Success meets sustainability: Experts weigh in

by carly_mchugh | 24 July 2023 3:24 pm

By Carly McHugh

The digital printing and sign industries have experienced rapid growth and transformation in recent years, driven by continuous technological advancements and an increasing demand for high-quality, customized prints and signage.

With these developments comes the need to consider more tactful and responsible actions, to ensure the long-term viability of these industries. For example, companies should look to implement more sustainable practices into their operations, where possible, to remain competitive and meet the expectations of their customers.

However, there are also some challenges in the market that could present roadblocks for print and sign shops. Today’s rising raw material costs and interest rates have caused more businesses to think on their feet and adapt their approaches, to ensure their continuous success.

For a first-hand look at the current state of these industries, Sign Media Canada spoke with experts Calvin Frey of Innovative Ink, and Guy Langevin of AG Sign and Graphics. They shared their insights on the steps sign and print shops can take to be both successful and sustainable, as well as what the future might look like as they expand beyond their traditional borders.

Sign Media Canada (SMC): How can shops integrate more sustainable practices into their operations? What benefits can they expect to see from doing so?

Calvin Frey (CF): The easiest and perhaps the most obvious way is reusable and recyclable materials. The benefits are being a good steward of your resources, and if your clients can see you operate a responsible company, they can trust you with their projects.

Guy Langevin (GL): You can go down the path of sustainability in different directions, but it comes down to the management team and their directive. If it’s sustainable practices or processes, they have to identify what materials are best for their customer base, what materials are best for their workflow, and then continue to use those products to benefit their printing ability or sign manufacturing ability—if it’s consistent with their recyclable directive and it still meets their client’s needs. If not, they’ll continue using the traditional products they’ve used in the past, which aren’t sustainable, and wait for the supplier or manufacturer of those goods to offer sustainable products.

SMC: What role does consumer demand for sustainable products and services play in driving sustainability efforts, and how can shops respond to these demands?

GL: In the sign industry, customers are always demanding to be price conscious, so offering green, recyclable, or sustainable solutions won’t give those customers their expected results. They would have to understand these solutions would cost more money, but, in the end, they would have the knowledge that the products they’re consuming will be recyclable or sustainable. Therefore, it’s more to do with the education process.

CF: Consumers are becoming more educated on sustainability, and, as a result, more aware. Using materials for display systems that will end up in a recycling environment at the end of their life will build consumer trust and appreciation. We’ve received direct requests from clients to use sustainable materials in their projects, which help to fuel the transformation for companies such as ours.

SMC: What innovative technologies or materials are emerging that can help reduce environmental impact, and how can shops adopt and promote these solutions?

CF: I’m a big proponent of recyclable, paper-based products for interior displays, over plastics and vinyls. Inks are also becoming more eco-friendly. As a small company, we can only do what’s within our sphere of influence. We rely largely on our vendors to provide us with the opportunity to use sustainable products.

GL: There’s a type of acrylic emerging now that’s plant-based. Some of it works for digital printing, some of it doesn’t. On the sign side, there are recyclable products that are also plant-based, as well as recycled polyethylene terephthalate (PET) or polyvinyl chloride (PVC) products for fabrication, at a somewhat competitive price point. Additionally, sign trucks are starting to emerge with electric features—which is huge, because that wasn’t available two or three years ago. It’s becoming very available now, but at a price point, with an extra $100,000 cost to add it to your service platform. However, it gives that company a leg up in terms of sustainability and offering green solutions for service work. On the printing side of sign equipment, they’re manufacturing machines that use less electricity. Thus, there’s a big swing towards more efficiencies, and you’re seeing that emerge right across the board.

SMC: How have recent innovations in equipment and technology impacted the competitive landscape of the digital printing and sign industries?

GL: Any company could benefit from buying new technology with greener or less carbon footprint obligations. Their capital costs may be more, but their operating costs would be less, which ultimately suggests that’s the goal. However, it also depends on whether the company has the capital resources to upgrade and buy the newer equipment that provides the new technology. It really comes down to cash flow and capital advantage.

CF: The smaller digital and sign printers are fairly inexpensive to purchase and can be operated by anyone dedicated enough to learn. In my world, in the rural area, I end up competing with people who have a small roll-to-roll and a small digital printer in their garage or basement, and its tough to compete against people with almost no overhead. However, I have to remind myself that I was in the same situation a few years ago.

