Production Print Provides Diversification and Growth in Changing Times

The COVID-19 pandemic brought sudden and disturbing shocks to imaging channel dealers and OEMs alike. For many, diversification efforts into IT management services, digital capture and workflow solutions, security and other digital transformation business services helped ease the pain from the loss of office printing as offices shut down and staff began to work from home. Although offices are slowly reopening, the resulting acceleration of digital transformation and the establishment of the hybrid workforce environment means the continued reduction of printed pages in the office. Imaging channel dealers and OEMs are pushing to evolve and diversify their businesses. Production print continues to provide a path to diversification and growth in the form of familiar printed page technologies.

Office equipment OEMs such as Konica Minolta have been marketing and selling digital production print products and solutions for quite some time. We’ve found the production and commercial print market keeps offering growing opportunities for dealers and OEMs to be involved in delivering innovative digital print technology and products to their customers.

In the production print equipment space, the move from analog technology to digital technology continues. According to Smithers, the portion of production equipment revenue that reflects digital equipment is now at 30% and is expected to increase to 34% by 2026. Electrophotographic (laser) equipment is forecast to have a 2.2% CAGR between 2021 and 2026 while inkjet equipment is expected to grow at a 3.6% CAGR. These are the production print technologies dealers and OEMs are investing in. Additionally, in the post-COVID era, the print industry that uses this equipment is now looking at print jobs becoming smaller and more frequent, which bodes well for the continued need and growth in the use of digital equipment.

Konica Minolta has established a clear strategy and a competitive presence in the digital production print area. Their diversified product offering includes digital press, large format, high-speed inkjet, industrial print, label press, and print embellishment solutions. We thought it would be interesting to look at what Konica Minolta has done in this area over the past 24 months.

Konica Minolta Strategy

Like other OEMs, Konica Minolta’s revenue and operating profit saw significant impact when the COVID-19 pandemic hit. The company has anticipated office print volume declines and has been transforming its business to office solutions and IT services. That does not mean the company is exiting the print business. However, it is reorienting its focus in print to reduce the company’s dependence on the Office Printing Business and increase revenue and profit contributions of its other business segments.

Konica Minolta plans to grow the Professional Print Business operating profit contribution to 19% by 2025, which is almost double the contribution expected from the business unit in 2021. Over the same time, the Office Printing Business is expected to move from contributing more than 50% of company operating profit presently to less than 25% of operating profit by 2025.

Konica Minolta has been a keen competitor in the production print space for more than a decade, controlling almost 36% of the mid-range color production segment according to IDC. What has been impressive is the company’s understanding that the needs of the production and commercial print customer do not stop at digital presses and reliable, quality output. Needs also extend into workflow solutions and services that improve operator and machine productivity, automatic quality inspection and optimizing features, and accessories for finishing, folding, scoring, and cutting output.
Print industry establishments are also in search of solutions that can provide added value to their output product or help them diversify into new business opportunities. Konica Minolta has expanded its production print equipment li    neup to include high-speed inkjet printers, wide format printers, packaging printers, label printers, and print embellishment equipment. These types of products allow Konica Minolta dealers to not only satisfy traditional production print customers, but help those customers and the dealers grow into new markets for net new revenue and profit growth.

Production Product Portfolio and More

Cut-Sheet Production Press

The most familiar and popular production print segment that imaging channel dealers participate in is the cut-sheet production printing press segment. The equipment in this segment contains black and white LED and color laser toner technology with print speeds up to 140 ppm or more. While most OEMs in the industry market production print equipment, some have only recently entered this product segment. Konica Minolta is one of the few OEMs with long term experience in this area, providing a wide assortment of cut-sheet print models ranging from entry-level light production units capable of printing up to 700,000 sheets per month to high-end, heavy-duty production print presses that can print up to 2.5 million sheets and more per month.

While COVID may have introduced challenges through cancellations of shows like Drupa and PRINTING United, it did not hamper Konica Minolta’s introduction of new AccurioPress color production print models in 2020 and 2021.

KM AccurioPress C14000
AccurioPress C14000

The AccurioPress C14000/C12000 was previewed at the Printing United show in November 2019 and began shipping in February 2020, followed by the AccurioPress C4080/C4070 models in November, and the AccurioPress C7100/7090 in July 2021. Other than differences in speeds, monthly page volume ranges and media weight support, the new AccurioPress color production print models provide similar functions, features and input/output accessories across the lineup. For example:

• All can simplex print on sheets up to 51 inches in length and duplex sheets up to 35 inches long(C4080 is up to 34 inches)to support signage and banner applications

• Finishing options such as the TU-510, an inline creaser and trimmer unit, can be added to any model to create what John Fulena, National Director of Production and Industrial Print, Dealer Sales calls “ready to box output.”

