Xeikon Café Brings Education, Technology to the Forefront
In Elgin, Illinois, the week of May 8, printers, vendors, and press gathered for the first official Xeikon Café since before the pandemic. While the company did host a scaled-back version in 2022, this marks the first time it was returning to a full schedule, complete with educational sessions, a vendor fair, and tours of its brand-new headquarters and innovation facility.
This also marked the first time new company president Rob Welford got to address customers and the industry directly, taking the opportunity to not only reflect on the progress and innovations Xeikon has championed over the years, but also to give a hint as to his vision for the future.
“Xeikon is fantastic little company,” he said at the opening general session welcoming attendees to the event. “Yes, we have our headwinds — economic pressures, strong competition — and yes, we should expect to see innovation continue. It should be no surprise that we’re looking at both inkjet and toner, and it should be no surprise that the foundation of it all is sustainability.”
Here is a closer look at just a few of the sessions from the week, and the fantastic breadth of information and education they provided to help printers run their businesses better and prepare for the future.
The Economic Crystal Ball
One great session open to both the packaging and commercial print/graphic arts tracks was Alan Beaulieu, the president of ITR Economics, who gave a picture of the current state of the economy, and his predictions for the rest of 2023 and beyond.
And unfortunately, it wasn’t the news most wanted to hear. “The economy is going to slow the rest of this year, and we will be in a recession next year,” he told the audience. “And if you wanted good news, come back next year and I’ll talk about the recovery in 2025.”
That said, he did note that he doesn’t see this as being as difficult a slowdown as the media might make it out to be, believing that overall the retractions will be mild. Certainly enough to impact businesses that aren’t prepared for it, but we’re not talking about the next Great Depression either.
“Take this time to invest in your business,” Beaulieu stressed. “Ignore the media. Ignore the political noise. This is a good chance to position yourself for organic growth in 2025. Take this slower period to get ready for it — find where the bottlenecks are, and what you can improve, and I want you to invest a lot of money in your business in the next year so you’re ready for the other side.”
Opportunities Within Package Print Challenges
The packaging track included two sessions exploring industry trends and how converters can capitalize on emerging opportunities and overcome challenges being driven by these trends. The first speaker was Marco Boer, VP of IT Strategies. Boer discussed three key challenges facing the package printing industry — rising substrate costs, labor shortages, and increased demand for short-run printing.
“Now short-term, things [substrate availability conditions] are actually okay,” Boer acknowledged. “The bad news comes when you look out long term, and I’m thinking broadly now at the print industry as a whole.” Boer cautioned audience members from thinking that recent conversions at paper mills from commercial print papers to packaging papers mean they will be immune to future paper shortages. “Now what they mean by packaging is not necessarily labels,” Boer said, “It’s more along the lines of folding cartons and corrugated, and also tissue paper. This refers back to Alan’s session, where he talked about the growing need for Depends and things like that. So, it’s our belief that things are okay at the moment, but long term the cost of substrates will continue to go up because there’s not enough capacity in the world.” This — combined with rising energy costs, the financial impacts of environmental regulations, and competition for raw materials from other industries — will drive substrate price increases.
Labor is and will continue to be a challenge for the printing industry. The continuing retirement of baby boomers is hitting the printing industry especially hard. “According to the Bureau of Labor Statistics, the average press operator age is about 58,” Boer said. “So, pressure from labor is not going to let up. It’s going to get worse.” These employees will be difficult to replace, Boer explained, because of a lack of interest in manufacturing jobs from young people entering the market now and lower birth rates resulting in fewer overall prospects in the future. Further exasperating the labor problem is the changing market for package printing jobs.
“Then you have a sort of hidden problem — the business is changing,” Boer said. “Just as the pressure for more labor goes up, run lengths are going down. For example, let’s take a typical printing company, which had 25 jobs a day back in 2016. That company moves to 50 jobs a day and then 100 jobs a day because run lengths are getting shorter and brands want more versioning and the like. If that job takes 20 minutes to set up, and this is probably underestimating, the total setup time went from maybe eight hours a day to 33 hours a day. That means you need more staff to deal with all of that setup time, and that ultimately becomes unmanageable in most traditional printing business models where business forecasting is built upon economies of scale.”
Despite these challenges, Boer explained, the packaging industry has several opportunities to thrive, especially with the advancement of digital printing for packaging technologies. Brand, marketing, and package design trends are driving demand for more high-value products. These trends include the growth of e-commerce, the demand for customized products, and the desire for fresh, new designs.
The second analyst to address packaging industry trends was NAPCO Research analyst and packaging industry expert Cory Francer, who also cited labor shortages, rising substrate costs, and the increasing demand for short-run printing as challenges. Francer also noted operational challenges from business models and technological incompatibility between traditional converters’ operations and the growing demand for customized packaging.
Diving into recent label printing data from NAPCO Research seeking to quantify the increase in label versioning, Francer said, “Sixty-eight percent of our respondents stated they were seeing between a 21 to 50 percent increase in total versions. As converters see an increase in the number of versions or SKUs that they’re being asked to produce, they are also experiencing complexities in their workflows.” Once successful workflows may no longer be viable in future markets due to the difficulty and expense of managing such workflows with traditional equipment. These difficulties, Francer warned, can erode profit margins and lead to production delays.
