2021 State of the Industry Report: The Role of Printed Forms In a Post-Pandemic World
From a global pandemic to a new administration, the past year was filled with attention-grabbing headlines. For Print+Promo Marketing’s 2021 State of the Industry report, we set out to learn more about the central issues currently affecting the print and promotional products industry, and find answers to questions like: Which vertical markets are poised for recovery and how does that impact the products distributors sell?
As part of our investigation, we reached out to experts in various market segments: printed forms, promotional products, labels, branded apparel and direct mail. Below is an excerpt from our conversation with Steven Osterloh, vice president of marketing for Ennis Inc., Midlothian, Texas. Find out what he had to say about the current state of printed forms, and the influence of vaccine rollout and larger trends shaping the future of the market.
What are your thoughts on the current state of the forms sector?
Steven Osterloh: There is going to be a continued decline of forms for dot matrix printers and laser [printers], but we are seeing an increase in inkjet printing. The cost and availability of uncoated free sheet will impact laser and carbonless forms as more paper manufacturers take capacity out of the market. These products will continue to be considered a commodity. Bright spots are the demand for additional added features in forms such as integrated and affixed products as high color and variable imaging.
What have lead times been like for materials? If delayed, how can distributors develop a contingency plan with their supplier partner?
SO: Lead times remain near normal for us, but this may be different for companies that don’t have a strategic partnership and purchase on the spot market. Availability of certain grades will be the greatest concern as mills continue to discontinue fringe use sizes, weights and colors. Distributors should migrate their clients to grades produced based upon the largest tonnage of grades being produced. Boutique grades (high-end security, light and heavy basis weights, and unique colors) will be in jeopardy of being discontinued over the next couple of years. Mills are converting to linerboard and brown papers that are replacing grades where demand is low or diminishing.
How has vaccine rollout impacted your business and orders?
SO: The decline from 2020 has stalled. Recovery will be slow and it his highly doubtful we will see a return to 2019 demand levels for traditional products. Labels and packaging have experienced growth of up to 6% to 10% in the last 12 months, but traditional forms use is not growing. Being deemed an essential business and not having to close our facilities helped, but as the economy slowed and in some cases shut down, the effect on these products was down.
How have the challenges brought on by the pandemic differed for suppliers versus distributors?
SO: Mills are taking out capacity (shuttering equipment and reducing shifts) to balance supply to demand. Many manufacturers are doing the same thing. We are concerned that a significant number of distributors will close due to loss of business, retirement or the inability to seek new opportunities face-to-face. Is there a sales force that want to sell our products and are they selling against the alternatives? Those distributors with technology solutions have fared better than those that were just selling orders. Lastly, many distributors were able to sell PPE, and these sales allowed them to survive the beginning of the pandemic. Although we did a lot of printing for COVID-related projects, it wasn’t near the PPE sales levels that we saw for some of our distributor partners.
Are there any larger trends in the forms sector or otherwise that are not pandemic-related that industry distributors should be aware of?
SO: The move to inkjet printers will reduce the demand for uncoated papers. The long-run inkjet printers use a coated sheet. I would expect to see a 10%-plus decline for traditional forms as end-use customers replace paper with technology alternatives that had to be developed through the pandemic, in addition to the annual decrease that we had already seen.