Between the energy and paper crises, the situation remains tense for companies in the printing industry. In the second quarter of the year, the online print shops recorded in the ZOPI, the Zipcon Online Print Price Index, continued to pass on the cost increases to their customers almost without exception and in some cases increased their prices significantly. Nevertheless, there was one outlier on the downside, at least in one product area.
The printing industry is resource and energy intensive and therefore remains under pressure. Paper is still scarce and expensive, not only because capacities have been taken off the market or some manufacturers have recently switched their production from graphic and newsprint papers to packaging papers – or are planning to do so (such as the new owner of the former UPM site in Steyrermühl, Heinzel Group), but also because the situation in the pulp market has not changed and the costs for the raw material and its transport continue to rise.
In addition, due to the war in Ukraine, the prices for energy currently know only one direction: upwards. Destatis puts the increase in energy prices in June 2022 at +38% compared to the same month last year, and inflation in the same month was +7.6%. This, as well as concerns about a possible supply freeze for Russian gas, was also reflected in the BVDM’s economic telegram, according to which the business climate in the printing industry cooled down in June following an interim stabilization.
More digitization for more flexibility
In this mixed situation, business models are needed that enable companies to respond agilely and flexibly to changing market conditions. Thanks to their high level of digitization and the World Wide Web sales channel, online print shops in particular are therefore able to act more quickly than traditional print companies. This is particularly evident when you look at the development of prices for print products. As the current Zipcon Online Print Price Index (ZOPI) for the second quarter of 2022 shows, (almost) all major online print shops have once again increased their prices, thus passing on at least part of the rise in energy and paper costs to their customers. This trend, which was already cautiously indicated at the end of last year, has gained momentum especially in recent weeks and months.
Detailed look at flyers
Whereas a year ago the average prices for 10,000 flyers in DIN A5 format, printed in four colors on both sides, remained virtually exactly the same as they were in the first ZOPI survey in June 2020, the picture has now changed significantly: At the end of the second quarter, the price increase for the standard print product averaged 26.28%, which is once again almost 13 percentage points higher than the average value in March 2022 (13.79%).
And the individual analysis also shows that the price called up by almost all online print shops surveyed rose by at least ten percentage points again in the last quarter. Compared with the index value from June 2020, the increases are even more pronounced: Flyeralarm and Onlinedrucken, for example, are still in the comparatively more moderate range at 11.31% and 18.73% respectively. Redprintgroup, sourc-e and WirMachenDruck recently achieved significantly higher increases of 21.13%, 27.09% and 28.62% respectively.
Onlineprinters and Saxoprint have gone one better, with 35.40% and 37.10% respectively – while the overall biggest increase compared to the starting value in June 2020 is shown by online printer print24 with 60.82%. Unitedprint’s flagship was among the first ever to raise flyer prices in October 2020. Just a few months later, in January 2021, Vistaprint also followed suit and called for slightly higher prices. But since then, the development could hardly be more different, because after several months of higher prices in the single-digit percentage range, at the end of June, the company is once again pricing well below the June 2020 index value at -3.7%, forming the lower end of the price spectrum for 10,000 flyers in DIN A5 format, printed on both sides.
Detailed view of the shopping cart
In the case of the price index for the shopping basket – which, in addition to the 10,000 flyers, also includes brochures (32 pages, DIN A4, stitched, printed on both sides) and business cards (4/4 color, no finishing) – the differences are not as pronounced: The seven online print shops surveyed for this purpose have increased their prices without exception, by an average of 29.66%. By comparison, this figure was still 17.83% at the end of the first quarter. The values in the current ZOPI were also closer together overall: from 23.46% at Flyeralarm, 27.55% at Onlineprinters, 27.73% at Onlinedrucken, 28.17% at Redprintgroup, 28.51% at Saxoprint and 29.59% at WirmachenDruck. The biggest increase compared to the first survey in November 2020 was also recorded by the print24 shopping cart: Here, the price in June 2022 was 42.63% higher than at that time – compared to March 2022, however, the renewed increase was lower than for other providers, at just under 4 percentage points. The biggest price jump from March to June 2022 for the shopping cart was at Onlineprinters, with a rise of more than 18 percentage points.
Has the end of the price spiral been reached?
Even though the average prices for flyers and the shopping cart have risen significantly in the last three months, by 26.28% and 29.66% respectively, it is still not certain whether the end of the price spiral has been reached, given the further rise in energy prices and paper shortages – to name just two of the challenges. The question of whether the increases called for are sufficient to absorb the cost explosion on the production side will therefore continue to accompany companies in the printing industry in the third quarter.
Print is becoming more valuable
The good news is that “online print is slowly recovering, despite the rising delivery prices,” explained Bernd Zipper at the Online Print Symposium 2022 in Munich at the end of April. This is because the majority of customers now also accept the higher prices. But they are still looking for alternatives – and this does not necessarily have to be negative, because services such as print on demand, production of shorter runs, and target-group-oriented advertising materials are among the main areas of expertise for online printers.
Will the printing industry continue to struggle? Yes. Will fewer print products be produced overall in the medium and long term? Yes to that, too. But there is no need to be alarmed, because it is above all online-generated print sales (OGPR) that are rising despite all the adversities and – according to Bernd Zipper’s forecast – could exceed traditional print sales for the first time as early as 2025. It is therefore all the more worthwhile to give digital transformation a high priority right now.