One Year Out, drupa Sees a Thriving Packaging Market Ready to “Embrace the Future”

drupa 2020 logoDÜSSELDORF, Germany—Once again, this city will transform into the epicenter of the global printing and packaging industry, June 16-26, 2020, as more than 250,000 visitors and 1,800 exhibitors flock to drupa 2020. One year out, show planners are reporting that current booking status exceeds figures for the same period in 2015, with 1,800 contracting for space. Better than 30 percent of those hold the title “first-time exhibitor.”

The motto for the 11-day event is set: “Embrace the Future.” Sabine Geldermann, director drupa, commented, “The global industry is in robust health overall. Clearly, there are significant differences in prospects across different regions and markets, as demand rapidly changes with economic conditions and evolving uses of print.”

She promised, “drupa 2020 will be accompanied by a high-caliber line-up of renowned, international speakers and special forums like drupa Cube, drupa DNA, Touchpoint Packaging and Touchpoint 3D fab+print that will provide high-quality knowledge transfer and inspiration.”

Dynamite Demographics

Supporting observations with facts, Geldermann issued the sixth drupa Global Trends Report, approximately one year out from show time. It revealed, “The global print industry as a whole is in a stable condition. Results remain positive overall, with some regions and markets, particularly North America, doing much better than others… The packaging market thrives, as does functional print.”

In packaging, documentation collected attested to five firm facts:

  1. Revenues are on the rise
  2. Prices are increasing
  3. Margins are expanding
  4. Utilization rates are booming
  5. Suppliers share printers’ confidence

Those findings and others were drawn from an annual survey, conducted in late 2018 and targeting 600 printers and 200 suppliers representing senior decision makers in attendance at drupa 2016. Polling and tabulation was performed by Printfuture (UK) and Wissler & Partner (CH).

WEB drupa Printer Financial Measures
All data courtesy of drupa
Among the major conclusions reached:

  • Globally, 40 percent of printers saw their economic condition as “good” in 2018
  • 13 percent of printers described their condition as “poor”
  • For suppliers, 36 percent pointed to “good” economic posture; 17 percent, “poor”
  • Both groups remain optimistic with upward of 50 percent expecting things to be better in 2019
  • North America continued to enjoy strong growth in 2018
  • Europe and Australia enjoyed steady growth
  • Asia, the Middle East and South/Central America were cautious
  • Africa was in decline

Richard Gray, operations director at Printfuture, stated, “Most panel members are positive overall about the future, despite very clear concerns about the economic and political prospects for 2019 and beyond. It is striking that many show an increasingly confident grasp of how to exploit the rapidly changing opportunities for print, as the wider markets make increased use of digital communications.”

Most printers make money despite huge pressure on margins by increasing revenues through raising utilization while keeping overhead as stable as possible, he noted. “Globally, we even saw a small increase in prices, despite substantial increases in paper/substrate prices.”

One interesting corollary: “Suppliers saw revenues and prices rise globally, but with an even sharper decline in margins.”

WEB drupa economic confidence
WEB drupa How Companies are Doing

In terms of capital expenditure:

  • 41 percent of printers spent more in 2018 than 2017
  • 15 percent spent less
  • Expenditure grew in all regions except Africa
  • Packaging and functional print were very bullish, while those in commercial and publishing were more cautious
  • For printers, finishing equipment was the most common target in 2019, followed by print technology and then prepress/workflow/MIS
  • The packaging market saw a 5 percent growth in the proportion of SKUs specifying digital print across all applications, except for labels where the figure is already 40 percent

Pointing to challenges that some may deem “key constraints to growth,” Gray explained, “For most (printers and suppliers) it is ‘strong competition’ followed by ‘lack of demand’ with ‘lack of skills’ third. However, skills shortages are becoming more important and it was the No. 1 issue in North America and No. 2 in Asia.

“What can printers and suppliers do to improve matters?” he asked rhetorically. The answer: “‘Reduce staffing/improve productivity,’ followed by ‘systems integration’ are the most common responses for printers. For suppliers, it is ‘new product launches,’ followed by ‘new sales channels.’”

Queried on long-term technological disruption, both suppliers and printers chose “‘Automation and data exchange (often described as ‘Industry 4.0’) as having most impact. When asked about long-term threats to the industry, printers chose ‘digital media’ and suppliers chose ‘overcapacity.’”