Loonie as it may seem, the rising dollar that’s eroding print and many other exports in Canada is also causing a domestic wealth-effect that is expected to revitalize our ink-(or toner)-on-paper medium and the overall economy by over six percent this year.
The where and what of print market growth will shift as exports, energy and all the extraction sectors (except gold) de-extract in the new, post-melt-down, mature Canadian business landscape.
The where to find growth will be among 10 sectors, most in the consumer-driven economy we rarely recognize. Canadians are big savers, and we’ll now be able to both spend and continue to invest as the dollar reaches and exceeds parity with the U.S. greenback. The what will be growing in terms of print products will be the more personalized digital and offset/digital hybrid relationship print that will entice consumers far beyond the traditional visual dimension. Our industry’s big chance in 2010 is to take control over the next era of smart communications. Remember, we bungled the “opportunities” in personal computing, the Internet and social networking and we’re still playing catch-up. It’s now wake-up-and-win time!
1. The largest print buying market will be foods, beverages and food-service (a $212 billion market, growing +6% with $3.4 billion to print, a growth of +7%). In place of exporting low-value-added agri-and-aqua raw materials, foods are going farm-to-fork through processing, packaging, branding and marketing of finished products for local and global consumption. Uniquely Canadian, as well as critical-mass ethnic offerings, will hunger for free-standing inserts (FSIs), in-store graphics, loyalty and recipe cards and, yes, printing industry generated mail-and-mobile-messaging. Smart packaging, employing substrates and ink-films that monitor product integrity, movement and tampering, as well as the ability to “talk” and “text” when in the hands of the shopper, will be a new-normal at supermarkets. Large-format sheetfed, RFID application litho and flexo labels, thermo-chromatic metal decorating inks and lenticular outdoor and floor screen signage with nanotech-animation will appetize and quench this sector and its customers.
2. At number two will be discretionary consumables ($271 B, +7% with $3.0 B to print, +6%). Entertainment is the big star as Canadian music and motion pictures come to dominate the U.S. market—many top TV series are made here. An as-yet unmet opportunity is to set up print-and-Web-based viewer loyalty programs with merchandise store-fronts and imprintables. Disney and others will buy up content and game providers and put Canadian content on the global map.
3. Information/communications technology ($109 B, +10% with $2.2 B to print, +5%) is number three and three-tenths is publishing based. Our society is one-fourth more literate than our southern neighbours based on per-capita consumption of magazines and books (or are we just bored?). The consolidating cable/satellite segment is buying more trans-promo, FSIs, outdoor and transit as it seeks saturation and retention. Canada could lead the global knowledge economy because of extraordinary higher-education and professional in-migration rates. All languages and persuasions are here as at no other place on the planet. Diversity is awesome for print.
4. The number four top market will be banking/insurance and investment/brokerage services ($269 B, +4% with $1.3 B to print, +2%). Commercial banking is over one-half the sector print spend with digital hybrid direct mail, plastic cards, inserts, FSIs, signage, transit/outdoor and, yes, forms and cheques all on the ledger. Bay Street demand is level but will return to print as new investment vehicles and enhanced services, including foreign-currency accounts, mobile banking and prepaid charge-cards are introduced. Property/casualty insurers and life insurers will increase their coverages of the market and invent secure new life-investment hybrid products. Investment banks/syndication and securities brokerage will benefit as flight capital from the U.S. brings about many more TSX registrations. Toronto should soon be the world’s fifth largest money-center.
5. Ranked fifth are medical/pharmaceuticals and health providers ($134 B, +5% with $1.1 B to print, +2%). Pharmaceuticals and wellness are anything but healthy as patents (not patients) expire and generics (not genetics) prevail. Packaging, point-of-purchase (POP), ROP and bind-in placements will continue in decline in the U.S. and UK, but outsourcing is bringing pharma work here. Health providers will seek more private patients as provinces de-socialize the system. Direct mail and outdoor/transit providers should check in early.
6. Really, at number six is real estate ($203B, +5% with $1.0B to print, +6%). Residential new single housing and residential resale ($0.8B to print, +6%) is going through the roof in urban areas from Halifax to Victoria. Oppositely, commercial real estate is overbuilt thanks to the REITs, and will scream for signage, traffic-builders, anything to keep tenants and their customers in shopping and office centres. An opportunity is to produce and distribute U.S. sunbelt/snowbird content locally. Yes, sell the print in Honolulu, Phoenix and Miami this season and run it up here.
7. Transportation equipment and services ($172 B, 1% with $1.0 B to print, -2%) are a wreck at number seven, even though there was a bump-up in the Fall. Automotive print will continue at one-half the average spend of a decade ago, with most mail, FSIs and open-web pasted books generated by a decreasing number of dealers and small publishers. Showroom brochures have crashed, but transit, outdoor, POP/POS and ROP heatset web are staying in the lane. Airlines and rail have reduced the frequency of in-flight magazines and all print advertising. An exception is the new adhesive onboard tray mat. No food on them; just ads. Next, we should provide car-cards onto the overhead luggage compartments. Some foreign carriers are already running wrap-ads on plane tails and wings. Air Tim Horton’s? A probability.
8. At number eight is durable consumables, except transportation ($139B, +3% with $1.0B to print, -5%). Home furnishings, appliances and improvements are coming back as household formations and residential real estate build. StatsCan calculates that an average $46,000 is spent after a home purchase or lease. Large format displays, floor art, direct mail, newspaper FSIs and outdoor should sit comfortably with heatset web, screen and digital printers.
9. Government, federal and provincial ($594B; +3% with $1.0B in print, -10%) drops to number nine. Budget balancing acts have closed the book on all non-essential print. Data/document integrity security is the new priority, and smart print will encompass radio frequency identification (RFID) chip embedment and nanotech and biometric recognition in and on tags, labels, passports, licenses, decals and legal documents, just as it is on, yes, the Loonie.
10. Finally, at number 10, are professional, scientific and educational services-non-public ($161B; +6% with $0.6B to print, 0%). This sleeper-cell will grow enormously by the mid-new decade as professions, including the oldest ones, embrace marketing, as in the U.S., Canada must triple university admissions by 2020 to attract the best-and-brightest from everywhere, and build a post-extraction/manufacturing economy. Oil sands and potash will be replaced by nano-smart batteries and global-leadership bio-engineering. It’s a destiny play.
These 10 biggest, and some hottest, marketplaces should account for 71 percent of Canada’s G.D.P., and 92 percent of all printing sales. Rank the relative presence of each sector/category to the geographies of your plants and sales offices to determine where you want to concentrate your sales efforts. It will be a very good year if you stay out of the cold and get hot! CP
Vincent Mallardi, C.M.C., M.B.A. is an international printing authority and economist. Having both Canadian and U.S. roots, he is uniquely qualified to reconcile trade and investment issues between the two neighbours. He is a director of the Canadian American Chamber of Commerce and the Printing Brokerage/Buyers Association International. For the full North American “Hot Markets for 2010-2011,” contact vince@pbba.org
