is absolutely no doubt some of them are going to look at packaging and labels, and new printing. It may be new printing for them, but wallpaper has been printed for hundreds and hundreds of years. Probably before commercial printing, in some cases. [crosstalk 00:25:05].
Sean, one of the things that I am thinking about talking to you, it must be fantastic to sit in a company with that wealth of information that you have because I guess that you sometimes also get information under NDAs, and I guess that you can even use your data to support developments of technology in certain directions because you have this insight of data that is extremely valuable, but first of all, is that a correct assessment that you have that and you can use it that way? And secondly, if you do so, can you talk also about mega trends in where, if you look at the printing industry in a longterm perspective, can you use data to kind of see the future?
Well seeing the future is always difficult, and anyone who tells you who can see the future is probably lying, but what you can do is you can take the knowledge that you have and say well, if this is going to happen, then all of a sudden that means that this process is going to be far more economical, far more useful. Therefore, it’s likely that that will grow and that one will decline. And as well as providing the information, Smithers also acts as a consultant, and I do consultancy work for many of the leading equipment manufacturers, analog and digital, and also for suppliers to them who may be an inkjet head manufacturer, an inkjet ink manufacturer, or a manufacturer of components that go into inkjet inks and they do things. And we look at areas, and we look at an awful lot of wealth scenario planning. What if this happened? What if this happened? Is it likely that the technology developments will move away? And that’s one of the implications.
One of the key trends that the printing industry as a whole, having said there isn’t a whole printing industry, tends to forget is end user preferences. Demand for print comes from a whole variety of things, but it’s from people using print, ultimately. And if they like using Facebook, Google, whatever, TikTok, they will do, and print has to become relevant to them. But we’re trying to factor in a range of these areas and go where the money goes in that. And as a result of that, we have forecast the rise in digital printing, and when I look at how I think the sectors are going to change, I think digital printing is going to fare better, I suspect, then many analog print areas because it can be more flexible, because it can be more tailored to provide what individual customers want, which is not huge runs of the same thing, it’s things tailored for them, and digital is very good at doing that.
Yeah. When I was attending the Online Print Symposium with Bernd Zipper in March, that I just referred to before, a lot of the agenda was also down to the copy of one, and individualization, and personal need, and how the new generations look about print in totally different ways, and how the smartphone can interact with the printed products and things like that. So I think that you’re totally right. There’s a lot of changes in both when it comes to mass produced products in packages and labels, but also when it comes to the types of product because basically, if you have individuals as your audience, your audience is potentially seven billion people, right. So you can also look at it from a perspective that the market is rapidly growing if the technology is capable of delivering what it needs to be able to deliver in order to have that kind of individualized products.
Absolutely. My daughter is a teacher. Schools in the UK now have been closed. There’s an awful lot of homeschooling going on, and there’s an awful lot of high demand now by parents looking for some books that they can make sure the kids are actually writing the answers down rather than touch the screen and playing it. And [crosstalk 00:00:30:00].
And I’m happy that you … I’m happy that you mentioned that because my wife, she bought three books for my kids the other day, so that was totally aligned with the statistics and the trends, so that’s great.
It’s difficult to know how they do, but I think the other thing that will happen, and you mentioned Bernd and the Online Print Symposium, will be the routes to market and how print companies can actually satisfy demand for new customers, they can use partners and other suppliers rather than having to do it themselves, and if they don’t have to do it themselves, it means they don’t have to do some things they’re not very good at themselves, and I suspect that one of the interesting things that are going to come out of this is far more focus, far more specialization, and far more actually high levels of efficiency coming out on the back of not doing a range of things that your customers want you to do and you do for them to stop them going to a different printing company. Maybe we’ll see a lot more of the sharing and collaborate.
Now that has a significant impact on the demand for print equipment and the efficiencies within printing companies. And the online community, particularly the trade online community, I think probably there’ll be issues for them, but I suspect that they will do a lot more work. And I think that, for the smaller shops, if they are just focusing on themselves rather than the broader community, then I think that that’s not going to be necessarily sort of good for them because some of the monsters that-
That takes everything.
