It’s a time-honored tradition to look into the crystal ball and project into the future all of the industry developments we think will materialize. There are things we already know, those we can speculate, others we wish for, and awareness of the possible surprises that no one anticipated. A good industry futurist looks at trends related to politics, regulation, economics, raw materials, logistics, consumer preferences, print buyer strategies, print providers, and technology developments. The further out you look, the more these inputs are important.
Our team has some unique insights to the market that leverage our daily conversations with all of the key participants involved with production inkjet printing. We see the struggles of print providers who are innovating with a broad array of inkjet equipment, trying to solve real world problems and push the envelope to grow their businesses. We see innovations in substrates, ink chemistries, supply chain management, workflow, and business strategies. Some of the changes we have seen are incremental and some are leaps forward.
We expect that 2019 should be an exciting year for production inkjet and we encourage print providers to stay informed to be in the best position to take advantage of the developments that are forthcoming. The crystal ball will be cleaned and shined in 2019 and the view of the future will become clearer.
Supply Chain Challenges
In 2018, Inkjet Insight documented many of the challenges impacting the availability of substrates and tightness in freight and logistics markets. We started off 2019 with the announcement that Georgia Pacific was exiting its printing and writing papers business and we don’t see these issues will lessen in 2019 unless there is a major disruption to the economy that slows overall demand. We also anticipate several more paper price increases in 2019, especially with the large reduction of supply represented by the Georgia Pacific decision. Compounding these challenges are the recent postage increases which will take effect at the end of January and impact First-Class (2.486%) and USPS Marketing Mail (2.479%). All of these issues impact the cost of print and cause tension between forces that advocate for displacement of print for electronic alternatives. At a minimum, print providers may rethink their strategies and delay new equipment purchases as they assess the impact of increasingly tight paper supply market and overall increased costs. We also expect to see offshore mills enter the U.S. market to address and capitalize on the tight supply situation. While it’s a long shot, we wouldn’t be surprised to see one of the equipment manufacturers act to help stabilize paper supply for their customers.
Competing for the Glossy Page
Printing high-value high-coverage color pages on coated substrates is a requirement for many marketing, publishing and packaging applications and this is where the industry have been innovating most recently. We are at a point where there are different approaches being marketed, from ink and chemistry innovations, offset/transfer imaging versus direct to substrate, print head developments, drying strategies, and paper formulations. Some approaches work great for sheet-fed but aren’t the right solution for high-speed roll-fed and vis versa.
What is increasingly clear is that the manufacturers recognize the expanded market opportunity beyond those best suited for uncoated substrates and are aggressively competing to establish themselves for market leadership. We expect to see equipment manufacturers aggressively promote their ability to print on glossy substrates and look forward to learning customer success stories indicating progress in this market development.
Competing for Cut-Sheet Toner Pages
The low hanging fruit for production inkjet was low-coverage applications printed on uncoated substrates, such as direct mail and transaction documents. Much of this volume has been transferred to inkjet from legacy continuous-feed toner solutions. According to I.T. Strategies, in North America, inkjet represents approximately 41% of direct mail pages, and toner makes up 9%. For transaction pages, inkjet is 28% and toner is 36%. The remainder are most likely offset printed inserts. It’s safe to assume that many of the remaining toner pages are printed on cut-sheet engines and competition for those pages is going to heat up.
We already see document-centric production cut-sheet inkjet solutions from Canon, Delphax, Riso, and Xerox, and expect to see Kyocera commercialize their technology in 2019. There are also many high-value color pages currently produced on toner equipment for marketing collateral and direct marketing and competition for those pages are just starting to emerge. These pages will be addressed by both equipment designed for document-centric applications, and those designed for complex graphic applications with varying sizes, paper weights, and finishing requirements.
Expect to see more transition of black and white toner pages to inkjet including the transformation of those pages to include color elements. The high-volume color applications are already transitioning, but the lower volume applications are still primarily toner. 2019 is probably still another year of market development to compete for many of these color toner pages, but we do expect to see more success stories pointing the way for greater market adoption in the future.
Growth in Packaging, Labels, Textiles
Everyone seems to be developing inkjet solutions for packaging, labels and textile applications. These markets are growing and currently have limited penetration of digital print technologies. There’s a lot of trial and error, and innovation as early adopters seek to find the same benefits of digital printing that the document market has enjoyed for years. These applications will become increasing important to equipment manufacturers who will seek to extend their experience into growth segments and Inkjet Insight fully expects to see exciting developments in 2019. It’s also noteworthy that many of the packaging solutions are non-perfecting sheet-fed presses which may eventually be further developed for perfecting or two-sided printing. With the run up to drupa 2020, we expect to see perfecting versions of these presses designed for commercial print applications. Inkjet Insight will continue to track these developments and share those that are noteworthy and useful to our audience.
We are currently in the period after drupa where commercialization activities are in full swing and the focus for most manufacturers is to aggressively compete for installs and market share. We expect to see competitive activities heat up in 2019, with fights for the attention of prospective customers, pricing strategies finely honed to win competitive bid scenarios, and the positioning of broader portfolios that enable customers to step into inkjet with pre-owned or entry level solutions and grow their volumes into more productive solutions. This market has always practiced “creative financing” and we expect to see more customized programs to encourage “bench sitters” to take the leap into production inkjet. One of the reasons why they may hesitate is anticipation of new announcements expected prior to drupa which should begin towards the end of 2019.
This is an interesting time for everyone involved with inkjet printing. From production page printing applications to those who seek to print on virtually anything, inkjet is making headway into more and more areas of industry and our lives. 2019 will represent a transition year where production inkjet is more suitable to address more applications that are printed on paper. The technology is maturing and being implemented in a range of unique and novel solutions, from ultra-high-speed continuous feed products, near-photographic offerings, hybrid systems integrated with offset presses, and everything in between. The Inkjet Insight team looks forward to covering the announcements and helping our community understand what it means and where the market is heading.
In Part 2 of this series, we will look at the landscape of suppliers providing technology solutions to the market and thoughts on product introductions we are hoping to see in 2019.