Curwood, Inc.'s Jennie-O Turkey Store "Oven Ready" Turkey Bag with Curwood's IntegraScore opening feature received the 2005 Flexible Packaging Association's (FPA) Highest Achievement Award in Packaging Excellence as well as a Gold Award in Packaging Excellence and Silver Award in Printing Achievement. It is the first package to include Curwood's IntegraScore opening feature along the side of a gusseted pouch. This technology eliminates the risk of damaging the inner bag when opening the outer pouch. The turkey bag is also unique due to its reinforced handle.
Numbers for the first half of 2005 collected by the National Association of Printing Ink Manufacturers (NAPIM) illustrate how the market is changing. According to NAPIM, the volume of packaging ink declined 1.4 percent compared to the first half of 2004, but sales rose 1.5 percent, reflecting the decision by ink manufacturers to implement price increases due to the higher raw material and operational costs they are facing.
According to Jim Coleman, NAPIM's executive director, "there was a lot of good news" across most packaging ink segments. Sheetfed ink volume dropped while its sales increased. Gravure solvent prices rose faster than volume. The biggest gains were made in flexo solvent, where volume rose 5.1 percent and sales increased 6.6 percent. The only bad news came in water-based flexo ink, which suffered a 5 percent drop in volume and a 2.5 percent decline in sales, which can be attributed to the challenges being faced by the corrugated and folding carton businesses.
Further price increases are on the horizon. Flint Ink announced that effective Oct. 1, its ink prices on the packaging side would be increased from 6 percent to 10 percent depending upon the type of ink, to meet rapidly rising raw material and operation costs. An additional 4 cents per pound surcharge was also put in place to cover higher transportation costs. Sun Chemical raised its prices 9 percent to 12 percent, and will also apply surcharges where appropriate.
Alcan Packaging received the FPA's 2005 Gold Award in Packaging Excellence for its Non-Foil Retort Pouch for Asian Style Selections, which uses the first domestically converted high barrier, non-foil retort stand-up pouch. With Ceramis as its clear, high barrier layer, the microwaveable pouch brings the added consumer convenience of allowing an entire meal to be prepared within minutes.
The acquisition gives Siegwerk additional capacities and capabilities in products and geographical coverage in terms of sales and service and manufacturing.
Siegwerk Group is well positioned in Central Europe, Eastern Europe, North Africa, Southeast Asia and in the U.S. SICPA's Packaging Ink Division supplements this positioning with its strong presence in Southern Europe, Turkey, Scandinavia and Russia, including its neighboring states, South Africa, North America and South America, as well as in the fast-growing Asia-Pacific region, including China, India and Australia. SICPA brings expertise in tobacco packaging and foil labels, as well as corrugated board and other applications.
"The acquisition is a major step towards the Siegwerk Group consolidating its worldwide presence and positioning as a global player," said Herbert Forker, president and CEO of Siegwerk. "We can now supply globally operating converters as well as national clients in every country in the world and support them in application engineering. This also makes us an interesting partner for the major brand companies."
For all packaging ink manufacturers, there is plenty of opportunity to differentiate their products and services. New packaging applications are seemingly being created every day, and these often require unique technologies.
For ink companies, developing new products and providing excellent service are the keys to continued success in the packaging market.
The Packaging Market During the Past Year
The packaging market continues to thrive, as consumer companies look to draw the attention of customers.
The recent strength of the U.S. economy is continuing to drive growth in the packaging market, especially flexible and rigid plastics, according to Richard Pettifor, president, Sun Chemical North American Packaging Inks.
American Packaging Corporation's Orlando Four Cheese Garlic Bread & Orlando Italian Garlic Bread received FPA's 2005 Silver Award in Printing Achievement. This reverse printed package uses NuDot technology to produce superior flexographic print reproduction.
Worldwide, packaging is also growing, Mr. Pettifor said, especially in rapidly developing areas that are supplying increasing domestic demand and growing packaging needs for export.
"Overall, the packaging market has fared well," said Mike Impastato, vice president of market development for Flint Ink North America's Liquid Packaging Division. "It continues to be an area of growth and innovation, even as growth in the overall North American printing market tapers off. Industry players have to keep in mind, however, that even as packaging consumption climbs, threats to domestic manufacturing are something everyone contends with, as outsourcing becomes more and more common."
In particular, flexible packaging and radiation curing are two areas where strong growth is occurring.
"Flexible packaging continues to be a primary growth area, with retort and shrink sleeve markets as growth leaders," Mr. Impastato said. "Radiation curable products also continue to gain momentum."
