Industry experts dicuss innovation and digital dilemmas

12 January 2016

After the first day of Dscoop EMEA4 Conference, held 3-5 June 2015 in Dublin, Ireland, global manufacturers and industry experts decamped to the Marker Hotel to hear more about the latest innovations at HP Graphics Solutions Dining Club, and Beverage Packaging Innovation was there to report the latest developments.

On 3 June at the Marker Hotel in Dublin, leading manufacturers from Ireland and across Europe gathered to hear more about developments and possibilities in digital print from HP Graphics Solutions. After an initial presentation by Christian Menegon, worldwide HP Graphics Solutions business development manager, at the Dscoop event, of the latest innovations and to see the printers in action, the group gathers to discuss digital dilemmas and victories at the hotel, moderated by Maev Martin, editor of Irish Printer.

Nancy Janes, HP Graphics Solutions' worldwide business development director, introduces the agenda for the evening, and provides an overview of HP's activities in digital printing and packaging: "The print market is constantly growing, with print jobs needing to be fulfilled faster, and with bigger and wider-format presses being required to allow digital print a larger range of applications; this is a HP Indigo sweet spot" she begins. "These developments in digital are continuing to unlock new, cost-effective designs, and find new ways to add value to packaging and help it continue to engage with consumers."

There are tangible benefits to a well-executed use of digital print, with companies like Irn Bru and Coca-Cola seeing percentage growth across campaigns that have used digital labels. The challenge is for companies to be aware of all the capabilities of digital and to apply the best fit to projects.

Many around the table at the Marker Hotel are not widespread users of digital, whether through lack of communication about the most up-to-date techniques from their supply chain partners or for other reasons. The purpose of the first part of the discussion was to share insight into what is possible, which led to the first speaker, Silas Amos, partner at Minerva Studios.

"When I started off in design, it was very sluggish. I like to use the analogy of design before digital being like handling an oil tanker. You could adjust lines and alter course a little bit, but any major changes required enormous amounts of time to enact," Amos says. "Today, with digital print, it's more like steering a speedboat with an agility that amazes me, when compared with before.

"While consumers might not know or care if a product is digitally or flexo printed, they do want unique, engaging, personal and relevant packaging and products. HP Graphics Solutions digital allows agility beyond being able to make more designs. You can test, adjust, design and launch in real time - easily scaling up pilots to national roll outs. Packaging is the last interruptive media in an increasingly fragmented consumer market. Agility is key to reaching and engaging with today's distracted or disinterested consumers, and while they can turn off their phone or tablet, they cannot turn off the packaging in their homes."

Amos concludes by discussing the choices that are made available via digital, "It's not what you can do, but it's what you do with it. They said there was nothing left to invent on the internet after the search engine and yet it keeps expanding. The same is true for digital."

Change of view
Christian Menegon, worldwide business development manager, industrial products, HP Graphics Solutions, follows this opening with some important points.

"When it comes to branding and packaging, you need to make sure your product stands out in a crowded market, but there is an element of risk in making such changes," he opens with. "However, it is important to consider the risk and reward of changing your printing or packaging to digital. For example, Ferrero had a campaign at the end of last year for Nutella where it pre-printed labels with different names, digitally. Consumers bought their Nutella and paid extra for their name on a label. They put the label on themselves. Nutella had minimal additional costs to make these labels - maybe a couple of hundred euros to purchase the stock, and it could make these 20,000 labels for minimal outlay. What is this cost when compared with a marketing spend for a media spot, or advertising? And the result was a phenomenal increase in revenue and profit.

"Another very famous example was the 'share a coke' campaign for Coca-Cola. This required a number of risks to be taken; paying for the materials, adding new suppliers, addressing supply chain management and logistics to account for the additional labels and materials needed. At any point, this risk could have stopped the progress of the innovation, but there was belief in the project in the company that allowed it to pass all these barriers to deliver a stunningly successful campaign," Menegon adds.

Next to voice his opinion was Steve Lister, head of innovation and sustainability at Charterhouse, a global marketing services company that works with over 500 leading brands on sustainable print and packaging solutions.

"Though I work in sustainability, I am a realist," he points out. "I understand that your print, packaging and NPD have budgets they have to follow, and that innovation has to add value across company operations in order for it to be successful. We work with our clients to offer them enhancement - in 35 countries - and we look after print management services for major brands like Unilever, Coca-Cola, Heineken and many others.

"We focus on three pillars of innovation: materials, design and technology. All three are underpinned by sustainability, which does not have to be boring. If you want to connect with consumers and carry a sustainable message to promote your brand, there are options available. Whether it's a bioplastic label for Homebase that can biodegrade, or a Starbucks cup that is made from 10% waste coffee grounds, it is possible to provide a material that not only innovates the product message but is also good for the environment. I agree with Amos about the options that are becoming available to create something new and different that challenges and delights consumers.

"In paper, there have been a number of sustainable developments that tie the product, planet and innovation together, such as Favini & Croppers, which has been working with paper made from cocoa shells and other recycled ingredients. The paperboard has multiple applications; it can be made from coffee, fruits or olives. Another innovation are the lolly sticks for ice cream that have seed ingrained in the board so when you have eaten your ice cream you can drop the stick into the ground and plants will grow. Heineken have even made paper from recycled beer products, and this beer paper can be manufactured for less than conventional paper. In wine, Ecologic from the US has made a 75cl bottle from fibreboard. This has 80% less weight than glass."

