A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION
September/October 2019 Volume 23, No. 5
APPETITE FOR EXPANSION
How independents are growing and competing through acquisitions and joint ventures
ALSO INSIDE Set Up for Success Special Section: Raking It In Special Section: AICC Education Catalog
TABLE OF CONTENTS September/October 2019 • Volume 23, Issue 5
COLUMNS
40
3
CHAIRMAN’S MESSAGE
4
SCORING BOXES
8
LEGISLATIVE REPORT
12
MEMBERS MEETING
15
ASK RALPH
18
SELLING TODAY
22
TACKLING TRENDS
24
ANDRAGOGY
28
LEADERSHIP
72
THE ASSOCIATE ADVANTAGE
74
WHAT THE TECH?
76
STRENGTH IN NUMBERS
80
THE FINAL SCORE
FEATURES
40
APPETITE FOR EXPANSION How independents are growing and competing through acquisitions and joint ventures
54
SET UP FOR SUCCESS
DEPARTMENTS
54
Innovation and expansion continue to drive the rigid box market
60
SPECIAL SECTION: RAKING IT IN Sales compensation sees doubledigit growth
62
SPECIAL SECTION: AICC EDUCATION CATALOG
10
WELCOME, NEW & RETURNING MEMBERS
33
GOOD FOR BUSINESS
36
MEMBER PROFILE
78
ICPF UPDATE
60
BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2019 AICC. All rights reserved.
Visit www.aiccboxscore.org for Member News and even more great columns. Scan the QR code to check them out! BOXSCORE www.aiccbox.org
1
OFFICERS Chairman: Joseph M. Palmeri, Jamestown Container Companies First Vice Chairman: Jay Carman, StandFast Packaging Vice Chairwoman: Jana Harris, Harris Packaging/ American Carton Vice Chairman: Matt Davis, Packaging Express Immediate Past Chairman: Al Hoodwin, Michigan City Paper Box Chairman, Past Chairmen’s Council: Tony Schleich, American Packaging Corp. President: Michael D'Angelo, AICC Secretary/General Counsel: David P. Goch, Webster Chamberlain & Bean Counsel Emeritus: Paul H. Vishny, Esq. AICC Canada Director: Jana Marmei DIRECTORS-AT-LARGE Kevin Ausburn, SMC Packaging Group Gary Brewer, Package Crafters Marco Ferrara, Cartones Sultana Finn MacDonald, Independent II Nelva Walz, Michigan City Paper Box DIRECTORS David DeLine, DeLine Box Company Ben DeSollar, Sumter Packaging Eric Elgin, Oklahoma Interpak Guy Ockerlund, OxBox Mike Schaefer, Tavens Packaging & Display Stuart Fenkel, McLean Packaging AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd.
AICC México: Pedro R. Aguirre Martinez, Tecnología de Cartón Overseas Director: Kim Nelson, Royal Containers Ltd.
SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com
EMERGING LEADER BOARD DELEGATES Josh Sobel, Jamestown Container Companies Daniel Brettschneider, CST Systems
CONTRIBUTORS Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Education and Training Manager Laura Mihalick, Senior Meetings Manager Patrick Moore, Member Relations Coordinator Taryn Pyle, Director of Education and Leadership Development Alyce Ryan, Marketing Coordinator Steve Young, Ambassador-at-Large Richard M. Flaherty, President, ICPF
ASSOCIATE MEMBER DIRECTORS Chairman: Dave Burgess, JB Machinery Vice Chairman: Pat Szany, American Corrugated Machine Corp. Secretary: Joe Morelli, Huston Patterson Printers Director: Greg Jones, SUN Automation Group Immediate Past Chairman: Ed Gargiulo, Equipment Finance Corp. ADVISORS TO THE CHAIRMAN John Bolender, Niagara Sheets LLC North Greg Arvanigian, Arvco Container Dave Burgess, JB Machinery PUBLICATION STAFF Publisher: Michael D'Angelo, mdangelo@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Vice President: Jack Davidson Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Creative Director: Serena L. Spiezio Art Director: Mike Vucic Account Manager: Brian Hershey
ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Taryn Pyle 703-535-1391 • tpyle@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
ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974.
