Koenig & Bauer: Simplify print and packaging - The Noel DCunha Sunday Column

Noel D'Cunha (NMD): Drupa to Drupa (I know it's been eight years), what are the labels and packaging market trends, trends in book POD, and photo segments in India?
Andreas Plesske (AP): Now, are you asking me as the CEO of Koenig & Bauer (K&B) or Drupa's chairman?

NMD: As the CEO of K&B...
AP: Eight years is a long time, so at the trade show, there are numerous innovations, which is logical. After eight years, twice as much progress is evident. You'll see a lot of innovations in machinery, as well as efforts to refine strategies. The two main themes at Drupa, digitisation and sustainability, summarise most innovations. Productivity is another key focus: better equipment integration and increased output. Overall, there is a strong emphasis on labels and packaging, which are showing growth.

There is also a significant presence of commercial printing, despite being relatively flat in terms of growth, and book printing, which is a niche but appears to be strong. Book printing is driven more by government decisions than consumer demand. Labels and packaging are on a growth path, while commercial printing shows some growth in specific niches, and book printing, despite being niche, appears to be robust.

NMD: Some visitors PrintWeek met believe that the technology being discussed is only making small improvements and isn't the groundbreaking technology we might have seen in 2004 or 2008.
AP: Technology encompasses two aspects. Firstly, I will address the hardware side, while my colleague Ms Wagner will elaborate on the other aspect. On the hardware side, technological advancements are largely incremental, with machines operating slightly faster and experiencing reduced job change times. However, there are notable hardware innovations in the digital printing sector, particularly in the B1 format for packaging.

But you're right. Much of the industry's innovation is centred around digitisation.

Drawing a parallel to the automotive industry, where cars initially only had basic electrical components, such as starters, lights, and radios, and then later incorporated small computers for navigation and other functions, we can see a similar digital transformation happening in the printing industry. The digitisation of machines and workflows is at the heart of innovation in this field.

NMD: So, let's discuss digital technology with you, Sandra Wagner...
Sandra Wagner (SW): We proudly introduce our latest AI, Kyana, which is designed to assist our customers. Kyana can support installing, servicing, and maintaining machines and help find the most efficient solutions. We have also developed connectivity and data solutions to work harmoniously with our AI, aiming to increase productivity through efficiency and automation. Kyana's capabilities include identifying anomalies in the data, allowing for quick troubleshooting and problem-solving. This cutting-edge technology represents the future of our industry, leveraging our expertise in printing presses and operations, combined with customer input, to drive innovation and improve our operational efficiency.

NMD: So, AI here is more predictive?
SW: Much more.

NMD: How much? When you explain AI on printing presses, one needs to learn what it does besides being predictive.
SW: Have you used ChatPT or Google Gemini?

NMD: I did.
SW: That's generative AI.

NMD: But I thought it was very sourced...
SW: What you usually do as a company, like we do, is check that general model because you can integrate pictures, videos, text, speech, and everything.

NMD: For example?
SW: You can integrate pictures, videos, text, and speech into the channel model. Let's say you are a new team member and have no idea how the printing press works. If a failure code comes up and there's no one around to help, you can use the generated value to ask for guidance. For instance, you might ask, "I have this failure. What should I do now?

Can I proceed, or do I need to call a hotline or replace something?" The generated value could then provide instructions based on the service manual, such as putting certain steps together so you can proceed, or it might indicate that it's just a minor issue not to worry about. Alternatively, it might highlight a larger issue requiring calling the hotline.

NMD: Could you use a set format or set of responses for that?
SW: Not if you want to have real-time data. If you wish to have real-time data along with historical data, our system can provide both. We also offer predictive algorithms. By combining real-time and historical data with regenerative AI, we can alert you to potential events before they happen and provide actionable recommendations. It took us two years to develop this technology, which was not previously available in the market. We have integrated this technology with our existing platform, including all the chatter, PT, and other features.

NMD: So you won't need an engineer now?
SW: We still need engineers because it's a supportive solution. It does not replace good people, but it will help you. The most significant benefit is being able to work faster and more efficiently. Instead of looking into books or calling a hotline when you don't know what to do, you always have this virtual assistant helping you with your production. That's the idea behind it.

