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In this first episode, we proudly present Ron Gilboa who is the Group Director managing a very recognized and skilled number of industry analysts.
My name is Ron Gilboa, and I’m the group director of the production team at Keypoint Intelligence. This is a group of very diverse set of people with ranging skills from helping print providers, communicators, and of course industry vendors in understanding the opportunities the digital printing workflow and solutions bring to us as a whole in a variety of different industry segments, whether it’s commercial printers, packaging printers, signed graphics display, as well as decorative printing in other areas of industries that are now benefiting from significant growth in digital printing that helps them make good business decisions and grow their business.
Well, wide-format printing is a, if you will, a very broad term for an industry sector that serves a range of market segments, whether it’s technical printing, sign display graphics, creative, as well as industrial segments, whether it’s a laminate printing, textile printing and others. So today we’re going to be focusing on fundamentally what we in the graphic arts market relate to wide-format printing, which is mostly sign display graphics.
Sign display graphics is a segment that is dealing with communicating messages via banners, posters, point of purchase displays, decals, floor signs, a variety of different applications that end users are engaging with on a regular basis. And that is a market that is mature, that is a market where there is a lot of technology and very high use by a variety of print providers.
Well, it’s not a completely new market by any stretch of the imagination. As I said, it’s a mature market because the digital transition in this segment happened many, many years ago. There’s still screen printing happening. There is also a lot of digital printing happening. And there’s also digital displays that in the last few years have come into the marketplace. And all of these technologies compete on [mind share 00:02:38] and a real estate in its core meters are printing in a variety of places. We typically see about 50% of the output goes to outdoor signs, and the rest goes into indoor signs. And within each one of these, there is a variety of different implementations.
We’ve seen in the last few years, various types of point of purchase displays becoming available to end users, whether rolling types of materials. We’ve seen textile coming into that space with a feather flags or banners and things of that nature. We’ve seen the world of trade shows completely moving into self signage. If you’ve been to an airport, I mean we travel a lot, I kind of walk around with, my hands are on the walls to see how the signs are made. We’ve moved from paper signs behind protective plexiglass or glass into signs that are made out of fabric. They’re very, very easy to mount. They don’t need any additional protections on top of them. So we’ve seen the industry churning and moving, and fundamentally the types of output we just talked about, whether indoor or outdoor, falls into what we call durable inks.
And there are several inks that are used for those very high permanency applications where it needs to be scratch resistant, or touch resistant, or easier to implement, and things of that nature. And they’re typically based on the types of ink used in those environments. And there’s a few inks that have been dominant in this space for many, many years to name. One is solvent and eco-solvent, and we’ve seen solvent and eco-solvent holding the market for many, many years, printing on vinyls, printing on various types of material, very high durability and fairly cost effective to work with. And the market as a base has been using this technology for many years and likely to use for awhile longer. However, solvent inks have some issues with it, which we can discuss a little later.
The other inks are entering that segment as the technology mature. One of them, one of the first ones has been sublimation, where we take sublimation inks and then take a paper, then transfer it to fabric or any other materials that we want to create the face transfer into. And those are very, very vibrant things. They work very nicely on fabrics. Fabrics are nice and easy, and light, and easy to hang. But it’s multi-step process, so we’re looking at other technologies coming into that space and ultimately help bring it to, if you will, the 21st century.
One of the bigger players in the industry has introduced latex inkjet a few years back. They’re are very dominant in that space. That’s HP. And latex has been initially used for paper printing and then it moved into other substrates. Now Latex can work on rigid materials. It can work on fabrics. It can work on metals, and wood, and a variety of different materials, which are very, very easy to then implement into the sign display graphics.
Many of the inks that have been introduced in the new generation of latex have higher permanency. They have better scratch resistance, and they withstand weather a little better. Although most applications that I’ve known with latex have been indoor application.
And of course we cannot forget that there is UV inkjet. And UV has always been the ink that prints on any substrate. In the last years we’ve seen a really good strides where UV became an ink of choice for many, many suppliers. One advantage of UV is you print, and you cure, and you’re ready to go hang. So there’s not too much delay time between printing and actually going and putting the posters or sign wherever they need to be. That’s true for UV as well as latex I might say.