WHEN YOU INVEST AND ENGAGE, AICC WILL DELIVER SUCCESS.
Chairman’s Message
The Industry’s Big Picture: You Can’t See It From Behind Your Desk
W
hen I learned the theme of this issue was The Industry Big Picture, I was flummoxed as to what to write about. It’s a big waterfront, I thought; where do I begin? As I reflected on the subject, though, it occurred to me that I’ve been talking about the big picture all year as I’ve traveled around North America and overseas to our national meetings and summits and those of other organizations. If you’ve heard the presentations I’ve given in the past nine to 10 months, you will have seen the big picture through the eyes of Jamestown Container Cos. I spoke of the founding of our company in 1956 by Glenn Janowsky and how my father, Joseph R. Palmeri, was one of the first five employees at that time. I spoke of how, over the years, through our involvement in organizations such as the Fibre Box Association (which we joined in 1969) and AICC (we were a founding member), we have been able to meet other entrepreneurs, make connections, and build relationships that have grown our company to what it is today. In other words, my father didn’t sit behind his desk; he ventured out to industry meetings to learn the big picture—where the industry was and where it was heading—and he brought what he learned back to Jamestown, where he, his partner, and now his succeeding generations used that information to build the company we are today. And this is the lesson for all of us: If you invest and engage in your industry, in your industry’s big-picture events and organizations, you will succeed. This is the message that I have been telling members everywhere I have traveled in this past year as your chairman. As I end my term, I want to thank all of you who have opened your plants to me and have hosted us in our various visits. Dianna and I have had the opportunity to travel throughout North America and overseas to our friends at the Sheet Plant Association in the United Kingdom, visiting with members, sharing common concerns, and generally looking at the big picture. I also want to thank the members of AICC’s board of directors for their support and encouragement throughout the year. You can’t find a better group of big-picture thinkers than those on AICC’s board. So get out from behind your desk. See the big picture by engaging in what AICC offers you: networking, training, education, and advocacy. Learn how your company can benefit and grow by investing and engaging in our industry’s organizations. Thank you for the honor to serve as your chairman. It has been a pleasure.
Joseph M. Palmeri President, Corrugated Packaging, Jamestown Container Cos. Chairman, AICC
BOXSCORE www.aiccbox.org
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Scoring Boxes
The Big Picture: How Our Customers Contribute to Economic Growth BY DICK STORAT
A
n expanding economy is what keeps America growing. That growth is best measured by change in the nation’s gross domestic product, better known as GDP. Corrugated boxes made by independent corrugated converters contribute to that growth by protecting products from damage during shipment and storage and by providing point-of-sale promotion, to name just two vital jobs that corrugated boxes perform. Although corrugated boxes contribute to all sectors of economic activity, most are used in the manufacturing sector. We will look at the size of manufacturing industries’ contributions to economic growth. In the broadest view, 88% of economic activity, or value added, comes from the private sector, with federal, state, and local governments contributing the remaining 12%. Of the private sector’s contribution to GDP, 65% is generated by services, 13% by wholesale and retail sales, and 9% by agriculture, forestry, mining, utilities, and construction. The remaining 13% of GDP is generated by the manufacturing sector. While 13% may sound like a small share, it amounted to no less than $2.7 trillion last year. The first division of manufacturing activity is the split between goods expected to be consumed in three years or less, such as food, clothing, etc. (nondurable goods), and those expected to last longer, such as furniture, autos, etc. (durable goods). Durable goods contribute 56% of manufacturing economic activity, while the remainder of domestic manufacturing production is nondurable goods. According to the Fibre Box Association,
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BOXSCORE September/October 2019
Contribution of Nondurable Goods Manufacturing Sectors to U.S. GDP 3% 8%
Chemical products
10%
16%
Nondurable goods manufacturing accounts for 5.0% of U.S. GDP.
