Covid accelerates use of digital print in packaging to $21.1 billion in 2021

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Through 2020 and into 2021 inkjet and electrophotography printing has secured new markets in labels and packaging. Data from the new Smithers report – The Future of Digital Print for Packaging to 2026 – shows total value for this will reach $21.1 billion in 2021.

This is in line with existing trends, as run lengths have decreased and print quality on inkjet presses has risen; but the market has received a specific boost from the Covid-19 pandemic. As normal supply and consumer purchasing patterns were disrupted, the utilisation of the installed base of digital pressed rose to meet fluctuating demand from packaging buyers. Accordingly print volumes for digital print in packaging rose by 20.8% across 2019-2020. This happened in a market space where globally total printed packaging volumes declined by -1.9%.

With other print segments badly hit by Covid-19, packaging and labels are increasingly the focus for many print OEMs, with the latest digital technology promising to open new segments and print options for print service providers (PSPs). Overall from 2021-2026 the sector will remain attractive with demand for digital printed packaging significantly outperforming the broader market.

Led by inkjet, digital’s share of the printed label and packaging market will increase from 4.4% by value in 2020 ($18.5 billion), to 7.2% ($35.9 billion) in 2026. This is equivalent to an 11.2% compound annual growth rate (CAGR) for 2021-2026.

Labels still account for the majority of digital output in 2021, worth $11.79 billion, but these will have a relatively low CAGR of 5.6% to 2026. Growth will be fastest in corrugated ($5.78 billion in 2021), closely followed by folding cartons ($2.31 billion). With both segments more than doubling their use of digital over the forecast period, their combined value will exceed digital label printing in 2026.

Smithers’ analysis tracks the technology advances that will underpin this transition across all major press formats and packaging substrates. These are principally for inkjet systems. Over the next five years, improvements will help make the process more cost-competitive, even on medium and long run commissions for folding cartons, corrugated, flexibles, and rigid plastics.

Further advances in printheads will boost both quality and speed. While printheads with a 1,200dpi native resolution and greyscale printing up to 200m per minute are standard today; it is forecast that by 2026, 2,400dpi units will be common and greyscale speeds will rise to 300m per minute. Variation in drop size will also enhance inkjet’s use, down to 1pl for fine quality, or much larger for whites, solid colours, varnishes and embellishment effects.

As the market expands, machines from larger OEMs will increasingly dominate the space, with fewer turnkey solutions and hybrid models being sold. More installations of sheetfed inkjet presses will help open larger format packaging work to digital print.

Simultaneously inks will improve to allow use on a wider range of packaging substrates, there will be an increased use of water-based ink sets; while greater sales volumes will push the price per litre down. Print quality will continue to improve, supported by more paper substrates optimised for inkjet production, although analogue inks and toners will still outperform inkjet when using specialty inks, such as metallics.

For colour toner presses, the main challenge will be competing against newer inkjet machines in labels, cartons and flexibles. The segment will be bolstered by its own new technology developments, such as HP Indigo’s LEPx technology; but the deeper trend will be to push electrophotography use more towards premium labels and niches in high-quality cartons and flexible packs.

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