May/ June BoxScore: Connecting the Dots

CONNECTING THE DOTS

ALSO INSIDE

Best in Class: AICC’s Educational Opportunities

Peeking Into Policy: Today’s HR Priorities

Member Profile: NEWW Packaging & Display

OFFICERS

Chairwoman: Jana Harris, Harris Packaging/American Carton, Haltom City, Texas

First Vice Chairman: Matt Davis, Packaging Express, Colorado Springs, Colorado

Vice Chairs: Gary Brewer, Package Crafters, High Point, North Carolina Finn MacDonald, Independent II, Louisville, Kentucky

Terri-Lynn Levesque, Royal Containers Ltd., Brampton, Ontario, Canada

Immediate Past Chairman: Gene Marino, Akers Packaging Service Group, Chicago, Illinois

Chairman, Past Chairmen’s Council: Jay Carman, StandFast Packaging Group, Carol Stream, Illinois

President: Michael D’Angelo, AICC Headquarters, Alexandria, Virginia

Secretary/General Counsel: David Goch, Webster, Chamberlain & Bean, Washington, D.C.

AICC Canada: Lee Gould

DIRECTORS

West: Sahar Mehrabzadeh-Garcia, Bay Cities, Pico Rivera, Califormia

Southwest: Jenise Cox, Harris Packaging/American Carton, Haltom City, Texas

Southeast: Michael Drummond, Packrite, High Point, North Carolina

Midwest: Casey Shaw, Batavia Container Inc., Batavia, Illinois

Great Lakes: Josh Sobel, Jamestown Container Cos.

Macedonia, Ohio

Northeast: Stuart Fenkel, McLean Packaging

Pennsauken, New Jersey

AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd., Brampton, Ontario, Canada

AICC México: Sergio Menchaca, EKO Empaques de Cartón S.A. de C.V., Cortazar, Mexico

OVERSEAS DIRECTOR

Kim Nelson, Royal Containers Ltd., Brampton, Ontario, Canada

DIRECTORS AT LARGE

Kevin Ausburn, SMC Packaging Group, Springfield, Missouri

Eric Elgin, Oklahoma Interpack, Muscogee, Oklahoma

Guy Ockerlund, OxBox, Addison, Illinois

Mike Schaefer, Tavens Packaging & Display, Bedford Heights, Ohio

Ben DeSollar, Sumter Packaging, Sumter, South Carolina

Jack Fiterman, Liberty Diversifies, Minneapolis, Minnesota

EMERGING LEADER DELEGATES

Lauren Frisch, Wasatch Container, North Salt Lake, Utah

John McQueary, CST Systems, Atlanta, Georgia

Jordan Dawson, Harris Packaging, Haltom City, Texas

ASSOCIATE MEMBER DIRECTORS

Chairman: Greg Jones, SUN Automation Group

Glen Arm, Maryland

Vice Chairman: Tim Connell, A.G. Stacker Inc Weyers Cave, Virginia

Secretary: John Burgess, Pamarco/Absolute, Roselle Park, New Jersey

Director: Jeff Dietz, Kolbus America Inc., Cleveland, Ohio

Immediate Past Chairman, Associate Members: Joseph Morelli, Huston Patterson Printers/Lewisburg Printing Co., Decatur, Illinois

ADVISORS TO THE CHAIRMAN

Al Hoodwin, Michigan City Paper Box, Michigan City, Indiana

Gene Marino, Akers Packaging Service Group Chicago, Illinois

Greg Jones, SUN Automation, Glen Arm, Maryland

PUBLICATION STAFF

Publisher: Michael D’Angelo, mdangelo@AICCbox.org

Editor: Virginia Humphrey, vhumphrey@AICCbox.org

ABOUT AICC

EDITORIAL/DESIGN SERVICES

The YGS Group • www.theYGSgroup.com

Vice President: Serena L. Spiezio

Senior Director of Content Strategy: Craig Lauer

Managing Editor: Therese Umerlik

Senior Editor: Sam Hoffmeister

Copy Editor: Steve Kennedy

Art Director: Alex Straughan

Account Manager: Frankie Singleton

SUBMIT EDITORIAL IDEAS, NEWS, & LETTERS TO: BoxScore@theYGSgroup.com

CONTRIBUTORS

Maria Frustaci, Director of Administration and Director of Latin America

Cindy Huber, Director of Conventions & Meetings

Chelsea May, Education and Training Manager

Laura Mihalick, Senior Meeting Manager

Patrick Moore, Membership Services Manager

Taryn Pyle, Director of Training, Education & Professional Development

Alyce Ryan, Marketing Manager

Steve Young, Ambassador-at-Large

ADVERTISING

Taryn Pyle

703-535-1391 • tpyle@AICCbox.org

Patrick Moore

703-535-1394 • pmoore@AICCbox.org

AICC

PO Box 25708

Alexandria, VA 22313

Phone 703-836-2422

Toll-free 877-836-2422

Fax 703-836-2795

www.AICCbox.org

PROVIDING BOXMAKERS WITH THE KNOWLEDGE NEEDED TO THRIVE IN THE PAPER-BASED PACKAGING INDUSTRY SINCE 1974

We are a growing membership association that serves independent corrugated, folding carton, and rigid box manufacturers and suppliers with education and information in print, in person, and online. AICC membership is for the full company, and employees at all locations have access to member benefits. AICC o ers free online education to all members to help the individual maximize their potential and the member company maximize its profit.

WHEN YOU INVEST AND ENGAGE, AICC DELIVERS SUCCESS.

TICCIT® : Trees Into Cartons, Cartons Into Trees

As you know, my theme this year is “Better Minds, Better Boxes.” The purpose of this theme is to find ways to invest in the future of our industry and our companies through education. This means getting the word out about our industry to the next generation of workers, as well as providing continuing education for our current employees.

AICC and the International Corrugated Packaging Foundation (ICPF) have done a good job with outreach to colleges, and AICC and the Foundation for Packaging Education have done a good job with providing the continuing education our members need. This year, AICC and ICPF are focusing on educating younger, school-age students about what this industry has to offer.

AICC reached out to our friends at the Paperboard Packaging Council (PPC) to inquire about sharing their award-winning TICCIT® program with our members. Ben Markens, president of PPC, graciously said yes and was excited to hear we wanted to promote their program.

So, what is TICCIT (pronounced “ticket”)? It is an educational outreach program that provides an opportunity to connect with local elementary schools. The prepared PowerPoint presentation and script highlight these key aspects about our industry:

• Benefits of trees.

• How paper is made.

• Renewability and sustainability of paper-based packaging.

• Paper-based packaging is biodegradable.

• Trees are a crop, just like fruits and vegetables.

• How we manage our forests.

• The importance of recycling.

After the presentation, we provide the students with a sapling they plant in a paper-based carton we provide. The student is instructed to plant the carton with the sapling directly in the ground. They are informed that as the tree grows, the carton will biodegrade, completing the life cycle of “trees into cartons, cartons into trees.”

Our company, American Carton, a proud AICC and PPC member, has participated in this program for more than 10 years. The benefits of participation have been many, but these mean the most to us. The program gives us a chance to gather a team of our employees to prepare for the presentation day. Those employees and previous participants have had a lot of fun working together to engage with a school (usually one of their kids’ schools), gather the materials needed, and present to the students. In addition to team building internally, participating in the TICCIT program has allowed us to connect with our community.

We have made connections with teachers and principals at our local schools who really appreciate us coming in to educate the students. Finally, we get to share the sustainability story and open the students’ minds to our industry. I cannot say enough good things about this program.

I hope you will go to www.ticcit.info and see how easy PPC has made it for you to participate in this fun and interactive program. As stated on the TICCIT website, “Plant a tree, grow a mind.”

Thank you, PPC, for sharing this opportunity!

Jana Harris CEO and Co-owner, Harris Packaging and American Carton Co. AICC Chairwoman

How Does Trade Really Impact Us?

BY DICK STORAT

Have you ever wondered how international trade really impacts our industry and your business opportunities? To answer this question, we have searched through the full list of imported and exported goods to flag those products that need corrugated packaging to protect them in transit. In a search through the U.S. Department of Commerce’s lists of exports and imports, 32 product categories were extracted for examination. Examples include all of the food and beverage categories and an assortment of other nondurable goods such as cleaning supplies and pharmaceuticals. Also included were electronics and appliances. These are the same types of goods made in the United States and packaged to protect them through the domestic supply chain to their end use. Both tables on this page show how the categories were summarized.

The next step is to look at detailed Commerce Department data to identify the value of exports and imports of these goods traded internationally this past year. U.S. manufacturers exported a

2022 EXPORTS OF PACKAGEABLE PRODUCTS ($ BILLIONS)

significant quantity of packageable goods in 2022. Although we focus mainly on imports when thinking of international trade, it is important to recognize that exports provide significant additional opportunities to supply boxes and other packaging materials that wouldn’t exist without these exports. The table above summarizes the value of these exports.

IMPORTS OF PACKAGEABLE PRODUCTS ($

Exports of packageable goods offered a large market opportunity for additional packaging beyond that sold for domestic production for goods made only for U.S. consumption. Exports totaled almost $600 billion this past year.

Packaging-intensive foods, beverages, and fresh produce accounted for a total of $112 billion, or 19% of this past year’s total of packageable goods shipments abroad. Computers and electronic equipment is the largest export category this past year, amounting to $228 billion, or almost 40% of exports requiring corrugated packaging for protection. Another standout export sector is pharmaceuticals and medicines, which totaled $99 billion.

However, international trade doesn’t just stop with exports. The trade surplus generated by this past year’s exports of packageable goods needs to be reduced for imports of the same goods. Although there is some repackaging of imported goods in the U.S., imports are by and large packed in the needed paper-based packaging at the point of manufacture.

2022 PACKAGEABLE GOODS TRADE DEFICIT ($ BILLIONS)

In 2022, those imports totaled $1.305 billion as is detailed in the bottom table on p. 6. Countries worldwide have their eye on the lucrative opportunity created by a U.S. economy tuned for consumption rather than production. A U.S. dollar some 25% stronger than justified by economic fundamentals in the U.S. manufacturing sector facilitated this avalanche of goods again this past year. It was enough to wipe out the boost U.S. exports gave to the economy and its

independent paper packaging converters by more than two times over.

In the largest category, imports of computers and electronic equipment were twice the amount of this past year’s exports, thereby shrinking by more than $1 trillion the market opportunity for U.S. paper packaging suppliers. The same trend is true for other categories, as well. Imports of pharmaceuticals and medicines were about twice the level of exports.

Trade Balance for Pharmaceutical Products

The difference between imports and exports is the trade deficit. The table to the left shows the trade deficits this past year in billions of U.S. dollars. It also shows the change in the deficit from 2021. The overall trade deficit for packageable goods in 2022 was $715 billion. To get a sense of how enormous that is, consider that the gross domestic product (GDP) for the state of Ohio was $736 billion in 2021. That means the trade deficit for packageable goods in 2022 exceeded the state GDP of each state, except the seven largest states. By any measure, that is a sizeable market opportunity unavailable to producers of packaging in the U.S. Overall, the trade deficit worsened by $92 billion, or 15% this past year, compared with 2021. The trade deficit for computers and electronic equipment amounted to 37% of the total deficit and had eroded by an additional $33 billion, or 14%, this past year. Cleaning and toilet supplies and the other packageable goods categories were the only ones that did not worsen in 2022.

To get a sense of how the trade deficit has been worsening over time, look at the chart directly to the left, which shows how the trade deficit for pharmaceuticals and medicines has behaved since 2017. From a deficit of $57 billion in 2017, the difference between imports and exports rose to $99 billion this past year, a worsening of $42 billion.

So, the next time someone asks you how international trade affects independent paper packaging converters, just tell them it is like losing the state of Ohio from the U.S. economy. High impact, indeed.

Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@aol.com

Welcome, New & Returning Members

Welcome, AICC’s New Members!

BETHLEHEM DIE CUTTING

JASON BOHANNON

Plant Manager

802 E. 8th St. New Albany, IN 47150

812-282-8740

www.kyanaind.com

TOPP CORRUGATED PRODUCTS

BRIAN KENTOPP

President

45 Market St. Morristown, NJ 07960 201-738-8623

www.toppcp.com

KADANT JOHNSON

KENNETH C. LAHRKE III

Director of Industrial Sales

805 Wood St. Three Rivers, MI 49093 269-278-1715

fluidhandling.kadant.com

HOT MELT TECHNOLOGIES, INC.

DOUG GEBOSKI

Trade Liaison

1723 W. Hamlin Rd. Rochester Hills, MI 48309 248-853-2011

www.hotmelt-tech.com

BAY MACHINERY COMPANY

FREDERICK D. SMITH

Sales Manager

11118 Thompson Hwy. Blissfield, MI 49228 419-727-1772

www.baymachinerycompany.com

HIFLOW SOLUTIONS

MARIUSZ SOSNOWSKI

CEO/President

66 W. Flagler St., Suite 935 Miami, FL 33130 305-646-9933

www.hiflowsolutions.com

FIRST LUKE WOODWORTH CEO

12485 E. 79th St. Indianapolis, IN 46236 463-249-4705

www.firstindustrialservices.com

JUST PACKAGING

MONTY WARRICK President

54340 Smilax Rd. New Carlisle, IN 46552 574-654-7555

www.just-packaging.net

ST. PETE PAPER COMPANY

TOM GOMEZ President

2324 20th St. East Palmetto, FL 34221 941-776-4194

www.stpetepaper.com

Quality & Consistency

Produce Better Quality Graphics

ThermaFlo™ Brings HD Graphics To Corrugated Printing o

W ith a consistent cell geometry that promotes , ink metering and due to our multi-hit technology - you can get extended volume ranges

Repeal the ‘Death Tax’

BY ERIC ELGIN

As I have noted in past columns, your Association is well-connected with other organizations in Washington, D.C., that work to advance the cause of small and medium-sized businesses. AICC President Mike D’Angelo sits on the board of directors of the Small Business Legislative Council, for example, and he actively engages with groups such as the S-Corp Association and the Family Business Coalition (FBC). The latter group describes itself as “the voice of America’s main economic engine—family businesses—working together towards a better business climate that promotes private business expansion and job growth.” Since so many AICC members are family-owned, your Association takes notice when this group speaks.

