PAPER CHASES DIGITAL

[Anonymous]

Paper Chases
Digital
Emerging Trend: The
digital-paper market is the fastest-growing sector of the paper industry.

Why: Ninety percent of business
printing is now digital (i.e., derived from a computer file and transferred to
paper via toner, rather than with traditional lithography’s ink and oil
processes). “These papers need to be dry and durable,” says Find/SVP basic
industries consultant Ann Romeo. “This is what we should be using in our home
offices,” she continues, “and digital photography is really driving the consumer
side.” (High-speed color laser printing is expected to increase 40% over the
next three years.)

Opportunity:
Paper has traditionally been commoditized, notes Romeo, but the competition for
the digital market has spurred strong branding efforts, especially by
Meadwestvaco , Mohawk Paper Mills and Xerox . Retailers are
eyeing this niche, too, and R&D has grown as companies strive for an
inexpensive all-purpose paper (coated digital photo paper, for instance, costs
over one dollar per sheet). Marketing efforts will reinforce branding and
emphasize the importance of using the right paper for the job. “Companies see
this market as a way of expanding their capacities,” says Romeo, and are looking
next at the packaging segment. “Eventually, anything that has to be customized
will go this route.”

Danger:
Digital printing hasn’t yet made significant inroads into commercial printing
(books, marketing collateral), and since the same companies serve both sectors,
a strategic balancing act will be necessary. And with paper companies and their
retail channels–Office Depot and Staples for example–both
focused on branding, “ripeness is all” before turf wars start confusing
consumers.

Companies to watch:
Meadwestvaco, Mohawk Paper Mills, Xerox, Eastern Paper, SMART Papers
LLC

[Author]

March 28, 2005 at 10:27 AM