In 2021, the role of graphic paper is in flux. was the first year that worldwide demand for graphic paper fell, with a steady decline in demand ever since. The graphic paper industry was valued at and was estimated at $126.5 billion for 2018, an estimated decline of $29 billion. Though UK print industry revenues continue to , despite declines in volumes of magazines, newspapers, printed marketing material and catalogues, paper has had to adapt to stay relevant in an increasingly digital world.
Nevertheless, there is still a clear market for print. It was reported that, during the pandemic, consumers were making due to a desire to unplug from their phones and screens. As a result, magazine reading times went up from 44 minutes a day to 56. reported that millennials read 8.9 magazines per month, with this figure increasing to 9.1 for Gen Xers and 9.2 to Baby Boomers. Outside of magazines, Ö÷²¥´óÐã has reported that brands are adopting a more when it comes to printed marketing campaigns, with major retailers utilising the power of to drive customers to shop online.
Paper consumption in the main printing grades is falling, but this is likely a result of the move towards . Sustainability is at the forefront of consumers’ minds and so recycled options are increasingly attractive. Major paper industry players have narrowed their focus on segments, converting or closing various mills and tailoring their output towards demand. In order to remain competitive, printers and paper manufacturers alike have had to and adaptability. We spoke to Julian Townsend from Denmaur, one of Ö÷²¥´óÐã’s key paper suppliers, who highlighted the following industry trends:
1. Fewer manufacturers in the market
‘If you make publication paper, it’s a tough market. Compared to ten years ago, it’s a different world.’ The main reason for the change? A reduction in paper producers. ‘There aren’t new players and we don’t think there’s going to be new investment. You have fewer options, so you need to be as efficient as you can to work in a smaller pool,’ Townsend explains. ‘What we’ve had to do is be active across the market. You have to learn to work with the strengths of some mills and move away from mills that don’t have strengths in the right places.’Â
2. Increasing flexibility of mills
Many mills have kept themselves in business by being innovative and spotting gaps in the market. ‘The one thing paper mills are good at is investing in building up niches. Manufacturers have come along and tried to fill in the gaps and I can’t see that changing. What we are finding now is – because of the pressure of Covid, the economy and publishing – as people are wanting slightly lower grades or grammages, mills are quite creative (within the realms of expense) to come up with a tweak on a grade. So, I don’t think you’ll see less types of paper, you might even see more, it’ll just be less suppliers.’Â
In order to ensure the continued development of the print sector, brands and printers would be wise to consider long-term collaborations. If by teaming up to provide the substantial volumes required within paper making, it may be possible to develop a more bespoke paper grade solely suited to specific end-users. This would also suit brands in the same group who are considering the spend on their annual paper for catalogues. If your combined need reaches a mill’s threshold, then a mill would consider creating an exclusive grade just for you and your partner/s. With the quality of paper grades being reduced based on titles seeking a cost effective means of printing, by teaming up with another magazine or brochure you could both benefit from enhanced quality paper for your annual output. Your art director will certainly thank you for helping their work to shine on better quality paper, sourced at a more affordable rate.Â
3. Renewed focus on growing markets
‘It’s quite evident that if you’ve got access to trees and water and you’re a global business, there’s more exciting things you can do than make publication papers.’ The growth of innovative technologies coupled with the reduction in print volumes has persuaded some mills to abandon publication papers in favour of high-tech alternatives. ‘The market is contracting. In one email last August we lost 11 paper types, which in all my years we’ve never had before,’ Townsend explains. ‘[The mill] stopped their paper machines and made more pulp. That’s more exciting to the shareholders because pulp can do anything. It’s being used in hygiene, in packaging, in all these modern, non-carbon type industries.’ Denmaur themselves are exploring new avenues in line with this innovation-focused trend. ‘If you go into M&S and you get a triangulated sandwich pack, quite often they’re plastic-lined, so one of our big developments is working on non-plastic, airtight board. We’re diversifying. For our own future, we’ve got to have options and the more high-tech niche papers are, we think, the right place to go.’Â
4. The oversaturation of packaging?
‘Packaging was absolutely flying before and during lockdown, but so many people have gone into it,’ Townsend emphasises. ‘I know of four or five paper machines that were probably [producing] 300 tonnes apiece that have moved over to packaging in the last three or four years. That’s a lot of capacity coming on and lockdown has tended to keep that going.’ With Amazon achieving as a result of the first lockdown last year, it’s clear that the demand for home deliveries – and packaging to accommodate them – is at an all-time high. ‘At the moment, there’s actually a shortage [of boxes]. They believe there’s enough paper mills making corrugated box material for it to come back into balance but it’s that complete anomaly of where we are at the moment – and this is off the back of plastic,’ Townsend continues. ‘We’ve moved away from plastic packaging to paper packaging and that’s just added another rocket to it. [Graphic paper has] probably reduced by 10% a year over the last decade but there’s been massive growth in packaging. I think people are going to sit back and see where the market is because that could be your next oversubscription.’