One issue of major importance to FBC is the repeal of federal estate taxes, aka the “death tax.” In a letter to U.S. Sen. John Thune (R-South Dakota) who recently reintroduced a bill to repeal the death tax, FBC, joined by AICC and other several other family business groups, wrote:

“Repealing the death tax would spur job creation and grow the economy. Many studies have quantified the potential job growth that would result from estate tax repeal. Last year, the Tax Foundation found that the U.S. could create over 150,000 jobs by repealing the estate tax.

“The death tax contributes a very small portion of federal revenues. The estate tax currently accounts for approximately one half of one percent of federal revenue. There is a good argument that not collecting the estate tax would create more economic growth and lead to an increase in federal

revenue from other taxes. A 2016 Tax Foundation analysis found repeal of the death tax would increase federal income taxes by $145 billion over 10 years using a more realistic, dynamic economic analysis.

“In addition, the death tax forces family businesses to waste money on expensive insurance policies and estate planning. These burdensome compliance costs make it even harder for business owners to expand their businesses and create more jobs. In poll after poll, a super-majority of likely voters supports eliminating the death tax. Typically, two-thirds of likely voters support full and permanent repeal of the death tax. People instinctively feel that the estate tax is not fair. A 2016 state poll by YouGov conducted in South Dakota showed 75% of voters

supported repealing the estate tax. The negative effects of the estate tax make permanent repeal the only solution for family businesses and farms. Your legislation will help America’s family businesses create jobs, expand operations, and grow the economy.”

If you agree with this sentiment, contact your state’s senators in Washington, D.C., and urge their support for Thune’s bill. You can call the Capitol switchboard at 202-224-3121 or go to www.senate.gov.

Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com

Truck. Loads . More.

Corrugated printing has gone from basic to beautiful in 10 year s. With the explosion of packaging demands and shor ter print runs, speed has become the #1 capacit y driver. One of our customers tells us automated complete plate cleaning in < 4 minutes adds 25% capacit y in a working week with FlexoCleanerBrush™

He calls it ‘Truckloads More Capacit y’. You can do your own math.

ESG, Part Two

BY RALPH YOUNG

It has been almost two years since we alerted members and Associates to environmental, social, and governance (ESG) issues through a BoxScore article. While we will develop an update in this article, the main issues for financial investors and maybe your clients is the extended producer responsibility (EPR) initiative, which has been present longer and has more traction. Be on the lookout for producer responsibility organizations.

Although this unwieldy initiative is global, pushed forward by the United Nations Sustainable Development Goals, the United States and various states have adopted it in part as they attempt to implement recycling and diversion strategies.

This ESG program has a very large umbrella that may have started with sustainability but has grown into a much broader scope after the Paris Agreement, also known as the Paris Climate Accord, of 2015. It encompasses many issues not likely to apply to you, even though the carbon-neutral element may be an issue considering our consumption of electricity from various fuel sources.

Our joint response to the components must first be addressed for the whole industry: forest, mills, transportation, converting plants, and fiber recovery. I believe every box plant will need to focus on where its energy comes from—waste recovery such as office materials and metals and die boards, water consumption, dust usages, electrical consumption, and truck gallons consumed.

Terry Webber, vice president of industry affairs for the American Forest & Paper Association (AF&PA), has said

stakeholder engagement on EPR bills could make or break legislation. AF&PA plans to be an “active participant” in EPR for packaging discussions because of the potential for such laws to affect packaging costs and material flows. See AF&PA’s letter to the State of Connecticut from February 27, available on the AICC website. We will keep you posted.

According to McKinsey & Co., the targeted industries are not forest products (i.e., containerboard and corrugated) but they concern banks; automotive, aerospace, defense, and technology; transportation, logistics, and infrastructure; telecommunications and media; energy and materials; resources; and consumer goods.

Your AICC is attempting to develop an updatable white paper or template to assist you in responding to client and community requests, along with access to a new Packaging University course. We are gathering relevant perspectives from several other larger trade organizations and a few investment firms.

Challenges remain. For example, Germany’s plan to be carbon neutral by 2045 had a major setback when it stopped buying Russian natural gas because of the latter’s invasion into Ukraine. Germany’s desire to use hydrogen as a fuel source will take many years to develop, even with government subsidies.

Focus on your waste. No materials should be leaving your plant to go to a landfill or for incineration. Recover plastic and metal drinking containers, food packaging, die boards to be chipped, rule to be recovered, and office papers to be separated as a start.

Right to repair legislation, if passed, states you will need to keep that old slow

computer longer, since it can be usable. Batteries remain in question, although they are not toxic.

It should all be about value creation, but it will come at a cost! Consider the social aspect of the ESG movement, which includes better safety procedures, health and welfare, and community aspects such as charities and food drives.

PFAS

We get questions about corrugated and per- and polyfluoroalkyl substances (PFAS). It is found almost universally throughout the environment in water, air, soil, plants, printing inks, and animals. It is found in your phone, linings and coatings of ink buckets, plastic water and soda bottles, shampoo bottles, plastic agricultural chemical containers, and inside and outside your buildings.

The U.S. Environmental Protection Agency website has much to say about this issue but no solution because it is considered a “forever chemical.” On average, the levels are 30–50 parts per trillion, but no research can determine at what exposure levels a substance becomes an issue to human health and longevity.

This fluoride product has been around and is a major component of Teflon. While this product is not currently under the ESG umbrella, all that can change.

Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical issues that impact our industry at

askralph@AICCbox.org

Upsize your output

EMBA 295 QS Ultima™

It’s time to unbox the latest model in the Ultima machine family –EMBA 295 QS Ultima ™. Delivering outstanding productivity and quality as well as material efficiency to large box operations. That’s what we call big news.

benefits you’d expect and like all our Ultima machines it features our unique Non-Crush Converting ™ and Quick-Set ™ technologies.

By introducing the EMBA 295 QS Ultima ™, we now offer a complete machine range to fit any customer need. It comes loaded with all the

The 295 QS Ultima ™ offers true DualBox ™ production through TwinFeed ™ and XL slotter, as well as complex internal box die-cutting and creasing with the bottom diecutter. Several available options, like for example HighBox ™ and the award winning LiquidCreaser ™ , further enhance its true flexibility and top-class performance.

Inspired by the challenges of our customers, developed for ultimate results.

XL boxes + XL slotter = XXL output.

Going the Extra Mile for Employee Recruitment, Satisfaction, and Retention

BY TOM WEBER

The “great resignation” has continued for far longer than many had anticipated, with approximately 4 million Americans continuing to leave their jobs each month since April 2021. Th is trend persisted, even during the shaky economy of 2022, with the onset of a technical recession doing little to stop the turnover juggernaut.

Benefits packages are one of the key factors that can influence an employee’s decision to stay or go, which is why many companies have been beefi ng up their offerings in recent months. With the competition for exceptional talent remaining fierce, these five innovative benefits trends can act as powerful differentiators for companies that want to maintain an edge in recruiting and retention for 2023 and beyond.

100% Health Plans

It’s no secret that U.S. health care costs have risen dramatically in the past several years. According to a 2021 Kaiser Family Foundation survey, half of responding adults say expensive health care is a top fi nancial worry and a burden on their families. To alleviate these negative outcomes and attract scarce talent, more companies have decided to pay 100% of monthly health care premiums for their employees. The decision to embrace 100% premium coverage, rather than the national average of 83%, can be an incredible diff erentiator in the eyes of candidates. Currently, this practice is more common in smaller fi rms than larger ones, with 29% and only 5% off ering full premium coverage, respectively.

However, the perpetually tight labor market of the 2020s appears to be changing this equation, with many larger fi rms embracing 100% coverage plans in recent months. Although this can be a fairly expensive proposition, many think it is ultimately good for the bottom line because it boosts the physical and mental well-being of employees, increases engagement and productivity, and improves recruitment and retention.

Here are some key questions employers may want to ask themselves when considering a 100% paid health plan:

• Will the company pay 100% for employee-only coverage or extend this benefit to spouses and dependents? It’s more common to see employers cover 100% of premiums for employee only, with other plan participants needing to buy up.

• What about other aspects of a 100% plan design? While paying premiums looks good on its own, shifting costs to employees through increased deductibles and out-of-pocket maximums can undercut actual savings for plan users who think they are getting a good bargain.

• How does the cost for a 100% plan compare with hiring a new employee? According to the Kaiser Family Foundation’s 2021 Employer Health Benefi ts Survey, the standard company-provided health care policy totaled about $7,739 for single coverage and $22,221 for family coverage. According to the Society for Human Resource Management, the cost to attract, hire, and onboard

a new employee averages $4,129. Depending on industry specifics and the severity of one’s turnover problem, paying 100% of premiums may or may not make fi nancial sense.

Expanded Voluntary Benefits

You can’t please all the people all the time—unless you embrace voluntary benefits. Voluntary benefits, also called supplemental benefits, refer to optional perks off ered to employees at a discounted group rate, which employers negotiate with providers. While employees still need to pay to use these benefits, the amount is typically far less than it would be without company subsidies.

Th ese types of benefits give employees the chance to customize their benefits package to best suit their particular needs. Whether it’s aff ordable veterinary insurance for pet owners, subsidized pre-K child care for new parents, or discounted food delivery for the culinary-challenged, off ering these types of policies can directly improve the quality of life of employees who choose to take advantage of them. Th ese off erings can play a crucially important role in recruitment and retention strategies, with MetLife’s 20th Annual Employee Benefi t Trends Study 2022 fi nding that 73% of employee respondents would stay at their current employer longer if they had a wider selection of benefits.

Holistic Leave for Caregivers

Since the COVID-19 pandemic abruptly normalized remote work for millions

Ask Tom

of U.S. employees, those caring for young children or elderly relatives have been particularly reluctant to work in positions that do not offer them the flexibility to tend to these important family obligations. The truth is that conventional employment models are simply not conducive to people with these types of responsibilities. Because of this, hundreds of thousands of caregivers, particularly young mothers, have chosen to leave the labor force entirely over the past two years rather than put up with unnecessary commutes, rigid schedules, and stingy leave policies. The past two years have proved that in-person employment and the conventional 40-hour workweek are not necessarily required to build high-performing teams, and companies worried about recruitment and retention have taken note.

The best way to satisfy this highly skilled demographic of workers is to offer holistic leave and flexibility policies that don’t make them choose between being good caretakers and good employees. Competitive companies are getting ahead of the curve by offering unlimited paid time off, build-your-own-schedule provisions, reduced hours for those with young children, and sabbaticals for tenured employees. Studies have found that being aggressive and experimental in this area is a great way to attract and retain talented workers who desire more agency in how they spend their days. For example, LinkedIn’s 2022 Global Talent Trends Report found that employees satisfied with their company’s time and location flexibility are 2.6 times as likely to report being happy and 2.1 times as likely to recommend their employer to others.

Scientific Approach to Benefits

Providing a solid benefits package is a great way to increase retention, boost recruitment efforts, and show employees they are valued. According

to a 2018 study by Randstad, 42% of employees said they were considering leaving their current job because of inadequate benefits packages, while 55% had left jobs because they found better benefits or perks elsewhere. As an employer, it’s smart to know exactly what existing employees and potential hires want with regard to employee benefits. Because of this, data-driven benefits offerings are becoming more prevalent in the era of the great resignation, with internal employee surveys and external expertise being leveraged to improve offerings.

Conducting regular surveys is the most effective way to determine whether employees feel their wants and needs are being adequately addressed by current benefit offerings. In this regard, less can be more—consider adopting frequent pulse surveys with only a few questions rather than 20-page annual surveys. This sort of continuous employee listening strategy is excellent for measuring satisfaction and collecting feedback that can be addressed in real time. According to Qualtrics, this type of responsive action can make employees up to 12 times as likely to recommend their employer to others. By enacting a benefits strategy anchored in a scientific approach, employers can align offerings with larger business goals and maximize the impact of their benefits spend.

Personalization and Malleability

The U.S. workforce is currently home to five distinct generations working shoulder to shoulder. These different age cohorts have different needs, and it is difficult for a traditional benefits plan to give adequate attention and resources to everyone. This dynamic can push employees to decline offerings they personally do not want or need, which can effectively result in them forfeiting substantial monetary resources.

For example, a generous 401(k) matching scheme may not be as valuable to recent college graduates bogged down with student loans. Or a Gen X employee may choose to decline health care coverage because their spouse has a richer plan, resulting in the company spending much less on their benefits than for most other employees.

To combat this uneven distribution of benefits resources—and perhaps unintentionally ageist outcomes— employers may find it helpful to reconceptualize benefits as a malleable pool of resources that individual employees may allocate according to their specific needs. If a doctorateholding baby boomer is unlikely to take advantage of a company policy that reimburses the cost of higher education, let them reallocate those dollars to attend an industry conference that piques their interest. If an employee has a few more years of coverage under their parent’s health insurance plan but is struggling to afford veterinarian bills, allow them to take the cost of their unused health benefits and apply it to caring for their furry friend(s). This personalized approach to benefits can effectively foster more equitable outcomes, boost employee morale, and broadcast a positive corporate culture.

