The Role of Digital Packaging in Our Planet’s Future
And maybe a better publicist for the market
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The entire global packaging market is expected to exceed $1 trillion in 2023. Despite its massive size and obvious contribution to the global economy, the packaging industry is often compelled to justify the need for its existence because so much has been written or said about its negative environmental impact. But objectively, the packaging market merely needs to improve the perception of its intrinsic value in a completely informational and unapologetic way.
Despite what many environmentalists might claim, the packaging industry has been a leader in the drive for recycling—and was among the first to promote it because the industry understood the lower costs associated with using recycled materials over sourcing virgin materials. While this shift might have been motivated more by cost savings than environmental concerns, change is never simple for production printing plants. It requires extensive research to ensure that any new materials brought in will work, and that they will not cause even more harmful side effects than the materials they’re meant to replace.
Weak Links in the Supply Chain
It is important to note that the packaging industry is not in control of logistics or supply chain management. Even so, the packaging industry has largely been taken to task in this area. Admittedly, many of the larger players in the packaging market are the same players who control the bottom of the logistics chain—but like all chains, logistics is made up of individual links that are not controlled by any single player. The largest part of the chain falls outside the gamut of the big packaging players, and this is where the breakdown can (and often does) occur.
This is where the emerging digital packaging market comes into play. In addition to the production methods used, digital refers to the fact that the packaging can be augmented with linked technologies (e.g., augmented reality) to create a packaging or consumer experience that continues long after the purchasing process. Digital packaging has been around for quite some time, but it has long been seen as a latecomer to the market. Digital players dabbled in sectors that the mainstream production companies found it difficult to play in due to the short run lengths or boutique-type nature of products. Then another global phenomenon occurred (in the form of the COVID-19 pandemic), and digital packaging and labels came into their own.
COVID-19 Spurs Digital Packaging Growth
Prior to the pandemic, there were an estimated 7 million online stores on a global basis. A little over two years later, the online market has almost quadrupled and is still growing. What had been an in-store customer base became an online customer base virtually overnight. Today, while the worst of the pandemic is (probably/hopefully) behind us, the convenience, speed, and just-in-time nature of online shopping are here to stay. The ever-increasing popularity of online shopping has brought with it the demand for a new type of packaging—one that can only be met by digital technology. This is because every order is now different from the one before it. Digitally produced labels can be applied directly to the product, rather than being applied to the primary packaging and then also to the secondary packaging. This results in cost savings and reduced waste.
Looking Ahead with Digital Packaging
While digital production for packaging has been around for a while (“packaging evangelists” have been promoting the benefits of digital packaging and labels), it is only now that these technologies are realizing their true potential. The trends that have created a perfect storm for packaging include increased employment levels (due to the demand for more packaging), increased cost-effectiveness (due to better use of equipment), more attractive packaging that can be personalized with variable data, increased product differentiation, and reduced waste of production materials.
Digital packaging and labels have a great deal to offer—not only to brand owners, but also to the consumers on the receiving end. Digital print production for packaging and labels has seen exponential growth over the past two years, and it will continue to see a meteoric rise as influencing factors bring new advantages to this method of production. Digital offers the advantages of production flexibility, extremely short runs, improved inks that can even be used in food packaging, higher degrees of automation that save time and money, a reduction in process steps, as well as an ever-increasing range of substrates that are dedicated to digital print. This final benefit came about because it was more cost-effective for substrate manufacturers to make and improve substrates for digital production than for conventional printing.
Keypoint Intelligence Opinion
These factors, when aligned with the focus of digital print equipment manufacturers and OEMs, will fuel the digital print production market as time goes on. Over the next two years, global digital packaging sales are expected to reach about $28 billion. As new technologies are developed and adoption levels continue to climb, future growth will continue way past that amount. Through recycling initiatives, packaging manufacturers are also able to become drivers for change and help reduce the damage that has been caused to the environment.
Through the lessons taught by the inherent frugality of digital production methods, the packaging industry is helping to create a global ethos of producing only what is needed, reducing volumes of waste that are generated, and making better use of the resources that are available. This is quite a valuable lesson for the population as a whole!
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