Dedicated to Labels: Embracing Opportunities in a Growth Segment | Digital Output Magazine

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Label applications are achievable with wide format printing and finishing devices. However, if demand is strong it makes sense to invest in a dedicated label system.

A large market of digital label presses exist. Targeting entry- to production-level volumes, options abound. Once you’ve made a decision to invest in labels, many considerations go into making the right selection. Here we discuss solutions focused on low- to mid-range volumes. “There are several considerations in defining entry-level versus mid-range label printers, including print volume per month, price per label for ink and substrate, cost of the label press, and print quality,” says Mike Pruitt, senior product manager, Epson America, Inc. “The main consideration is typically print volume per month, and I see entry level as up to 150,000 square feet per month and mid-range as up to two million square feet per month in print volume.” “The output of the press is dependent on the label format, but in linear output speed of 20 meters per minute and below are generally accepted as entry level,” adds Fabrice Conq, global sales manager, Eclipse Label Equipment.

If segmenting by volume, Russell Doucette, product marketing manager, Konica Minolta Business Solutions, says a low-volume or entry-level label press is defined as producing 2,000 labels or less, while mid-volume would produce anywhere from 2,000 to 30,000 labels.

“Typically any label production job below 10,000 labels would be considered short run. A label production device that caters only to those production lengths would be an entry-level device,” suggests Steve Lynn, director, labels and packaging, Durst Group.

Linear speed and printing widths are differentiators between entry- and mid-rage options. “People can tell difference between entry- and mid-level label printers by linear speed or printing width. If the printing width is narrower than nine inches, we consider it entry level. If production speed is a minimum of seven meters per minute (mpm) to 15 mpm in width of 13 inches or wider, we consider it a mid-level printer,” explains Juan Kim, CEO, VALLOY Inc.

Filip Weymans, VP of marketing, Xeikon, says the term entry-level presses may have a narrower web width, lower printing speed, or less automation compared to higher end devices. “It is important that an entry-level press offer a simple, fast, and profitable way to produce short- to medium run lengths of full-color, high-quality labels. For the operator, it should be easy and intuitive to operate without the need for advanced specialist knowledge.”

A key distinguisher for entry- and mid-level is commercial feasibility in concept of durability and cost. “Entry-level solutions are easy to use but production cost is much higher and there can be some limitations in durability or quality. So the output from entry level can be considered for in-house use,” he adds.

Demand in Wide Format Wide format print providers are involved in many forms of graphics, including labels. “The demand for labels is growing, especially for applicator-driven labels. Wide format and cutsheet label production cannot support these types of label deliverables and may be missing opportunities,” states Doucette.

Mike Atkins, national sales manager, Afinia Label, sees interest from large format printers, especially where decal and sticker customers are asking for product labels. “Typical applications require labels to be on a roll, which is not possible with wide format,” he points out.

Conq sees wide format print providers as a fast growing segment for label press adoption as the demand for shorter runs, more bespoke labels, tailored to the small- to medium-volume producers is increasing fast.

Wide format print providers want to diversify their businesses and move into other segments, like labels. “The COVID-19 pandemic shut down a lot of wide format production while packaging segments like label and corrugated stayed strong. This has driven an interest in bringing label production in house,” affirms Lynn.

Many companies in the wide format print space produce a variety of jobs, including labels and stickers. “They might be using their existing wide format printers but with low efficiency due to high material costs, low production speed, and high waste, this means limited productivity. To make this business area more effective, an entry-level, roll-to-roll digital label press could bring a substantial cost improvement and also open up new business opportunities, such as pipe markings, signage labels, and floor stickers. Anything that fits on a 220 to 520 millimeters (mm) wide web in unlimited length,” offers Weymans.

Pruitt says there is a demand for roll-to-roll digital label presses within the wide format print provider segment, more specifically demand for cost-effective digital solutions as presses are often used in these environments to augment wide format. “These shops are looking for label printers around $200,000 with the ability to produce high print quality with white ink.”

While Kim says the wide format market was separate from narrow web, many vendors provide wide format and narrow web solutions, so naturally some resellers handle both. “The digital packaging market, including label and flexible packaging, is rapidly growing in comparison with the mature market of wide format graphic printing, so many solution providers or dealers in wide format want to expand to narrow web,” he asserts.

Dedicated Advantages As aforementioned, there are many advantages to adding dedicated label capabilities to a wide format shop, mainly diversification. With dedicated in-house label production capabilities, wide format print providers offer full services to existing customers that may be looking elsewhere for label rolls.

“It is simple. If they bring dedicated label printers and finishers into their capability they will get more orders from low- to medium-size producers, for which they can charge more per label versus the very competitive world of large-scale label production,” suggests Conq.

“The label market continues to grow with healthy profit margins, which is why many printing companies, including wide format, are looking to branch into this segment. An entry-level label press can be a cost-effective way to expand your offering and optimize opportunities,” says Weymans.

