As expected, the theme of convergence played out. Many “traditional” flexo manufacturers displayed presses with digital capabilities. Many digital companies touted modules that can be added to flexo presses. Traditional laminate suppliers had flexible packaging options at their booths. One part of this trend that I’ve written about before is the equipment changes will drive consolidation at the converter end more than any other factor. To really play in the high end label market requires close to a seven figure investment. Yes, there are less expensive digital options coming to market constantly. It will be a long time before their quality and efficiency catches up to the market leaders. As substrates become thinner and customer demands become greater, the 35 year old flexo press ain’t gonna cut it.
Of course, the buzz of the show was around Bemis’s sale of MACtac to a private equity firm. In some respects, that sale flies in the face of my convergence theme. Bemis is a leading provider of flexible packaging. It sold its label and graphics business. Certainly Bemis’s management team and board have a strategy for their business. It’s pretty clear it doesn’t involve pressure sensitive labels. I would argue they made that decision years ago – they had MACtac sold in 2003 after all. They haven’t made investing in MACtac a priority. There are also less synergies in the value chain for an extruder and a laminator than there further down the chain in the decorating end. However, don’t be surprised if a major flexible packaging player buys a laminator or vice versa. People are going to look for ways to push the value chain in their favor. Upstream and downstream integration are two ways to try.
It’s going to be an exciting next few years in our industry. Buckle your seatbelts! On a lighter and more personal note, it was great to see so many friends in Chicago. I got an interesting comment from a bartender one night, “We get a lot of groups here that like to have fun. You guys like to have fun and it’s clear you all like each other.” She didn’t get my irony when I replied, “We’re stuck in this industry!”