Don't miss the boat - waves of digital innovation | market trends and drivers fishbone diagram | new survey data | patent holders | product tech suppliers | markets growth digital vs analogue | evidence for market pull & activity | perceived barriers to adoption relatives | Customer DMUs | Strategy Logic

1. Digital Printing for Packaging Industry
Q1 2015
www.cir-strategy.com

2. Cambridge Investment Research
consulting for strategy

3. Examples of relevant work done
Tech roadmap for Xaar printheads back in 2004, successfully exploited
High-Value Manufacturing Conference Series since 2002 (36 conferences delivered averaging 100 execs)
Technology strategy for Domino in digital labels in 2009
PIRA Inkjet Inks for Packaging Report 2006, Digital Textiles Reports 2012 & 2014
Commercial Diligence for Domino plc just before they purchased PostJet in 2012 for GBP£6.5Mn with
presentation to Board of Directors
IP Strategy for Plastic Logic 2013
and...
Market Entry Strategy for DP Start Ups/Spin-offs e.g. Inkski
Work on labels for Epson “Beyond the Tech Enablers” - 2008
Reports on Global IIJ & Labels sold Globally, EU, APAC and NA - 2009
Mapped entire Cambridge High-tech Cluster (750 scaleable technology firms)
2 large recent & ongoing Direct-to-X digital printing in packaging clients

4. Workshop – Co-creation
- Joint creation of a better plan with CIR proposals of contribution (workshop)
- Separate client / CIR reflection on the joint creation
- Joint conclusion of the results from the activities above and proposed next
steps (what have we learnt and have we proven to be able to work together)

5. 1
• What is the nature of the opportunities from digital printing?
2
• How real is the interest from customers in the digital package printing opportunity?
3
• What is the competitive landscape & market potential?
4
How economic is digital for the packer or processing factory?
Areas of focus:
• Structural changes to market | their effects on the business
• Market readiness, timing & growth rates
• The use case & customer value-proposition
• Business model concepts | Scenarios & options (via Route to Value)
• Business propositions & validation
• Routes to Market | Accessing technology
• Recommendations to Board

6. Overestimating the Short Term, underestimating the Long Term:
Digital printing waves* observed in last decade
2004 – signage & displays
2008 – labels
2010/12 – ceramics
2012/14 – textiles
2016/18 – packaging?
…Wait and see or Don’t miss this boat?
* Moving from unknown to an established or even saturated market
in relatively short period of time, year given represents approximate “take-off”

7. Source: CIR Dec 2014

8. 42 interviews on digital
for packaging achieved
Aug-Sep 2014
Technology supplier - equipment (printers, print finishers and line machinery)
36% N=15
–
Packaging (12) & Labelling (2) Converter
33% N=14
–
Brand owner or retailer or packaging filler / food producer
29% N=12
–
Consultant / Packaging Gurus
2% N=1