To learn more about these topics and others, visit NOW.AICCbox.org. You can also connect with AICC Director of Education and Leadership Taryn Pyle at tpyle@AICCbox.org or Education and Training Manager Chelsea May at cmay@AICCbox.org

Tom Weber is president of WeberSource LLC and is AICC’s folding carton and rigid box technical advisor. Contact Tom directly at asktom@AICCbox.org

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Maximizing Your CRM for Success

BY TODD M. ZIELINSKI AND LISA BENSON

As inflation and interest rates soar, savings dry up, and consumer spending shifts to essentials, boxmakers face uncertainty about sales in the coming months. This comes on the heels of the 2022 fourth quarter, which experienced the largest decline in box shipments since the great recession in 2009. Although the current picture may not seem optimistic, it provides an opportunity to gain market share for companies with a strategy.

A successful downturn strategy will include the mandatory use of a customer relationship management (CRM) system. Having a centralized depository with up-to-date customer information can provide a trove of valuable data to assist in sales and marketing activities. Effectively used CRM systems allow you to identify sales opportunities, track sales activity, and analyze customer buying behavior, all of which can lead to increased sales and

revenue. In addition, by analyzing customer data, businesses can create targeted marketing campaigns that are more likely to resonate with their customers, leading to increased marketing effectiveness.

But for a CRM to be effective, it must be used consistently, which means getting buy-in across all levels of the organization. Additionally, thought must be put into how it is set up so impediments to its use are reduced, and its fullest potential is reached. Using a CRM with a mobile app and email integration and automation will make it easier to use and promote consistent use.

At any given time, anyone using your CRM should know whether a contact is a prospect or a customer. Your current client list should be accessible, and it should be clear where opportunities are in the pipeline. They should be able to view records and create reports based on segmentations (e.g., product, territory,

industry), sales data (e.g., order history, revenue, projections), and a salesperson’s performance.

If you are setting up a new CRM or are not getting the most out of your current CRM, below are several recommendations to help you maximize its use and performance.

Understand Your Goals

Before your CRM is set up, it is important to understand how you want to use it and what you expect to get from it. Consider all departments using it, such as sales, marketing, customer service, operations, and finance. Each department may have its own needs and goals.

Creating a CRM strategy will allow you to tailor your CRM to meet the goals of all who can benefit from its data. A crucial step is to figure out where you have gaps—data you need but currently do not have easy access to.

Goals should be specific and measurable. With goals in mind, you can begin to set up the fields and properties within the CRM.

Define Data and Pipeline Requirements

Setting up a CRM can be overwhelming, but getting it right is critical to success. It is recommended that you have a CRM administrator who can maintain and manage data and users, as well as ensure best practices are adhered to.

Defi ne the data points and fields that are required. Data should include identifying and quantifiable information. Identifiable data might consist of company information (e.g., name, location, industry, prospect, customer) and contact information (e.g., name, title, phone, email). Quantitative data might include the value of opportunities and sales and engagement with emails and your website if your CRM is tied into your marketing automation.

Create pipelines based on the stages of your sales process and buyers’ journeys. Pipelines allow you to defi ne benchmarks and activities that will be used to move opportunities to the next stage. Th is allows you to see where each opportunity is and what needs to be done to move it along in the pipeline.

Setting up automation and integrations increases efficiency. For example, when integrated with Microsoft Outlook, email exchanges with a prospect or customer can be captured without manually entering them. Integration with marketing automation allows marketers to segment and create email campaigns that can drive engagement and sales. Also, using a rotting or last-touch feature prevents opportunities from being lost because the CRM will notify you of deals that have been idle for too long.

Maintain Clean, Accurate Data

Data integrity is crucial to a successful CRM system. If you are doing a data

dump when it is set up, scrub data to ensure it is clean. Gather and store data in a standardized format whenever possible. Use drop-down select or multiselect properties whenever possible, unless you’re collecting unique values (e.g., contact name, company name, messages). Doing so eliminates human error and makes segmenting and fi ltering data for marketing or analysis easier. It also improves the user experience.

SEGMENTATION AND FILTERS

The contacts in your CRM are in various stages and have different needs. Segmentation allows you to build useful lists of customers grouped by data points such as products, location, relationship type, account owner, and revenue. An exclusion fi lter is helpful for marketing activities so that emails are being sent to only those that should get them. With these lists, you can conduct more targeted marketing and sales efforts, and automate activities on those contacts.

USE AUTOMATION

Automation relieves your sales and marketing teams of repetitive tasks and boosts productivity. It can support your sales and marketing teams throughout the sales cycle by sending out internal emails, assigning tasks, creating workflows, or sending trigger automated emails based on an action or inaction. Automation allows you to keep activities moving and ensures data remains current.

LEVERAGE REPORTING AND ANALYTICS

Th ere is power in CRM data when it is used. While your CRM subscription level will govern the depth of reporting available, all of the above eff orts and anything else you do in your CRM can’t be truly maximized, unless you can understand the data and make decisions based on it. Building dashboards can help you understand the eff ectiveness of marketing campaigns

and sales eff orts. You can set up shared views and reports in advance that can quickly answer regularly asked questions about marketing, sales, and forecasting data. Evaluating the data will allow you to recognize if you are meeting the goals you created, uncover additional sales opportunities, spot issues in your processes, and make appropriate changes.

CONTINUE TO MONITOR YOUR CRM

Keeping data clean and ensuring the CRM is being used will require ongoing eff orts. Th is is why having a designated CRM administrator is essential, and the expectations for all users should be clear from the start. Establish a regularly executed process for cleanup, which can include removing hard-bounced emails and identifying gaps or missing data. Determine why data is missing (the salesperson didn’t input it from a form, etc.), and have the appropriate person populate the data or make corrections in forms or processes to prevent future occurrences.

Get the Most Out of Your CRM

Effectively and consistently using a CRM opens the door to countless more opportunities hidden in your data. All you need to do is take the fi rst step, and start using the tools and features to their fullest potential.

Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com

Lisa Benson is senior marketing content consultant at Athena SWC LLC. She can be reached at lbenson@athenaswc.com

A Holistic Packaging Education

BY JULIE RICE-SUGGS, PH.D.

Security questions. We all know them; we all forget them. But answers to questions like “What is your mother’s maiden name?” or “What was the name of your first pet?” or “What was your first car?” are seared into our brain so we can avoid the hassle of resetting the account. For me, the question asking for a childhood hero is my favorite because it makes me think of my dad—my forever hero. Why not Batman, Wonder Woman, or the wholesome Mr. Rogers, you might ask? Well, not to discount any of these heroes, but my dad shaped my views from a very early age on what I believe is one of the most empowering experiences to seek—education.

When I was growing up, my dad was constantly pulling wide-ranging subjects into our conversations. He was insistent that learning about everything around you is the key to understanding the bigger picture of life. This broad worldview translated to me attending a liberal arts college—in my dad’s footsteps, of course—where I took a variety of classes such as history, literature, theater, writing, philosophy, and chemistry. The classes were interdisciplinary, holistic examinations of a sweeping range of topics that allowed me to see the interconnectedness of the subjects, with learning seamlessly flowing from one class to the next through seemingly very different coursework.

Keeping that train of thought, let’s apply it to you amazing folks in the corrugated industry because this same worldview is just as relevant when it comes to packaging education. As skilled professionals in the corrugated realm, you are well versed in all things corrugated—from understanding the composition of the material to the specific flute type best suited for various applications. You speak the language of corrugated board. However, at the Packaging

School, we invite you to become a bit more “packaging agnostic” in your educational approach. We believe that to do your job effectively and efficiently as a corrugated expert, you need to speak the language of packaging as a whole.

What would that look like in practical terms? Let’s say you work in sales at a familyowned corrugated box company, and your client wants to ship thousands of wine bottles across the country. To understand glass as a material alongside corrugated not only helps to level up your knowledge, but it also serves to actively help your client make educated decisions on the best box for shipping their product. If you know to ask your client questions about the weight, volume, neck finish, etc. of the glass bottle they need to have shipped across several states, they will have confidence that you know what you are talking about.

Our students in the Certificate of Packaging Science (CPS) program have bought into this methodology of learning. Many come from one specific industry and are now taking the time to grapple with the various materials, processes, and influences shaping the advancement of the industry. From design conception to production and end of life, students are gaining a comprehensive knowledge of packaging and utilizing it as a key differentiator for themselves and their company. The CPS offers 60 hours of content, 12 courses, and six continuing education units (CEUs).

One student, a sales manager from a paper-based packaging company, had this to say about the CPS: “It is great to learn about the production of paper after being in the industry for 15 years. However, I got to learn about the more technical processes of other materials, too, that our clients use, since it is not only important what you do but also what your clients do.”

Another student, a sales representative for product inspection equipment, echoed these thoughts when discussing another certificate program we offer, the Certificate of Mastery in Packaging Management (CMPM). He said, “Th is program gave me the knowledge to speak about the full scope of a line design to better service my customers. The detailed coursework on primary, secondary, and tertiary packaging was invaluable for my sales process.”

The CMPM is a 12-week program offering 80 hours of content, 14 courses, and eight CEUs. The beauty of this program is that it has a completely customizable project based on your needs and interest, and it is led by a professor with a doctorate in packaging over the course of 12 weeks. Educating yourself about everything possible is invaluable for your growth as a human being. Like my dad is fond of saying, “Learning never stops.” And when it comes to a packaging education, a holistic understanding of packaging will contribute to your growth as a packaging professional, allowing you to strengthen your individual value proposition and enhance your choice of packaging solutions for your customers.

Julie Rice Suggs, Ph.D., is academic director at the Packaging School. She can be reached at 330-774-8542 or julie@packagingschool.com

Alli Keigley, who contributed to this article, is production coordinator at the Packaging School. She can be reached at alli@packagingschool.com

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Secret Sauce Recipe

BY SCOTT ELLIS, ED.D.

Company culture is the way you get things done by planning and by what happens automatically. The secret sauce is concocted by embracing a system for deploying your values and intentions and sticking with them. At this point, I may be agnostic when it comes to which system is best for your company. The primary objective is to be consistent within a system that fits your values.

There have been many excellent ways of getting things done over the decades, I have observed. The quality systems of Deming, Juran, and Crosby gave us a way of gaining clear requirements and aligning our daily practices to improve our methods and communication. Carnegie taught us to communicate, Greenleaf encouraged leaders to serve their people, and Covey broke down the keys to being effective individually and corporately. The Toyota Production System focused everyone in the company on continuous improvement. In recent years, Holly Green has helped many to develop destination models to organize and reach objectives. Today, the Entrepreneurial Operating System is being used effectively to organize, involve, and engage individuals and teams for greater success. Each script for getting things done seems to have adopted key points from those that came before, adapting to the times.

The secret sauce recipes, regardless of the brand, share some key ingredients that cause allergic reactions in entrepreneurs. Companies founded by opportunistic innovators thrive on the heroic effort but balk at doing the same thing every day. As one such leader put it, “We are great at getting a job out today. We just can’t seem to get one out next Tuesday.” Consequently, most of us need to set up a system and ease our way into consistent deployment. With

respect to Jim Collins and all those mentioned above, the commonalities of sustainable execution include the following.

Humble Leadership

The smartest person in the room has been known to serve the team by equipping them through modeling and allowing time on task to develop critical-thinking skills. This is a discipline common to those who lead a team of problem preventers. When problems occur, they ask why it happened before they ask who is to blame. They overcommunicate the vision and model the values to which they aspire. Most effectively, this includes taking responsibility when the company strays from its goals and leading a quick recovery. Recovery time is a key performance indicator (KPI) of cultural fitness.

Educate and Involve the Entire Team This takes longer than we first expect. It involves showing the team the plan, helping them to understand how they fit in and benefit from the plan, and holding everyone to the same standard in deploying the plan. It also includes a robust system for repeating this process when new team members are added.

Shared Responsibility

Every leader in the company has the consistent deployment of the system as a key component of their performance evaluation. Consistency is essential, and it does not run on charisma or force of personality. If a particular manager is given day-to-day responsibility for incorporating the effort (e.g., quality, process improvement, training, and development),

they must be seen as a choir leader rather than a soloist. Their job is not to sing all the parts but to equip everyone to sing off the same sheet of music.

Clear Requirements

Quality has been defined as conformance to requirements. Engaging cultures have clear requirements for excellent behavior, as well as for products. Team members know what it takes to perform well, and they are confident everyone will

SECRET SAUCE

Combine all ingredients daily:

• Humble leadership

• Educated staff

• Shared responsibility

• Clear requirements

• Measurement

• Communication

• Recognition Substitutions:

• Caffeine

• High-fructose corn syrup

• MSG

Build Better Board.

Precison & Durability Saves

be accountable to those standards. Th is can even include attitude if the effort is expended to defi ne target attitudes behaviorally (aka operational defi nitions).

Measurement

KPIs help every team and individual keep score and track their own performance. When the requirements are clear, and performance is measured by them, management and improvement are simplified.

Communication

Every team member has a communication pathway by which to be heard. This is best accomplished when it is direct rather than channeled through a supervisor. The ability to identify issues, share improvement ideas, and ask questions is key to engagement.

Recognition

Team members get credit for their ideas. Th is may include a gain-sharing fi nancial reward. Sustainable programs always include a personal thank-you.

These are offered as observations on common ingredients to secret sauce. Yours will likely include caffeine; mine has high-fructose corn syrup. When a company has the secret sauce, it is evidenced by a purposeful energy and enthusiasm rather than a frenetic pace and frustration seen elsewhere. It has adopted a way of doing things that is consistently deployed regardless of the challenges of the day. It has owned an “our way.”

