HP Indigo, the Israeli maker of production-level EP printers for flexible packaging, recently announced an order for 24 units of the HP Indigo 20000, the company’s 30” EP web for that application. The deal is the biggest to date for the 20000 and, same as last year, the buyer is the Israeli company’s best customer for the printer, ePac Flexible Packaging (Middleton, WI); ePac set the previous record by ordering 20 units in 2018. ePac currently operates 28 of the 20000s at 12 locations and expects to operate 52 at 20 locations after all the latest batch are installed next year. In money terms, the deal is also big: Pricing for one HP Indigo 20000 is unpublished but, even assuming a discount for buying 24, this latest purchase will likely total well over $20 million just for hardware; spending over time for toner, parts, and service will add substantially to that.
To explain the two companies briefly, HP Indigo is the top supplier of production level, color digital label and packaging web printers, mainly at label converters but, since the 2014 launch of the 20000, also at dozens of flexible packaging converters globally. Its customer ePac, founded in 2016, has had a meteoric start as a digital-only flexible packaging converter, with HP Indigo 20000 as the core printing equipment at each of its sites.
A key part of growth of ePac is its business model, which has attracted entrepreneurs as owner-operators for sites in a dozen cities, mostly in the U.S., plus one in Canada and one in U.K., with each entrepreneur making an investment to obtain the franchise. To assist each location, ePac Holdings was formed to provide a core set of centralized functions including site planning, finance, IT and marketing; ePac Holdings is also the majority shareholder, providing management oversight for ePac as a whole.
Each site is thus standardized in terms of design, processes, and hardware, including equipment and software from partners besides HP Indigo; ePac has several non-HP vendors, notably for prepress and finishing. All the sites use Esko prepress workflow tools, Nordmeccanica solventless lamination, Karlville slitting and rewinding, and Totani pouch making, which together with the digital press allow ePac branches to offer complete solutions, whether finished pouches or printed rolls of film, for use in form/fill/seal lines. HP Indigo is still the heart of each site; according to ePac’s co-founder, Carl Joachim, the company’s current sites now have two to three HP Indigo 20000s; and said he expects most sites to have three units in one to two years.
The clients of ePac branches are most often food manufacturers, a natural given the prevalence of flexible packaging in that segment, but there are many others, from drinks suppliers to makers of electrical goods and industrial products. Besides the packaging format’s basic advantages (low weight, low cubage, high protection, etc.), color digital printing allows clients to print just what they want and even to achieve a new “look” quickly and efficiently, whether for tests or big print runs with many versions.
While ePac gets the main credit for developing a repeatable business concept, HP Indigo’s printer is the core hardware for its implementation. Built from the same HP Indigo liquid toner print engine as the B2 sheet fed HP Indigo 12000 for commercial print and 30000 for folding carton, HP Indigo 20000 is the first color digital web to be commercially successful in flexible packaging. HP Indigo prepared for its 2014 debut with several years spent developing the flexible packaging application on HP Indigo 6000 series narrow EP label webs, enlisting partners for media and finishing as early as 2009. When the 20000 arrived it was a welcome extension of that initial effort, in particular because its 30”/760mm web width is similar to the “mid-web” dimensions of flexo presses that converters use, and thus big enough to impose most flexible packaging images (in contrast, 13”/330mm label webs are too narrow for many such images). Basic features of the 20000: Up to seven colors; inks safe for indirect food contact; linear speed up to 147 fpm/45 mpm in CMY, 112 fpm/34 mpm in CMYK; automated color management; film media as thin as 10 microns; Esko-powered DFE; reverse inspection unit.
In its press conference at the Brussels Labelexpo in September, HP Indigo cited the success of the 20000 in the label application—about 20% of placements are in fact for printing labels—but revealed as well that about 200 total installations of the 20000 now operate globally, with the majority of them dedicated to flexible packaging (a small share of all installations print other applications, such as commercial print). Most of those flexible packaging installations are with established flexible packaging converters, companies that use flexo or gravure to print most jobs, but that now can handle short to mid-sized runs easily on HP Indigo 20000. Thus the 20000 has a natural constituency among analog converters of flexible packaging, who normally will run the EP web side by side with flexo or gravure technology. That said, ePac is an example of a different type of company, an enterprise that uses only digital print for this application. Given ePac’s early success, this digital-only approach looks like a compelling addition, one that is creating a new tier of converters for the flexible packaging market, and a new focus of InfoTrends consulting.