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    Features

    The Packaging Ink Market Continues to Thrive

    New technologies are helping to drive the growth in the packaging ink segment.

    The Packaging Ink Market Continues to Thrive
    The Packaging Ink Market Continues to Thrive
    Photo courtesy of Siegwerk.
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    David Savastano, Editor05.15.17
    The packaging printing market is one of the strongest growth areas in printing. Ink World estimates that packaging makes up approximately $8 billion of the $20 billion global ink market, split fairly evenly between flexo, gravure and packaging sheetfed inks, with digital printing growing in use.

    Depending on what part of the world the package is being printed, the primary process will differ. Flexo is the leading packaging process in North America, while gravure is dominant in the Asia-Pacific region. Flexo is making gains in Europe and Asia-Pacific. Also, digital printing is expanding, as inkjet is increasing in label and narrow web applications as well as making new inroads in corrugated.

    Packaging ink manufacturers continue to see growth in the market.

    “There has been an increasing demand for flexible packaging, including new types of packaging materials,” Siegwerk CEO Herbert Forker noted. “Siegwerk has seen an interest from our customers in creating eye-catching products, for example, using special effect inks to highlight packaging with unique designs. Overall, the global packaging printing market shows steady growth with individual momentum according to country, application, ink technology and printing process. We have a strong market position due to our close partnerships with our customers, who help us target our R&D efforts towards upcoming trends in line with their requirements.”

    “There is indeed growth in this market, and considering the forecast of an annual growth rate of approximately 5% based on the 2015 value figures, participating in this upward trend seems a feasible task,” said Heiner Klokkers, management of Europe and South America at hubergroup.

    Deanna Klemesrud, global marketing director - brand and promo, Packaging & Narrow Web for Flint Group, said that Flint Group is seeing positive indications of growth in the market, with many printers expanding into other application segments.

    “There is continued consolidation in this market space, with some customers growing substantially through mergers and acquisitions,” Klemesrud added. “All indications do confirm that this is a healthy market with GDP growth rates, or higher, for the total market, which we expect to continue. As for Flint Group, we are enjoying growth in our packaging business overall, with some rather strong growth in specific regions and business segments.”

    Todd Dragoo, technical services director of offset/digital for INX International Ink Co., also noted customer consolidation.

    “The overall packaging market is strong, with mergers taking place regularly. We are seeing more opportunities for growth in the offset segment,” said Dragoo.

    “The package printing market continues to see ongoing, healthy growth across the flexo, folding carton, corrugated, and narrow web, tag and label markets,” said Felipe Mellado, chief marketing officer, Sun Chemical. “This has translated into Sun Chemical also seeing growth in the packaging market overall, especially in the flexible packaging segment.”

    “The growth has been steady in the US market, supported in part by consumer spending,” said Masa Nagatsubo, GM, Liquid Ink Business Division of Toyo Ink America, LLC. “Our customers are investing in equipment to increase their capability to meet a growth in demand. Accordingly, we are enjoying the growth of packaging applications across a wide array of consumer goods.”

    “We believe packaging will continue to grow,” added Joe Kelly, INX’s R&D director of liquid water-based inks. “Controlled portions, enhanced freshness and convenience, and ever greater consumer appeal will drive this growth.”

    Klokkers noted that packaging is changing, and the needs for inks are naturally changing as well.

    “As the value is growing, a lot of packaging is also changing in many ways,” Klokkers observed. “The trend goes to lighter weight packaging and less effect on the environment, while the point of sale still requires to catch the attention of the consumer. For some packaging, those trends make designs even more colorful, for some it creates an opposite development. The desirable packaging segment is also target for all ink makers and thus, it requires straight attention to stay on top of things. Ink makers and packaging manufacturers are in the same situation, in a market where competition is high.”

    Mellado also discussed the changing world of packaging.

    “Sun Chemical continues to provide the widest breadth of products available on the market for package printers that address a wide range of the industry’s key challenges, including migration, the push toward smaller package size, recyclability, shelf life and other efforts to reduce the impact of packaging on the environment,” Mellado noted.

    “Consumer packaged goods companies are looking for support in their sustainability efforts and Sun Chemical has helped by providing solutions that meet their goals of source reduction, a smaller number of packaging layers, along with decreased package size,” Mellado added. “Additionally, biodegradable and more recyclable flexible packaging materials are currently favored by both major retailers and brand owners. Sun Chemical anticipates further growth opportunities from these key areas related to sustainability, in addition to further growth thanks to the recent launch of our newest range of liquid inks with very high renewable content. Standout has always been an important quality brand owners demand from their packaging and Sun Chemical remains ahead of the curve in provides options to help a package pop on the shelf, from sensory coatings and vibrant spot color inks that match on a variety of substrates to printed electronics.”

    Growth Areas

    Not surprisingly, certain segments are growing more rapidly. Nagatsubo reported that flexible packaging continues to grow, primarily in the food and beverage and personal care sectors.

    “The shift in consumer preferences toward flexible plastic packaging alternatives is gaining momentum,” Nagatsubo said. “Consumers are looking for more convenient, easy-to-use and lightweight packaging features. In addition, US manufacturers and brands are also looking to address the challenges of producing less waste and adopt materials that have excellent barrier properties.”