36%
Food, beverage, and tobacco products Petroleum and coal products Paper products and printing Plastics and rubber products
27%
Textile mills and apparel Source: Bureau of Economic Analysis
the nondurable goods sector consumes nearly half of all boxes produced in the United States, while fewer than 10% are consumed by manufacturers of durable goods. The chart above shows the shares of nondurable goods manufacturing. At more than one-third of the nondurable goods, chemical products of all types make up the largest single category. This category includes cleaning products, personal care products, etc., in addition to industrial chemical products. Food products, including beverage and tobacco products, account for more than one-quarter of nondurable goods output and are the most corrugated-intensive nondurable goods category. Further down the line are petroleum and coal products such as gasoline, heating oil, etc., at a 16% share. They are followed by paper products and printed products, which add 10% to this sector’s activity. The final categories are plastics and rubber products, and textile goods and clothing, at 8% and 3%
shares, respectively. Collectively, these fast-moving goods account for 5% of GDP, or about $1 trillion last year. The topmost chart on Page 6 shows the shares of durable goods made in the U.S. Computers and other electronic products account for almost one-quarter of these durable goods. The second-largest category combines primary metals, nonmetallic minerals such as cement, etc., and other goods for long-term usage not included in the other categories shown. Motor vehicles and parts account for 13% of the category, followed by other types of machinery and fabricated metal products, each contributing 12% to durable goods economic activity. Also providing a 12% share are other types of transportation equipment such as aircraft, boats, trains, trailers, etc. Combined with motor vehicles and parts, the transportation sector accounts for one-quarter of U.S. durable goods economic activity. Finally, furniture and wood products and electrical equipment and appliances
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Scoring Boxes
Contribution of Durable Goods Manufacturing Sectors to U.S. GDP Computer and electronic products
6%
5%
Primary metals and other manufacturing
23%
Motor vehicles and parts
12%
12%
Durable goods manufacturing accounts for 6.4% of U.S. GDP.
12%
Machinery Fabricated metal products
17%
Other transportation equipment Furniture and wood products
13%
Electrical equipment and appliances Source: Bureau of Economic Analysis
Change in Contribution to Nondurable Goods GDP by Nondurable Goods Manufacturing Sector: 2008–2018 (percentage points) Chemical products Food, beverage, and tobacco products Plastics and rubber products Textile mills and apparel Paper products and printing Petroleum and coal products -4
-3
-2
-1 0 1 2 3 4 Source: Bureau of Economic Analysis
Change in Contribution to Durable Goods GDP by Durable Goods Manufacturing Sector: 2008–2018 (percentage points) Electrical equipment and appliances Furniture and wood products Other transportation equipment Fabricated metal products Machinery Motor vehicles and parts Primary metals and other manufacturing Computer and electronic products -3
-2
-1
0
1
2
3
4
5
Source: Bureau of Economic Analysis
6
BOXSCORE September/October 2019
contribute 6% and 5% to durable goods GDP, respectively. Over time, one can expect that each of these manufactured goods categories will contribute either a growing, shrinking, or stable share of economic value added. The middle chart at left shows how many percentage points of growth or decay each of the nondurable goods categories has undergone in the 10 years between 2008 and last year. The fastest-growing contributor to nondurable activity is also the largest category: chemical products. During the past 10 years, it has increased its share of nondurables by 3%. Food, beverage, and tobacco, the second-largest contributor to 2018 GDP, is also the second-fastestgrowing, having increased its share of economic activity by a little more than 2%. At the other end of the spectrum, gasoline and other petroleum and coal products have given up the most ground, declining by more than 3% over the past decade. Paper products and printing have been hobbled by the growth in electronic communications and have ceded 2.2% over the past 10 years. The picture is slightly different in the durable goods sector, as shown in the bottom chart at left. Here, the largest industry, computer and electronic products, has lost the most, with its share declining by more than 2% over the past 10 years. And the smallest category, electrical equipment and appliances, has shown the fastest growth, gaining 4% over the past decade. Independent corrugated converters can use this information to evaluate the different manufacturing sectors of their customers to gain big-picture insight into historical trends and current shares of economic activity. Dick Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@ aol.com.
