Watershed Group: achieving growth in European labeling through relevance and efficiency
The Irish group combines good manufacturing practices with a fleet of analog and hybrid Mark Andy machines and introduces Flint Group’s VIVO Colour technology.
With the exception of the corrugated giant Smurfit Kappa, Ireland is not known for being the birthplace of internationally renowned packaging printing and converting companies. That said, this is not the first time that we fly to Dublin to write stories of print innovation. Last fall, at Labelexpo, we met Liz Waters, Managing Director of Watershed Group, and we were captivated by her extraordinary energy and resourcefulness. So, we chose the Irish company to tell you again about digital transformation, and meet an entrepreneur who built an international business based on expertise, organizational efficiency, cutting-edge technology, loyalty to suppliers, and a desire to offer a tangible advantage to customers.
The label industry consists of a relatively small number of operators (a few thousand worldwide), most of which are independent. More rarely you come across label converters that are part of multinational organizations, and just a handful are active on more than one continent. With sales exceeding €22 million (2019), 130 employees, and manufacturing sites in Ireland, the UK, Germany, and Poland, the Watershed Group is a “middleweight”, but aims to carve out a significant role as a pan-European supplier of global and local brands.
The company was founded by Tom Waters in 1992. Waters began his career in the credit and financial sector, before joining the Industrial Development Authority Ireland (IDA), the Irish government agency responsible for attracting investment to the country. At some point, the manager realized that he wanted to establish his own business. He was convinced that the growth and relevance of Irish companies had to be based on export, and a certain critical mass. From this intuition came the inclination toward acquisitions, and the passion for diversity, which are still part of the Watershed Group’s DNA today.
“The quality and great flexibility digital technology offers make it future-proof, and the only possible development path for the next 3–5 years.”
— Liz Waters, CEO of Watershed Group
During the same period, his wife Liz — with a background in classical studies, and experience as a teacher — raised four children, joined Aer Lingus as developer of the leisure segment in Europe, and, in 2005, acquired Malones of Dublin, a historic Irish brand of cleaning products. Upon her husband’s death in 2012, Liz joined the Watershed Group, and became its CEO and sole shareholder. This opened a new phase of growth for the company, which began expanding its product portfolio, and investing in modernization of its technologies and processes. They also took the unusual decision to unify the entire press fleet on Mark Andy’s flexo and digital technologies, and adopt the Flint Group’s VIVO Colour ink formulation system.
The pride of being Irish, the importance of being relevant
More than just numbers, machinery, and renowned brands, Watershed Group is proud of what it is today and focuses on what it aspires to be in the future. As for the present, the company is first and foremost proud to be Irish.
“Irishness is a value. When you live in a small and isolated territory, whose population is insufficient for you to grow, you have to be inventive. You have to look outside,” says Waters. “In our field, looking out means being flexible, adapting to different cultures, preparing for mergers and acquisitions, having great confidence. Irish people are very confident, and that’s one of the traits I’ve instilled at all levels of the company.”
The owner of Watershed Group does not embody the legacy and customs that characterize many long-standing print entrepreneurs, nor it is influenced by the many manufacturers who push their customers to invest by emulation. On the contrary, this entrepreneur shuns “me-too” approaches and aims to transform her company into a supplier capable of standing out internationally for its unique character.
“Labeling is a resilient industry, where many companies have survived the recession and continue to grow because they operate in mainstream sectors, such as packaging for the food industry and personal care. Yet, our market has changed, and we need to prepare for new scenarios,” Waters explains.
Every day, the Irish company competes with converters who put their firepower, achievements, and specializations, whether real or claimed, before a clear idea of how to generate value for their customers. Again, the Watershed Group’s approach is unconventional.
“Before you produce, you need to think about how relevant you want to be to your market. Success and relevance are two different subjects, and among companies in the industry, especially in the UK and Ireland, the trend is more making money than gaining relevance,” says Waters. “That’s why we decided to focus on how to be relevant, rather than just economic success.”
A pan-European supplier for an international clientele
Once they cross national borders, it is difficult for many organizations to define the limit to their internationalization journey. Some take the biggest leap and fall. Others find it difficult to get out of their comfort zone, or a particular geographic or linguistic area, and deny themselves many opportunities. Watershed Group, which already serves some of the largest global beverage brands, has broken down this psychological boundary, and is investing confidently to offer its customers new services.
The dominant trend today is being able to offer a very broad portfolio of complementary products — labels, packaging, POS materials, commercial print applications — no matter whether they are made in-house or through partners and subcontractors.
“More and more brands are looking for a mix of products and services, and it’s essential to get ready to offer them,” Waters explains. “You can do this through acquisitions, joint ventures, partnerships. What matters is that brands know how to deal with suppliers, and their main interest is to speak with people who can combine the pieces, oversee processes, and ensure a complete and effective offer. This is the area where we want to position ourselves.”
Watershed Group developed a growth strategy based on three pillars. The first is organic growth, which requires continuous investment in new technology, efficiency, and digitization in order to generate value for the company.
“Investing is inevitable, but you have to be smart, and it’s vital to understand what’s really necessary,” explains Waters. “Thanks to our strength, and the support of the banks, we invested nine million euros in new technology over the past six years. An approach that would be unsustainable for a small converter with limited access to credit.”
The second pillar is the addition of new sectors and markets, such as alcoholic beverages, which the Watershed Group entered into only three years ago and is now supplying some of the world’s most prestigious producers.
Last, but not least, is growth through acquisitions, which Watershed Group conducts in a way that is fully respectful of existing people and corporate cultures.
