Time to Get Uncomfortable
How comfortable are you? In the business world, companies have two options: to step forward into growth or step backward into safety. In those initial stages of growth, it’s going to feel awkward and uncomfortable. It’s the nature of the beast when it comes to trying something new.
Convergence has been an important industry conversation recently as more and more print service providers (PSPs) start offering products and services beyond their traditional core business. As reported in the Q1 Specialty Graphic Imaging Association’s (SGIA) Quarterly Industry Benchmarking Report, which focused on markets and products, convergence shows no sign of letting up.
In each of the printing industry segments investigated (graphic and sign producers, apparel decorators, functional printers, and commercial printers), survey data showed, to varying degrees, companies do not restrict themselves to their primary segments. The proportion of printers who identified as serving at least two industry segments ranged from 31.9% (apparel decorators) to 63.3% (commercial printers). According to the data, additional segments may bring in more than one-quarter of revenue, on average, as seen with graphic and sign producers, for whom commercial printing contributed 26.9% of revenue.
What drives the decisions to move into adjacent markets? How have companies successfully navigated the uncomfortable, awkward transition period as staff really gets their head around the new technology, service offerings, and markets served? It’s requires a combination of technology and staffing, to be sure, but a specific vision from the top is also needed.
On the following pages, see how some PSPs have successfully grown their businesses into adjacent markets and see how they are leading the way — and the industry — during this period of convergence.
D’Andrea Visual Communications
When David D’Andrea started his litho company in 2005, his vision was to create a commercial print shop that would someday hit around 20 employees. Today, D’Andrea is the CEO of a $25 million, 150-person operation in Cypress, Calif., with a second location now open in Las Vegas, offering services that span far beyond offset printing.
D’Andrea explains that the evolution to become a marketing service provider began in 2013, when he added grand-format printing equipment to his mix, allowing him to expand the types of services he offered, and to go after a much wider range of potential clients. In particular, that combination of technologies allowed him to find a great deal of success in the exhibition space, where the growth potential is significant, which has also led D’Andrea to open the second operation in Las Vegas.
“It’s a calculated decision — our exhibit customers asked us, once we’re in Las Vegas, if they can give us more work,” D’Andrea says. “We’ve seen a lot of growth on the exhibit side, so I am going to take the opportunity to get a foothold in Vegas, and continue finding other areas of growth in that market, as well.”
For D’Andrea, growth has been about more than just expanding to new locations, however. He has embraced the concept of industry convergence in a major way, seeing growth opportunities in a wide range of complementary marketing and communications services.
One business he is starting to explore is the packaging space. D’Andrea Visual Communications has found success offering specialty packaging options, especially for some of his higher-end customers in industries such as entertainment or music, where offering unique and exclusive versions can be a lucrative marketing approach for many brands. Examples of that type of work include doing special packaging for products given out at the Emmys, a special package for Metallica’s “ ...And Justice For All” album, as well as a package for an exclusive Led Zeppelin pin released along with the band’s albums.
3D printing is another technology D’Andrea is watching, although he admits that while he finds it “unique and exciting,” he just isn’t seeing a large call for it yet — not enough to justify an investment, at any rate. That could change once the technology and demand move away from the one-off, very customized projects to a more mass-produced approach.
One of the keys to the company’s success has been not necessarily being the early adopter for the latest and greatest technologies, but investing at the right time, when the hardware, software, and demand all converge.
“We want to make sure our investments are accurate, on point, and timely,” D’Andrea says. “We don’t want to get too far in front of ourselves, so we focus on where it will need to be in five years, and where the manufacturers are putting their R&D resources. That’s what I like to keep my eye on.”
The result of that investment strategy is an ever-growing and diverse service mix that can withstand whatever the future may bring, D’Andrea believes. “Markets have ups and downs. We lost a lot of players in the 2008/2009 [economic] downturn — I want to be ready, to have a plan to withstand any storms.”
The wide range of services D’Andrea Visual Communications offers is advanced by what its clients need. By steering his company into complementary marketing offerings, D’Andrea notes he is just “staying on top of where the market takes us.” While younger generations, he says, grew up with all technology, he is starting to see them migrate back to print for things such as news or brochures when buying high-end items like cars.
“The landscape has changed,” he adds, “but, in the greater sense, we are continuing to produce print, and there is still opportunity there.” D’Andrea recognizes, however, that print is just one portion of the broader strategy for modern-day brands. And by ensuring he can produce whatever might be needed, in whatever medium might be required, D’Andrea Visual Communications remains the first and only call every time a new campaign emerges.