9. Evidence of Related Patent
Activity in last 5 years around
digital for packaging (CIR
Patent Search Team)
Adverpack LLC
Atlantic Zeiser GmbH (Germany)
Ball Packaging Europe Gmbh (Germany)
Colgate-Palmolive Company
Cuch Simon R ( Us ),
Cyan Tec Systems Ltd ( Gb )
DIC Corp
Durst Phototech Digital Tech ( At )
Fuji Xerox Co Ltd
Fujifilm Corporation (Japan)
Gizeh Verpackungen Gmbh & Co Kg
( De )
Graphic Packaging International, Inc.
Guangdong Dongfang Jinggong
TechnologyCo
Heidelberger Druckmaschinen Ag
Heineken Technical Services B.V. (Nl)
Hewlett-Packard Development Company,
L.P.
Hitachi Ind Equipment System Co Ltd
INX International Ink Company ( Us )
KHS GmbH (Germany)
Kimberly-Clark Worldwide, Inc.
Konica Minolta Holdings Inc
Krones AG ( De )
Machines Dubuit (France)
Mars, Incorporated
Memjet Technology Limited (Ireland)
Mimaki Eng Kk
Osiris Technology B V ( Nl )
Plastipak Packaging, Inc.
Pressco Technology Inc.
Primera Technology, Inc.
Procter & Gamble Company, The
Reynders Etiketten N V ( Be )
Seiko Epson Corporation (Japan)
Smurfit Socar Packaging ( Fr )
Sun Automation, Inc.
Superfos Packaging As ( Dk )
Tetra Laval Holdings & Finance S.A.
(Switzerland)
The Coca-Cola Company
Till GmbH (Germany)
Toppan Printing Co Ltd
Toshiba Tec Europ Imaging Systems SA
( Fr ),
Toshiba Tec Kabushiki Kaisha (Japan)
Videojet Technologies Inc.
Weng An Zhongya Color Printing
Packaging Co Ltd
Westvaco Packaging Group Inc (Us),
WM. Wrigley Jr. Company
Xeikon Ip Bv (Netherlands)
Xennia Technology Limited (United
Kingdom)
Xerox Corporation
Xinxieli Package Products Shenzhen Co
Ltd

10. hp indigo (ep ip)
ABG Intl (dfs w/ hp
indigo)
Xeikon (fn pkg fc iml,
ep)
KHS – d2s ij (pet)
Krones – d2s ij (pet
hclient)
Till – d2s ij (any mat)
ToneJet (w/ Ball) – d2
metal cans es
FFEI – Graphium – h m
prt ij flxo
Sacmi
Machines Dubuit d2s
pet ij
Hp scitex – d2 corrug
ij
efi (corrug fp fc) ij
Durst (corrug) ij
FujiFilm Screen (fc
corrug) ij
Sun Automation (d2
corrug)
DPS (Brother?) ij
VIPColor lbls fc fp por
paper
Primera lbls fc fp
Cyan Tec rtr rts
Heidelberger w/
Gallus, CSat (h m prt)
mark andy (h m prt)
Nilpeter (h m prt) lbls
fc fp
Colordyne lbls tags
sheets
Epson (lbls - fn pkg)
INX Digital
Edale (dfs)
Atlantic Zeiser (ip)
VideoJet ip d2p
Uteco dfs flxo
Spartanics dfs
SEI dfs
Hinterkopf aerosol
metal cans
Wifag Polytype ij
Highcon (dfs fc w/
xeikon)
Presstek fc
Kodak (Prosper,
Stream)
w/ Bobst (dfs corrug)
Xerox vdp rtr/sheet
Canon Oce vdp rtr/
sheet
Landa (nanog fc)
Companies already developing &
marketing digital packaging printing & finishing systems

11. Global Label & Packaging Market Growth
Source: PIRA 2013
6.6% CAGR
4.2%
15.5%
22.7%
fc and fp 40-45%
CAGR forecast
Global packaging will
reach $1Tn by 2018 (PIRA)
EuroBn
18.2%
“Packaging has gone from an afterthought
to an integral part of the product”
- a packaging converter

12. Evidence for market pull
How strong is your or your customers' interest in using direct-to-package digital printing?
N = 30
Average = 3.50
or
“Middling to Strong” (median / average)
“Strong” (most common answer)

13. Other US research into packaging Q4 2013
Source: Karstedt Partners
How Brand owners and retailers view the
benefits of digital printing

14. Other US research into packaging Q4 2013
Source: Karstedt Partners
Does interest level change with a premium level of
15% to 20%

15. Evidence for market activity
If you may at some stage require to buy digital direct to pack printing equipment,
which of the following would best describe your current position or approach to this:
Median response
& a surge in beta installations
exp. Q4 2014 & 2015

16. Perceived barriers to adoption of digital direct packaging
printing
All barriers around technology, printing, finishing
are thought to be solved within 4 years and
then any delay to adoption is organisational