Keep up the sustainable end
This sustainable innovation is ongoing. Coca-Cola has introduced tertiary packaging that is waterproof cardboard that folds into an ice bucket for 12/24oz cans.

What's driving this technology and developments? The growing millennial consumer base purchase completely differently from previous generations, as they have technology not previously available to use. Near field communication, comparing prices online or via social media, using discount vouchers that are time sensitive for a deal. Research even tells us that millennials do not look above head height when shopping. Top shelf does not convey the quality it would do to older consumers.

Moderator Martin then poses a question about the benefits of digital, to which Lister and Amos were clearly in agreement. "Digital packaging can be more relevant to a location, personal interest or occasion," states Amos.

"Digital is also a means to an end, but it provides a never-ending series of means, and supports brand and quality growth across packaging lines. You can print one and upwards; something that is impractical or even impossible with larger-run conventional print," Lister agrees.

"Does the type of package matter?" Martin asks, at which point Menegon responds, "The best answer is no... yet, in theory, there are no limits. However, some of the technology has not yet been developed. What do you want to do after printing, in terms of decoration? Ink provides a technical window to varnish, emboss or sterilise - flexo or gravure might be slightly ahead today, but not for much longer."

On the run
Martin's next question is about the ideal print run for digital and Menegon is quick to respond. "Right now, if we are talking a print run of millions, conventional print is better. However, if you want thousands of units in minutes or short, variable data runs, there is no question that digital is better," he says emphatically.

"We do not see digital's future in big, long standardised runs, which is why it is not a replacement to conventional print, but a supporting market."

"It's important to challenge your supply chain partners to see what print they can do for you," Lister chimes in. "There are a couple of simple questions you can ask to see if a job is possible. It might need a change of print houses, but unless you ask them you will not get told about the full range of printing available to you. When we were walking around Dscoop, I met a printer who is capable of the precise printing needed for a new Wall's ice cream pack due out in the new year. Without having met this printer, I would have no way of being able to fulfil this project.

"There is also a growing and exciting ability for digital to address security through digital watermarking. QR codes are embedded in the image printed on products and customers can connect to a separate website or online information without having to use packaging space for a black square code, freeing up more real estate on the package for branding or information. As infinite, separate codes can be printed into the watermark, no two codes are the same and now there is an even more secure supply chain capability, brought to us by digital.

What are you doing with digital?
Following these questions, HP Graphics Solutions's Janes opens up the discussion to the participants to ask them for their questions and insights as brand-owners: "We are continuing to grow in our understanding of the market and its potential, and we would love your input in terms of what you are seeing happening in digital. Is the information we are providing tonight known to you, are there questions about digital we can help answer and where do we go from here?"

To answer this, Michael Nevin of Kerry foods offers up an opinion. "One observation from the food industry is that there is a lack of packaging technologists in Ireland, and so it is difficult to find people who can match the technology and the materials development or runnability and substrate development," he says. "Somewhere along the line, via a design house or repro company, we lose something in package development."

"This speaks to my earlier point that you have to make sure you do not let your printer tell you as a brand what you can do," Lister replies. "Lead times are tumbling for brand-owners, and who is best placed to help with zero-time print runs than digital printers? It may need a change of printer, but it is far better to have the best possible product than to stick with a supplier who is not providing you with what you need."

Conversation turns to how homogenisation of packaging lines in Ireland in particular, but also globally, but specifically with retailers, is a major issue as there is almost no point of differentiation on the shelf. This is of more concern than security for those in the private label or food industry as it is far more difficult to make the product stand out.

Lisa Deveney, marketing manager, PepsiCo puts forth a thought: "The fear for us would be going through the process and proving it works with short runs in retail only for the retailer to take the idea in store and cut us out, using the benefits of digital to raise the profile of their own products. We might succeed with a regional or narrow SKU, but the worry is they would then take it across their whole portfolio far quicker then we can keep up.

"There have been a number of times when a retailer has enacted a clear-floor reduction and we have only been told at the last minute that the POS has all got to change, and it seems digital would provide a way of being able to fulfil these changes, even in the protracted time scales we are being given. Even though I like the idea, I would question how helpful it could be, or would be, when we are spending our time chasing artwork or making last-minute change, and are not able to concentrate on product development and packaging."

"It is not worth turning on a flexo printer for fewer than 5,000 or 10,000 cartons, but digital is more agile," Nevin responds.

"Supermarkets today have too many SKUs with diminishing volumes and so it's a case of finding the best, most cost-effective fit to get the product on shelf at the highest quality and on time. Dave Lewis of Tesco recently announced that it is simplifying Tesco's range by about 30-40% and the remaining SKUs can be best covered by digital printing.

"One area that could benefit from better development would be digital in corrugate, especially when it comes to food-contact printing and packaging."

Rounding things off
Deveney and Neville continue to discuss some of the challenges in printing around free-standing displays, and the potential benefits of digital in being able to address them.

This led to the final discussion of the night, which surrounded waste management, where retailers profit from the waste, receiving euros-per-ton from the waste companies, in addition to not having to pick up the cost of the packaging in the first place. Janes confirmed that as digital reduces waste and the cost surrounding it, this benefits the brand-owners by reducing their costs as well as allowing them to make real-time changes.

The discussion provided an insight into the print market and challenges of Irish brands, and was a success in that all attendees were able to come away with concrete action plans to implement internally. Digital's full range of capabilities to delight design and print, secure the supply chain, and reduce waste and cost for brand-owners was on show, and even those who had attended with a limited understanding of its benefits to their companies were confident that they could see applications across future projects.

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