SMC: How can shops differentiate themselves from competitors, meet the changing needs of customers, and maintain an advantage in these ever-evolving industries? What role does technology and/or geographic location play in this process?

GL: Buy new equipment, upgrade, and beat your competitors. Keep ahead of technology and never be obsolete. Prior to the pandemic and the shift we’ve seen in the last 10 years, there was always a thought that most production and manufacturing facilities had to be within an urban area or large city. However, most of these companies are now starting to spread out and look for smaller cities or semi-rural areas, where they can operate with a lesser cost and footprint. In an urban area, your cost to rent is through the roof, and it’s not going down. Therefore, you’re seeing more companies operating out of southern Ontario and getting out of the larger cities.

CF: My company has had some success with looking for specific products our customers need that aren’t directly a commercial print product. We’ve also branched into printing onto products for manufacturers. Products that can’t be purchased online or from every other print shop will set you apart. Geographically, we still have a reasonable amount of loyalty from our client base, although I’m seeing that erode as more people compare us to the entire globe. It’s tough when you get compared to a large corporation in Toronto or a printer in China. However, two types of projects that are very geographic and I see staying that way are outdoor signage and vehicle wraps, as they’re much more difficult to purchase from far away.

SMC: How have rising raw material prices impacted the digital printing and sign industries, and what can businesses do to manage these costs while remaining competitive in the market?

CF: In our last fiscal year, our top-line sales were up, and our net was down. We’ve been too soft with price increases and have been taking it on the chin. We’ve raised prices where we can, but now we’re looking more specifically at where those prices can be increased. Of course, similar to everyone, we’re always looking at automation to produce more work with the same staff. This battle will continue long-term and is one everyone needs to look at if they want to stay in business.

GL: The easiest way is always having inventory ahead of your competitor. If you have cash flow, take advantage of deals to buy bulk that you can store and use as long as the shelf life, and be competitive with that bulk. If you’re only buying as you need product, you’re always going to be paying a premium, and then you’re not going to be competitive. However, your competitor will. There will always be someone who’s more agile than the next person. That’s just business.

SMC: How are rising interest rates affecting shops, and what steps can they take to mitigate the impact on their operations and growth?

CF: We have significant investment in real estate for the size of our company. The interest rates increasing this quickly has directly impacted our financial statements. However, I’m more comfortable paying interest on real estate than on equipment because equipment is depreciating rapidly, while also costing more in interest. Real estate is hopefully stable in the long-term.

GL: If you don’t want interest rates to impact your business, don’t buy anything. Hunker down and just maintain the equipment you have. Interest rates are going to keep on climbing. The days of cheap money have come and gone. Even if your credit score is triple-A and you have a very lean operation, you’re still going to pay a hefty price on capitalizing your equipment. Interest rates come right off the bottom line. Companies who are looking to expand will always look to buy. Whoever’s looking to buy will always pay a premium. There’s no real magic, unless they have cash flow, where they don’t have to rely on financing their equipment, but who wants to tie up their cash flow on capital costs? You want to use your money efficiently and keep your cash flow for operations. The companies that will survive and actually take advantage of it are always the companies growing, but they will always pay a premium, especially in the current market.

SMC: Where do you see the digital printing and sign industries heading in the next five to 10 years?

CF: Digital printing and signage will become more competitive as entry into the industry gets easier on the small scale. It’s a bright future in this industry for those who look for the unique opportunities and service their clients well.

GL: We’re seeing a lot of consolidation. Larger printing companies are buying a lot of medium-sized printing companies, consolidating, and looking to add to their offerings for their clients. They can be more agile in the different products they offer, and then that’s just their business model. They’re going to keep on buying digital print companies. We’re also seeing that right across the board in the sign business. Larger sign companies are buying and having strategies to buy small- or medium-sized sign companies to augment their offerings for the customer base they’re looking for, or looking to buy companies that have the customer base they’re looking for, to add it to their own internal roster. Thirdly, over the last five years, we’ve seen some unique situations where medium-sized sign companies are understanding the need to offer a good digital print footprint and consolidating or adding capital equipment to their businesses. They’re becoming more hybrid sign companies, offering digital print in a large capacity, as well as custom signage. I’ve seen that model a lot throughout southern Ontario, Montreal, and Vancouver. Essentially, three different business models are happening, and the ultimate solution is to offer customers a one-stop solution for signs and print.   

Source URL: https://www.signmedia.ca/success-meets-sustainability-experts-weigh-in/

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