An excerpt from AP July 2020 – by Spicers CEO David Martin
The demand for paper still exists, but it has been in decline for the past 10 years. And we’ve seen three to four years’ worth of decline in the last three months. Regardless of printer or supplier, everyone is feeling the impact.
There are some key sectors like tourism and travel that have a direct effect on paper uptake. Just within the media space, for example, with some newspapers going digital it means it affects paper demand. As applications move away, it has impacted business; so, it’s not like losing market share but rather, a new application for paper needs to be developed to replace it.
Sign and display has also taken on a similar downward trend. It has closed down on the retail end, apart from your major grocers. There are certain products in sign and display that are in high demand because of COVID-19, like floor graphics, but other parts of the portfolio are in decline, mainly driven by lower in-store promotion in ‘bricks and mortar’ retail.
That’s the reason for Spicers having to diversify its offerings – to suit market needs. We’ve seen the trend ongoing over a few years, which is why our strategy to diversify wasn’t just in the last few months.
Paper has been a very strong part of our offer, encompassing paper, packaging and industrial packaging. For us, the acquisition of Direct Paper closed at the beginning of March and that move has supported our business position, especially in packaging, and with our food services products. Packaging, in particular fibre-based packaging, was looking at a growth rate of six per cent leading into COVID-19. Labels is another area of growth; it is one of the sectors that has found applications that have rapidly picked up.
We’ve broadened our business portfolio, and that has helped us develop our value in new sectors. We will continue to keep our roots as a supplier of paper, but have included a number of other strengths. We’ve added new products to the range, like our Bauhaus Aqueous media for Photo Fine Art & Proofing. 3M Fasara Architectural window treatment films, 3M DiNoc Architectural refurbishment films and 3M Safety & Security films have truly extended our reach. We’re much more diversified now than before.
Our approach is to add products to our range for our customers to find new areas of growth. Printers add value to our consumables, and our aim is to diversify our offerings so that printers are able to diversify their business as a result. There are some speciality products that may have more functionality for today’s customer needs and requirements, such as tactile stocks. Printers that have a broad capability in foiling, embossing and finishing have great opportunities ahead of them utilising products such as our Stephen and Splendorgel range.
Most printers are actively expanding from their traditional areas of play. For example, commercial printers are looking at sign and display. Customers in sign and display are mostly looking into Architectural products. As a rule, businesses are looking into refurbishment instead of construction. So, these are some areas they can expand into. It requires the same skillset, but different applications in different target markets.
We’re very focused in our sustainable efforts, which is what consumers are demanding as well. Fibre-based supply has been driving our packaging and food services offerings. On the materials side, many of the products that we sell into the rigids market are 100 per cent recyclable. That has been a strong push for us.
The other focus is 3M’s Envision wrap films, which is a non-PVC product. We are promoting this product heavily into the digital print market. 3M is doing a lot of work in the sustainability space; as it brings new products through we aim to promote them to replace any relevant PVC-based products.
Sustainable sourcing is part of the value of our business. We’re the channel between manufacturer and demand, and it’s up to us to source the products that the market is expecting. It’s a common expectation from consumers now and it has also given us a competitive advantage to have sustainable solutions.
It’s all about quantifying perceptions and reducing the impact on our future. Part of our responsible sourcing is to ensure that we source from FSC or PEFC certified suppliers. At the end of the day, there is a demand for paper and what we need to do is make sure that we source it in the most ethical manner possible. Our four values are accountability, integrity, collaboration and dynamism, and every employee intends to live up to them, each day.
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