Doucette adds that wide format shops have knowledge of preflight and file preparation, which are critical for label printing. “They also understand color management and substrates that are paramount for label production.”

Wide format shops are proficient with web to print and familiar with managing many short-run jobs. “With the right equipment and software configuration, wide format print shops can take on various small jobs that label converters do not typically focus on,” offers Pruitt.

Investment Considerations Even with advantages, the decision to invest in a dedicated label system should not be taken lightly.

“There are many aspects to consider when entering label printing and challenges can differ from company to company,” cautions Weymans.

Key factors include sales, customers, competition, cost, and capabilities. Do your existing sales people know how to sell these jobs or will they require training? Do you need to find new customers or can you sell to existing? Will you be up against the same competitors as now or will you encounter new ones? With the current high cost of substrates and finishing materials/tools, can you use your current suppliers and existing agreements or will you need to source new ones? Do you have expertise with the printing technology already or do you need to build this expertise from scratch and train operators?

“Label printing will be the easy part for wide format shops,” shares Doucette. He says making introductions into the label substrate manufacturers and understanding the terminology and processes used in label production might be a challenge, but one that is easily overcome with the right industry partner.

Even if the small label printers and finishers have a lower price tag these days, it is still an investment, admits Conq. “However, due to the lower value of the equipment, the return on investment (ROI) has come down significantly over the years and today at the reach of most businesses, even smaller businesses.”

Determining how to price and market jobs can be a hurdle, along with adjusting to a digital workflow, and deciding which materials to stock. “Local dealers will help relieve these challenges,” suggests Atkins.

Finishing is another thought. While label printing can be relatively simple, label finishing—die cutting, embellishment, and coating—is the biggest challenge for wide format printers entering the label market. “Finishing a printed product is very different from what a wide format printer is typically used to,” cautions Lynn.

ROI Determining the expected ROI can help justify a decision to invest in new equipment—or not. Weymans suggests that 20,000 to 30,000 square meters per month would be a good starting volume, or approximately 1,000 to 15,00 linear meters per day.

Having regular label work is imperative to investing in a digital label press. “Generally speaking, a print service provider should be producing around 30,000 square feet per month. In addition, I recommend looking for a system in which the ink/toner and substrate cost is less than $1.5 per MSI—100 square inches. This will help to ensure a print provider is set up for profit success,” offers Pruitt. “It is also worth noting that a single-pass UV inkjet press differs from a multi-pass inkjet press in that it performs best when printing at volume regularly, preferably daily. Hence you need a healthy output of jobs to ensure good performance. Multi-pass systems are more forgiving if the press stands still for a few days due to the absence of jobs,” adds Weymans.

“If a wide format shop is producing over $2,500 per month in label revenues, we would encourage them to have an assessment to see if new, dedicated label equipment would provide a better ROI,” shares Doucette. Faster equipment may allow them to produce more labels in a shorter amount of time, enabling them to grow their label business.

Pinpointing a volume or revenue number is complicated. This is because there are so many variations of the types of label work that can be completed—all with different market prices and volumes required to make an investment. “If a decent amount of work is being farmed out to label companies it is worth investing time in sharing volumes and costs with a label equipment provider so they can help advise if they have a solution that will fit,” says Lynn.

Features and Capabilities As previously discussed, many considerations go into an investment in digital label systems, including engine type—inkjet versus toner, expanded color gamuts, inline effects like varnishing, and supported media. Print quality and feature sets should be top-of-mind considerations when evaluating and investing in digital label presses. “Printers want to know that a press can deliver when it comes to color gamut, accurate spot colors, and gradients required for brand-quality color prime labels and packaging,” notes Pruitt.

Your local market makes a difference when determining the type of label equipment to invest in. For example, not all labels require expanded gamut or embellishments, offers Doucette.

“There are expensive presses that deliver high-end embellishments and specialty effects, but if 90 percent of jobs received only need CMYK printing on white material it may not make good business sense to overspend on features that may not be needed,” agrees Atkins.

One thing to consider in equipment selection is the per label cost produced on the device—including consumables. “As one moves from an entry-level label printer to mid-size, the cost per label often drops significantly, allowing a company to be more competitive,” notes Doucette.

The stability of the manufacturer, press automation capabilities, the variety of standard flexographic substrates supported by the press, and the service network are also worth considering. “In addition to ensuring the technology is suitable, businesses also want to know that they are making the right choice in who they are partnering with,” says Pruitt.

Kim says UV inkjet is an adventure for narrow web label converting companies, because labels from inkjet appear different from traditional labels. “It looks glossy and embossed. White and varnish options are the strongest points of UV inkjet and customers are getting more familiarized in UV inkjet printed labels, so the market share by UV inkjet will increase as time goes on,” he shares.

Doubling Down on Labels Many wide format print providers may have gotten their feet wet in labels, either in house on wide format printing and finishing devices, or as an outsourced offering. The decision to bring production in house with a dedicated label press is worth considering for some.