Scott Ellis, Ed.D., delivers training, coaching, and resources that develop the ability to eliminate obstacles and sustain more eff ective and profitable results. He recently published Dammit: Learning Judgment Th rough Experience. His books and process improvement resources are available at workingwell.bz . AICC members enjoy a 20% discount with code AICC21.

Design Space

The Future Perspective in Packaging Design

BY BRIAN ROMANKOW

Since the start of the COVID-19 pandemic, many things have changed in the way we do business, and many things continue to change even “post-pandemic.” Communication on Teams, Zoom, etc. has become the norm. Shopping online and picking up your groceries at the local store parking lot, without having to get out of your car, are now common. Even home food delivery shopping opportunities are more prevalent in small towns today, just as they are in big cities. The pandemic accelerated the way we live, how we do our daily chores, and what is to come. At the inception, no one knew what the best approach was, so everyone tried something a little different and then developed data to adjust and drive a more positive consumer experience.

The same can be said about how a lot of people are now processing customer requests for manufacturing—and not just in packaging. Ideally, things are now expected to happen a little faster and with more accuracy, based on data supplied by the customer.

Corrugated designers face greater challenges to deliver designs and prototypes of all kinds in less time than what was typically given four years ago. Ten years before that, the expectations of the time it would take for design to process through development and prototype to the customer for approvals were slightly longer.

Of course, not all design requests apply, but most do today. New product development, for instance, requires the time for validation and consumer feedback studies

or International Safe Transit Association testing for supply chain validation. Extra steps will always be communicated, and timing expectations are set, but whoever can get to the validated and best solution first will win!

Because of these increased expectations, companies are looking for ways to further automate steps in the development process. What’s scary about this is that automation is reliant on data—yes, zeroes and ones. So, a lot of software companies are creating new artificial intelligence and digital-twin solutions and bringing them to market as the next best thing to improve speed.

Data gets a mixed reaction depending on who is in the room at any given time. Older generations who like to touch and feel the product may tend to not trust data, whereas newer engineers and designers in the workforce rely on data because it is what they are used to from training at technical schools and universities. Imagine creating a design and sending it to your customer digitally so they can “see” in dimension and “feel” the weight and texture using virtual reality goggles and haptic gloves. Physical prototypes may soon be a thing of the past!

For a designer, this is scary and exciting. Job security, for one thing, comes to mind; if the computer is making the design, why am I still needed as a designer? Adversely and in a positive light, I see

opportunity—opportunity to get out of the sizing of boxes day to day and making like-for-like specifications and to get more involved in the creative projects and new product developments that separate one supplier from the next. Ideally, this can allow companies to capitalize on creative and innovative design by utilizing the talented engineers and designers to bring ideas to life.

Additionally, our businesses work with many business systems, most of which are not integrated. Moving ideas more quickly to manufacture and market will call for systems to talk and work with each other automatically (no human interaction), so expected turnaround times also decrease. You will need to rely on good data in the system to output the same.

Bringing the next innovation to market is what most companies are striving for today. It is not an easy task, and choosing where to focus your talent will become a key in winning the race to the top of the podium. Understanding the tools of design’s future will be important for success.

Brian Romankow is NA design and innovation manager at DS Smith.

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BYLINE

Member Communications

AICC Benefi ts in Small Bites: AICC Update

AICC has launched a new weekly podcast, AICC Update. Each week in less than five minutes, members can hear about upcoming AICC events and learn about benefits.

AICC member companies are investing in their teams by giving them access to AICC member benefits. AICC Update is another way to inform everyone at an AICC member company about the Association’s benefits.

“The Association offers so much to members that it can be difficult to be

aware of everything. We wanted to give our members a quick reference to stay on top of the ways AICC can help team members and their companies grow,” says Virginia Humphrey, director of membership and marketing at AICC and the host of the podcast.

The podcast will remind members of event deadlines, upcoming learning opportunities, and member benefits.

AICC President Mike D’Angelo says, “AICC is constantly working to keep our members out front. We always offer

something new. Th is podcast will be impactful because in a few short minutes, members can be updated and ready to access programs that will help them achieve success.”

Subscribe to AICC Update on all major podcast platforms including:

• Apple Podcasts: apple.co/3LvFCoG

• Spotify: spoti.fi/3JDwddr

• Google Podcasts: bit.ly/3ZS1Wxh

• Amazon Music: amzn.to/3LmiFo0

Or visit www.AICCbox.org/update.

Sustainability Moving Beyond Good Intentions

BY JULIE RICE SUGGS, PH.D., AND ALLI KEIGLEY

We all need goals to move us forward in life. Companies without goals remain stagnant, or worse, regress, without them. So, when you think about your company, what are some of the goals you hope to accomplish in the next five, 10, or 15 years?

More than likely, environmental, social, and governance (ESG) efforts factor into your plans. In recent years, ESG goals have become an essential and expected part of business strategy and operational management. Maybe your company wants to set a goal along the lines of ensuring that 95% of your packaging will be produced from renewable, recycled, or recyclable sources by the year 2025—an incredible goal. But you may be at a loss as to how this is accomplished.

With that in mind, AICC and the Packaging School have crafted a sustainability program that enables member companies to develop internal champions who will transform sustainability intent into action. To begin a multifaceted program such as this, we plan to start with an overview of the key terminology a learner needs to speak the language of sustainability with colleagues and customers.

Here are a few of the key sustainability terms we will cover in this program:

• Biodegradable: biological decomposition process of carbon-based materials by microorganisms (no time frame)

• Compostable: subset of biodegradable, with measurable time frames and specific requirements for degradation and toxicity

• Extended producer responsibility (EPR): environmental policy approach in which a producer’s responsibility for a product is extended to the postconsumer stage of a product’s life cycle

• Carbon neutrality: net-zero carbon footprint reached when the same amount of carbon dioxide is released into the atmosphere as is removed, in turn, leaving a zero balance

• Carbon dioxide equivalent (CO2e): number of metric tons of CO2 emissions with the same global warming potential as one metric ton of another greenhouse gas.

After becoming well versed in sustainable terminology, learners will work to set United Nations-based sustainability targets and goals, develop sustainable system designs (on the material level), measure the carbon footprint of their packaging, and select relevant offset programs to achieve carbon neutrality at a per-product level or per-box level. This program is meant not only to be deployed internally but also externally to map packaging solutions for members’ customer-specific sustainability goals.

Overall, this four-phase program consisting of an online sustainability course, a goal-setting workshop, a carbon workshop, and a demonstration of findings at the AICC 2023 Annual Meeting in September will help establish your organization as a thought leader in the ever-expanding

sustainability sector. Being able to discuss how carbon is measured, show examples of projects that offset emissions, and present opportunities and alternative solutions to reduce carbon positions you as a packaging consultant and leader.

If you’re inspired to take this step of becoming a sustainability champion within your company and for your customers and prospects, please contact Taryn Pyle for more information at tpyle@AICCbox.org.

Julie Rice Suggs, Ph.D., is academic director at the Packaging School. She can be reached at 3307748542 or julie@ packagingschool.com

Alli Keigley is production coordinator at the Packaging School. She can be reached at alli@ packagingschool.com

Recycling Packaging Industry Unites Behind Residential Recycling Initiative

Unable to ignore the climate crisis any longer, businesses are increasingly searching for more sustainable solutions. Switching to paper-based packaging is one of the easiest and most substantial ways to make an impact.

According to the U.S. Department of Energy, 68% of paper-based products are recycled, compared with only 5% of plastics.

With e-commerce on the rise, the onus is increasingly on consumers to correctly dispose of their boxes. The majority of consumers believe corrugated is worth recycling. However, 2 out of 3 consumers confess to not always recycling. Education is imperative to increasing the residential recycling rate and creating a circular economy. Th at’s why manufacturers and brands from across the packaging industry are uniting behind Box to Nature, a new residential recycling initiative.

Unlike other recycling programs, Box to Nature is specific to paper-based packaging. The campaign mark provides instructions on how to properly recycle the material right on the box—“Empty, Flatten, Recycle”—and directs consumers

to scan a QR code that leads to a microsite (box2nature.org ) with an interactive quiz and additional recycling tips. The mark is free to use by any company shipping goods to consumers and is a great way for brands to showcase their commitment to sustainability.

Rolled out just this past year, the program has already made waves throughout the packaging sphere, with 10 million boxes bearing the mark printed in the fourth quarter of 2022 alone. To date, 22 box producers have signed on to the program. Th is figure includes large manufacturers and smaller independent companies alike. “The need to increase the recovery of reusable material is bigger than any one company. We need all hands on deck to achieve our goal of raising the residential recycling rate,” says Mary Anne Hansan, president of the Paper and Packaging Board (P+PB), the national consumer marketing campaign spearheading the program.

Adds Greg Tucker, chairman and CEO of Bay Cities, “Only 40% of the corrugated boxes shipped to our homes in America are getting recycled. This is hampering our ability to produce new boxes from old boxes because we are not encouraging consumers to break down these boxes and put them in a recycling bin.”

With a solid foundation, Box to Nature is ramping up efforts to bring more brands and companies into the fold. As well as targeting

additional independent boxmakers, the program is prioritizing building awareness among large e-commerce brands through a LinkedIn campaign and direct outreach. New sales resources also have been launched to provide further support to participating companies. The program is optimistic about reaching its goal of having 125 million boxes with the mark printed in 2023.

Join the movement to get every residential box back and give corrugated fibers up to seven lives! If you would like to participate or learn more about Box to Nature, contact P+PB at box2nature@paperandpackaging.org or visit paperandpackaging.org.

Sixth and Seventh NEWW TAKES PRIDE IN THE UNUSUAL OVER MANY GENERATIONS

BY STEVE YOUNG

COMPANY: NEWW Packaging & Display

ESTABLISHED: 1834

JOINED AICC: 1978

PHONE: 978-632-3600

WEBSITE: www.newwpkg.com

HEADQUARTERS: Gardner, Massachusetts

President and CEO: David Urquhart

This is not a story about a 189-year-old New England company. It is not a story about how it was founded in 1834 by Elisha Murdoch to manufacture wooden household products such as buckets, firkins, and washboards and hence was eventually called New England Wooden Ware. Nor is it a story about how, in 1929, at the start of the Great Depression, the company gambled on a new packaging technology called “corrugated fiberboard.”

Rather, this is a story about NEWW Packaging & Display and the vision that the sixth and seventh generations of ownership envision for the future of this family business in a consolidating, challenging market. It is a story about a

successful and thriving independent with a reputation for quality, service, and a “willingness to do the unusual.”

Ben Urquhart, 45, has been with the company for 12 years. He graduated from Princeton University with a bachelor’s degree in ecology and evolutionary biology. He also holds a master’s degree in forest management from Yale University. Before becoming a sales manager three years ago, he served as a corrugator supervisor, prepress manager, and production manager. “This is my fourth job at NEWW,” he says. “I keep my old business cards to remind me of my history here.”

Ben’s partner in leading NEWW Packaging & Display is his father, David Urquhart, president and CEO. The

senior Urquhart, 73, is also a graduate of Princeton, as well as the University of Alaska and Worcester Polytechnic Institute. After a stint working for Alaska’s Institute of Marine Science, he returned to New England in 1981 to join the family business. He served on the AICC board of directors for more than 10 years and as the Association’s chairman in 2010–2011.

David remembers that Ben’s decision to work at NEWW 12 years ago was “of his own volition,” adding, “I did not ask him to come to work at NEWW. This event was of great significance to the eventual path to be followed by this now 189-yearold company. NEWW is very fortunate to have Ben working and now guiding

Photos courtesy of NEWW Packaging & Display.

David Urquhart, president (left), and Ben Urquhart, sales manager, are the sixth and seventh generations of the Urquhart family, respectively, at NEWW Packaging & Display.

this company through the present and into the future.”

NEWW Packaging & Display’s principal production facility is housed in a 300,000-square-foot plant in Gardner, Massachusetts, about 65 miles west-northwest of Boston. The company employs 150 people working three shifts, producing about 500 million square feet of corrugated packaging products annually.

The New England corrugated packaging market is, in Ben Urquhart’s view, a challenge. “One of the things I sometime hear is, ‘There is no new business in New England.’”

Ticking off a list of issues in the region vis-à-vis other parts of the country, he adds, “You know, who would invest in building new manufacturing capacity in this part of the world? Your energy costs are high, your labor costs are high, and the weather’s unpredictable.”

Yet, despite the market area headwinds, NEWW Packaging & Display continues to excel in serving a diverse range of stable corrugated users such as consumer goods, biomedical, food, and beverage. This customer-base stability allows NEWW to focus on long-term, core customers with unusual packaging needs. Says Ben, “I haven’t seen dramatic changes in our mix of customers over the past 10 years. Some come and go; we acquire opportunities, but our success is very much based on our capabilities and our consistency.

“We see ourselves as occupying a specialty niche,” he adds. “We think that we are good at serving customers with challenging structures, challenging artwork, and challenging expectations.”

Ben cited one area in which the company excels: specialty die cuts. In the past three years, the company has made major investments to support this niche. It acquired a Bobst VISIONCUT flat-bed die cutter, a Baysek die cutter, and a 113" Kolbus five-color rotary die cutter. “The investments we’ve made in our machines

and our systems are very much about supporting this niche,” he says.

He also noted that NEWW’s production excellence is a critical support for those customers who rely on automatic case-erectors and related packaging-line equipment with tight tolerances that demand precision. “I think our success is very much based on our die-cutting capabilities,” he says, adding that NEWW’s customers value the peace of mind knowing their lines will be running smoothly. “And yes, we also satisfy our customers’ psychological expectations.”

David agrees with his son’s take on NEWW’s ability to run demanding and challenging orders. “Some companies’ whole push is 90 black and 30,000 kicks an hour,” he says. “That’s not our niche.”