    Klemesrud said that the largest growth regions are in Eastern Europe, India, Latin America, and various areas in Asia/Pacific.

    “The large, existing, markets in North America and Europe are growing, but not as fast,” said Klemesrud. “As far as segments are concerned, we see growth in flexible packaging, shrink sleeves, high end folding carton and board structures, and pressure sensitive labels. Overall, all packaging segments continue to show growth.”

    Dragoo said that energy curing is one growth segment.“Many offset printers are converting presses over to energy curable low migration, specifically LED type retrofitting,” said Dragoo.

    Forker said that in terms of print application, flexible packaging and narrow web remain the key growth drivers in the industry. “We are seeing significant demand for ink solutions that are safe for food applications and migration optimized ink systems to meet these needs,” Forker said. “There is also an ongoing trend towards shorter runs and providing a wider variety of designs. This leads to more focus on efficient changeover processes, and in certain areas, switching jobs from wide web to narrow web. Lastly, we will continue to see the rise of digital in terms of printing processes and are working on the expansion of our offering of inkjet inks.”

    Consolidation in the Supply Chain

    There is consolidation throughout the packaging supply chain, from customers to suppliers, and ink manufacturers are seeing a wide range of impacts.

    “Market concentration has both sides of a coin,” Klokkers noted. “Of course the pressure in negotiations is growing as a clear result of growing purchasing power. On the other hand, the packaging converters have not only grown their size but also their knowledge. Today we are collaborating with incredibly skilled and knowledgeable partners. That fact makes business a lot more comfortable in regard to the daily challenges. Packaging has become much more sophisticated and outstandingly safe for consumers. This benefit shouldn’t be underestimated when we look at how good food is protected and how easily we can keep our stocks over a long time.”

    “For packaging converters who acquire other converters, it is good as it can increase their market share by reducing their competitors, or as they can add certain business and technology,” Nagatsubo said. “It seems like medium size companies are targeted for such acquisitions and big players become bigger, and smaller converters remain. I think this is the same for printing ink markets, and it becomes critical for smaller players to differentiate themselves from bigger competitors.”

    “Consolidation is challenging,” noted Kelly, “and the anticipated cuts in corporate taxes will only accelerate the process.”

    “As more and more consolidation takes place in the packaging industry, the converters have developed a commonality in their expectations from the ink supply base,” Mellado said. “Due to the increasing size, scale and complexity of these consolidated businesses, they are looking to suppliers to drive standardization in products, processes and performance.

    This not only helps reduce complexity, but also improves cost and efficiency, and ultimately delivers value into those consolidation efforts. Converters will expect simplification, standardization, cost reduction and innovation across their entire supply chain.

    “From the ink suppliers point of view, the simplification of inks remains a key to aligning consolidated sites,” Mellado added. “Additionally, consolidation among converters increases the need for all supply chain partners to have the capability to scale-up rapidly, and support broad ranging businesses and applications as well as geographies.”

    “On the supply side, the industry is traditionally consolidated and we expect it to remain that way,” Forker said. “On the customer side, we have observed no significant change in the slow but steady rate of consolidation. We are permanently adapting to the changes in the market and are working on making the best out of these opportunities.”

    Low Migration Inks

    No discussion of packaging, particularly food packaging, is complete without discussing the area of low migration inks. The industry is facing stricter regulatory challenges, and ink companies are working closely with their customers to meet these mandates.

    “We are staying ahead of the ever-changing regulations and performing the necessary research and development to create products that meets these new requirements,” indicated Dragoo.

    “That means more analytical staffing with large investments in state-of-the-art equipment is needed to track migration down to low parts per billion,” Kelly added.

    “The increased demand for migration optimized ink systems is due to existing and upcoming regulations for food-related applications,” Forker said. “In the packaging market, there is a steady increase in regulatory efforts worldwide that is driven by stringent regulations like the current Swiss ordinance or policies from large global brand owners. Product safety is the most important and most challenging aspect of packaging.”

    “Limited availability of raw materials for low migration inks is one challenge to satisfy physical properties required,” Nagatsubo said. “Different understandings of what low migration inks are creating some confusion.”

    “The desire for food packaging compliant inks continues to grow around the world,” said Klemesrud. “Ink suppliers have no choice other than to stay abreast of the regulations as they become more stringent. We know this is a never-ending process – we need to be on the ready to develop new inks and coatings that meet the dynamic requirements of the various regulatory bodies.”

    “Migration-compliant packaging continues to be a market focus,” Mellado said. “In order for converters to meet the high standards set by REACH and the Swiss Ordinance, compliance means much more than simply using ‘low migration inks,’ it refers to all the materials in the packaging construction and process.”

    “Those challenges are not new and of course some smaller ink manufacturers have a hard time managing the effort for this special area of application,” Klokkers noted. “That is also why mainly the larger ink makers are serving the lion’s share to this part of the packaging industry. A close cooperation has established among all the involved parties. The latest regulatory challenges are isolated discussions about hazard-free compounds that are all of a sudden under a suspicion for no good reason. There would be a few examples, but the discussion becomes frequently very emotional as soon as a chemical name is involved. That, and the fact that politicians and regulatory bodies are not necessarily proficient in assessing risks, hazards or exposure scenarios, makes the process complex and time consuming.” 
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