Prices for print products continue to rise – as shown by the current zipcon Online Print Price Index, which looks at the first quarter of 2022. This puts print – at least in terms of appearance – seamlessly between food, gasoline, and electricity. Following the impact of the pandemic, which has hit various industries and markets with varying degrees of severity over the past two years, the consequences of the war in Ukraine are being felt by everyone. Since then, print shops have been under pressure from two directions at once – with consequences that could fundamentally change the industry.
On the one hand, there is the paper crisis, which first announced itself a little over a year ago in the form of repeated price increases and has since grown into a real crisis. Paper is no longer just expensive; it is almost impossible to obtain in the quantities required. In the last six to nine months alone, expenditure on paper has in some cases risen by 80 percent, as Jürgen Winkler, Chief Operations Officer at Onlineprinters, recently explained in an article on Bavarian radio. This has long since been due not only to supply problems with the raw material virgin fiber per se, as was the case just over a year ago, but also, among other things, due to strikes at the Finnish manufacturer UPM, which were most recently extended until the end of April, or Stora Enso’s plans to sell four of its five paper mills dedicated to graphic papers. According to the manufacturer, paper is no longer a strategic growth area and in the future, it intends to concentrate on packaging, among other things.
Energy prices explode
Above all, the rapidly rising energy prices caused by the war in Ukraine are causing problems for the energy-intensive paper industry and, as a result, for print shops and their customers. Publishers are worried about their planned publications, the European governing body for the print and media industry Intergraf and the Bundesverband Druck und Medien (BVDM – German Printing and Media Industries Federation) are calling for the EU Commission to rethink its forestry strategy and import duties from China – and at the end of March, the European paper association CEPI even called for the industry to be classified as critical infrastructure.
On the part of the printers, however, there were initial reports of companies, some of the longest established, getting into difficulties – perhaps not exclusively as a result of the energy and paper crisis. But it can be assumed that the current situation has the potential to drive consolidation in the market at an unprecedented pace and lead to numerous closures in the coming months and years. And the costs of paper and energy are only one factor – the lack of planning certainty on the other hand is also making important and necessary investments more difficult.
Online print shops pass on price increases
The same challenges are faced by online print shops, which we regularly monitor in our ZOPI, the zipcon Onlineprint Price Index. The initial situation of companies such as Vistaprint, Flyeralarm and Co. can certainly be considered better due to their head start in terms of digital transformation and their recognition across national borders – yet the challenges are the same. After all, companies that produce high print volumes need a lot of paper and a lot of energy.
Flyers are becoming more expensive (almost) everywhere
Online printers have been passing on these cost increases to their customers for some months now. Most online printers have been raising the prices of their products since mid-2021 at the latest – and most of them have continued to do so in the first quarter of 2022, as the latest ZOPI shows. With the exception of Vistaprint and Onlinedrucken, all the companies surveyed have, increased the prices for 10,000 flyers in A5 format, printed on both sides, compared with the last quarter.
The average increase here, compared with the first survey in 2020, was 13.79%. However, when viewed individually, the online print shops performed quite differently: Vistaprint and Onlinedrucken for example, lowered their prices from the ending value seen in the fourth quarter of 2021. However, while Vistaprint has largely remained consistent with its index values seen in 2021, Onlinedrucken on the other hand saw a sharp increase to 10.82% in the fourth quarter of 2021 and only marginally lowered its prices to 9.60% at the end of the first quarter of 2022.
The situation is different with the remaining online shops. For example, on closer inspection of Unitedprint, Onlineprinters,Flyeralarm and Redprintgroup: these four online print providers increased their prices for flyers in the last quarter by more than 6%. Compared with the respective index value by 42.63% (Unitedprint), 13.37% (Onlineprinters), 1.19% (Flyeralarm) and 24.17% (Redprintgroup).
Shopping cart costs increase
An examination of the shopping cart, which includes brochures and business cards as well as flyers, reveals a basically similar but nevertheless slightly differentiated picture: While Saxoprint (14.23%) lowered their prices in the first quarter of 2022, Wirmachendruck (19.34%), Flyeralarm (12.23%), Onlinedrucken (17.64%), and Redprintgroup (13.72%) and the other online shops, raised their prices from the last quarter of 2021. Here, the values in parentheses mark the price increases compared with the first survey of the shopping cart in November 2020.
The price of the shopping cart has fallen at Saxoprint, which had its price index values set at 18.62% at the end of the quarter 4/2021 compared to its current 14.23%. The average increase for all seven companies surveyed at the end of March 2022 was 17.83% over the index value.
Is the price increase sufficient?
In view of the shortage and significant increase in the price of paper, the additional energy surcharges that paper manufacturers are now charging, and the overall increase in energy costs, price increases of between 13.79 % for flyers and 17.83 % for the basket of goods appear rather manageable. Will this be enough in the long run to compensate for the cost explosion on the production side? Probably not, because one thing is now certain: the increase in the cost of resources that are so important for print shops and publishers is not a temporary situation, but will accompany the entire industry for many months, if not years to come. This must and will be reflected in higher prices for print products in the future.
One aspect, however – even if it may sound almost cynical in view of the challenges described – is that the shortage of paper will increase the value of printed products and make them more valuable again to recipients, readers and consumers. Perhaps the perceived downward spiral therefore also contains a small spark of hope for a rosier future for (online) print shops. At least for those that have adapted well to the new challenges of the market thanks to their digital transformation.