This challenge can become an opportunity, Francer explains, if converters invest in new technologies and adopt new business strategies, such as investing in digital printing equipment and developing new marketing programs that target print buyers looking for customized packaging. “Digital can really help solve some of these complexities in workflow,” Francer explains. Without the need for plates or extensive makereadies, digital printing can help converters produce smaller runs of more complex and personalized packaging more profitably when incorporated in workflows that more efficiently manage more orders of smaller quantities.
Francer also noted that digital printing technologies can also aid converters looking to expand their printed product range, e.g., from labels to folding carton. Citing data from NAPCO Research “Lowering Entry Barriers into Digital Package Printing,” Francer said, “Over half of respondents stated they view digital printing as a way to break down barriers for expansion into packaging.”
Printers are already using this technology to capitalize on the convergence trends. Explaining how printers are exploring moving into adjacent segments other than their core offering, Francer said, “Thirty-four percent stated that they’ve already allocated funds to expand into an adjacent segment, and just over half stated that they’re thinking about it. That adds up to 85% of our respondents are looking to make a move and utilizing some of these digital technologies like those we’ve seen throughout this event.”
Books Are Still Big Business
In the commercial print and graphic arts track, one session of note was given by Matt Baehr, the executive director of the Book Manufacturers Institute (BMI). He noted that actually putting numbers on book sales can be challenging — even for this 90-year-old trade association, which caters to both the book manufacturers and suppliers. The problem is: how do you define a book? Because of that, he cautions, any data you see about the book manufacturing business should be taken with a grain of salt — instead of focusing on the numbers themselves, instead use them as a good way to gauge the trends.
In particular, he notes that several reports have shown there was a massive spike in printed book sales during COVID-19. He is seeing those numbers start to come back down as the world gets back to business as usual, but he noted that sales are still higher than they were pre-COVID, which is a good sign.
In particular, he noted that manga — the Japanese style of comic books — is hugely popular right now, with sales spiking sharply and not coming back down. Adult fiction is another category that he noted continues to be strong sellers across all retail segments. On the flip side, the educational market is falling — that segment, he said, was propped up by the CARES Act, which gave school districts access to money they were able to use in part to invest in new books, “but that money is ending this school year, so we are going to start to see that number change. All the growth there over the last few years was CARES, so we will see that start to slide off,” he said.
Another change Baehr called out was the shift from publishers just looking for the lower cost per unit as the only deciding factor on which titles to produce and where to have them printed. Lead times, in particular, have changed the market dramatically, and the weeks needed for offshore printing and shipping is no longer acceptable in this “just in time” economy. “Forecasting used to be iffy,” he noted, “they didn’t have to plan as much, and they could just wait and see what the market was doing. Now they can’t offshore because it’s not predictable enough, and they need better planning and forecasting. They are now looking at the total cost of the book — yeah, there’s the print, but there’s also transportation and logistics, the cost of having it sit in a distribution center for six months, the cost of pulping it if it does sell. They can’t just look at the lowest cost per unit.”
Another big change he’s seen is that digital has finally reached a point where most publishers and readers alike can’t tell the difference between an offset and digitally printed book — the quality has finally reached a point where it’s not a factor anymore. So one big trend he’s seeing is publishers looking to do one offset run, and then backfill demand with shorter digitally printed runs.
COVID also taught publishers that paper doesn’t matter as much as they thought it did. “Publishers learned that readers can’t tell the difference in papers, and they are starting to realize there are a lot of alternatives out there,” he said. This is great news for book printers who might still be struggling to get allotments of specific grades of paper, but can offer solid alternatives for these projects. In the past, publishers were far less willing to entertain those conversations than they are today.
Labor Challenges for Today’s World
Another great session was led by Claudia St. John, with Affinity HR Group, on the trends around the labor market, and the fact that printers are going to have to adjust to this as the new normal.
She noted that there are a few factors that have contributed to the current challenges printers of all sizes and types are facing around labor.
The cost of wages. While the average rate of increase for wages is usually around 2.5%, she said, last year the average increase was 4.8%. “And more pay means more money in people’s pockets, which means they’re buying more and driving up prices,” she noted.
Unemployment is at historic lows. Her latest numbers show it as sitting around 3.4% — the lowest rate of unemployment in the last 50 years. “This means everyone who wants a job already has one. So if you want to hire someone, you have to convince them to leave what they’re doing to come work for you,” said St. John.
So why are the labor rates so low? Where did all the workers go? St. John joked that contrary to popular belief, they aren’t sitting on a beach somewhere sipping cocktails and collecting unemployment checks. On the contrary, those workers are just gone.
“We lost 8 million workers during COVID,” she said. “Half a million died. Two million had to quit because of long-COVID disability and they couldn’t work anymore. 2.5 million are baby boomers who retired early because working isn’t fun anymore. Two million moms quit their jobs because for a family with a baby, toddler, or school-age child the cost of childcare is $37,000 per year, so if she’s only making $30,000, what’s the point? And the last one million are immigrants who aren’t coming into the United States — not undocumented immigrants, but legal immigrations. We shut that funnel off. So in total, we’re missing eight million people.”
