Latest analysis shows that 2020, and the global coronavirus pandemic, have profoundly disrupted the global printing industry. Total value fell from $814.7 billion in 2019, to reach a projected $743.4 billion in 2020.
The challenge of operating during lockdown (shelter-in-place) orders has been severe, and the nature of these restrictions has had a deep effect on print purchases. Some of these will recede as the COVID-19 restrictions do; others will have a lasting impact, either unanticipated or accelerating existing market trends for the 2020s.
Graphics, Publications, and Packaging
Lockdown orders and widespread homeworking has stopped sales to commuters, and many more readers have switched to more instant online media channels. Advertising budgets are following, lowering output from coldset and heatset litho presses. It is likely that most of this lost volume will never return as titles move to online only or are discontinued. IKEA has announced that it will stop publishing its catalog once the largest print job in the world after the 2021 edition.
Commercial print business forms, newsletters, manuals, etc. suffered severely in Q2-Q3 2020. The radical fall in demand will see many service providers close. Post-COVID, a more open environment will create great opportunities for surviving companies in the medium to long term. As this happens, there will be fewer low-value items printed with an emphasis on higher quality and embellishment effects that add value and interest to products.
Packaging and labels have been affected least by COVID-19. There has been a drop in use of transit and industrial packaging, but these carry limited printing. Food, beverages, and pharmaceuticals have and will continue to be prioritized by governments and consumers. The short-term boost in Q2 2020 linked to “panic buying” and consumer stockpiling has been more muted in Q4 2020; even as the emergence new virus strains has seen a re-imposition of lockdown orders.
The decline in graphics and publication jobs will be reflected in the market for print substrates. Newsprint, coated and uncoated woodfree, and coated and uncoated mechanical have all seen a fall in volumes, much of which will be permanent. Board and packaging film volumes have been more resilient and are forecast to return to positive growth through to 2025 and beyond.
To protect revenue during lockdown, many retailers have opened new e-commerce direct-to-consumer service lines. E-commerce packaging volumes are up 40% compared to 2019, with each purchase requiring additional packaging and delivery labels.
E-commerce and the wider use of web-to-print will not just reshape direct-to-consumer sales. There will be less need for intermediates or the conventional sales contact relationship in packaging and print ordering in the 2020s. By 2030, online specification and ordering will be the norm for print and printed packaging.
One of the highlight investments of 2020 was Amazon’s commitment to buy $400 million of inkjet equipment for its new Merch business line. Customized print of direct-to-consumer products—like mugs, calendars, or other photo products—will see genuine growth for PSPs that can diversify into this area, including installing direct-to-object systems.