NMD: So, one packaging converter asked how AI will help tackle counterfeiting...
SW: We have solutions for many products that allow you to imprint something on them.

The printing is included in the package. Even if you can't see or touch it, there's a solution using your mobile phone. By scanning it, similar to a logo, you can verify that it's an original product. The great thing is that you don't need to make many changes to the printing layout or your process. It's a digital solution that includes anti-counterfeiting measures for any product you can think of.

NMD: From finding pilferage, can AI help determine the culprit?
SW: Yes.

NMD: On the K&B stand, one can see solutions that can simplify packaging. For example, you have solutions for cartons, labels, flexible packaging, flexo corrugation, and metal. That covers all the aspects of packaging as far as printing is concerned. Some players may have two, three, or even all of them. How does one manage the workflow?
AP: We utilise AI and big data to gather information in an agnostic manner. This means that the type of press a customer has—whether it's a flexo, offset, or digital printing press—does not pose a problem. Our company has various printing presses and understands different processes, so we have designed an open model to accommodate this diversity. Therefore, whether a customer has a flexo press combined with a digital printing press, our system is capable of handling any substrate, machine, and process.

NMD: Dr Plesske, can you provide insight into where you see growth within the four sectors we discussed? While it's understood that all sectors are experiencing growth, I'm interested in where you believe the most significant growth is occurring, whether from a substrate standpoint or a process standpoint.
AP: I see only some sectors growing. Let's start with those sectors and talk about our company.

I see potential for growth in the packaging printing sector, especially in the area of corrugated printing and high-level decoration. Our company's growth models involve post-print processes such as die cutting, including a rotary die cutter that runs at 16,000 sheets per hour. We are also focusing on digitisation, commercial business models, and industrial digital printing for packaging at high volume. We believe that digital solutions will partially replace traditional analogue processes, and we have digital solutions for printing on various substrates, including metal, glass, and cardboard, both pre-print and post-print.

NMD: The shift to digital has changed the landscape, so it's no longer a matter of digital versus offset, but rather digital plus offset. Given the technologies we're seeing at Drupa, what adjustments should packaging converters make in their investment plans?
AP: Digital printing is not a one-size-fits-all solution. Each printing method has its own strengths and weaknesses. When customers ask us what they should do, our response is tailored to their specific needs and circumstances. We assess their business model and recommend the printing equipment that best suits their requirements.

For businesses with a production model focused on ultra-long runs and high volumes, offset printing is likely the best choice. On the other hand, businesses with a mix of short runs, long runs, and unique projects might benefit from a hybrid system that includes both offset and digital printing. This approach allows for more flexibility in production and can optimise overall costs. For example, adding a digital press alongside offset presses can help manage short and medium-run projects efficiently.

Ultimately, the decision on which printing method to use should be based on the specific requirements of the business and its projected future needs.

NMD: Any example?
AP: I find it fascinating how Amazon has transformed the way we receive packages. They now offer incredibly fast delivery and even experimented with drones to drop off packages in your garden. This kind of speed and flexibility is driven by the demand for quick solutions from customers and businesses.

Traditional printing methods couldn't keep up with the pace of these new demands, which created opportunities for new business models. However, there are still situations where digital printing may not be the best solution. It's important to consider all aspects and find the most cost-efficient business model, whether digital or analogue printing or a combination of both.

NMD: What would you do if a digital print specialist who is engaged in packaging comes looking for an offset press? Would you sell it?
AP: Of course, I will.

NMD: But does it make sense? What would your advice be?
AP: Of course, it makes sense. That's why he wants one.

To answer your next questions, we are happy to provide advice when someone asks us about the advantages and disadvantages, costs, versatility, and delivery time of business modelling. If they later decide to buy a machine from us, that is their choice.

We are the only company providing free advice without conflict of interest. We are open to discussing different printing options, whether digital or offset, based on their needs.

We aim to be a one-stop shop for packaging and a large part of the commercial printing world, providing everything under one roof. While you may occasionally purchase from our competitors, we can offer unbiased advice on what suits your business model.