On top of that, she noted that 4.3 million people are quitting their jobs every month and moving into other work. 35% are staying in the same industry — but 65% are leaving their previous industry altogether and looking for something different.
“A lot of businesses believe they are quitting for more pay, but the reality is that it’s a proxy for dissatisfaction in the workplace — probably the culture of the business or industry.” She knows this because the average length of time a pay increase will motivate an employee — whether they’ve received a raise or switched jobs — is just six weeks. “After that, they’ve forgotten about it,” she stressed. So printers who want to find — and keep— employees have to get a lot more serious about building a culture and environment that motivates and encourages them to want to stay.
Overall, St. John notes that right now there are five million more job openings across the country than there are people to fill them. That gap is slowing down a bit, but it’s not going to go away any time soon, as on top of all the numbers above, the younger generations are just not choosing to have children. They are either skipping out on parenthood altogether, or only having one or two children. There just aren’t enough children to replace the aging and retiring populations as they leave the workforce over the next 10-15 years.
So what do employees want? What can printers do to make themselves that attractive place to work and spend a career? St. John had an enlightening list of the top 12 things that highly motivated and engaged employees say keep them energized and excited to work:
- I know what’s expected of me when I come in to work.
- I have the materials to do the work correctly.
- I have the opportunity to do what I do best every day.
- In the last seven days, I have received recognition for good work.
- My supervisor cares about me as a person.
- I have someone who encourages my development.
- My opinions seem to count.
- The mission of the company makes me feel my job is important.
- I have associates around me who are also committed to doing quality work.
- I have a best friend at work.
- In the last six months, someone has talked to me about my progress.
- There have been opportunities for me to learn and grow in the last year.
Notice that not one of those was about pay or benefits. While those things are important to get someone in the door, they aren’t going to be enough to keep them there without fostering a supportive and constructive work environment.
Finally, she noted that if you have just $1 to spend on your people, spend it on training your managers and supervisors. “People don’t quit jobs, they quit managers,” she noted. Things like conflict management, how to deliver positive feedback, handling stress in the workplace, and how to inspire workers can all help create that environment highly motivated employees are craving.
A Look Ahead to Atlanta
The Café also included a look ahead to the PRINTING United Expo, to be held October 18 to 20, 2023, in Atlanta, Georgia.
Chris Lyons of PRINTING United, who serves as president and publisher of NonProfit PRO and Packaging Impressions magazine at NAPCO Media, energized the audience by leading a group stretch before explaining how the PRINTING United Alliance and Media Group supports its more than 3,000 printing industry members, including print service providers and their suppliers such as Xeikon.
The interactive discussion, which included frequent polling of the audience, explored several of the Alliance’s services to its members, starting with education. “We have NAPCO Media,” Lyons explained. “We support the industry not only with print magazines, but also e-newsletters that go out everyday. Printing Impressions magazine is the premier print magazine for the industry and has been around since 1958. In-plant Impressions serves the in-plant market. There’s also Packaging Impressions and Wide-format Impressions magazine, and the Industry Ink newsletter. We also have brands in the upstream market, including Nonprofit Pro and Total Retail, so we are regularly talking with the brands and agencies creating demand for print production.”
In addition to the Alliance’s educational services, Lyons described how the association delivers business strategy tools through industry-specific economic forecasts from the Alliance’s in-house experts, access to the OSHA, HR, and sustainability experts that are part of the Alliance’s nearly 150 employee base, professional development for printer’s employees including the iLearning+ portfolio of 135 classes, certification and standardization program such as G7.
The Alliance offering that the audience was most familiar with was the PRINTING United Expo — not surprising considering the success of the 2022 event. “In 2022, we had the Expo in Las Vegas,” Lyons said. “We made a huge investment into promoting the event, and we had 28,000 attendees! In terms of this year, we expect about 32,000 people to come to this year’s Expo [in Atlanta] with 750 exhibitors. If you are looking for equipment, this is a show that you want to explore. If you’re looking for that convergent opportunity to go into other markets, this is the show for you because you’re going to see everything under one roof.”
Speaking further about the convergent opportunity at the 2023 PRINTING United Expo, Lyons said, “At this year’s Expo, we have hubs, which are centers for different market segments. We will have a Packaging Hub, a Direct Mail Hub, and a hub for the apparel market. There you will find many of the associations that serve those segments. In addition to the hubs, we also have an educational series with conference sessions dedicated to different markets.”
Lyons ended his session with an invitation to learn more about the event at the PRINTING United booth at the Café and entertaining questions from the audience, including a request for more information about registering for the PRINTING United Expo in Atlanta. “Just yesterday, we opened up registration for the Expo,” Lyons said. Registration links are at any of the brands I mentioned before, including Printing Impressions, Packaging Impressions, In-plant Impressions, and Wide-format Impressions. You can also go to the Printing United Expo website, which is printingunited.com.”