It’s not just box packaging that’s seen a rise in demand. Strong kraft paper bags are back in fashion. ‘Since the 1980s, craft paper mills have been seeing less business – some were hanging on and others have gone. In the last two years there’s been massive growth because people want paper bags again. It’s very trendy and suits users’ environmental consciousness. After 20 years of decline, it’s been reborn.’
5. Import/export market
With the rise in environmental concerns and the advent of Brexit, the import/export market is also experiencing instability. The American paper market is also in decline. ‘In 1997, there were over 20 manufacturers of wood-free coated paper. There’s, I think, 4 or 5 now. There’s been so much restriction of domestic supply in America that they actually are buying more paper from Scandinavia now than they ever have done. And, again, you just don’t hear someone announce that they’re going to put a paper machine in or buy a mill. So I would see very little paper coming here from America, if anything it’ll be an export from Europe to America,’ explains Townsend.
With most companies’ and consumers’ increased focus on the future, a sustainable approach becomes a priority. ‘It isn’t wise to be sending Scottish paper to America. It makes sense to bring it back to the regions for the sake of carbon footprint and paper miles.’
Townsend continues, ‘Container rates around the world have gone up six or sevenfold in the last 18 months, so if you can get paper from a local mill, it makes sense long-term. We buy from a mill in Belgium that is technically the nearest wood-free coated mill to the UK market. There are no wood-free coated mills in England. You could get global deals (often referred to as deep water supply contracts) being done but it doesn’t sit pretty with what we’re all trying to achieve with minimum environmental impact. It’s much easier to get [paper] locally.’
Brexit has complicated the import/export market as entry fees are now being added to costs of transportation. ‘As paper is entering the UK, you’ve got different VAT implications (depending on who the importer is) and then you’ve got the cost of entry of the consignment. There are signs that a number of coated and uncoated wood-free producers are trying to increase pricing at the moment and one element may be to do with the additional cost of delivering to the UK. Everything has to have a cost of entry fee on top of what it was before.’Â
6. Availability
The other factor that many customers might not consider is paper availability, which is similarly unpredictable in the current climate. ‘In March/April last year there was a big drop-off in tonnes. People were cancelling everything, so paper became really quick to get. But by May, you had the furloughing of paper machines and our dates shot out by three weeks,’ Julian continues, ‘It’s a very long, inflexible process. Lead times and availability have become much more complex.’
7. The decline of gravure
Being more expensive and time-consuming to produce and therefore suited to larger print runs, CMR (coated mechanical reel) rotogravure paper faces more difficulties as print volumes continue to decline. The more gravure printers that close, the more the price of gravure paper is increased, with becoming increasingly cost-effective. Townsend agrees, ‘The print market isn’t necessarily suiting gravure anymore. You’re not going to get many new things launching into the market that need 300,000 of exactly the same thing every week.’Â
The European Rotogravure Association (ERA) reported that paper consumption in the publication gravure printing sector fell by 4.5 million tonnes to 2.5 million between 2008 and 2018, a decrease of 44.4%. There were also 24 fewer gravure printing presses in 2019 than there were in 2015. Townsend continues, ‘You’ve got no manufacturers in the UK for gravure paper, it all has to be imported. So the paper supply is going to be a huge disadvantage as well.’Â
Why invest in paper for web-offset?
The reduction in gravure volume has allowed web offset companies to step into the breach and assist titles whose print runs have become smaller and more manageable. On many fronts, web offset is a more advantageous choice.
- More environmentally friendly
Because of the less time-consuming production methods, web offset is a greener print choice. Ö÷²¥´óÐã works with key partner, UPM, who produce many of our paper grades at the Caledonian mill in Scotland, which runs on 50% renewable energy.
- More flexible
Web offset paper allows you to consider a variety of grammages, including bulkier coated and uncoated options, providing flexibility to campaigns. Adjusting the publication size can also give your product the opportunity to qualify for postal incentives, including Royal Mail’s Sustainable Advertising Mail.Â
- Shorter lead times
In a post-Brexit world, working with a European print supplier has led to a protracted production process. Echoing Townsend’s comments above, has reported that delays with logistics and shipping have led to delivery issues. With shorter lead times on grades produced locally at UK mills, such as UPM’s Caledonian outpost, versus Finnish and European grades which have markedly longer lead times, Ö÷²¥´óÐã can help ensure your titles are produced on deadline and without unexpected additional costs.