“When we acquire a company, we generally safeguard their management, and we review their procedures only where strictly necessary,” Waters explains. “Rather, we like to work with the local team to align production and reporting. Rather than growth, and a quick return on investment, we focus on customer needs.”
In 2019, Watershed Group completed the installation of the Label Traxx business management software, which allows the company to govern processes and plan activities in all its plants.
Technological uniformity and consulting
While almost all label converters have a heterogeneous fleet of machines, an expression of manufacturer diversity, Watershed Group has choosed to base its production on a fleet of Mark Andy flexographic presses. The Irish company identified the P5E platform, the latest addition to the American manufacturer’s Performance Series, as the solution to ensure high quality, productivity, repeatability, and rapid job changes, without compromising the flexibility needed to handle very different markets and applications.
“If you want consistency in production, you need to use the same machines, the same inks, and the same paper,” explains Waters. “Using only Mark Andy technology, Flint Group inks, and Avery Dennison substrates at all production sites, we can produce the same job anywhere, with the same quality and colors.”
The choice of Mark Andy comes from the US manufacturer’s particular attitude toward research and development, customization, and creation of unique and user-friendly solutions.
“Mark Andy is a company of engineers who, as such, love to do things right. When we approached them, they were smaller than they are today, and they wanted to grow very quickly,” Waters explains. “This motivated them to be extremely flexible and accessible, and to offer us many additional features, including a powerful online data management interface, and full industry 4.0 compliance.”
To meet the demands of designers and brand owners, the label converter has chosen to adopt Esko Full HD Flexo technology and to equip its production lines with modules for hot and cold foiling, embossing, and screen printing.
“There’s always been a gap between brands, designers, and printers, that we try to bridge by sitting around the table with them as consultants,” continues Waters. “For example, it happens that designers create complex and expensive projects that clients don’t want to pay for. At that stage, we complement our technologies with our expertise, developing viable solutions to achieve the same effect, but at a lower price.”
VIVO Colour to keep color under control
For any manufacturer of packaging and labels, color management and spot color reproduction are a crucial issue. An area that is steeped in variables too often left to the discretion of press operators. That’s why Watershed Group decided to address this issue with its usual analytical and pragmatic approach.
“Ensuring a correct color matching by eye is very complex,” explains Patrick Murphy, Chief Operating Officer of Watershed Group. “You may be a great printer, but you may not have color skills, and you may make expensive mistakes.”
Thanks to the relationship with Flint Group, in early 2019, the Irish company was among the first in the world to test VIVO Colour, a unique cloud-based ink formulation system. VIVO Colour provides the operator, anywhere in the world, with a rigorous mixing formula and procedure, which allows them to precisely reproduce the desired color according to the type of ink, print technology, and substrate. The system works regardless of the target to match, whether it is a PANTONE or PantoneLIVE reference, Lab value, spectral data, or a sample supplied by the customer.
“VIVO Colour is based on a simple but ingenious idea, and requires a reasonable investment compared to the advantages it produces.”
— Patrick Murphy, Chief Operating Officer di Watershed Group
The platform includes the VIVO ColourCloud portal, which houses the formulation database, and VIVO ColourPortal, staffed by technicians and dedicated to creating new on-demand formulations, and the execution of tests on new media and types of anilox rollers.
“It’s a simple but brilliant idea that could have been developed twenty years ago. And it’s a reasonable investment compared to the benefits it produces,” continues Murphy. “With VIVO Colour, we have achieved full consistency in color matching, reduced ink consumption by 5%, and we estimate a start-up time saving of five minutes and twenty meters of material per spot color.”
In order to quickly implement the platform, Flint Group has organized a training program for all machine operators and prepress staff, which has enabled them to gain the necessary skills to achieve the best results in a short time. A few months after the program was launched, VIVO Colour was unanimously accepted as a system that makes work easier and reduces downtime.
Watershed Group has introduced VIVO Colour at its headquarters in Dublin, where beta tests are conducted on all new technologies. At the end of the validation process, scheduled for the end of 2021, the company will extend Flint Group technology to all the group’s European plants.
Towards digital production
In parallel with the digitization of the flexo prepress, Watershed Group has invested in digital printing technologies. Here again, the relationship with historic suppliers was crucial, and in 2018, the company was the first to install the Mark Andy Digital Series hybrid system in Ireland and the UK. The configuration chosen, designed to meet the needs of the high-end alcoholic beverage market, includes four flexo units, the five-color inkjet printing engine (CMYK+W), the lamination module, and the die-cutting unit.
“We had been looking at digital for some time, but most of the existing technologies seemed to us to be poorly differentiated and too expensive, both in terms of hardware and consumables,” says Waters. “Also, by making mostly high-volume products, we were struggling to figure out where to apply digital printing effectively.”
True to its strategy of diverging from the “me-too”, Watershed Group has identified Mark Andy’s hybrid technology as a factor to diversify its offer in the eyes of brand owners, as well as an opportunity to offer printed labels with an unprecedented quality and visual impact, even in small quantities and in multiple variants.
“The advantage of digital is not limited to small batches and short delivery times. The quality and great flexibility it offers make it a future-proof technology, the only possible development path for the next 3–5 years,” concludes Waters.
With six years of double-digit growth, strong loyal customers, and ready to attack new market segments looking for reliable suppliers and premium quality, Watershed Group is now focusing its efforts on further increasing the quality of its products. In particular, by the end of 2020, the company will complete the adoption of automatic inspection systems on 100% of its production lines. These implementations are part of the collection of best practices that Liz Waters named “The Watershed Group Way”: a set of strict guidelines created to enable the company to continue its journey of development in a sustainable and virtuous manner.