The other innovations we’ve seen in UV have been the introduction of LED curing. Typically we used to cure with mercury lights and if the substance got stuck in the machine or something happen, it will burn because the mercury lights are always on. And if something bad happens, it limits the amount substrates you can print on. And the introduction of LED, almost in once, alleviated all of those issues. You can print now on a more heat sensitive materials such as film, mesh, and other types of materials besides materials that can take the heat very well. So LED has fundamentally changed UV printing.
We’ve also seen many of the vendors investing in making their inks more robust. And we’ve seen several different areas in that space. One is the reduction of VOCs. If you recall the older UV inks, they had some after-smell. And many of the vendors today claim very low VOC or almost no VOCs with their inks, which are volatile organic component that created that that smell, and those have almost are gone.
Also what we’ve seen, the inks becoming a more flexible. So typically if we printed UV on a flexible substrate and we would fold it or crunch it, the ink would crack. Today’s ink can elongate almost 400%. That means we can do fabric printing and stretch the fabric, and the ink will remaining place. Or we can do thermal forming and really stretch and material a lot, and the ink will still stay put.
So that brings in a set of inks that are really, really important to the industry, predominantly with those durable applications. So we’ve seen sublimation becoming much more effective. We’ve seen it moving into direct sublimation for sign display graphics. We’ve seen latex moving in from flexible materials altered for rigid materials. We’ve seen UV advancing. And even though solvent or eco-solvents are still popular, they are slowly diminishing in their use as more materials become available with the other technologies and available to end users to be very, very creative.
Typically what we do at Keypoint Intelligence is we research the market to kind of get the pulse of what happens with both end users as well as suppliers. So we survey all the suppliers once a year, or once a quarter to be honest, with regards to what’s selling. What’s hot? What’s flying off the shelf? to understand which technology is going into the market. And then we compile that into an annual industry forecast. For example in our latest forecast, which is forecasting 2017 out into 2022, we predicted that the volume in those durable inks we just noted is going to grow at about 10% compounded. That means that by the time we get to 2022, we think that the volume is going to be about 891 million square meters across all of those technologies.
Obviously, they’re not all growing in the same way. So for example, we predicted solvent continues to decline to about 17 million square meters on a regular basis, for example in the US. By the way, the number I quoted is a US number. Whereas latex printing is going to grow to about 154 million square meters. And UV, which is one of the fastest growing category, is going to grow to about 520 million square meters. However, we have to always remember there are different nuances inside each one of those categories which are reflected in our research because not all UV machines are very big and make very big signage. Some of them are very, very small, used to make printing on golf balls, and pens, and phone covers.
So there is multiple dynamics inside each one of those numbers that ultimately drive the growth, but it is growing. And what we’ve seen is that though some of the placements may be declining, the volume keeps growing because the efficiency of those devices coming into the market is very, very high.
Those numbers tell us one side of the picture, right? We go to vendors. We asked them, “What do you do?” and then we do some secondary research within users with regards to print volume and things of that nature. But we also do some primary research and we go to end users and we ask, actually ask specific end users, “What are you doing? How is your business? Is it moving in one direction or the other?” And we’ve been doing this with a variety of different partners around the world, whether it’s the FESPA worldwide organization, or SGIA in the US, or others to really understand what their end users are doing.
And we’ve heard from end users telling us that even though there’s still investment in some eco-solvent technology, one of their top categories usually end up being UV printing, latex, and in certain cases, sublimation, depending on where they’re coming into the market from. If they’re just digital printers or are they sign display graphics that have some existing technologies, there’s going to be some variations. But for most of those cases, we see UV printing as one of the top technologies everyone is looking to invest in.
We want to make sure that when we develop our forecast, we develop that side of the research, it is bearing testimony to what’s happening with end users. And we also visit end users on a regular basis. I’ve just came back from a big producer in the New York metro area. We spoke with them, visited their site. We spoke with a few others in a focus group that we’ve done. And we looked at, what are their pain points? What are the things that they’re looking to get improvements on? And oftentimes we’ll hear about what’s working well for them, which technologies they are using. That particular user is, you know, invested heavily in a UV as well as in sublimation, a variety of different devices both big and small.