“We’re doing our best to work with clients and help them achieve the results they are looking for, and doing it in a timely manner,” he concludes. “There are opportunities out there. You just have to hunt them down.”
— Toni McQuilken
Hatteras, based in Tinton Falls, N.J., which started in 1983 as a commercial printer, today produces a wide range of products, including signage, marketing and branding materials, variable data direct mail, packaging, event graphics, and more. “There has been a lot of change here over the past few years as we have evolved as a company,” says Bill Duerr, president.
Until about 10 years ago, Hatteras’ growth was centered around the world of offset printing, creating a solid slate of products and services, with a range of customers in several key verticals. However, as the market evolved, explains Duerr, and as digital technologies improved enough to meet the quality standards of the company, “we felt we needed to become a more dynamic service provider.”
While print remains the core service, Duerr notes that Hatteras couldn’t continue to be so narrow in the types of printing it offered. Production digital printing and wide-format printing are technologies he sees as complementary to offset, which is why the company began its convergence journey there.
“Wide-format and [production] digital are the two growth areas for print,” Duerr says. Hatteras is still about 60% offset, with digital and wide-format each capturing roughly 20% of its workload. During the next five years, however, he believes those numbers will continue to shift. He says that while Hatteras’ offset business is still growing incrementally, the company’s mix of work is changing, leading to a slow decline of offset as a percentage of total sales, whereas its digital and wide-format business grows at about an even pace.
While Duerr notes it is hard to pin down completely, given how rapidly technology and the market are shifting, he estimates offset will likely make up about 50% of the business by 2025, with digital and wide-format growing to around 25% each.
“That said, it’s all becoming pretty complementary,” he notes. “We are turning jobs that have components across all three platforms. They have different sizes and quantities, so it makes sense to run them cross-platform, and we are trusted by the brands to keep it consistent. So even though we are breaking down the revenue into those three divisions, we see where each creates opportunity for the others.”
The next big growth area Duerr is eyeing, however, is packaging. Short- to medium-run packaging is an area he believes will feature heavily in his product mix in the future. Hatteras has already started looking at ways to prepare for that shift, improving operations in the finishing side, for example, with the addition of a new folder/gluer that will allow the shop to be more efficient.
Hatteras already offers what Duerr calls product assembly services, where the shop produces some components, the brand supplies others, and personalized or versioned packaging and materials are created, assembled, and shipped directly from the print shop. “We are leveraging our data processing capabilities, variable data printing, finishing, and our assembly and mailing teams,” he notes.
Fulfillment is another aspect of that shift, going hand-in-hand with the package printing and kitting services. Hatteras already offers custom fulfillment services for some of its customers, Duerr notes, but as he looks to expand that entire division from the initial steps the shop started to implement, he sees fulfillment becoming another major growth area in the future.
Hatteras exemplifies how convergence into new products and services can create a stronger, more nimble print service provider. “I don’t know the secret sauce,” Duerr says. “We continue to try new things and, when they work, we scale them up. The more dynamic you are, the more challenging it is to manage. That’s why we went down the culture path, to try and bring these services altogether.
“I feel like we’re just getting started and, as a company, we need to keep looking forward,” he explains. “We have to get exposed to what our customers are doing, and what challenges they are up against — the better in tune we are with that, the better we can position ourselves for the future.”
With the market and industry changing so fast, “never rest on your laurels” seems to be the unofficial motto of Hatteras. Evolving the people, process, product, and technology simultaneously, and always striving to anticipate what comes next, is a strategy that will continue to serve Hatteras for many more years to come.
— Toni McQuilken
Premier Press is a company that never stands still. It embraced the concept of convergence long before it became an industry buzzword, evolving during the past 45 years from a small shop with a single pressman to a 170,000-sq.-ft. facility in Portland. Ore., with more than 140 team members.
As part of that mission to serve customers across the entire gamut of a project, “It was natural for us to move into other services,” Juli Cordill, managing director and CMO, says. Her father, Arnold Wheeler, founded the company as Pep Printing, and today it remains a family business. “We are always pushing the bar on technology, always trying to push the limits,” Cordill continues. “A lot of clients come to us to do the impossible.”
Starting out in commercial sheetfed offset printing, the shop added digital printing, and then direct mail and program work.
Recently, it has also begun offering services such as custom or influencer packaging — shorter runs where brands want to prototype a new design or want to create something innovative and out-of-the-box for a small group of targeted consumers.