• Each model can use the Intelligent Media Sensor IM-501 option to automatically detect the stock being used and make necessary adjustments and the IQ-501 Intelligent Quality Care Unit to monitor and adjust color consistency along with front to back registration for each page being printed.

• New Simitri toner delivers consistent, accurate, high-quality output.

Throughout the past year and a half, Konica Minolta has also announced a variety of media and substrates certified to run in the AccurioPress line. The company also achieved the Idealliance Digital Electrophotographic Press Certification and ISO/PAS 15339 System Certification for the AccurioPress models.

The newly revamped AccurioPress color line delivers an easy-to-use, reliable and modular type of color production printer solution with high-quality output and consistency across a variety of media with the ability to finish that output at whatever production volume level a customer needs to support. For dealers, the lineup means easier support and service and lower inventory carrying costs since they don’t have to stock multiple devices, options and accessories. Laura Blackmer, Senior Vice President, Dealer Sales, summed it up well saying “I feel really good about our lineup, it’s impressive. We’re very focused on where we feel the whole direction of the industry is going.”

Wide Format Solutions

Wide format solutions, particularly for architecture, engineering and construction (AEC) firms, continue to offer sales and growth opportunities to imaging channel dealers. Architectural drawings, technical drawings, maps and charts remain a large part of the applications done by wide format equipment. In the past few years, with advances in digital wide format print technologies that can print onto flexible or rigid media, print service providers (PSP) have found or created new applications for signs, posters, banners and a whole host of other commercial applications to diversify their customer offerings. While this product segment wasn’t immune to COVID impacts, applications like floor stickers, window posters, directional signs and even face masks emerged. Many of these applications are difficult or impossible to support with production cut-sheet presses. New applications requiring wide format equipment will continue to emerge and provide a market with real and sustainable growth for dealers willing to invest in this segment.

KM Accuriowide 200

Konica Minolta’s lineup of wide-format products includes the AccurioWide 160 and AccurioWide 200. These are 6-color (or 4-color plus white) UV LED wide-format inkjet printers that can print on sheets or boards, or from rolls. When printing from rolls, the output can be gathered in a roll or cut to specific-sized sheets. Available for dealers to sell and support, these solutions provide a way for a dealer to diversify and expand production print solutions in their current base or add net new customers from in-plants, PSPs and commercial printers wanting to expand and diversify their market offerings.

A unique wide format solution is the AccurioJet KM-1e B2+ LED UV Inkjet Press. Introduced in June 2020, it replaces the AccurioJet KM-1. This wide-format production print solution can print onto media including canvas, heavy textured, translucent, metallic, and packaging carton stock in sizes up to B+ or 23 x 29.5 in. Applications include menus, calendars, posters, cartons, labels or even ID cards. Konica Minolta has promoted the success of this product through a variety of press releases. While this product is not available for direct dealer sales and support, Konica Minolta has an easy and very rich lead program that dealers are successfully using.

Continuous Feed

Continuous feed digital printing sales can involve multi-million-dollar installations and large investments to meet required service levels, installation requirements, and other types of support. While Konica Minolta has the WEBJet 200D for very high-volume continuous feed/roll-fed printer applications like transactional, publishing, direct mail and in-plant print applications, it is not available for direct dealer sales and support. However, dealers can participate in Konica Minolta’s lead program should they find an opportunity that can be met with the WEBJet 200D.

Finished Print Enhancement Through Embellishment

An ongoing adjacent growth opportunity within the production print market for imaging channel dealers is digital print embellishment. Adding varnish to highlight areas of a brochure, embossing foils on a direct marketing piece, or adding 3D textures to a printed piece can make that piece stand out and motivate the reader to act. Konica Minolta notes that PSPs can charge a premium of 17%-39% for embellished print products and that by next year (2022) the number of A4 sheets produced with some form of decorative embellishment will be 385 billion. As PSPs look for diversification and value-added services to add to their printed products, dealers in production print have an incremental revenue and profit growth opportunity in the sales of embellishment equipment and supplies.

Konica Minolta has had an alliance with MGI, a key manufacturer of print embellishment solutions, for quite some time. The JETvarnish line of products from MGI can add 2D and 3D textured varnish effects to printed material, offering affordable, entry level embellishment solutions. JETvarnish models can support high-volume, long-run commercial applications on cut-sheet, roll-based, and up to B1 size media. There is a high level of expertise and experience needed to support and sell this equipment, but unauthorized dealers that have sales opportunities can still be involved through the Konica Minolta lead program.

An affordable tabletop print embellishment solution that is available to all dealers is the AccurioShine 101. With the capability to add foil, metallic color, laminate and spot gloss to print products, this product may be a valuable add-on to a dealer’s production print sales strategy.