Offering a confirming metric to emphasize the point, Ben says, “You know, on an average day we are shipping a couple million square feet, but the total throughput of the factory is often much higher. So, the amount of board passing through our machines is an indication of how many orders require multiple passes.”

A corrugator plant, NEWW’s 98" Fosber corrugator produces B, C, and E flutes. In recent years, the corrugator has seen several upgrades, which Ben says have been “gradual and judicious.” A new Fosber dry end was installed in the past three years, and plans are in the works to add more upgrades to the double-backer, splicers, and roll stands. “We are making gradual, judicious investments to bring the corrugator up to a more modern and capable system,” he says. “We are running substantially faster and better than we used to,” Ben adds.

Additional improvements for the corrugator could be in the future, as well, he says. “I entertain myself by looking for new and interesting opportunities to do unusual things. So, if our niche is the strange and the difficult, what about F flute?” This enthusiasm recently led Urquhart to experiment with unique

grades of paper—running acid-free linerboard and vat-dyed liners. “I daydream about doing more unconventional things with our corrugator,” Ben adds.

NEWW is also a shareholder in New England Sheets in Devens, Massachusetts, a joint venture founded in 2010 with original partners Rand-Whitney, Horn Packaging, Interstate Container, and Norampac. The project is managed by Schwarz Partners. New England Sheets has a 110" Marquip corrugator running B, C, and E flutes. “We became involved with Schwarz Partners and got the ball rolling with Ed Davis at Rand-Whitney, the guys from Norampac, and Peter Hamilton at Horn Packaging,” Ben says. He says the decision to invest in a sheet feeder raised eyebrows among some of his business advisors. “A couple of the people who may read this article have been consultants to us in the past. Some of them felt very strongly that we were dooming ourselves to the trash heap by trying to be some sort of bizarre hybrid,” Ben recalls. “I remember one of them saying to me, ‘Nobody does this. You can either be a sheet plant, or you can be a corrugator plant. There’s nothing in the middle; don’t do it!’”

Now that the company is 13 years into this successful venture, how does NEWW leverage the firepower of New England Sheets along with its own corrugator capability? “We run our corrugator to maximize our internal efficiencies, but it’s really about utilizing both the sheet feeder and our internal corrugator.” Ben explains. “I could get all my board off our own corrugator, but how many days a week am I going to run frost-white double-wall? Or how many days a week am I going to run Kemi? The sheet feeder often comes through in these situations and of course when we need trailer loads of C flute every day.”

He praises the management team at New England Sheets, which is headed by Phil Barrett, general manager. “They do

a good job for us,” Ben says. “There are many hardworking, talented people at the sheet feeder.”

NEWW Packaging & Display’s and New England Sheets’ corrugator output is supported by an impressive array of converting and fi nishing equipment. In addition to the die-cutting capability mentioned earlier—the Kolbus five-color rotary, the Bobst VISIONCUT flatbed, and the Baysek—the company has two Ward die cutters, three flexo folder gluers by Bobst, Langston, and Emba, and two litho laminators by Automatan. In addition, NEWW recently invested in a Durst 2500 digital printer and an Esko C64 digital cutting table.

Ben compares his early experience working with the plant’s converting machines with its equipment mix today. “My fi rst summer here was in 1992,” he

says. “I spent the entire summer feeding two-man feeds on a two-color Koppers letter press, where we had to staple the slugs to the impression roll.”

Guided by David’s philosophy of “gradual and judicious” investment, the company is well positioned to guarantee a high level of reliability and quality to its customer base. And as a testament to the intestinal fortitude of the NEWW Packaging & Display leadership team, the company made five significant equipment investments during the COVID-19 pandemic. At the same time, NEWW Packaging & Display also achieved its ISO 9001 certification.

“We’ve made good decisions over the past years,” David says. “We are now at the point where we have a comfortable level of redundancy among our machines. We have three good and capable rotary die

cutters, three flexo folder gluers, three flatbeds, two laminators—from the Kolbus as the best printer to our Baysek, which is able to stack small, intricate blanks. And with all these, when we have issues, we have the ability to back it up with our existing machines. Each of these investments was done in a thrifty, cost-effective way to expand our capabilities without taking on significant risk or debt.”

Ben was especially complimentary of key suppliers, singling out Kolbus and their work in hustling the delivery of the die cutter, and Baysek for their ease of communication and functionality of their machine. Baysek machines “are fairly easy to maintain, and the company is doing interesting things with what they’re offering. They were pleasant to deal with from a communication perspective. It was simple: ‘How much

Robert French (right), operator of the Bobst VISIONCUT die cutter, with Ben Urquhart.

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does it cost? When’s it going to be here? All right. We’re done. Sweet.’”

Like many independent companies in the corrugated industry, NEWW enjoys the loyalty and dependability of longtime employees yet struggles to fi nd good, younger workers to replace those who are retiring. Says David, “Twenty to 30 years ago, everybody in the plant had been with us 20, 30, 40 years. Our maintenance supervisor just retired after 50 years. Amazing! Now it’s very different. I’d like someone to explain to me what’s going on with the younger generation. They don’t seem to need jobs or income.”

Still, despite the attitudinal challenge of the younger worker, NEWW has succeeded in nurturing a next generation of capable and versatile operators. “We have impressive, hardworking people next door, but we are in the midst of a generational shift,” Ben says. “There are a lot of good

young people in the plant who we’re excited to have, and we want to keep them.”

David was equally complimentary of the commitment of the company’s workforce, saying, “NEWW has a nice coterie of young, focused people who show up every day and manage the plant.”

A union shop, NEWW has negotiated rules it must follow in staffi ng its machine centers. Yet both Urquharts see employee onboarding and training as an occasion for personal interaction. “Operating the machines, learning how to print, learning how to die-cut, how to glue—it’s always been a personal, apprenticeship-like program where the savvy veterans will take someone under their wing who meets the criteria of what skills are needed to do the job,” says Ben. He cited the case of one such worker, saying, “I’m thinking of one young man who joined us during the

pandemic. He’s proven to be intelligent and capable. In a very short period of time, he has learned how to run several diff erent machines. I’m going to try to clone him.”

In recent years, Ben has taken up the rebranding of the company to NEWW Packaging & Display from its former New England Wooden Ware. “The intent was to have our stated name better represent what we do,” he explains. “I needed the word ‘packaging.’ I wanted the corrugated profi le to visually be there but also represent a rotating gear.”

Turning to a graphic artist and his own internal management team, he went to work. “I hired a local graphic artist who has experience in such projects and then solicited my co-workers for input,” Ben says. “I pushed for the revised name, and then we settled upon the logo, font, and color scheme with an internal

collaborative process involving sales, graphics, and our customer service reps.”

And in a tribute to his grandfather Alec Urquhart, who was a U.S. Navy veteran, Ben chose the colors of navy blue and gold for the company’s new look. “I quite like the new logo,” he says.

Ben maintains a New England-like skepticism about business conditions in the remaining months of 2023. “I anticipate serious challenges in the coming year with eroding paper prices, continuing labor shortage, increasing machine capacity in a competitive landscape, and falling consumer demand,” he says.

Indeed, his sentiments reflect those of AICC members at large, nearly half of whom said in a recent AICC business conditions survey that they expected their business to be down between 5% and 10% in 2023. He says NEWW’s business had declined early in the year, noting, “Our sales dollars and sales volume are down 5%. Our best projections for the year are zero growth, but in a perverse sense, some of that is OK because we were working so hard for so long during the pandemic, it was unsustainable.”

Yet, Ben’s caution is colored with optimism based in the company’s growing capabilities and dedication to customer service. He sees additional investments in the company, but in doing so acknowledges the constraints placed by NEWW’s existing building. “We’re thinking about the machines of our future; we’re thinking about real estate options; we’re thinking about buildings and land,” he says.

David agrees. “It goes without saying that NEWW needs to focus on future investments. NEWW is a bit distinctive in terms of our current presentation to the market. Ben and I, in concert with our managers, need to rough out the best industry path we see as being before us.”

In the end, however, Ben, David, and the 150 employees at NEWW Packaging & Display understand that it’s more than

equipment, real estate, buildings, and land. “It’s not about the machines; it’s about the people running the machines and the attitude they bring to their work each day,” Ben says. “We need people who are to be decision-makers and assume positions of responsibility, and we have people who come to work every day trying to do the best they can for their own sake and for the sake of the people around them.

“The foundation of our success is, you know, a willingness to go the extra step and get the job done right—generation after generation.”

Steve Young is AICC’s ambassador-at-large. He can be reached at 202-297-0583 or syoung@AICCbox.org.

Ben Urquhart (front) and Kolbus rotary die cutter operator Todd Alliy discuss a setup.

CONNECTING THE DOTS

Taking stock of the state of digital printing

By Robert Bittner

Digital printing is no longer the new kid on the block—unproved but brimming with confi dence. Customer requests for shorter runs, quicker turnaround speeds, and expanded versioning options are combining with advances in digital inks and single-pass functionality to

make digital printing a key player on the shop fl oor.

“From a qualitative standpoint, there are multiple digital options available today that can address a number of customer needs, depending on the market segment you’re looking at,” says Dusobox Corp. President John Kelley.

Growing Market

“I’ve heard some industry advisors and consultants say the market should have grown faster than it has currently,” acknowledges Matt Condon, business development manager for corrugated at Domino, a digital equipment supplier. He doesn’t necessarily agree. “I think a lot of that had to do with the direct impact of COVID-19 and the timing of the new corrugated machines getting into the market. Overall, I’d say the digital printing market within corrugated is growing incrementally. Now that we’re returning to ‘normal,’ more converters are looking at digital again and investigating the business and economics of digital.”

There is much to investigate in 2023. Digital printing is not what it was even five years ago. For example, Condon says, “in 2017 and 2018, inks were primarily UV-based. Today, we’re seeing a shift toward aqueous inks, which are more environmentally friendly and can be near-food safe. We aren’t seeing a strong push toward aqueous inks here in North America yet, but the impact is huge in Europe right now as governmental legislation on sustainability and green initiatives are making converters rethink usage of UV inks. Typically, what happens in Europe will make its way over to the U.S. within a certain amount of time.” In addition, he says, “we’re also seeing incremental speed improvements.”

Like modern computers, digital printers are packing the latest technology into increasingly smaller spaces. “Our machines probably have the most compact footprint for single pass on the market today,” Condon says, “with the press dimensions of 38' x 21' and about 75' x 21' with stacking section. Th at means our machines can fit into more places in a factory compared to other single-pass options.”

Liz Logue, vice president of strategy for inkjet at digital printer supplier EFI, points to single-pass printing as one

of the most significant recent developments. “In the past, digital printing, or inkjet printing, was very slow because it relied on a shuttle-based system with a small number of printing heads that moved side to side. Th at technology can only achieve 100 to 150 boards an hour. With our single-pass inkjet, we use fi xed heads in a row and continuously feed sheets. Now, we can get up to 10,000 boards an hour, 75 meters a minute. Th at’s a huge jump in productivity. At the same time, total cost of ownership has been driven down due to ink-usage reduction and productivity efficiency. Because of developments like these, our customers are seeing that digital printing is not just ideal for short runs; it is very eff ective for long runs, as well. In fact, many of our customers produce jobs in the 36,000 to 50,000—or 100,000—box range.”

In 2022, EFI conducted a customer survey through an independent consultant to better understand digital adoption. Among the 15 customers surveyed, says Logue, “we discovered that most of them now are replacing all their litho with digital. They’re seeing the same quality—or very close to the same quality—with digital, while improving their costs and turnaround time.”

Despite the technological advances and improved functionality, misconceptions regarding digital printing continue to influence perception and adoption.

Lingering Misconceptions

“Even though many companies have added digital printers—it was particularly accelerated during the [COVID-19] pandemic—I think digital printing is still not completely understood within the industry,” says Kelley. For example, he points out that it will take time to understand how to wring the most from the equipment in terms of the consumer’s own needs. “It’s not as simple as sending a PDF to a printer. At Dusobox, we have very complex workflows and complex profi ling and color management that have to be done, structured for the materials you’re printing on, the environment you’re printing in, and the specific environments where the packaging will ultimately end up.”

It also may take time to fully appreciate the economics involved. “When comparing digital to traditional printing, a lot of converters compare a pound of flexo ink to a liter of digital ink and are taken aback at the price difference between both of those two products,” Condon says. “From this comparison, it is then assumed that flexo is

“In the next few years, we will see further improvements in quality, speed, and capabilities of digital presses. Overall equipment effectiveness and tighter integration into fi nishing capabilities will continue to improve, creating a more capable and costeffective press.”

—Liz Logue, vice president of strategy, inkjet, EFI

always cheaper, and digital is always more expensive. That’s not inherently true.

“When you look at the business of doing digital, most likely you will do better on cost with the shorter runs than you would on flexo because of the economics of operating digital,” he adds. “Converters need to learn to look past the individual products and components that make up digital and to consider the total cost of ownership: the cost of your uptime, your downtime, the labor, the consumables, and so on. Take everything into account, then use the best tool for the job at hand.”

Condon points out that the “best tool” may not be the same printer other colleagues are using. Not every machine is right for every operation. “You need to look at what machine fits your business best. The market offers two options for corrugated: multi-pass solutions and

single-pass solutions. Each one provides a benefit based upon cost and productivity. So, if a converter says they want a digital printer for short runs, our fi rst question is, ‘What is a short run to you?’ Th at leads us to whether multi-pass fits better into your business than single-pass because it’s really a choice of volume versus economics. If a converter is looking to grow quickly, starting with multi-pass may not fit best if the future [goal] is to significantly increase your volumes over time. Choosing the right machine means understanding what the converter and their customers require and where the converter is projecting to be in the next few years.”