But the most recent addition to its creative services lineup — photography — came along with the shop’s acquisition of JTW Partners in late 2018. “Photography is a whole new ballgame for us,” Cordill says. Premier Press originally looked to JTW for its dye-sublimination fabric printing capabilities — another new service it is gaining in the acquisition — but Premier also viewed it as an opportunity to add commercial photographers and production artists with prototyping and post-production retouching.
“It was an opportunity to onboard team members who are leaders in that field,” Cordill notes. “It was a bonus for us. Photography fits in nicely with the creative services we’re already providing. We can now do backup color retouching or take on a whole project, doing full photo shoots. It’s breaking new ground for us, for sure, and it’s very exciting.”
Much of the work right now consists of digital photography for projects such as websites and online catalogs, rather than for print campaigns, but, according to Cordill, “that is a great synergy to help us start moving more into the digital world, as well.”
Cordill notes that right now, expanding the creative and agency side of the business is a top priority, with the new commercial photography services playing a pivotal role, but project management and diving further into package prototyping is also going to be a major element of the business going forward.
The shop also recently purchased a new HP Indigo digital press, upgrading the shop’s digital capabilities and allowing it to offer more comprehensive print options as well. “Print is important to us, and it supports the other side of the business,” Cordill says. “We are not looking at getting rid of it — we are looking at expanding both sides. And we still do a lot of offset printing as well. Offset still has a big part to play — not as big as it used to be, but still a part.”
Another element the company is looking to grow is the wide-format digital printing side of the business, with Cordill noting it is considering expanding capabilities and capacity in that space. “And continuing to grow the direct mail and online ordering solutions program work is also a focus for us,” she reveals.
“I see us continuing to grow,” she continues. “Probably expanding more into digital marketing materials as well. We’ve always been really good at keeping an eye out for what’s next and being able to move and go after it.”
Premier Press truly embodies “convergence” and what success can look like when printers start to look beyond the presses. Print remains a strong element of the company’s business model, but it is also supporting other services and directions, allowing Premier Press to grow and change as the needs of the industry and the market shift.
It is a company never content to accept good enough, or to stop looking ahead at what might be next. “And that makes it fun,” Cordill concludes. “It’s never boring around here.”
— Toni McQuilken
Adding Value with Wearable Print
As budgets continue to tighten, many in-plants are looking for new sources of revenue and new services to make the operation even more valuable to the parent organization. One service many are taking a hard look at is garment printing.
One in-plant that has seen great success with garment printing is Ohio University, located in Athens. The in-plant, which employs 14 people plus two student workers, added the service 15 years ago, when the demand started to build.
“We were getting so many different departments on campus asking us about doing shirts,” says Director Blaine Gabriel.
As a result, the in-plant added a Brother direct-to-garment (DTG) press. Today, the shop is on its third garment printer after recently upgrading to the Brother GTX, partially for the ability to print white ink, which allowed it to expand into printing on darker shirts. While Gabriel estimates the in-plant has only printed around 1,500 shirts in the few months since the upgrade, he notes that the operation has printed tens of thousands since adding this service.
In fact, Gabriel was so pleased with the results of his garment printing services, he started talking about it to other in-plant managers — including Drew Burgering, assistant director of Valdosta State University Printing & Copying Services, in Valdosta, Ga., which has three full-time, and one part-time, employee. Three years ago, partially on Gabriel’s advice, Burgering invested in a Brother GT-3 Series DTG press.
“Everybody who has a t-shirt job has a print job,” points out John Wesseling, director of Communications Services at the University of Cincinnati. His in-plant has been printing garments with an mPower mP5 from Anajet, a Ricoh company. Offering a service like this increases the number of ways the in-plant can interact with customers, he notes.
“The more ways you can touch a client, the more ways a client will come back to you,” he says.
Recognizing the opportunity that garment printing brings to an in-plant, and actually executing a business strategy, are two different things. One way to build the business is to start with what is already there. Many organizations have a need for t-shirts, be it for events that require attendees to be dressed in clothing with the corporate logo, or perhaps a way for different departments within an organization to show individual pride. If an in-plant doesn’t offer garment printing, that is revenue that is automatically going to an outside source.
This is the strategy that Ohio University used, where the demand preceded the investment. That allowed the shop to jump right into offering garment printing as a service.
Burgering, however, took a different approach. He notes that his in-plant had some additional budget that needed to be spent or he would lose it. Between the recommendations he had gotten from peers, and talking to his design team, he determined to make the investment and then grow the service from there.
“I was looking for somewhere to expand, so I talked with the design group to see if they had a lot of requests to design t-shirts,” he says, “and they said they did.”