Two years ago, Konica Minolta told us “Embellished printed pieces become cherished and memorable.” We believe that still holds true for end customers and the dealers who move to add embellishment solutions to their portfolios.

Digital Label and Packaging Printing

As dealers see office printed pages, and even some production printed pages, move to electronic documents, one area of printing that is not being replaced by electronic documents is labels and packaging. Brand owners and commercial printers servicing boutique retailers, micro-breweries, wineries and emerging micro-businesses are searching for ways to print labels in short runs with high print quality and flexibility. Custom printing onto packaging is also going up. Transparency Market Research expects the global market valuation of the digital label printer market to move past $8.71 B by 2031, and a survey by industry association Finat found 83% of brand owners project that label purchase volumes will increase or remain the same in 2021 across all formats, despite the impact of the Covid-19 pandemic on supply chains. Konica Minolta provides equipment for dealers to take advantage of this growing market.

The PLS-475i inkjet label printer is a good entry-level digital label printing solution for companies that want to bring label printing in-house. The AccurioLabel 230 toner-based digital label printer is for higher volume needs. For corrugated customized box printing, the PKG-675i fits the bill. For dealers sincerely interested in new diversification and long-term sustainable business, the digital label and packaging market may offer a path to success and growth.

Dealer Support and Education Investments

As a dealer makes investments to establish a foothold in the production print market or continues to fund investments to grow an established production print business, an OEM must make investments of money and time to support those efforts. The production print market presents challenges to a dealer that go beyond what product segment investments to make. There are challenges in developing sales teams with skills that reflect a deep understanding of PSP, commercial printer, and in-plant needs, languages, color spaces, media, certifications in printing standards and more.

Konica Minolta’s DX2022 midterm plan points out that R&D investments in production, commercial, and industrial print technologies and products are an important part of the company’s strategy. It also has made investments in supporting dealers that are participating in those markets.

Opened in early 2020, the Customer Experience Center (CEC) in Ramsey, NJ, is available for dealers to schedule VIP customer visits that allow customers to experience the full line of cut-sheet production presses, cut-sheet and web inkjet printers, wide format products, MGI embellishment solutions, and packaging and label presses. Laura Blackmer, Senior Vice President, Dealer Sales, says “I don’t call it a showroom because these devices are working devices that have product coming out of them every single day. They’re manned by actual operators that understand pre-press, workflow, software, color management, media requirements, applications — it’s a real working environment. It has cutting and folding machines, and pretty much everything we sell.”

Blackmer also pointed out that Konica Minolta is focused on educating dealers to enable them to have the kinds of conversations and create the talk tracks needed around these products. The company hosts dealer groups in which a dealer’s production team and management come in for a day for education and training on the market, opportunities, applications, selling approaches and how the different Konica Minolta products/software can be used.

During COVID lockdowns and travel restrictions, the company was unable to physically host dealers or customers at the CEC, and instead held live video streaming sessions. Blackmer said that in one eight-day timeframe more than 400 individual reps, management, and production specialists from 75 dealers were trained through these sessions. “Since then, sales have increased, even in the middle of COVID,” she said, “and our production numbers are higher than they were in 2018.”

Konica Minolta is also readying a Vertical Market Enablement Program. The program is focused on in-plant production print opportunities in nine different vertical markets. John Fulena, National Director of Production and Industrial Print, Dealer Sales, created and is rolling out the program. He said, “We’re sticking to in-plants and not P4P [print for pay] or commercial printers to start since many of our dealers are more comfortable calling on those kinds of accounts because of the service requirements and lower margins associated with P4P accounts.”

Fulena told us the program, in collaboration with Keypoint Intelligence, is focused on building dealer awareness of in-plant production print opportunities within a specific vertical market, how to build interest in the vertical market for production print solutions, and decision making and how it’s done. It will include an examination of a dealer’s readiness to enter the vertical market, training, marketing collateral, and guides on applications within the vertical market – and importantly, what products can be used to fill the applications.

Summing it Up

Office printing has been on the decline for years. Digital transformation and the hybrid workforce were accelerated by COVID reducing those pages even more drastically and setting up a reality in which those office pages will never return to previous levels, ultimately declining at even faster rates. Like all areas of the print industry, production and commercial printing felt the effects of COVID during the last two years. However, growth opportunities for dealers in those markets continue to exist and, properly taken advantage of, could offset the loss of a considerable amount of office printing. For those dealers and OEMs looking at adjacent print market areas such as wide-format, digital labels and package printing, or technologies that add value to printed pieces through embellishment technologies, the revenue, profit and growth opportunity could be even greater.

Konica Minolta has made a clear strategic decision that places its Professional Print Business as one of its three pillars of the future. When examining the portfolio the company offers it’s hard to disagree with Blackmer, who said, “We’re pretty bullish on this space right now. It has staying power.”