Not the right word. Large companies, I should say, online community are extraordinarily efficient, and they can gang together, and they can do some very clever things, and take time and cost out of the process, making it more relevant, far more timely, and overall increasing the efficiencies of that. I think we’ll see changes in how we think about print manufacturing.
Yeah. That’s the interesting thing.
Instead of serial processes.
Yeah. Sounds great.
Why [inaudible 00:32:38] serial processes? The technology [crosstalk 00:32:41].
Yeah, because we have been used to that.
We have been used to it, but now if you really want to sort of get a better way of manufacturing a book, you will not reinvent the analog processes, you’ll do it differently. And that will happen for many, many print processes. And the clever people who are running small, medium businesses, and if you’ve succeeded in running one and you’re still here today, you are a clever entrepreneur, and engineer, and technologist, will do it differently and they’ll change it. You’re seeing printing companies getting involved in producing the personal protection equipment. And you think why are they doing that? Well they have the skills. [crosstalk 00:33:33].
And there’s a need in the market right now. Yeah. So they adapt to the needs.
But they have the skills. And this is how I think, come the day after tomorrow, that the industry is going to reinvent itself. But I think it’s going to be a very different industry to what we thought it was six months ago. And it will be doing more things in new ways, using the inherent skills that we have of technology management, and understanding demand, and seeing opportunities.
Yeah. Sean, final question here, because we’ve been talking for 35 minutes, which is nice and good, so time flies by. Things changing a lot in the printing industry, as we just discovered in our conversation. Is it also changing for being a knowledge supplier? Is the market changing for companies like Smithers, like Keypoint Intelligence, like ITC and all the companies that have been producing highly demanding, in a positive way, reports and surveys and the research work? Is the market ready to continue supporting that knowledge gathering, or how do you see that future for company-
I can only speak for Smithers.
Of course, yeah.
And I have been involved with a number of calls that people are looking out for potential new work, and that’s sort of coming up. I don’t know how that sector will supply. We run conferences, and they have just stopped. Hopefully they’re going to come back later on. We do bespoke consultancy as well as providing the reports. There is no … or as far as I know, we are still going to be producing the same number of reports, probably the mainstream ones, which the print, and packaging, and paper reports are, as far as I know, still going to go ahead. And I think that, at the end of it, insight and understanding of market trends is going to be critical for companies as they manage their way out of the situation that they find themselves in come the day, and they plan for the next Drupa, they plan for the next FESPA in the areas because there is still going to be a demand for print in packaging.
Some bits will change, but if you can’t get food in restaurants, you get food at home, it has to get to you without hitting food waste. And so for the knowledge suppliers, if you like, from the business perspective, I don’t worry too much about that because I’m just the guy, or one of the team that delivers it and does what we’re asked to do. And I see people looking at industrial printing, what are the added value opportunities in there, if I’m a supplier of equipment and if I’m a printer doing it. And I suspect that there will still be a requirement for that, but I think the businesses will be slightly different going forward, and hopefully sort of focused at supporting people and seeing how they might change their market offering to make it more relevant for them, and the market to take advantage of.
Sounds great. Sounds perfect. And I could concur more with you because I think that knowledge in an industry and in a world where sometimes I think there’s too much 2 minutes, 3 minutes, 30 seconds communication. I think it’s good that sometimes we have time to talk, and I think it’s also very good that a lot of people in industry still need comprehensive market research and information about both market and technology. So Sean, I just want to thank you very much for the time. I know that we made this agreement very short notice, but I really appreciate the conversation, and thank you very much.
Morten, it is absolutely no problem. But remember, if you want to get from where you are now to somewhere else, in the good old days you would use a map. Today, you use GPRS. It’s information. Print information can be fantastic, but it also does other things. It can package, it can do various things, and print is still relevant and will remain so probably certainly longer I need to worry about. [crosstalk 00:38:37], and please keep well and keep safe.
And you too. Thank you very much. Talk to you soon.
Okay. Thank you.