NMD: We are now shifting our focus from digital to a topic we hear about daily: sustainability. Different machines, structures, and formats can be used in a more sustainable way, especially when it comes to flexible packaging and plastics. Many press manufacturers have established connections between resin manufacturers, extrusion companies, and printing and converting, all in an effort to close the loop for flexible packaging. I see that you have the Flexotechnica, which is your flexible CI press. Do you have a plan to close the loop for flexible packaging at K&B?
AP: That was a big chunk around three topics. Let's try to slice that up.

Sustainability is crucial for production machines, as they should strive to be more sustainable in terms of the resources they use. This means that sustainability and cost-cutting are not mutually exclusive. I am reiterating this point as it is of utmost importance. In the past, sustainability seemed to contradict cost-cutting. For instance, opting for an electric car for ecological reasons usually means higher costs. Similarly, a machine that used less energy and resources was often associated with increased costs.

However, by teaching machines to use fewer resources, such as substrate, ink, and energy, we can achieve a more sustainable production process without incurring significant cost implications. One remarkable example of sustainable technology is the digital printing press, which produces no waste and uses minimal electricity. Additionally, we have incorporated various features, including artificial intelligence for energy efficiency and ink recovery systems, to enhance sustainability further and minimise waste. These advancements have transformed the way machines operate, bringing us to a new era of sustainability in production processes.

NMD: What about the sustainability of material?
AP: That is a completely different issue. It's a matter of matching the material to its function. For example, you can't really put liquid in a paper bag; it wouldn't work well. Different materials serve different functions. There may be a shift away from using plastic, but not necessarily away from clear film, which protects products from humidity and bacteria. It's not always possible to replace clear film with something opaque if visibility is important. Similarly, you can't always swap materials for paper when you need to keep humidity or bacteria at bay, especially in the case of food and beverage packaging.

Material producers are in stiff competition, and there are now foils made from cornstarch or other hybrid materials that possess the properties of oil-based foils while being recyclable. It's like wearing a raincoat that you can dispose of, and it will naturally break down in a few months, returning to biological waste. There's a whole industry working on these solutions. So, if you want to protect paper from humidity, you can apply a small coating to it.

NMD: Coating and sustainability?
AP: Coating, by definition, is not something made out of green tea. However, a small coating on a cardboard box might still be more sustainable than using plastic inside a cardboard box. For example, if you have a cardboard box and a plastic bag of cereal to keep the contents fresh, you want to eliminate the plastic bag but still keep the cereal fresh.

The cereal can become mushy without the plastic bag if transported through a humid environment. Using hybrid materials for thinly coated cardboard may be more sustainable than using both a cardboard box and a plastic bag. This results in less waste and promotes reuse and recycling. Some whiskey producers also consider eliminating the cardboard box for their bottles, opting for more intricate labels. This shift may lead to less waste from packaging, but it may also introduce different environmental impacts.

NMD: But there is a world out there that revolves around production technology, which includes machines...
AP: Making the world more sustainable means using less waste, less ink, less electricity, and also reducing word power. It also involves using less material, though this is not our strong point. However, our strength lies in our ability to print on any material. So, our strategy is to congratulate every winner in the race for finding the proper substrate because we have a printing solution. Whether it's switching to hybrid materials from plastic to paper, or from one printing press to another printing process, we are ready to accompany these changes. We can provide a solution for all of these substrates. We anticipate a lot of change in the next five to ten years, with most changes expected in the world of digitisation. However, what we've described so far is just the beginning of what we're doing here. Another significant change will be seen in the world of substrates.

NMD: In the field of machine technology, analogue technologies have reached a high level with incremental improvements. Digital printing on an industrial scale is the new technology in packaging production. Where do you see most innovations in the next two years besides digital printing?
AP: The focus will be on digitisation and substrates. In a previous interview, I was asked about the future of printing and packaging. I mentioned that Drupa stands for print and paper in German and jokingly referred to the future as "Druma" – print and material. I believe that digitisation and sustainability will be the key trends, with a focus on sustainable production equipment.