Speaking with Dino Pagliarello, Senior Vice President, Product Management and Planning reinforces this bullishness. He said, “Now that we’ve rounded out the entire AccurioPress color lineup I would say we have the freshest lineup of production color products in the industry. And we absolutely have the widest breadth of production, commercial and industrial print technology in the industry.” He went on to say that when people visit the new CEC their eyes widen and they are wowed by the scope of print technologies the company and its dealers can offer.

As for what to look for from Konica Minolta, Pagliarello told us to look for continued investment in production color and black and white, with some of the intelligent automation technology now used in color becoming available in the black and white AccurioPress lineup. More investments are in the works in the wide format, print embellishment, and digital label and packaging areas. He noted that in 2020 about 40% of the global packaging print market was digital, and in 10 years 60% of that market is expected to be digital. He hinted at a new packaging manufacturing product that will help take advantage of that growth.

Konica Minolta not only is investing in product technologies, the company’s leadership is also investing in the support and education of their dealers to enable them to participate in the production, commercial, and industrial printing opportunities. The CEC facility seems to be paying off, and a rich lead program for dealers is enabling them to increase sales and placements of very high-end production devices such as the KM-1 and MGI products. The new Vertical Market Enablement Program looks to be a well-thought-out program to enable dealers to penetrate higher velocity and higher margin placements in vertical market in-plants.

Since the last major print industry show in 2019, Konica Minolta has kept building its position as a strong partner for any dealer looking to enter the production print space. For those who are considering expansion and diversification of their production and commercial print business into the growing markets of wide format, digital label and packaging print, and print enhancement, Konica Minolta provides the breadth of solutions and support to accomplish that move.

A Dealer’s Perspective
With Clint Dorgan, Marco Technologies

To get a dealer’s perspective of what is needed to be successful in production and commercial print, and how Konica Minolta is positioned to help the dealer’s success, we talked with Clint Dorgan, Production Systems Sales Manager of Marco Technologies. Marco has locations in 12 states and is one of the top Konica Minolta dealers. Dorgan, who has almost 30 years of experience in digital printing, was brought in about 13 years ago to develop Marco’s production print business. Dorgan now has over a dozen production sales specialists and pre-press people on staff.

All of Dorgan’s team come from large commercial print enterprises like R.R. Donnelley, with some having more than 25 years of experience.

“There’s not anybody on our team that touches a digital production engine that doesn’t come with that level of experience, so we can support the complete sales motion from pre-sale, through the sale, and then post-sale,” Dorgan said. “These people understand the engine, customer applications, color matching, variable data printing and workflow as well as the production print environmental conditions required to make sure the customer gets what they expected. That means the Marco team understands the effects of improper paper, media, and supplies storage, print room temperature and humidity conditions, and other print room operating environment conditions that can affect the performance of the machine and, ultimately, its final output. It’s not just selling a machine; sometimes it’s an educational conversation with the customer.”

This experience has seemed to pay off well as, according to Dorgan, Marco has become Konica Minolta’s most successful production print dealer.

“We are loyal to Konica Minolta – we love their products,” Dorgan said. “For a commercial printer, they provide a good accurate CMYK workhorse, they’re reliable and cost-effective.” When it comes to product improvements, Dorgan went on to say, “Konica Minolta listens to us, and each generation just improves on the previous one. The newest models in the AccurioPress C4000, C7000 and C14000 series have big improvements on all three model series that are very similar across the platform.” When asked if there was any specific feature that makes Konica Minolta stand out in a competitive situation, Dorgan replied “The IQ-501. We think that’s literally the bee’s knees. It takes a really good machine and just makes it that much better — it’s very rare that we’re not attaching it to a sale.”

Marco also sells AccurioWide products, mostly to the AEC market. Marco has jumped into the embellishment technology through sales of the MGI products and has invested in adding an MGI unit to the showroom floor. It’s not only for demonstrating to potential customers but is also used for Marco’s marketing collateral printing. The company has also turned in multiple KM-1 leads that have ultimately been navigated to sales, with Marco being paid for the lead.

The Marco offices in New Jersey, Pennsylvania and Maryland have used Konica Minolta’s CEC. They are also building out a new production demonstration facility in Minneapolis/St. Paul that will house the digital production print engines, MGI models, and appropriate accessories. Like Konica Minolta’s CEC, it will have environmental controls that provide the correct temperature and humidity levels for optimum print performance. During COVID, Dorgan’s team set up audiovisual equipment to enable remote live demonstrations from the current Minneapolis/St. Paul facilities and will continue with that ability in the new facility. Dorgan estimates a nearly 90% close ratio on the demonstrations given to customers in this fashion.