But also it is very, very important to note that as much as they made investment in their printing devices, they probably made a very big investment also in feeding, and finishing, and getting material to the machines, getting materials off the machine and then finishing it off because the work is not done until the final product is actually either hung in place. And they’ve been doing a range of applications from point of purchase displays, to banners, to retail furniture and retail displays. So the diversity of the application was really, really exciting to see.
We work with several audiences here at Keypoint Intelligence. One of our prime targets is the vendor community, the vendor community that is looking to figure out the strategy going into the next cycle of product platforms or the next cycle of trade shows or events or the next … the upcoming year now, that we’re coming into. It is a very competitive market. The sign display graphic market has been digital for many, many years. There are products there for a very cost effective a entry point, all the way to multimillion dollar machines that satisfy the needs of very, very big operations. So the vendors are one of our audiences.
The other audiences that we work with as well is the end user marketplace or the end user who is looking to invest or looking to what is their next investment is going to be to make sure they’re going in the right direction.
So our research have been used by many end users. For example, the FESPA census that we do on a regular basis with this great organization is used by some of their members to justify banking loans and to show the bank that in the region that they’re in there is this demand and growth for those types of application. And the result of that, their investment in technology is justified.
So we’ve been doing work that straddles both the end users as well as the vendors. Typically for some end users we can also offer custom work, which is unique to them. We can go in and analyze their business, analyze their workflow and give them [inaudible 00:16:01] recommendations. So when they set strategy in motion, it is based on solid findings from either their local markets or the overall trends in the industry.
We typically given the fact that we work with many of the vendors that is by definition check on the way we’re doing things because they’re going to be very, very sensitive if we’re going to be biased one way or the other. However, we’ve been doing this now for almost three decades. We’ve been in the industry. The vendors in the industry trust us. We’ve worked with some of them for decades as well. And we became a reliable source for them for ongoing, unbiased forecast information, market research information, and we support their activities. Typically we keep a lot of the work that we do firewalled in a way that we don’t reveal any trade secrets or things of that nature because that is the key for all of that work.
However, many of the vendors in the industry are interested in promoting and looking at where the industry is at, who has market share. And ultimately when we do that, we share it with everyone. So we’re not leaning into one vendor or the other. We’re trying to make sure that we have an unbiased opinion with regards to that. And you’ll see some of our materials appear in some press reports from vendors and others where they take our data and report it as, you know, “The Keypoint Intelligence team believes that this market is going to grow at a certain rate based on their research.” And usually you’ll typically see that in some presentations where you go to SGIA, or you go to IMI, or you go to other a user events where our material is used or we’ve actually presented in person in those events. So typically that has been an ongoing relationship with both the end user community and the vendor community that has been built on trust.
All of our analysts have been in the industry for many, many decades. They have experience working for vendors. They have experience working as consultants. A lot of us have been working as print providers beforehand. So when I started my career, I had a two-color Heidelberg and a DS608 scanner, and I ran a shop for a very big organization in my home country. We all have ink under our fingernails. We’ve all, you know, walked the talk. So when we come in, we bring in hundreds of years of combined experience between us. For myself, working in prepress, working in printing, whether it’s [inaudible 00:18:54], offset, digital capture, workflow and those kind of items. Those are the things that I bring to bear into the consulting world.
And once I amassed my knowledge on what’s happening in the industry with regards to technology, then you can really get into the nitty gritty things like, how’s the ancient bill? How many orifices are in an inch? Is it circulating, not circulating? What type of ink is running through it? Is it water-dispersed, or is it solvent-dispersed? All of those are little intricacies that help us come in and provide valuable insight to end users. I mean, you and I just witnessed the call for one of these who are looking for things that probably will end up in high chemistry to figure out why a UV inkjet printer is going to achieve a certain goal on a certain substrate that was pretreated. And those are the day-to-day dilemmas that print providers have that they need to solve.
So we need to be basically constantly on top of technology, on top of innovation and particularly when it comes to digital printing. And specifically when we talking about inkjet, the disciplines that you need to be aware of, whether it’s chemistry, mechanics, electronics. And of course all of the permutations of workflow are things that we, with the team that we have here, keep a keen eye on to make sure that we can give good advice to those who are seeking it so they can then make the right decision.