Inkjet and digital printing are likely more sustainable, and there will be efforts to reduce ink, paper, and substrate waste. Material innovation will also play a significant role in sustainability. The discussion around plastic waste will likely shift to biodegradability.

However, we are observers in this field and will focus on understanding the printability of new materials. We need to assess the compatibility of new materials with printing, including considerations of ink type, adhesion, drying, stacking, and other factors. Our expertise lies in the decoration of packaging, and we assess how new materials can meet the printing requirements.

NMD: The liquor brands have actually done away with the cartons, which has wiped off around Rs 1,000 to 2,000 crores, if not more, of carton packaging business in India. Is this a trend in Europe too, and if it is, isn't that a concern?
AP: It's obviously a concern for people in the business. Take toothpaste, for example. It comes in a plastic or metal tube inside a carton box, which gets thrown away. Many people might buy packs with multiple toothpaste tubes in a corrugated cardboard tray.

So, sustainability is on everyone's mind to some extent. If packaging doesn't make sense from a sustainability standpoint, it will likely disappear. However, the decrease in nonsensical packaging might be outweighed by the overall increase in packaging.

NMD: We live in a dynamic world with a population of eight billion people, which is projected to increase to around nine- or 10 billion in the next 10 years. I think you said that when you came on the tour to India. How will it benefit the packaging industry?
AP: The definition of the middle class varies widely based on income levels. For instance, someone with USD 20,000 in India might be considered rich, while in Germany they might need government assistance for housing. I consider the middle class to be those who have a good job and can afford to buy packaged and branded products. The number of people transitioning from poverty to the middle class is expected to increase from around 3.5-million to 6-million in the same period. 

This means that the demand for packaged and branded food and beverages will double in the next 10 years due to the increase in the middle-class population. International brands are striving to establish a presence in every market niche, aiming to maintain consistent brand value, image, packaging, and quality globally. Consequently, some packaging types may no longer be available in certain market segments as a result of these trends.

It's important to remember the three R's: reduce, reuse, and recycle. There is a need to decrease the amount of unnecessary packaging, especially for branded foods and beverages. While there is a trend towards reducing packaging, it is overshadowed by the increasing consumption of branded goods due to the growing global population.

This issue is not limited to a specific country and shows no sign of stopping.

NMD: I reiterate. Are there liquor brands in Europe that have reduced their packaging?
AP: I do not have exact data numbers. But I know from the market that there are whiskey box makers who have very sad faces.

NMD: But the good part is that many startups with increased market share are using packaging in India...
AP: Understanding trends is similar to understanding the weather or the economy. A good politician might say Tuesday is blue, and Wednesday is red, but three weeks later, that order may change. The truth is, we don't really know. We see some clear indicators but can't predict customer behaviour or government regulations. Our strategy is to be ready to adapt to a changing business environment, but we can't predict exactly how and when it will change. And in all the greatness of being K&B's CEO, we don't know.

This is similar to the situation with electric cars – experts made predictions, but the reality turned out to be different because of customer behaviour, costs, and other factors. It's not wise to put all your eggs in one basket. Therefore, we tried to put our eggs in several baskets.

NMD: My final question, as the chairman of Drupa. Have you stepped out of the K&B stand? If you did, which technology impressed you the most?
AP: In the end, it will likely be the digitisation connection, which involves extracting data from the printing process and using it for various purposes. It's like transforming a car into a computer with four wheels, emphasising the shift towards more digitisation. This isn't just about digital printing but about how equipment performs and the insights you can gain from it. There's a focus on packaging connectivity and how it integrates with the cloud, as well as connecting with customers and envisioning future models. This seems to be the common thread at Drupa—everyone is working on it and striving for innovative solutions.

This trend of combining the digital and hardware worlds is the most impressive, given the significant progress made in the last eight years. While there has been progress in mechanical aspects, digital advancements have seen the steepest growth.

As the Drupa chairman, I see the most impressive R&D efforts in this area as I walk through all the buildings.

NMD: Thank you, Dr Pleeske and Sandra, for your time.