Consolidation By the Numbers: I
As the chart below clearly shows, the commercial printing industry consists largely of small establishments. More than four-fifths (83.3%) have fewer than 20 employees and almost 71.0% have fewer than 10 employees. At the other end of the spectrum, just 3.2% have 100 employees or more. Note: A distribution of sales by company size would give a vastly different picture, with companies of 100 or more employees accounting for about half of industry sales. But that’s for another time.
As discussed in recent posts, the number of establishments in the commercial printing industry has declined by more than 11,800 or 31.4% since 1998. Consolidation has been widespread across all company-size categories, with declines ranging from 26.5% for the smallest establishments (1-9 employees) to 49.4% for the largest (over 250 employees). However, when viewing the data on establishment counts, keep this in mind: There’s more to the story than just numbers.
Many of the companies that have survived have done so for a reason—with luck not being among them. They have become much more competitive, more efficient, and more valuable to their clients because they recognize the industry is being redefined and are acting accordingly. Furthermore, the companies entering our industry—and new companies are starting every year— are starting with a clean slate—i.e., without the legacy equipment, work habits, and mindsets that can limit flexibility. So, while consolidation may have its benefits, don’t get lulled into the position that “printers closing their doors is automatically good for us.”
Andy Paparozzi Joe Vincenzino