A growing number of converters are discovering that the answer need not be either/or regarding digital versus analog solutions.

Blended Solution

“One of the big questions that always comes up is whether digital is replacing analog,” Kelley says. “In my opinion, that’s not going to happen. Digital complements analog and has a defi nite place, depending on the application. I think the biggest inhibitor to digital is the speed at which we can produce, relative to the analog options. But from an overall cost standpoint, there also is a point of diminishing returns with digital. So, we need to fi nd a balance. You’re not going to be entirely digital, and you’re not going to be entirely flexo. To me, the solution is to have a blend of both.”

Condon suggests that a reluctance to switch over entirely to digital may be holding back some market segments— when there is no practical reason for such a switch. “I think people have a

misconception that digital is going to come in, take over everything, and you’re never going to see ‘heavy iron’ again,” he says. “I don’t believe that. We’re never going to get rid of the heavy iron; there’s always going to be a need for it. Instead, I believe digital is complementary to traditional methods.

“Let’s say I’m doing short runs of 2,000, 3,000, 5,000 pieces that may better fit a digital press, and my longer runs will go on the conventional machines,” he adds. “Th at’s enabling your factory to be more efficient overall. It’s a matter of using the proper tool for the job; it’s not trying to use a butter knife as a screwdriver. Th at’s how traditional and digital machines can work in harmony.”

Th is is the approach Kelley has adopted at Dusobox. “We prefer to be agnostic as far as what the print execution is, depending on the customer’s requirements,” he says. “We can provide a digital solution, an off set-printed solution, or a flexo-printed solution.” The company can even incorporate all three solutions on the same project. “We can do this based on our G7 Master Certification for Color Space. With proper color management, we blend all three print disciplines into a single display. It all goes back to what is the most cost-effective solution for what the customer needs.”

Shape of Print to Come

When it comes to digital printing, it’s easy to get caught up in the latest technologies, especially when, as Kelley notes, “digital press manufacturers are constantly evolving and improving their technology.”

While he recognizes how that evolution benefits the industry, Kelley encourages converters to focus fi rst on the machines that meet their needs rather than assume they must install the latest and greatest. “For me, the assets that I have at my disposal deliver the performance we need. Currently, we’re running an HP multi-pass

digital printer, and we are the primary customer on an affi liated, off-site HP C-500, as well. The technology is 6 years old and 2 years old, respectively, and not much has changed since their installation. There’s nothing compelling us to have the newest thing.”

Th at isn’t to say there aren’t some advancements that would get his attention, however. “The biggest improvement I’d like to see is regarding the operational speed of digital printers. Currently, that’s

limited by the processing technology. But I also think—and I’ve felt strongly about this for many years—that the ideal solution for the corrugated industry is a hybrid digital-flexo machine and not a stand-alone digital machine.

“Look at corrugated packaging for retail,” he adds. “We often are attracting customers using large spots of solidcolor coverage. Printing large areas of solid color is not cost-eff ective when done 100% with digital. A flexo solution

“Choosing the right machine means understanding what the converter and their customers require and where the converter is projecting to be in the next few years.”

—Matt Condon, business development manager, corrugated, Domino

is far more efficient. Then, if there are other elements of the graphic that require more detail, halftones, fi ne fonts, etc., they can easily be done digitally. Th at way, you’re not putting down as much digital ink, which, depending on who you’re buying from, could be more expensive than an analog flexo ink by a factor of three to 10.”

“We are continuing to see quality improvements with digital printers,” says Logue. “Of course, quality is always in the eye of the beholder, but it’s something we are constantly developing—in coordination with cost efficiency and improved productivity and reliability. So, we balance high-quality print with cost and productivity. Some of our competitors are moving to higher resolutions that depend on very fi ne droplets. But as you do that with our single-pass technology, costs rise. We’re working to maintain

reasonable running costs and better overall equipment effectiveness for the sake of our customers.

“In the next few years, we will see further improvements in quality, speed, and capabilities of digital presses,” she continues. “Overall equipment effectiveness and tighter integration into fi nishing capabilities will continue to improve, creating a more capable and cost-effective press. We also see a wider variety of substrates being utilized, with thinner flutes and expansion into paperboard.”

Last Frontier

While no longer “new,” digital is only just beginning to reveal its industry potential.

“I think we’re experiencing the Wild West of printing right now,” Kelley says. “Digital represents the last frontier when it comes to adoption within our industry. So, it remains to be seen how it evolves in

the coming months and years. It’s fully entrenched in our industry, and it will continue to grow.”

Condon agrees, adding, “Converters are going to look at what their customers are demanding, what their colleagues and competitors are doing, and [they] will need to compete. With digital and traditional presses on the floor, they’ll be equipped to manage more of their customers’ jobs, running low volume and high volume at the same time. Because you can react better to customer needs, you become more important to them.”

Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.

BEST IN CLASS

AICC continues to offer all of the education your teams need to grow and succeed

By M. Diane McCormick

Now that the challenges of the past three years appear to be dimming to their pre-COVID roar, boxmakers have more breathing room to think strategically about how they educate and train their employees.

AICC and its Education Content Committee are keeping pace, building an intentional, vibrant curriculum in AICC’s free Packaging University courses while continually updating an array of educational offerings for relevance to today’s audiences.

Additional online resources, such as webinars, white papers, and industry statistics, are assembled on the new AICC NOW hub for easy search and access. AICC’s intent is to engage members through high-quality learning experiences that suit every employee in every position. “We all enjoy the relationships, the networking, and learning from each other through AICC, but that educational piece is more important than ever before,” says Gary Brewer, president of Package Crafters and chairman of the Education Content Committee.

No matter what a boxmaker needs educationally, AICC delivers a comprehensive package designed to answer pressing questions and train teams to serve as solutions providers across all fronts of the business.

Packaging University Evolves

Around 2013, then-AICC Education Content Committee Chairman Tony Schleich led the blending of AICC’s existing training and webinars into virtual education. It was the beginning of Packaging University (then called the Packaging School), starting with courses addressing fundamental training needs in corrugated basics and safety basics.

“We noticed when we went to a company that what most people were learning was ‘whispering down the line,’” says Taryn Pyle, AICC’s director of education and talent development. “We wanted to create courses that everybody could use and learn the same thing.”

Since then, the AICC Board has charged staff with creating up to 10 new courses a year, says Jana Harris, AICC chairwoman, past Education Content Committee chair, and Harris Packaging and American Carton Co. president. Today, Packaging University offers more than 100 courses grouped by channels— corrugated history and basics, customer service, fi nance, human resources, leadership, maintenance, packaging production, process improvement, resources, safety, and sales, plus timely specialty courses on the latest technology from the education investors whose sponsorship helps keep Packaging University free for AICC members.

“We do some brainstorming within our companies on the board but also ask members, ‘What do you want courses on?’” says Harris. “Over the past 10 years or so, Packaging University has blossomed. The staff and [AICC] Board really listen to our membership and the unique courses they need for employees.”

In the early years, courses were developed with subject matter experts hired for their expertise. As topics expanded,

Scott Ellis, Ed.D., of Working Well, joined to fi nd the experts and give educational structure to their content. With his background in leadership development and process improvements in the printing and packaging industries, Ellis knows the challenges boxmakers encounter and the people who can help resolve them.

Classes are stocked with video and 10- or 15-minute modules, plus an “Are you paying attention?” quiz. At least one application exercise in most courses instructs learners to stop, go into the plant, and fi nd an example of the lesson—perhaps decoding a roll label or fi nding examples of corrugated

board combinations. “We try to make it immediately applicable so people aren’t speeding through the course to just go out and get a certificate,” says Ellis.

Unique to AICC, all courses are open to all employees at member companies. Shared participation in courses helps build shared understanding and promote problem-solving, says Ellis. For instance, a supervisor and employee on the precipice of an escalating confl ict can watch a Communications for Coaches course and discuss their takeaways, which lead to better understanding.

The shared experience can also reinforce uniform procedures among line teams,

perhaps instilling more consistent ink management procedures. It’s about better buy-in through understanding. “Any time you have a problem, you’re looking for an answer to implement across the board for your fellow employees,” says Brewer. “You see five different people managing ink five different ways, and you’re after a common goal. If you have a unified training approach, that certainly helps.”

Many member companies are building their education strategies around Packaging University, utilizing the training to build employee skills. Some are making participation in relevant courses prerequisites for their jobs.

To support those efforts, AICC is preparing syllabuses for each department. The resulting training tracks can help employers teach their new hires—including the many hired from outside the industry due to the tight job market—the basics in logical order. “Manufacturing companies want to get these people up and running very quickly, but they also want to make sure they know the safety basics and then learn the things they need to know in their departments,” says Pyle.

“Particularly in Mexico, they’re extremely hungry for knowledge. The [number] of courses we’ve translated into Spanish is an absolute home run. It’s a very powerful bang for the buck.”

—Gary Brewer, president, Package Crafters

Now, at the request of Mexico-based members, more than 20 courses are available in custom-translated Spanish, with more to come. “Particularly in Mexico, they’re extremely hungry for knowledge,” says Brewer. “The [number] of courses we’ve translated into Spanish is an absolute home run. It’s a very powerful bang for the buck.”

environment, popular webinars have helped AICC members stay anchored by learning to adapt to online sales, create machine parts manuals, recognize multigenerational learning styles, and maintain plant safety in legalized-marijuana states, says Pyle.

With AICC’s All Access Pass (www.AICCbox.org/Pass), annual subscribers and all their employees have unlimited viewership of all current and past webinars. “Our staff knows that if any webinar comes up that they want to watch, they have access to that at any time,” says Harris. “When things slow down, we highly encourage our employees to take the time and take some courses.”

• Podcasts. AICC’s popular monthly Breaking Down Boxes podcast offers conversations and insights from successful entrepreneurs in packaging—from Chad Wagner of Peachtree Packaging on his “young, dumb, and fearless” dive into the industry, to Harris’ “twisty road to the top.” The new AICC Update podcast provides a weekly five-minute peek into upcoming events and AICC benefits.

AICC NOW

In September 2022, AICC launched AICC NOW (NOW.AICCbox.org ), a one-stop shop for online educational content. Th rough a single search on one topic, visitors can fi nd all of AICC’s related webinars, videos, podcasts, interviews, white papers, and expert advice.

Webinars

While Packaging University covers the evergreen topics of boxmaking, AICC webinars, found on AICC NOW, have the agility to address timely topics and concerns. “If we hear of something going on, we do our best to get a webinar up and running quickly,” says Pyle.

Brewer remembers when digital printing was surging, and the AICC Board and Education Committee pushed hard to develop educational offerings. The webinars provide perspective amid changing circumstances, says Brewer. One of the most popular webinars currently is about recession-proofing your business.

“What are the people yearning for?” says Brewer. “What’s the latest trend? We always try to capture that in the webinar—whatever we can do to keep people engaged.”

The pay-to-view webinars now number about 150. They are typically one-hour explorations of hot topics in boxmaking, led by experts. In a churning business

A Learning Medley

Sometimes, a manufacturer has a question a webinar or Packaging University course doesn’t answer, or a team needs a quick reminder of the basics.

AICC NOW offers resources for those moments and other unique situations:

• Ask the Experts. Th ree consultants contracted by AICC are available to answer questions, emailed or by phone, about folding carton, corrugated, or safety. Answers go into an archive for retrieval later by boxmakers facing similar challenges.

• One Point Lessons. Members asked for lessons in bite-size chunks, so AICC created two- to three-minute videos addressing urgent priorities, such as the safety hazards of wearing hoodies, or the importance of accuracy in production codes. While some employers like to show them on a loop in break rooms, Ellis suggests using them situationally, to avoid turning them into easily ignored background noise.

• Statistics and white papers. Research into marketing and packaging reveals current and coming trends, customer expectations, and the advantages of different packaging materials. A one-minute read can open new avenues in outreach and sales through lessons in such topics as the role of secondary packaging in in-store marketing or label materials on craft beer purchases.

The spectrum of educational materials, from formal to bite-size, allows AICC members to customize educational approaches that resonate with each employee. Adapting to learning styles helps solve hiring and retention challenges, especially in the production environment where younger workers are taking the place of older employees, Brewer says.

“We promote based on performance, and your performance includes your desire to learn, your desire to take in this educational content. Th at’s important to me because it says you’re here for more than just compensation. You want to learn to be the best you can be.”

Leadership Groups

AICC membership and its conferences offer invaluable opportunities for networking, but for true, guided peer-to-peer interaction, AICC offers advisory groups for CEOs, emerging leaders, leaders, production leaders, department managers, sales managers, and salespeople seeking professional development. “That’s like your own group of mentors,” says Pyle. “They’re all peers and talking about the same challenges you have and getting solutions.”

Group rosters are carefully crafted based on region, potential conflicts, and company size. Facilitators keep the groups on task, leading guided discussions and plant tours, for peeks into daily operations or emerging technologies. “For me, personally, it has been an off-the-chart offering,” says Brewer. “I can’t tell you how beneficial it’s been. A lot of us are family businesses. A lot of us have the same issues to discuss, and we are able to celebrate each other’s successes.”

At Harris Packaging, Jana Harris’ daughter, nephew, and a structural design lead who has risen through the ranks are eager to learn through the Emerging Leaders group, led by Pyle. “They’ve formed quite a strong group, and it’s encouraging to see how the next generation is falling in love with corrugated and really wants to continue learning as much as they can,” Harris says.

Pyle is also developing and seeking members for a women’s leadership group, suitable for production managers or women moving up in the family business. “Women in our industry are treated very well, but sometimes, we see things differently,” she says. “Th is is for conversations about managing production and managing family. It’s all the things you need to do to be in that C-suite.”