Sonoco Flexible Packaging's President's Choice Blueberry Cheesecake received the Gravure Association of America's (GAA) 2005 Golden Cylinder Award for Flexible Packaging – Paper.
Gordon Mackenzie, vice president, business manager for SICPA North America's Packaging Group, said the greatest growth in packaging is occurring in flexo.
"Many new high-speed presses are being installed, with great improvement in graphics, although this in turn adds cost and makes the process more technically demanding," Mr. Mackenzie said.
In paper packaging, the market is expected to flatten out, with considerable consolidation going on among converters and increasing threats of imported containers, Mr. Pettifor said. The use of better graphics and some digital printing is adding value to the paper packaging segment, he added. Industry reports show that U.S. shipments of corrugated cartons were down 3.6 percent through August. Meanwhile, folding carton shipments are up 2.1 percent through the first half of the year, according to the Paperboard Packaging Council.
Much of the corrugated slippage in the U.S. can be attributed to increased imports and offshore manufacturing, Mr. Pettifor said.
"If the manufacturing of these products is moving offshore, then packaging will soon follow for cost and time savings," Mr. Pettifor said.
"The corrugated market is flat, growing at GDP at best, but will be a consistent presence in the packaging market," Mr. Impastato said. "The folding carton market is flat or declining, driven by the continued shift from rigid to flexible applications as well as some outsourcing. There are a few key uses for folding cartons, but this will not be an area of growth unless some unforeseen innovation turns the market on its head."
Printing Flexible Packaging
Flexible packaging has been the brightest area for printers and ink companies alike. In recent years, there has been a significant shift from gravure to flexo due to lower costs, improved graphics and the need for shorter runs. However, digital may soon begin to pick up share in the market.
Pliant Corporation and Bryce Corporation earned the FPA's Silver Award in Printing Achievement for Friskies Treats - Various Flavors, 3oz. The Friskies Treats resealable stand-up pouch's shelf appeal sets it apart from its competition. Its unique shape and stunning graphics from the flexographic printing, highlighted by use of metallized substrates, help the package stand out on the store shelf.
"Even with improved graphics capabilities of flexo printing, products printed gravure still show a higher quality, especially over long runs," Mr. Impastato said. "Flexo is very competitive, however, for shorter runs. Customers will often use gravure printing for traditional long runs but print flexo when timely promotions require shorter runs. As packaging designs and marketing programs continue to call for packaging with a shorter shelf-life, flexo printing will benefit."
Mr. Pettifor noted that a recent study by the Graphic Arts Marketing Information Service (GAMIS) showed that nearly 80 percent of the flexible packaging market is printed using the flexographic process, and that same study also shows that both flexo and gravure printing for flexible packaging may experience slight declines as use of digital printing grows. Mr. Pettifor pointed out that while digital printing has a very small share of the market, it does have potential if the technology develops quickly.
Gravure does offer excellent quality of printing and can be competitive on longer runs, Mr. Pettifor said. "However, flexo printing continues to narrow the quality with gravure and has lower costs for short- to medium-length press runs."
"We have seen flexo continue to take market share from gravure and flexo is more than competitive," Mr. Mackenzie said. "For gravure, which is indeed a more simplistic process and requires less 'human' input to be successful, it needs to challenge the areas where it is not cost competitive. One of the most important is ink application, where typically ink costs are 30 percent to 40 percent higher than flexo. There is no reason for this to be the case, just historical precedence."
Chocolates Britt Christmas Tree Pouch, printed by CLP Industries Ltd., received the FPA's Gold Award in Printing Achievement. Competing for impulse sales where tins or fancy cardboard boxes are the standard for special gifts of chocolate, the Chocolates Britt Christmas Tree Pouch uses gravure printing, spot varnish and shaped pouch technology to capture the fancy of holiday shoppers.
A trip to the supermarket confirms the changes that are occurring in the world of packaging. A decade ago, folding cartons appeared virtually everywhere. Today, flexible packaging, shrink sleeves and stand-up pouches are now the norm, as can be seen in flexible packaging's growth from a $12 billion business in 1990 to a $22 billion industry in 2004.
New developments are coming in areas such as shrink sleeves and stand-up pouches, while retort packaging, allowing food to be cooked within the package itself, has gained a large foothold in Europe and Asia, and will ultimately move forward in the U.S.
"The packaging market has several segments that offer opportunities for growth," Mr. Pettifor said. "Flexible packaging still has not reached its full potential, and some areas like stand-up pouches and retort packaging offer substantial opportunities, as does rigid plastic packaging. New shrink sleeve packaging appears on retail shelves almost weekly, and we get an increasing number of requests for Brand Protection solutions via our Sun Chemical Security business unit."
