Strategies for a Tough Market
Premium uncoated papers do battle in market slide.
Michael J. Ducey -- graphic arts online, 3/1/2001
Paper customers have benefited in the last couple of years on the cost side (lower by $10 to $60/cwt) by using bond or opaque stock for direct mail, letterhead, annual reports, and books. As this economic trend reverses in 2001, there exist market share growth opportunities and account fortification challenges that can be addressed by using higher-quality paper for print.
By using more expensive paper on smaller and fewer jobs, printers will retain their revenue lines for the short term, with the hope of reaping higher profits in the future by buying larger quantities at discounts from merchants.
Heavy stress
The business and personal letterhead markets are under heavy stress now that the dot-com gold rush has ebbed. Bulk letterhead orders probably are over for now, thereby reducing volume, but smaller personal jobs are likely to increase as more downsized workers become consultants (just like what happened in the early 1990s).
Premium uncoated papers fill this application with myriad choices of shades, colors, textures, and folio.
Neenah Paper's new Environment sampler is a good example of using premium text and cover grades to distinguish new businesses with letterhead, envelope, 80-lb. business cards, notepads, and 80-lb. reply card/compliment cards. Environment's design is unique as well in that it uses 50% sugar cane waste and 50% recycled paper, which is both laser and ink-jet printer guaranteed.
Neenah, which also released Classic Crest samplers focusing on digital applications, relaunched its Classic Laid line last year with five colors and a 99-ultrabright offering in a new swatchbook.
The move to digital
For those printers moving smaller letterhead jobs to digital printing, plenty of new mill products are available in commercial and express quantities. For example, Gilbert relaunched its NeuTech collection with new digital-friendly features like smoothness and bright white, and revamped its Realm line to fit small job needs.
On the economy side, Hammermill Regalia and Via lines are options that offer digital printing guarantees, and excel in larger-quantity jobs. Hammermill has a wealth of experience with laser and ink-jet printer applications within its bond side and mill affiliation with several digital print machine manufacturers both here and in Europe.
Domtar also has released some new textured grades in virgin and recycled content. Domtar's on-line ordering service has been a major success in the dot-com world, proving that paper purchases can be efficient and effective for buyers, especially if operated on weekends and holidays.
Books under pressure
The book markets are under considerable pressure yet again from both the on-line world and digital applications. On-line book purchases are approaching $1 billion, but a peak already may have been reached. With Amazon announcing distribution center closings and affiliations with on-line book distributors (i.e. print-at-home or read on line), reliance on growth from the new e-tailers is probably foolhardy.
Here, two strategies are available to printers, both of which offer the prospect of success: bulk order cheap text, or reach for the stars with premium grades. In the bulk area, which is being fought down to the author and title level, Willamette's book grades seem to be faring well against traditional bulk marauders like Fraser, Georgia-Pacific (GP), Glatfelter, and Hammermill.
Willamette received the Harry Potter series order, which is seen as a major coup for expansion into children and contemporary titles. How did they do it? Price and quantity were major factors. Willamette has added and continues to add huge quantities of uncoated freesheet, which it converts itself and then ships directly to printers.
On the premium side, surface features and colors are winning the small but important battles in the book business. Strathmore has had success with short-run coffee table books, such as one recently published for John Deere & Company. The book uses Elements and Renewal 80-lb. text grades applied with block text and artistic photography for a soft design appeal.
For a more exotic look, printers also can try "tree-free" paper with economy. Naturally, environmentally conscious books are in vogue, but they also offer good examples of a wide variety of applications, such as David Brower's last title from New Society Publishers of Canada, which is printed on 100% kenaf from Vision Paper.
A new entrant in the uncoated premium market is Plainwell Paper, known for its premium coated book papers. The company is expanding its Shasta line to include a premium white offering, thereby filling out its book paper line.
Obviously, the above options come with cost implications, but once the initial hurdle is cleared, customers are likely to return to successful applications in greater quantities and new jobs with interest in premium papers, offering the paper buyer profit expansion through bigger paper buys.
Premium printing, direct mail
Last year, the Federal Reserve hit the direct-mail industry hard with its mandate to increase the point size of important information. Direct-mail houses thus were faced with increasing paper costs on some three billion units sent to households and businesses each year.
The cost challenges were met with cheap bond grades and opaques, and the result was predictable: response rates hit an all-time low of 0.5% to 0.6%, while solicitations nearly tripled. (Households and businesses receive about 460 solicitations each year, with an average cost to the solicitor of $1.50 per unit.)
Premium papers offer direct mailers a place of refuge. Direct mailers can take the cover letter and disclosure information on bond grades to meet compliance, but then use the main advertising piece for response. Successful campaigns have used the strategy to beat the averages, particularly with so-called "teaser" mailings offering discounts.
Premium uncoated grades in the economy and mid-range price levels still offer advantages over coated paper, both in cost and press operations. To gain further efficiencies, mail houses will use the copy machine or duplicator for bulk compliance information and the commercial operation for the hit piece.
Leveraging software
One more step is to use software and digital operations: demographic software programs are narrowing the response field dramatically.
If you're interested in purchasing software from companies like BrandDirect Marketing, ask about porting the data over to a digital printer, as this strategy will pay for the software in days in terms of makeready and waste savings.
The major paper makers-Fraser, GP, International Paper (Beckett, Hammermill, Strathmore), and Neenah-all are working with the data houses and printer OEMs to match target mail to paper applications for parameters like image reproduction, speed, and scoring/folding efficiency.
Direct mail printing is receiving attention from mills like Beckett, which recently relaunched its Concept line which with new colors in a swatchbook using photography and media layering. Additionally, Fox Paper unveiled a sampler of theme print, while Crane released a CD-ROM on print production techniques.