Future of Learning

From AICC NOW, a quick hop over to Packaging University fills out the picture. “It’s really easy to maneuver,” says Harris.

With its ease of use, agrees Brewer, the site helps visitors gather “all that collateral that helps people get a better understanding of the issues.”

Today’s young workers aren’t afraid to ask questions and are eager for educational resources, says Ellis. Packaging University courses, AICC webinars, and other materials provide answers and, for employees seeking career advancement or professional growth, a step up.

As Brewer notes, hiring is an investment, and educating employees in their fields leverages that investment through skill building and strengthened connections to the company.

At Harris Packaging, an employee named Shaban started in graphic design, moved into structural design, and is now helping prepare the next generation of boxmakers by teaching at the University of Texas at Arlington (UTA) Visual Communication Design program, which Harris supports. “These courses have really helped him broaden his mind on different

areas of corrugated—not just design—and he’s able to take that to UTA,” she says.

To maintain a sound financial footing for AICC’s educational efforts, AICC has launched the Foundation for Packaging Education. Once it reaches its goal of a $3 million endowment (see page 66), the foundation will contribute to the costs associated with developing training and education for the industry. “It’s workforce development,” says Brewer. “That’s what we’re after here. We want to be an attractive industry. We want to have people say, ‘What is the packaging industry all about?’” In other associations, education is usually an add-on to membership dues, while Packaging University offers “so much material for all the different areas in our company,” Harris says. “The fact that it’s free with membership—you can’t ask for anything better than that. I fi nd that to be a very good value.”

Learning is the key to growth for independent boxmakers trying to keep pace with a changing business climate, retain employees, and off er solutions, says Brewer. “If you recognize the off erings and choose to invest and engage, you are going to get results,” he says. “You will see educational results and improved company performance. The off erings are so broad. Education really is the foundation.”

M. Diane McCormick is a freelance journalist based in Pennsylvania and a frequent BoxScore contributor.

“Our staff knows that if any webinar comes up that they want to watch, they have access to that at any time. When things slow down, we highly encourage our employees to take the time and take some courses.”

—Jana Harris, president, Harris Packaging Corp. and American Carton Co., AICC chairwoman

The secret is out.

An investment in the KOLBUS RD 1155 Graphics Rotary Die Cutter will strengthen packaging producers' ability to grow and adapt fast to changing market needs. The modular machine concept includes up to eight print units plus a die-cutting module for corrugated board in one highly automated inline system.

• Top print available

• Camera Register system for precision printing and reduced waste.

• Sturdy construction (cast components from KOLBUS) for performance and precision in continuous operation.

• Stretch and shrink function allows for fine adjustments without opening the machine.

• Ergonomically optimized machine operation, practical, clear and easy to understand.

• Made in Germany.

PEEKING INTO POLICY

A top 10 rundown of today’s human resources issues in manufacturing

By Christine Walters

Employment issues are getting national, state, and local attention. The following is not the top 10 list but a selection of 10 current issues impacting manufacturers’ employment policies, practices, and programs.

1. Employment Agreements and Noncompete

On January 5, the Federal Trade Commission (FTC) announced its proposed rule that would effectively ban new and existing noncompete agreements. Specifically, the FTC’s new rule would make it illegal for an employer to 1) enter into or attempt to enter into a noncompete with a worker; 2) maintain a noncompete with a worker; or 3) represent to a worker, under certain circumstances, that the worker is subject to a noncompete. The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid. It would also require employers to rescind existing noncompetes and actively inform workers they are no longer in effect.

2. Employment Agreements, Nondisparagement, and Nondisclosure

On February 21, the National Labor Relations Board (NLRB) ruled that an employer violated the National Labor Relations Act (NLRA) when it offered a severance agreement that broadly prohibited covered employees “from making statements that could disparage or harm the image of the [employer] and further prohibited them from disclosing the terms of the agreement.” The NLRA covers most employers, including those with no unionized employees. Section 7 of the NLRA gives all nonsupervisory employees the right to act in concert regarding wages, hours, and conditions of employment. Section 8 prohibits employers from “interfering, restraining, or coercing” employees in the exercise of their Section 7 rights. The NLRB is

not alone in having this concern. The U.S. Equal Employment Opportunity Commission (EEOC) expressed similar concerns as far back as 1997. In that year, the EEOC issued related guidance, writing that “such agreements have a chilling effect on the willingness and ability of individuals to come forward with information that may be of critical import to the commission as it seeks to advance the public interest in the elimination of unlawful employment discrimination.”

Consider

enactment of the act. These trends, while well-intentioned, may flatten the market and make those of you who currently pay rates higher than the market less competitive when the market is flattened.

5. Paid Sick, Family, and Medical Leave

3.

Discrimination,

Harassment, and Bullying

You may have heard about Creating Respectful and Open Workplaces for Natural Hair (CROWN) acts. The CROWN Coalition reports that as of this writing, 20 states and 44 local jurisdictions have enacted this type of law. Other states are broadening their defi nition of unlawful discrimination and harassment to include conduct that is less severe than that required under federal law. The Workplace Bullying Institute reports that 31 states have introduced anti-workplace bullying or healthy workplace bills. Only California has enacted a related law. It does not hold employers legally liable for workplace bullying but does have mandatory training requirements.

4. Minimum Wage

The U.S. Department of Labor reports that as of January 1, at least 30 states have a minimum wage higher than the federal rate. At least 23 have announced they will increase their minimum wage rate this year. The Economic Policy Institute reports that 47 localities have adopted minimum wages above their state minimum wage. And at the federal level, the Living Wage Now Act, H.R. 505, is pending in Congress and proposes to increase the federal minimum wage from $7.25 to $15.00 per hour and take effect on the first day of the third month that begins after the date of

It is getting harder to fi nd a state or local jurisdiction that has not enacted a paid leave law. Common examples are sick leave, family leave, and medical leave. Most of the rest have enacted leave laws that require unpaid time off. Th is list is even longer for cities and counties, which often confl ict with the state law. At least two states have enacted paid vacation leave! The trend is likely to continue. President Joe Biden expressed support for paid family and medical leave in his most recent State of the Union address. Congress has at least three bills pending that would expand the federal Family and Medical Leave Act. Six members of Congress also recently announced the formation of a new House Bipartisan Paid Family and Medical Leave Group. These trends add to the myriad other leave laws covering military service, jury duty, parental leave, bereavement, school activities, and more, including vacation. Whether you employ staff working at just one location or are a multistate employer, stay abreast of the frenetic pace of these changing laws.

6. Recruitment and Pay Transparency

The salary history ban trend started several years ago. State and local laws prohibited certain employers from asking an applicant to disclose their salary or wage history. The laws varied, and many permitted the inquiry but

only after a certain point, such as the fi rst interview or an off er of employment. More recently, that trend expanded into pay transparency laws, requiring employers to disclose their pay range for advertised jobs, either upon an applicant’s request or in the job ad itself. These laws also vary, and state administrative agencies are often left to answer myriad questions not covered in the law, such as which employers are covered, only those in the state or those that might hire an employee to work from home in that state? Similar questions arise regarding covered applicants. And what if you post a job on social media that anyone in the nation might see— with which law must you comply?

7. Religious Accommodation

On January 13, the U.S. Supreme Court agreed to hear a case asking two key questions about what is or is not a reasonable accommodation under Title VII of the Civil Rights Act of 1964 for religious observance. (1) Should the de minimis rule be changed to a stricter standard? (2) Should the assessment of undue hardship on the conduct of the employer’s business include merely showing that the requested accommodation burdens the employee’s co-workers rather than the business itself? A tad more practically put, Title VII’s undue hardship rule asks if the requested accommodation imposes anything more than a de minimis burden on the employer. If it does, then it imposes an undue hardship, and the employer need not provide it. As to the second question—a burden on whom?—what if the hardship is imposed on one or more

your jobs. What tasks must a nonexempt employee perform, if any, before work can begin or end?

co-workers rather than directly on the employer? For example, an employee requests that one or more co-workers work the employee’s shift or a portion of the shift so the employee can take time off from work for a religious observance. Must the employer direct those co-workers to work the additional time over their objection, or would that be unreasonable? The court should answer these questions by June 30. As of this writing, oral arguments were scheduled for April 18. In the interim, review your current policy and practice on religious accommodation, and stay tuned.

8. Substance Testing

The Center for Advancing Health reports that at least 22 states have legalized adult recreational use of cannabis. It remains illegal in just six states. The others have a mix, such as recognizing its legal use as medically authorized only. Some state laws have express language that addresses employers’ rights to prohibit use on the job and conduct testing. On the flip side, some impose restrictions as to whether the employer

may take adverse employment action, such as firing or corrective action, based on a positive test result. And at least two local jurisdictions have enacted a law prohibiting related inquiries or testing at the preemployment stage.

9. Wage and Hour Woes—Preliminary and Postliminary Activities

On Valentine’s Day, a class action lawsuit was filed against the Hershey Co. It alleged that Hershey had failed to pay a group of hourly employees for all hours worked, as well as overtime. The issue was whether the time employees spent before and after their shift, donning and doffing “sanitary clothing and other protective equipment” was time worked. Time spent on unpaid

activities reportedly averaged 10 to 15 minutes a day.

The U.S. Supreme Court has ruled on this issue multiple times in the past 20 or so years. In general, an employer must pay a nonexempt employee for all time worked—that is, time when an employee is engaged in “principal activities.”

Principal activities are those that are “integral and indispensable” to performance of the job. Many jobs in manufacturing require the incumbent to do something before the actual work can begin, from donning protective gear to prepping equipment or machinery, conducting testing, taking inventory, and more.

Consider your jobs. What tasks must a nonexempt employee perform, if any, before work can begin or end? If

Whether you employ staff working at just one location or are a multistate employer, stay abreast of the frenetic pace of these changing laws.

those tasks are performed and not paid, talk to your company’s employment counsel to determine if they are principal activities under the Fair Labor Standards Act.

10. Wage and Hour Woes— One Manufacturer’s Bonus Program Bites Back

A manufacturer’s nonexempt employees frequently worked over 40 hours per week, averaging between 40 and 60 hours per week. The employer provided those employees with bonuses as “an incentive for hard work.” The allegation is that the employer failed to include the bonuses in the employees’ regular rate of pay for purposes of calculating their overtime compensation, and that they “denied significant amounts of overtime compensation.” Reminder No. 1: Overtime is based on the employee’s regular rate of pay. The regular rate is the employee’s hourly rate plus certain other wage payments such as shift, night, or weekend diff erentials, as well as nondiscretionary bonuses. Reminder No. 2: A nondiscretionary bonus may be a misnomer. It does not refer to your ability to discontinue the bonus program at your discretion. It generally refers to a bonus announced in advance, for the purpose of changing behavior, and upon which an employee relies when performing the requested work. If you off er such incentive compensation and do not include the bonus in your hourly or nonexempt employee’s “regular rate” of pay for overtime calculations, talk to your company’s legal counsel about remedial measures.

Christine V. Walters, J.D., MAS,

SHRM-SCP,

SPHR, is the founder and an independent consultant at FiveL Co. She can be reached at christine@fivel.net

The Associate Advantage

What Does Sustainability Mean to You?

BY TIM CONNELL

Sustainability. It’s a word packed with ambiguous interpretations, but what does it really mean? According to the English dictionary, sustainability is “the ability to continue.” In today’s world, it has become synonymous with the environmental impact of technology and human existence in the world that affects our planet’s future.

Sustainable manufacturing utilizes economically sound processes that minimize the negative environmental impact while conserving energy and natural resources. So, how does our industry continue making a positive contribution, without negatively impacting the environment in the long run? First, we need to know what sustainability looks like and how it has been implemented throughout corrugated.

On the manufacturing and converting side, sustainability goes hand in hand with energy and water consumption, recycling, and waste and emissions, with processes that improve productivity, quality, and safety. The final product might be eco-friendly and sustainable, but are your operations?

It’s important to create sustainable business practices that reduce waste—and cost—and lower your carbon footprint. Converters, original equipment manufacturers, and suppliers can help reduce the industry’s carbon footprint by investing in greener solutions.

On the packaging side, sustainability often means utilizing materials made from recyclable, compostable, or biodegradable substrates. Consumer surveys show more than 60% of customers would spend more on brands promoting eco-friendly and sustainable business practices. As a converter, you are using one of the most sustainable substrates available! However, converters can take their sustainability efforts further

by offering end users more recycled paper or alternative paper grades, when possible. Converters can also redesign items to be processed more efficiently and safely with less waste and energy consumption. Recent studies show corrugated boxes contain an average of 89% recycled materials that can be recycled up to 25 times, with little or no loss of quality. Now that is sustainable.

In recent years, I’ve seen industry leaders get creative in the following ways to reduce their carbon footprint:

• Use renewable biomass energy or solar-assisted power that reduces fossil fuel consumption.

• Minimize water and energy consumption and waste with process creativity, alternative processes, and investments in lean, green technologies.

• Coordinate scheduling for processes that require excessive amounts of gas or electricity for low demand times when costs are lower.

• Create closed loop scrap programs between businesses and local governments. The recovery rate for old corrugated cardboard/containers has reached 90% due to these initiatives.

To ensure the sustainable future of our industry and world, we must invest in solutions, processes, and best practices focused on reducing, reusing, and recycling.

Tim Connell is director of sales at A.G. Stacker and is vice chairman of AICC’s Associate board.

