Niche markets are delivering new revenue streams for savvy printers who are prepared to tackle new segments and take on shorter run work such as boutique packaging
Boutique packaging printing is one market that is drawing attention. This interest is fuelled by an increase in the number of ‘home’ businesses springing up particularly in the areas of food, beverages and natural cosmetics. Many of these start-up companies do not have the budget to undertake massive runs, and that’s where the opening has come for these niche services.
Adelaide’s Five Star Print and Heaney’s Performance in Print on the Gold Coast are two companies that have seized on the opportunity. And both are successfully making inroads into the packaging market by targeting the boutique manufacturers.
Five Star Print - Adelaide
Two years ago Five Star Print installed a Heidelberg XL105 six colour press with aqueous coater. The motivation, says managing director Carolyn Cagney, was ‘to directly tackle the packaging market’.
At the time the predominant product for printed packaging was a fluted substrate that needed to be laminated after printing. Cagney had an idea to introduce a cost-effective alternative that removed the need to laminate post-production. She chose the Heidelberg XL105 as her production press.
She says, “With our XL105 we can print directly onto board, and can handle greater thicknesses. This gives us a selling point over the fluted product which has to be laminated, and has enabled us to make inroads into what was a very tight, closed market space.
“When I was looking at market opportunities I honed in on packaging because it is virtually an essential commodity. There are other segments where electronic media has impacted, but with packaging, you are always going to need the box to put your product in. You can’t download toothpaste, for example, you need to put it in a box. The supermarkets and department stores are full of packaging. I can’t see that changing in a hurry. We are a consumer society and packaging is an important factor in brand awareness and in brand choice.”
According to Cagney the XL105-6 is ideal for packaging because of its flexibility with substrates and its speed, she says, “Because the press is so highly automated changing from thin board to heavier stocks is extremely easy and fast. We are printing directly onto 1mm board and can print on stronger stocks than our competitors.”
The advantage of packaging produced on the XL105, says Cagney, “is you don’t have to laminate it. We are starting to gain market share for wine packs and other specialty goods like pharmaceutical products as producers and manufacturers begin to see the economic benefits.
“And because we print on solid board we are able to manage the job in-house. The only aspect that is outsourced is gluing”. Cagney continues. “We invested in the XL105 to get into this market. Now we are in the process of building volume and once we have achieved our goals we will expand to include the finishing services”.
The structured investment philosophy behind Five Star’s push into packaging is the hallmark of the company’s success. Over the past 16 years the company has grown from a two-person operation to being one of the largest print companies in South Australia with a staff of more than 50.
And Cagney has plans for another XL105 press. “It’s such a fantastic press, fast, versatile, easy to operate and reliable. It has met all our expectations”. Cagney says the press runs consistently at 18000 sheets an hour even with heavy board. “My production manager couldn’t believe it, he said there was no way we could achieve that kind of efficiency, but we have. I’d definitely like another”.
Not one for doing things by half measures, Cagney has also employed a dedicated packaging sales person who is out making calls all week. She says, “We have a large winery market in South Australia, but there are other opportunities also in cosmetics, food and specialty products.” At present packaging represents around five per cent of the company’s turnover. Cagney concedes her initial forecasts factored faster growth, but the general economy put paid to that. “That’s why I’ve held off putting in the gluing line, as we need to increase volume. We anticipate growing the packaging work to around 20 per cent within the next twelve months as the market continues to improve.”
Cagney says the company has felt little impact from the economic downturn as far as sales go. “We had a couple of quiet months, but September has been extremely busy and we have work in hand moving forward”.
Whereas Five Star produces print for clients around the country, in regard to packaging Cagney is taking the stay local approach. She says, “In South Australia there are a number of avenues for boutique packaging. The important thing for us is keeping our profile out there, and educating the market on the benefits of printing directly onto board. It’s slowly, slowly, but that’s what you need to be prepared to deal with when you enter a new market. For us packaging is a long-term commitment”.
In closing Cagney says, “We are doing some great quality jobs. The more we do the broader our repertoire. I’m very positive about the future.”
Heaney’s Performance in Print – Gold Coast
Susan Heaney, managing director of Heaney’s Performance in Print, located on the Gold Coast, is one of a few people that has made the move into the niche market of boutique packaging.
Heaney’s has undergone a number of transformations over its 30 year history. In recent years Heaney bought out her partners and is now the sole owner. The company employs 36.
Six years ago Heaney’s reinvented itself moving from the A1 market to the A2 segment. Heaney says the motivation for the shift in focus “Was to get away from the book and magazine sectors where margins are low and the market is highly competitive. Today we focus on short run, quick turnaround work and in order to gain more of this work, we have added a digital stream and increased our focus on boutique packaging.
“We are doing packaging for home industries – food and beverage products and also cosmetics. Plus there is a good volume of work in self-promotional materials for companies and corporate gifting items,” she adds.
Over the last 12 months Heaney’s has been able to grow volumes out of this niche market by 7 per cent. Heaney says this is remarkable given the economic climate. “I credit our move into this area six years ago with giving us a vital edge in growing our business over this last year”.
Heaney’s produces work for clients locally and interstate. Heaney regularly visits the company’s interstate clients. She says, “It is paramount to stay in front of your client to manage and grow the relationship. Email is not an effective tool for this, and will never replace the need to understand your clients’ business in great depth.”
Until recently the company has felt little impact from the volatile economy. “We anticipated a downturn at some point, but luckily for us it hasn’t been protracted,” she says adding that they have been fortunate to withstand the downturn for so long.”
Heaney puts this down largely to the fact that they have a variety of Heidelberg equipment that enables them to produce a wide gamut of work. She says, “In addition to the CD 74 six colour with coater press we also operate an SM 74 four colour, as well as a couple of old GTOs that are still used for single colour jobs like business cards and other stationery items”.
Today Heaney’s is a full Heidelberg house. “We didn’t start out that way, but once we built our relationship with Heidelberg it became a natural transition. Our account manager is fantastic. And on a number of occasions we’ve worked with Heidelberg’s Business Development Unit on our business strategy, which has been of enormous benefit.”
Heaney’s recently became the first sustainable green print company in Queensland. It is this dedication to innovation and benchmarking that has seen Heaney’s continue to grow and prosper despite the challenging economy and the highly competitive east coast market.
In conclusion Heaney says success is a combination of productive, reliable equipment, a sound business plan, highly trained and motivated staff and a preparedness to be flexible. She comments, “Our plant is highly productive because we have installed equipment that enables us to push through quality work very quickly. But you need to have a strategy that encompasses all business areas and as a result you must be prepared to put in the infrastructure to support any new equipment.
“Whatever equipment we buy we do so with a clear objective – to provide a comprehensive service so we can deliver all our clients printing needs in-house.”
