While publication gravure has been struggling for several years with structural market changes caused by the Internet, such as a decline in print runs of magazines and the ongoing replacement of the mail order companies »big books« by smaller specialised catalogues, gravure package printing is currently booming. Press manufacturers have reported record sales of packaging gravure presses over recent years. This is a rather amazing development, because only a few years ago flexography was seen as the more flexible and more cost efficient process.
A glance at the share of the different print processes in the production of flexible packaging material – used in huge quantities by the large brand owners to pack food products and confectionery – shows gravure to be excellently positioned. Whereas in Europe gravure and flexography have about the same market share in this important segment, gravure clearly is the leading process in the dynamically developing packaging markets in the emerging countries in Asia.
Popular in emerging markets
Apart from China and India with their huge markets and with more than one billion consumers each, this is particularly the case in the rapidly growing economies of the South East Asian “Tiger States” such as Indonesia, Thailand, Vietnam, Malaysia and the Philippines. The USP (Unique Selling Proposition) of gravure such as excellent quality and high consistency even with very long print runs naturally favours gravure’s position in these markets, where alone over 800 000 gravure cylinders are manufactured per year, and almost 1 500 packaging gravure presses are operated. These are significantly higher numbers than in Europe with some 600 000 gravure cylinders per year and around 800 packaging gravure presses.
In fact, many of the packaging gravure printers in these countries are not yet equipped with the latest gravure technology. However, they are coming up rapidly and investing in modern gravure technology in order to meet the increasing demands of their growing markets. The country’s traditional structures of retail trade are currently changing, particularly in the big cities where all kinds of consumer goods, and everyday essentials, are now distributed by large super- and hypermarkets. Therefore, a significant number of packaging gravure presses have been delivered to these countries.
What has triggered the boom?
However, compared to Asia or even Latin America, packaging gravure is stagnating in the USA. In comparison with flexography, which is the dominating process in packaging printing in the USA, gravure’s market share of below 20% is at a relatively low level. What are the reasons for this? On the one hand, it is the effect of successful marketing by the suppliers of flexographic printing formes. On the other hand, the lower quality demands in the USA are a cost advantage for flexography, especially in prepress. This would not be the case in Asia, where cylinder manufacturing, due to lower labour costs, is significantly cheaper than in the USA. Moreover, in the USA investments in modern gravure equipment have been rather low, which does not promote the more favourable development of gravure. This is shown by the relatively high cylinder costs which are more than 100% above European cylinder costs, and significantly higher than 200% of the cost level in Asia.
As in Germany, Europe’s strongest economy and largest single market, and the other Central and Western European countries, gravure has not only well defended its market share in Europe as a whole, but also further strengthened its position. Particularly in the production of packaging for the large brand owners and retail chains, gravure is going strong.
The latter was revealed by a study by the German market research institute GfK on the brand owners’ perception of the different print processes. According to GfK, eight out of ten brand owners prefer gravure to print their packages, as only gravure guarantees the best quality, which is the most relevant factor for the brand owners' choice of print process for their packages. It is finally the appearance of the packaging which plays an important role in the competition in the supermarket shelves.
However, it is not only the high quality of gravure which explains its ongoing renaissance in packaging. Despite gravure’s undoubted printing quality, only a few years ago the process was regarded as conservative and not very innovative, and less cost efficient in comparison with its competitor, flexography. This somewhat antiquated image of gravure has now changed due to numerous technological innovations in the process. Improved automation in prepress, which now can be operated fully automatically, and faster engraving and shorter makeready times on the presses, have significantly increased the productivity and cost efficiency of the process. In fact, flexography has practically no cost advantage over gravure anymore: as flexography has improved its quality over recent years it has become more expensive and therefore lost the cost advantage which it had in the past. This shows that there is always a price to be paid for quality.
As the print runs in packaging are becoming increasingly shorter, reduction of makeready times is of great importance for the packaging printers. This is the field where the press manufacturers have recently been very innovative: they have developed trolleys and other special devices on the presses to increase the speed of changing cylinders, which meanwhile is done automatically. And the press manufacturers have also developed new compact presses specially designed for ultra-short runs.
What will the future hold? ERA’s International Packaging Conferences every autumn demonstrate that gravure has built on its strong position in packaging markets and should remain a process of choice for brand owners. This year the conference will be held in Turin, Italy in early November and ERA expects some 120 participants from packaging and decorative gravure and the supply industry to discuss latest developments in the field of packaging and decorative gravure. Particularly the ongoing dynamic economic development in the emerging markets in Asia offers gravure the best opportunities for further positive development. Provided that gravure can keep its high technical standard and even continuously improve the process, the gravure industry has good reasons to look forward with confidence.
By James Siever
Secretary General of the ERA European Rotogravure Association, Munich.