"Retort will continue to grow, as will shrink sleeves, RFID, though more slowly, and to some extent, brand security," Mr. Impastato said. "The latter will eventually take off, but it will be quite a while, perhaps more than a decade, before there's any kind of brand security that is mainstreamed in the packaging print industry. Use of digital inks on packages will certainly continue to grow as well."
Environmental issues are also becoming more important.
"One area that's come to the forefront recently is ecologically-friendly packaging, as highlighted in the recent announcement about Wal-Mart's collaboration with NatureWorks, LLC to provide consumers 'more wholesome, responsible packaging choices made from 100 percent naturally sustainable resources without compromising convenience or cost,'" Mr. Impastato said.
Bud Light No Label Look Family, printed by Precision Printing & Packaging Inc., received the GAA's 2005 Golden Cylinder Award for Product – Technical Innovation.
Packaging is a challenging field, requiring innovative designs that both are functional and draw attention. In the retort packaging market, for example, the package will be used for cooking, and also has to appeal to consumers.
For ink manufacturers, the packaging ink market offers the greatest opportunities to differentiate their services and their products. It is far from a one-size-fits-all market, and offering limited service is not necessarily going to be to the benefit of the printer.
With that in mind, ink manufacturers are emphasizing the value they bring to their customers.
"Packaging inks are highly specialized products designed to meet the specifications and end-use requirements of converters and consumer product companies," Mr. Pettifor said. "By formulating inks that are high performance and give the brand owner some 'wow' on the supermarket shelf, an ink maker can clearly differentiate itself. If the ink maker can back up those inks with responsive service, then they deliver a competitive advantage that spells value.
"Sun Chemical has always been sensitive to converters' needs to produce high quality packaging at the lowest total cost," Mr. Pettifor added. "That desire to achieve efficiency and productivity has been the driver for our long string of innovative products, such as the EB WetFlex inks, that we've rolled out for the packaging market."
Mr. Impastato said that providing optimal performance is essential for the packaging market, and added that Flint Ink has a broad portfolio of products for packaging ink needs. In the flexible packaging arena, Mr. Impastato said that Arrowbond Ultra and Sterling products are popular among printers who demand high performance at higher press speeds. In the folding carton market, Arrowstar, launched at Graph Expo in 2004, has won printers over around the globe. It's easy-to-use and highly consistent on any press, in any pressroom and in any geography.
Mr. Impastato added that digital and RFID technologies, which are being developed by Flint Ink subsidiaries Jetrion and Precisia, are also gaining momentum in the packaging arena.
"We also offer a seamless path to digital and RFID technologies available through our sister companies," Mr. Impastato said. "And of course, Flint Ink backs each and every customer with the expert and friendly support needed to maximize all press runs."
Sun Chemical and its subsidiary, SunJet, are also working on the digital market. One recent innovation is the FastJet, a digital press with UV ink system SunJet developed with Inca Digital Presses. Full release for North America is expected in 2006.
Safeway Select-Chicken & Pork Potstickers, printed by Nordenia USA, received top honors in the Pouches category in the Packaging Label Gravure Association's (PLGA) 2005 Global Awards. It is seven colors reverse printed on 48Ga polyester and laminated with solventless adhesive. The use of metallized ink adds to the overall presentation.
Mr. Mackenzie said that SICPA's in-plant approach sets his company apart.
"We have a very clear in-plant management philosophy that adds value to our customer base," Mr. Mackenzie said. "Ink supply is only one facet to supply to the modern converter – our record is proven in this area." Mr. Mackenzie pointed to the relationship between SICPA and Sonoco Charlotte as an example of a true partnership that leads to success for SICPA and Sonoco.
The reality is that ink companies can make a difference for their customers.
"One example of Flint Ink supporting the success of our customers is the partnership with a multiwall bag printer," Mr. Impastato said. "This printer had lost its 100 percent supply position with a long-time customer due to some sporadic quality issues and turnaround time on orders. Flint Ink came in as a new ink supplier and was able to provide in-house technical service that ensured the right amount of the right ink was delivered to the right press at the right time. Press approvals were streamlined by eliminating ink related downtime and on-press color adjustments. The printer was able to improve turnaround time on press approvals and eliminate color consistency issues.
"Now the printer again enjoys 100 percent of their customer's business and has improved efficiencies in their flexo printing operation," Mr. Impastato concluded. "We are proud of the fact that Flint Ink was instrumental in the repairing of this long-term relationship."
For packaging ink manufacturers, providing innovative products and excellent service can ultimately make a major difference for their customers in this growing market.