Understanding the convergence in converting
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Packaging is more than just another printing market; it’s a converting business and not every OEM understands the difference. Since the beginning of our post-COVID world, the printing industry has been undergoing a structural shift. Office printing has declined, commercial printing has plateaued, and OEMs across the industry are searching for the next area of growth in response. For many, packaging has become that area.
Packaging’s appeal is not surprising. The market continues to grow, it is less exposed to digitization, and it’s viewed as one of the last strongholds of analog printing. Even so, what’s happening in the packaging industry now is not a simple market transition…it’s a convergence.
Packaging Is Not Print
Three very different OEM worlds are now colliding within the same space, and they each bring different assumptions, capabilities, and levels of understanding. Before identifying the players, though, it’s important to understand the core issue:
Packaging is not just another print application; it’s a converting business.
Production environments are operationally complex, capital-intensive, and tightly integrated into manufacturing workflows. Success is not determined by print quality alone, but by how the associated technologies fit into finishing, substrates, supply chains, and overall production economics.
This is where many OEMs—particularly those coming from office and commercial printing environments—have historically struggled. In many ways, the struggles we’re seeing in the packaging industry are not new. They have happened before.
For more than 30 years, commercial print OEMs have attempted to enter the packaging arena. Each time, they have approached the market with a traditional mindset that often centered upon CMYK, image quality, and page-based thinking. This focus prevented them from fully understanding the operational and economic realities of packaging production, so their efforts largely failed.
Today, industry consolidation and strategic shifts are bringing new players back into the packaging space. As noted earlier, three completely different OEM worlds are simultaneously entering the packaging market.
1. Office & Commercial Printing OEMs
Driven by declining volumes and slowing growth in their core markets, office and commercial printing OEMs are now aggressively moving into packaging. They bring:
• Strong digital print expertise
• Global sales organizations
• Established customer bases
Unfortunately, they also bring their legacy assumptions. Many approach packaging as an extension of commercial printing, which makes them underestimate the complexity of converting environments while also overestimating the speed at which converters will adopt new digital technologies.
Simply put, these commercial printers are taking their own familiar strategies and reapplying them to an industry that has consistently resisted them. What we’re seeing as a result is a sense of déjà vu in the packaging sector.
2. Native Packaging OEMs
Native packaging OEMs are the analog and digital incumbents who have built their businesses within the packaging and converting industry. They understand:
• Production workflows
• Substrate variability
• Finishing and integration
• The economic realities of converters
Their approach to digital has generally been more measured compared to office and commercial printing OEMs. Packaging OEMs focus on where digital fits within their existing operations rather than trying to redefine their operations to accommodate digital. They tend to move more slowly, but they’re often more aligned with how packaging production actually works.
3. Chinese OEMs
Chinese OEMs are a newer, but rapidly emerging force in the market. They have:
• Accelerated development cycles
• Competitive cost structures
• Increasing technical capabilities
Rather than following the same long learning curve as traditional OEMs, many have effectively leapfrogged certain stages of development. As a result, many have entered the market with viable solutions at aggressive price points. Their presence is beginning to change expectations around cost, accessibility, and speed of innovation.
The Missing Center: Converters
Converters need to be at the center of these three OEM types, but they don’t work at the pace that OEMs expect! Converters operate in environments where:
• Downtime is costly
• Workflows are tightly integrated
• Margins are operationally driven
Rather than adopting new technologies based on potential, converters rely on proven, repeatable economic value within their existing production systems. Therein lies one of the key disconnects in the market today:
OEMs are moving quickly into packaging, while converters are moving carefully within it.
The Risk of Overcrowding
While the growth potential of digital packaging printing is real, the rapid influx of vendors may also create a new problem: Too many vendors chasing the same opportunity.
Packaging production environments are complex, capital-intensive, and highly operationally driven. Therefore, converters do not quickly adopt new technologies unless they integrate cleanly into existing workflows and deliver measurable economic benefits.
As more vendors enter the market, the industry may experience a period of experimentation before clear leaders emerge. Although the next decade will likely bring growth in digital packaging printing, it is also likely to bring competition, consolidation, and a major reshuffling of technology vendors across the printing industry.
A Broader Reality
It’s important to remember that what’s happening in packaging isn’t occurring in isolation. Even in adjacent digital print segments, the industry has yet to fully recover from COVID and post-COVID disruptions. In fact, over $2 billion in supply revenues are still missing compared to 2019 levels.
The broader reality is that growth in digital printing is not guaranteed. It must be earned through alignment with real production environments and customer economics. The key question that the industry has yet to answer is this:
If packaging is the future, and if OEMs are rapidly moving into this space, then why hasn’t digital packaging printing scaled the way many have expected?
Here at Keypoint Intelligence, we are actively engaging the market to answer this very question in our upcoming multi-client study entitled “Breaking the Analog Stronghold: What’s Inhibiting Digital Packaging Printing.”
This research is focused on identifying the true barriers to adoption from the converters’ perspective and defining the things that must change for digital packaging to scale. We’re currently in the final phase of sponsor engagement with participation closing at the end of March. For OEMs that are evaluating their strategy in the packaging industry, now is the time to not just understand the market, but to help shape the direction of the research itself.
Entering the packaging space is one thing, but winning in packaging is something else entirely. This raises a fundamental question for every OEM that is thinking about making a move:
Does packaging need you…or do you need packaging?
To learn more about our new multi-client study or our Labels & Packaging Advisory Service, contact your Keypoint Intelligence account representative or click here.