JEFF DIETZ KOLBUS AMERICA INC. DIRECTOR JEFFREY.DIETZ@KOLBUS.COM

JOHN BURGESS PAMARCO SECRETARY JOHN.BURGESS@PAMARCO.COM

TIM CONNELL A.G. STACKER INC. VICE CHAIRMAN TCONNELL@AGSTACKER.COM

JOE MORELLI HUSTON PATTERSON PRINTERS & LEWISBURG PRINTING CO. IMMEDIATE PAST CHAIRMAN JMORELLI@HUSTONPATTERSON.COM

GREG JONES SUN AUTOMATION GROUP CHAIRMAN GREG.JONES@SUNAUTOMATION.COM

Learn more about AICC’s Carbon Neutrality Program at www.AICCbox.org/Carbon.

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What the Tech?

The Benefi ts of Inkjet Printing

BY CHRIS BURDICK

Data proves that by investing in single-pass digital printing technology for corrugated packaging, a plant can generate additional benefits by increasing manufacturing capacity.

EFI has published a case study showing how incorporating a digital industrial printer into a corrugated packaging plant expands total manufacturing capacity, thereby accelerating the return on digital investment.

The case study is not about the new possibilities of the disruptive technology or about future business, but an analysis in a real plant, with actual order data. Th is in-depth analysis was conducted in collaboration with the management of a North American converting plant and demonstrates that investing in digital technology adds capabilities and flexibility by:

• Allocating jobs to the equipment that produces high-quality graphics more efficiently based on the characteristics of each order,

• Leveraging existing analog capacity without the need to invest in new flexo presses,

• Maximizing overall equipment effectiveness and overall plant profitability, and

• Proving to be an attractive capital investment with rapid return on investment.

For this study, data was collected from a converting plant equipped with eight flexo presses from one to five colors and a total production of 1.6 million msf per year. The study focused on two flexo presses with a total production of 560,000 msf per year. Production data was collected over a period of more than three months for further analysis.

The analysis began by calculating the break-even point between digital and analog printing. Th is made it possible to determine the average order size for which digital printing technology was most cost-effective. In this case, the average set the break-even point at 65,000 square feet. In other words, orders up to that amount were more profitable in digital printing than in high-quality flexo.

Based on 90 days of order-level data, orders above and below the break-even point were grouped to measure the direct savings from using digital where it is most efficient. These are savings or efficiencies generated by producing orders below 65,000 square feet with a popular digital printer instead of with the analog equipment used until now. By comparing the printing costs of one technology with the other, we identified savings of $1.2 million per year.

Next, the extra capacity generated by transferring orders under 65,000 square feet from the current analog equipment to the digital single-pass printer was calculated.

To do so, the average production times from analog manufacturing and the times from digital manufacturing were considered; the difference between them gives the available overtime. These overtime hours can now be dedicated to orders over 65,000 square feet, which, for the case analyzed, meant an additional capacity of 249,725 msf. Th at is, with digital printing, analog capacity increased by 42%.

The last part of the analysis was the profitability measurement that showed how the payback on the investment in certain digital technology can be realized in less than two years.

It is worth doing this calculation exercise and considering now the investment

in technologies that are a reality in the market and are providing a competitive advantage, efficiency, and extra capacity. And they do so with unprecedented flexibility because digital printing makes it easy to serve orders of any size.

Th is methodology can be applied to any corrugated packaging operation to identify the profi le where the impact of incorporating single-pass digital inkjet printing technology will be greatest. Thus, we can anticipate that digital printing will have a greater impact in plants that produce a significant amount of high-quality work with complex processes (fl atbed die cutters, folder gluers) and diverse types of materials.

For plants that do not currently manufacture value-added packaging, digital printing technology should be considered because it is the most efficient way to add high-quality printing capabilities while presenting opportunities for improvement.

Chris Burdick is sales director of packaging at EFI. He can be reached at 310-741-8768 or chris.burdick@efi.com

Scan the QR code below to learn more about EFI’s study.

Strength in Numbers

Dealing With Customer Contracts in a Period of Declining Prices

BY MITCH KLINGHER

More and more customers are compelling converters to enter into contractual commitments. The contracts can contain clauses about inventory levels, delivery commitments, volume rebates, and various other terms. However, all contain some sort of mechanism to adjust prices when the published price of containerboard moves. The more sophisticated buyers want to have some certainty about what will happen to their packaging prices when the price of the basic raw material—paper—changes. Our larger integrated brothers, which tend to deal with larger companies, have had a large part of their output under contract for many years, and this trend has been accelerating rapidly in the realm of the independent converter for the past 10 years or so. Let’s spend a little time analyzing the fi nancial aspects of the pricing mechanisms of these contracts.

First, we need to understand that paper in general is purchased by the ton and packaging sold by the square foot. So, to understand how to convert paper price changes to packaging, we need to understand the concept of basis weight. Basis weight is simply how many pounds per thousand square feet the paper weighs. For example, containerboard with a basis weight of 42 means that 1,000 square feet of this paper weighs 42 pounds. Pretty simple, right? Where it gets a little more complicated is that corrugated board is a combination of two layers of fl at linerboard paper and one layer of fluted medium paper, and the size of the flute varies with each grade of board and each machine used to combine the board. Th is is called

the take-up factor. So, B flute uses more medium than E flute, and older machines use slightly more paper in the process than more modern machines. Without trying to make this too complicated, in order to craft reasonable pricing mechanisms in a customer contract, we need to have a sense of how heavy the packaging we are selling is. The most common grade of combined board is ECT 32, which is often made using 33-pound liner board and 23-pound medium board. C-fluted board on a modern machine will generally have a take-up factor of 1.45/1, so the calculation for the weight of ECT 32 board made this way would be:

(33 lbs. + 33 lbs. + (23 lbs. x 1.45)) = 99 lbs./msf (thousand square feet)

In order to make the following calculations easier, we will round this off to 100 and make the assumption that ECT 32 board has a basis weight of 100 (lbs./msf). The next part of the puzzle involves converting dollars per ton to dollars per msf, and the formula for this conversion is as follows:

($/ton x lbs./msf)/2000 (lbs./ton) = $/msf

Therefore, if the price of paper drops $50/ton, and you are selling your

Strength in Numbers

customer packaging that has a basis weight of 100, then the change in the raw cost of paper is (($50/ton x 100 lbs./msf)/2000 lbs./ton) $2.50 per msf. If you are running your own corrugator, then these calculations are real and second nature to you. If you are a sheet plant purchasing sheets, the pass-through of the paper decrease may vary from these calculations, but you need to understand them in order to negotiate a reasonable deal with your supplier.

Your customer probably doesn’t fully understand these concepts and is trying to somehow extrapolate between the percent change in the price of containerboard to their packaging. The waters are muddied even further by how you approached prior increases or decreases with them and your need to recoup nonpaper costs in these inflationary times. Notwithstanding any of this, you need to have the following information before you begin to negotiate these kinds of terms with a customer:

1. What is the average basis weight of the packaging you are selling that customer?

2. What will your cost of sheets be before and after the published change in the price of paper?

3. What is the current sales price per msf of the packaging you are selling this customer?

If you know these three things, then you can compute what percentage price change to this customer would be “neutral” to your existing material margins. Let’s look at a hypothetical example. You have a customer whose average sales price per msf is $100, and you are selling them board that has an average basis weight of 120 lbs. If the price of paper goes down $50/ton, then to break even, the sales price of their packaging needs to go down by 3%. The calculation would be as follows:

($50/ton x 120 lbs./msf)/2000 lbs./ton = $3/msf

So, if your material cost is going down by $3/msf, and the current sales price is $100/msf, then you need to reduce your price by $3, which is 3% of the current sales price to maintain your existing material margin. As you can see, both the concepts and the math are fairly simple.

From November 2020 to March 2022, the published price of linerboard went from $765/ton to $935/ton—a 22% increase. From November 2022 to February 2023, the price has come down $70/ton to $865/ton—a 7.5% decrease. As I stated earlier, larger integrated companies have a longer history of using customer contracts, and a larger portion of their business in general is tied to customer contracts. The other thing we know about the integrated companies is that they ship more footage than independent converters do and generally sell it for a lower price per msf. Mill-based companies are more concerned with selling their mill output because it is enormously profitable and trying to set up extremely high yield plants that maximize throughput. Independent converters generally do more of the business that requires multiple machines, handwork, inventorying of goods, and tighter delivery times, and consequently, they charge more for their output. So, a pricing factor in an integrated customer’s contract probably needs to be higher than the same factor in an independent customer’s contract.

This is precisely where the problem arises. Customer A is doing business with a large integrated company for most of its packaging needs but also buys some packaging regionally from some independent converters. Their contracts with the integrated company call for 1.5% change in price for every $20/ton change in the price of paper. That may be an entirely appropriate percentage for the contract with the integrated producer, but when

applied to the independent producer’s pricing, it will yield way too much gain when prices rise and way too much loss when prices drop. Let’s stay with our hypothetical customer and his $100/msf sales price and 120-pound basis weight. And let’s say that the same customer is doing a bunch of high-volume business with an integrated producer at $60/ msf. Both integrated and independent producers have the same $3/msf change in the cost of paper. For the independent to create a neutral contract, the change in sales price needs to be 3% as we have already calculated. For the integrated company to craft a fair contract, the change for that $50/ton needs to be 5% ($60/msf x 5% = $3/msf).

What I have seen in my travels is that many independent companies have been using pricing adjustments based on contracts their customers had with larger integrated producers. To the customers, it seemed fair to have the same price adjustment mechanism in all of their packaging contracts. For the independent producers, this was a real moneymaker when the prices were going up and contributed to the stellar performance we have all noted in the past two years. Now that prices are going down, it could have a severely negative effect on many companies.

I strongly urge anyone who is entertaining doing a contract with a customer to think these pricing mechanism clauses through and do the basic math on basis weight, material costs, and overall sales price per msf. Unless you have a crystal ball and know which way paper prices will be moving over the contract term, try to craft a price that is neutral on margins and thus fair to both parties.

Mitch Klingher is owner of Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@klinghernadler.com

Foundation for Packaging Education

What’s in a Donation?

Corporate pledges from AICC members to the Foundation for Packaging Education continue to grow. Th ank you so much for your ongoing support of the foundation’s important mission, the ongoing education of those employed in this great industry.

Many of you love this industry and AICC. Its members and its programming have a lot of meaning and a lot of memories for you. You tithe to your church, to the YMCA, to other nonprofits, but have you ever thought about giving personally to industry foundations, unless it was with your corporate money?

Th is is a growing trend among foundation pledge-givers—individual donations, either as an annual pledge or as a one-time donation. Many foundation supporters have made individual donations in memory of a loved one or in honor of a colleague.

The foundation publicizes corporate donations and celebrates them. The foundation appreciates and celebrates its individual donors on a lower-key basis. If you go to www.PackagingEd.org and click on “Donors” under the “About” tab, you will see all the committed companies and individuals who are supporting box plant workers. Here is where their largesse goes:

1. Underwriting costs associated with providing education and training programs to the industry, curriculum development, learning management system platform costs, and instructor fees, thus helping to lower training costs for AICC members.

2. Providing funds for a formalized certificate skills achievement program.

3. Funding the creation of aptitude testing for pre-applicants for defi ned in-plant positions.

4. Providing funds for in-person, goal-based training programs for manufacturing floor teams.

5. Providing funds for educational and scientific research.

6. Developing and supporting industryspecific paper-based packaging education and training programs.

7. Funding and administering AICC’s Troll Memorial Scholarship Program.

8. Assisting members in developing internship programs for their companies.

9. Translating online courses into the Spanish language.

10. Underwriting professional services, instructor fees, and staff support needed to oversee the execution and completion of all foundation activities.

Please click the “Donate” tab at www.PackagingEd.org, and join your colleagues in supporting the important work of the Foundation for Packaging Education.

The Final Score

A West Ham Man!

John Bird, CEO of JB Machinery, was inducted into AICC’s Hall of Fame at the recently concluded AICC Spring Meeting in Miami. Accolades were aired on the big screen, toasts were lifted, hugs were exchanged, and John gave a wonderful speech.

How can such a diminutive man play such a large role in our industry, in our Association, and in my own professional development?

John is well deserving of this honor. He has earned it because of the innovations he has brought to the industry, his support of AICC and all who are reading these words, and his generosity with the International Corrugated Packaging Foundation (ICPF) and the Foundation for Packaging Education. His sharing of his time, his leadership, his opinions, his counsel, and his enthusiasm with so many of us.

John is the patriarch of a wonderful family, with Sandra, the matriarch, at his side. Two more generations of Birds are fully involved in JB Machinery, the family business. Individually and collectively, they prove the adage of the fruit not falling far from the tree. They have emulated and enhanced the examples that John and Sandra have set.

If you’ve listened to John’s story in the second episode of the AICC podcast series Breaking Down Boxes, you know the multiple ups and downs that have brought John to this peak—entrance into the prestigious AICC Hall of Fame. If you have not heard the story of John’s journey, I recommend you do so.

I have never known John to not take a moment for anyone who has asked. He leaped at the fi rst opportunity to donate to the Foundation for Packaging Education when it was formed. Th is was on the heels of a long-standing pledge to ICPF. When AICC has needed a sponsor or some other material, intellectual, or emotional support, John has not hesitated to say yes. I know many of you have had similar experiences.

I met John and Sandra at an AICC event years ago. I ended up sitting with the two of them at dinner, and I remember being taken with how gracious they were and how comfortable they made me feel. I had already been serving a long time at Bobst at that point but was new to corrugated. I had just enough experience to know that AICC was a special association. John and Sandra confi rmed my thoughts that evening. Th at was also the day I became a fan of the West Ham United Football Club. I had no prior allegiances. John insisted.

I know all of this was expressed for John and to John at the Spring Meeting in Miami.

For those of you who were not there, I just wanted to share this small tribute to the great man, Captain John Bird!

Michael D’Angelo AICC President

Scan the QR code to listen to John Bird’s story on Breaking Down Boxes.