17. 1st= Consumer engagement
1st= Faster turnarounds “Time to mkt segment”
3rd Advertising promotions: Limited editions
4th Advertising promotions: Local events
5th Regionalisation
6th Seasonal information
7th Languages
Customer drivers & Decision-Making Units
Marketing dept
Production/logistics
Regulatory/ICT
Order of importance from survey:
Other
US: commercial printers in maturing market
seeking new segments e.g. packaging
“profitable short-runs segment”
high
• Key to marketing and sales strategy for digital direct to
packaging will be accessing all 3 depts at brands

18. Strategy

19. Source: Harvard Business Essentials Series: strategy (generic aspects)

20. connect projects to
changes, objectives,
goal, values

21. Confidential 21
Towards a better plan…
CIR roles
1. Methods
2. Validation – hands on
3. Assurance – independent review

22. Confidential 22
Towards a better plan
METHODS
Design structure
Segmentation
Confidence
Value network & key case sub-network
Impact assessment
Opportunity prioritisation & Options
Business Proposition,Value Proposition
Service design
Your route to value

23. Confidential 23
Value network and dynamics

24. Steps for Value Network Analysis Set-Up
1. Identify Participants (all stakeholders) – NODES
Upstream and downstream
External & internal
Complementary Assets
2. Identify Expectations – FLOW LINKS
Tangible & Intangible
3. Define scope and boundary, context and purpose – UNIVERSE
Primary & Secondary Stakeholders
4. Validate participants, expectations & sequencing – LOGIC
Propensity to change of stakeholders

25. Confidential 25

26. Confidential 26

27. Confidential 27
Confidence

28. Confidential 28
Confidence table
Example
NOTES
1 Sources of confidence are adapted
for each client and project.
2 We do not use 100% confidence,
as this is usually impossible to
achieve.

29. Confidential 29
Routes toValue

30. Confidential 30
Routes to Value
The RtV View* explicitly links planning with execution.
Allows for impact of any decision to be understood.
StrategyTactics
*The RtV Map is a directed graph.
Our method ensures that everything aligns to a strategic goal
and that the impact of decisions is clear

31. Confidential 31
Structuring the decision context
Routes to Value – visible strategy

32. Confidential 32
Routes to Value – visible strategy
Identify emerging user need
Option 2
Option 3
PROJECT – choosing options
Analyse discourse stream
Cost Conf. Time Conf.
£20K 70%
6
wks.
60%
Dependencies
Agree license
Competencies
Ontologies and target users

33. Confidential 33
Routes to Value – visible strategy
Increase number and length of
accounts
CHANGE – making it explicit
RESP. Ed
Meter
Revenue as % of total revenue :
C F A T
15%
<=25
%
50%
<=66
%
Current Fail Acceptable Target

34. Confidential 34
Routes to Value – visible strategy
E.g. Increase the lifetime value of
customer
OBJECTIVE – Clarify goals
RESP. Ed
Meter
Annual spend over 5yrs £K pa
C F A T
55 70 100 250
Scale of measure
Metrics of measure

35. Confidential 35
Tracking confidence in outcomes
Uncertainty is the best predictor of outcomes.
Gollet. C., University of Toulouse

36. Confidential 36
Impact assessment

37. Customer lifetime value and impact assessment
LifeTimeValue function Life
Time )-(( )Transactions
number of,
Average
Transaction
Value,
Cost of
Acquisition+Cost of
Retention
Number of
Transactions in
a period, e.g. a
year
i.e. number of
periods
(number of
years, when
year = period
LTV f LT
) - (( )Tn,ATV, CoA + CoR
impact: l = low m = medium h = high 0 = no impact © Nicholas Coutts 2011 – 2014 All Rights Reserved
OPTION TIME COST IMPACT IMPACT IMPACT IMPACT IMPACT
Reduce
price
l l h h h o o
Improve
web site
m h m m h h h

38. Confidential 38
Towards a better plan
VALIDATION
Specific market and customer data
Interviews; Research; Intelligence; Insight