When organic chai and cocoa supplier Chai Me was looking to develop its business, a conversation with digital flexible packaging and labels producer Luminar opened a whole new product line, and revenue stream, for the company.
Based in Sydney, and founded by Marcus Child in 2009 following a motorcycle odyssey from Australia to Germany through Asia and the Middle East, Chai Me was supplying cafés in Australia, Singapore, Malaysia and the Middle East with its range of organic and vegan-friendly powders and syrups as a base for hot beverages.
Demand was strong. In the ten years since the business started some 10 million café customers have enjoyed a Chai Me drink. Like all successful businesses, however, Chai Me was beginning to look at new growth opportunities.
Luminar owner Matt Ellis was already working with Chai Me’s neighbouring business on developing pouches for coffee when the coffee roaster introduced him to Child.
Ellis says, “We talked about the Chai Me business, and quickly came up with the concept of selling Chai Me product direct to the consumer, through the cafés, under each café’s own branding. This would be possible through the capability of Luminar, using our HP Indigo 20000 press, to produce printed flexible pouches in short runs, for multiple SKUs.
“The customer really understood this and ran with it, and now the custom-branded packaging is a thriving part of his business. Our ability to produce high quality graphics on packaging in short runs means that each café owner now has another part of their own business too, selling own-branded product. So, Chai Me has new revenue, and so does its customers.
“And the more cafés he signs up the more economies of scale he will have. His customers are also helping him drive down the unit price of his pouches. He is winning because he has more buying power with his customers buying more product from him. Also, his customers have been winning because they are able to personalise the products that they’re selling, which in turn will mean more sales for them.
“It is a great story, which highlights the Luminar strategic approach: to add genuine value to businesses. We are not a me-too printer, our aim is to focus on the customer, and think about solutions to help that business grow,” Ellis says.
DIGITAL DRIVES GROWTH
The Chai Me story exemplifies the approach that Luminar has to the market, and the way its implementation of technology can drive new business for its customers.
“What I generally try and do with a new customer or potential customer is understand the challenges and needs. And then try and communicate how digital print can help solve those problems,” says Ellis.
“The HP Indigo hardware and PrintOS software that we employ gives us tremendous flexibility to work with customers for tangible business growth outcomes.”
Ellis says, “There are many business out there in the FMCG and foods sector – which are the markets we operate in – that don’t yet know what we are capable of, what can be done for them, and how it can help their businesses. Many in the industry are used to a certain way of approaching flexible packaging or labels – ordering huge amounts to get the cost down – which can lead to inflexibility, wastage and missed opportunity.
“Luminar offers print-on-demand in flexible packaging thanks to the HP Indigo 20000, with which we also print labels.”
BIG AND SMALL
While digital print technology is well suited to the SME market, the craft food and drink businesses, (and for some customers Luminar has become their sole packaging supplier), the company does work with big brands too.
Ellis says, “We welcome opportunities to work with bigger brands that want to innovate. While the hero products might not fit into the digital landscape, but digital is definitely a fit for the innovation department. Many of these big businesses want to create different versions, and we have a role to play there.
“So, rather than having a brand with one product they might want multiple versions of that product to appear, or they may want to test a new product, and test it in multiple packages. They may have a mock-up of 5000, 10,000, or 20,000 pouches, and they can cost effectively see what works. These are all viable runs for digital, but their current supply chain may not want to work with this as their systems may not work at those levels if they are geared up for much longer runs.”
For the craft and bespoke FMCG and food sectors though, Luminar is well placed, and seeing sales increase rapidly. Ellis says, “I set ambitious targets and they are all being exceeded. Sales in flexibles were up by 166 per cent in the year to April. Business overall is up by 44 per cent, it is an exciting time for us.
“I am having more and more conversations with businesses who are surprised to learn they can order 2000 or 3000 bags. And they can order multiple SKUs within that. And it’s important to note that HP Indigo is the only digital colour printing process that matches gravure quality and is safe for primary food packaging. They are quite happy to hear that there are these opportunities, and suppliers that can offer this capability now. It impacts on their growth plans, as it gives them a flexibility that was not there before," he says.
“We have worked hard on building a business that can offer value to other businesses, I believe in being able to work with a business based on offering value to that business. This is what we are able to do, and this is what excites me.”
The Luminar business is also developing an online transactional model, where customers can order themselves, particularly aimed at repeat orders, but still meaning that customers do not have to carry stock. The company is also currently building a clean room for food package printing that will have HACCP accreditation.
In flexibles its main products are pouches, sachets, and rewinds. Ellis says, “There is increasing demand, as the industry realises what we can achieve with them. The print quality we produce on the HP Indigo is outstanding, and the flexibility is causing FMCG and food producers to look at new opportunities.”
Luminar is not just working with end-customers though, it also supplies a trade service to other flexible packaging printers. Ellis says, “We enable traditional flexible packaging businesses to offer a new service to their customers. They may have a request for versions, or a test, or mock-ups, that are just too expensive to put on their presses. That’s where we come in, we can print for them, so they can fully satisfy the needs of their blue-chip customers.
“I think the market has yet to fully realise this opportunity.”
With Luminar’s ability to marry innovative print technology with a clear strategy of seeking to add genuine value to FMCG and food companies, it is little wonder that the company’s growth is surging.
To find out how Luminar can help your brand, visit www.luminar.com.au.