For Valdosta State University, taking the word-of-mouth approach has resulted in growth, albeit slower than Burgering originally expected. He estimates that the in-plant has done around 1,000 shirts since installing the equipment — projects that would have gone off campus previously.
“It shows people I can do whatever they need,” Burgering explains. “Now they ask me first before they look elsewhere, and that’s one of the things I want to instill: Ask me first. I can either handle it for you or go outsource it myself. If I can be their conduit it’s a win, even if I have to send it out.”
The individual volume of any one service might not be high, Burgering says, but the ability to say “yes” and build a reputation as the best place to go is just as valuable.
— Toni McQuilken
All American Label & Packaging
A strong company is built like a skyscraper, Brad Brown, CEO of All American Label & Packaging, explains. Without a stable foundation, it’s impossible for it to stand.
All American Label & Packaging, based in Dublin, Calif., with a second location in Memphis, Tenn., began setting its foundation as a label printer and converter in 1995. But despite its established roots in the label industry, Brown explains the business has evolved into a print provider, offering much more than labels.
“We [keep] adding capabilities,” Brown says. “Everybody can make a four-color process label. It’s not that hard. You can be faster, you can have better quality, you can be lower on price, but what do you do when you need to open up opportunities?”
Like most label companies, All American’s printing foundation is in narrow-web flexography, but Brown explains that he has never shied away from acquiring new tools to get a job done.
Since installing its first HP Indigo digital press in 2006, Brown says he has enhanced the company’s digital capabilities, upgrading his original 4000 series presses to a pair of HP Indigo 6800 digital presses.
But as All American continued to expand its business beyond labels, Brown prioritized bringing in the right tools for the right jobs. For example, he notes that when the company first began to dabble in shrink sleeves six years ago, it brought in 10-color, 17" servo-based film presses from OMET, which were better suited for those applications. And while All American had years of experience printing digitally for its customers in the wine market, a need for longer runs led to the company adding a Codimag waterless offset press five years ago.
In 2018 alone, All American Label & Packaging conducted an unprecedented technology adoption period. It started by boosting its web offset capabilities with a Nilpeter MO-4, a high-end press that Brown explains is ideal for serving customers in the wine segment. Extending beyond labels, however, All American also brought an EFI VUTEk grand-format printer on board to supplement its signage capabilities and to provide corrugated and display printing.
This year also marked All American’s expansion into sheetfed offset printing, with its installation of a Heidelberg Speedmaster CD 102-6+L press, along with a Heidelberg Suprasetter A 106 platesetter and an Easymatrix 106 CS diecutter. Brown says that with the addition of the Heidelberg equipment, the company has grown its packaging capabilities by taking on folding carton work, and entered commercial printing segments, including catalog printing. It has also allowed for the addition of cut-and-stack label capabilities.
“It’s all about finding those capabilities with the right people and building that foundation,” Brown concludes. “There’s not a high-rise building that starts at the fiftieth story. You start with a good base and a good foundation.”
Dave Kennedy, owner of Southern Carton, had his eye on expanding the capabilities of the 42-year-old traditional industrial packaging company in hopes of satisfying existing customer requests for retail-ready and point-of-purchase (POP) displays. The family-owned and operated third generation solutions company based in Lewisburg, Tenn., specialized in two-color flexo, two-color diecutting, one-color jumbo boxes, assembled partitions, and even added wide-format labelling to the mix in 2015, but did not have in-house resources for high-graphics opportunities.
“We also had no control over meeting the customers’ objectives such as timing, quality, and pricing, if we outsourced the work,” says Scott Fray, sales manager at Southern Carton.
With all of this in mind, Kennedy turned to the Inca Onset X3, distributed by Fujifilm in the U.S. — a machine that produces quality work quickly and at a good overall cost.
“[Kennedy] saw that choosing Fujifilm would allow us to increase revenue opportunities not only in POP but also [in] non-corrugated substrates,” Fray explains.
By investing in digital, the company has been able to create new revenue streams with partners. There has been a demand for various wide-format applications such as retail-ready wood products, acrylic displays, plant signage, and retail-ready packaging concepts.
The company increased engagement with marketing and sales departments of existing packaging customers to help them best understand where this new technology would benefit their organizations. “We showed them that digital has a cost advantage for both the beginning and ending of product life cycles with no plates, dies, or minimum runs,” Fray says. “It is extremely flexible in the way it reaches different target audiences.”
Denise Gustavson is the Editorial Director and Special Projects Editor for the Printing & Packaging Group, which includes Printing Impressions, packagePRINTING, In-plant Graphics and Wide-Format Impressions magazines, among other brands. She is also the Editor-in-Chief of Wide-Format Impressions.