Legislative Report
The Next Generation of Advocacy BY ERIC ELGIN
A
s you can see elsewhere in this issue, the AICC Chairman’s Emerging Leaders (EL) Field Trip, hosted by Joe Palmeri in Cleveland, was a big success. Yes, there were networking opportunities. Yes, there were plant tours. Yes, fun was had by all. But as most of you know, there is an educational element to most AICC events, and the EL Field Trip was no exception. As we have addressed often and hopefully shown in these pages, AICC advocates for the independent converter and the industry in many ways, directly and actively. Directly through the AICC Legislative Summit, of which there have been 13 to date. Directly through AICC’s letter writing and editorializing on issues through the years. Actively through AICC’s membership in the National Association of Manufacturers (NAM) and the Small Business Legislative Council. All that said, we still feel that the best,
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BOXSCORE September/October 2019
most passionate advocacy program that AICC supports is the one undertaken by the individual members and owners with their local, state, and federal officials. Hopefully, the activities of individual members and owners can be demonstrated to the next generation of family members active in the business—learning by doing. While AICC cannot “teach” advocacy, as that has to come from the passion of the individual, we can and did find resources to educate the ELs on the importance of advocacy and what it can look like in action. That was the program for Friday, July 19, the second day of the field trip. More than 40 ELs listened to Tim Ross from the office of Congressman Bob Gibbs (R-Ohio), who represents the state’s 7th District. Ross shared the process of how issues are heard, received, and acted upon—or not—by Congress.
Steve Young discussed with the group the importance of paying attention to what is going on in the political process at all levels. Especially if you are in next generation leadership of your family’s life’s work, you need to be aware at all times of the forces that can be working for or against you. You need to know how to be out in front on these issues. Todd Shelton of NAM shared the perspective of his organization, one that spends much human and financial capital advocating at all levels of government on behalf of manufacturing concerns that touch labor, safety, regulations, the environment, competitiveness, and much more. Sometimes the issues that exist go beyond the political and can be put to practical use to improve the reputation of your company with your customers and in the local community. Sustainability is one such issue. Paper-based packaging has such a great story to tell on this topic. Mary Anne Hansan of the Paper & Packaging Board shared the “As Life Unfolds” campaign for corrugated, paperboard, and fine papers. There is a message for all the veteran members in the industry from the program put on during the field trip in July: It’s never too late to get involved. The political process is unforgiving to those who approach it passively. 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.
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BOXSCORE September/October 2019
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AICC Emerging Leaders Engage in Cleveland
AICC Emerging Leaders began their tour day at Standard Printing Company in Canton, Ohio.
J
oseph M. Palmeri, AICC chairman and president, corrugated packaging, at Jamestown Container Cos., and AICC welcomed more than 40 AICC Emerging Leaders (ELs) and guests to Cleveland July 16–18 for the 2019 AICC Emerging Leader Chairman’s Field Trip. “Emerging Leaders has been a wealth of knowledge, opportunity, resources, and most importantly, friendships,” says Cassi Malone, strategic account manager, Corrugated Supplies Co. “The tours and workshops further expose us to different areas of the supply chain we might not otherwise observe, and the relationships cultivated have been invaluable. This group has truly been an incredible learning and growth opportunity both personally and professionally.”
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BOXSCORE September/October 2019
The program, which began with a networking dinner, offered three plant tours, a half-day training on advocacy, and a night out at a ballgame. The ELs began the next day early, with a Thursday morning tour of Standard Printing Co. in Canton, Ohio, a privately owned digital and sheetfed printing company that has been manufacturing for nearly 100 years. The group then moved on to Jamestown Container-Cleveland in Macedonia, Ohio. Jamestown Container Cos. started more than 60 years ago with a basic brown box and five employees, and it has since grown into a multifacility, concept-to-finished-goods corrugated packaging supplier. The final stop of the day was Tavens Packaging & Display Solutions in Bedford Heights, Ohio.
Founded in 1956, Tavens is a sheet plant that has made significant investments in its people and equipment to offer new services and opportunities to its customers. “I love the excitement of the group,” says Daniel Brettschneider, AICC EL board delegate and vice president at CST Systems Inc. “These are box people through and through, and they’re passionate and ambitious about growing into the industry. We have a lot of fun, and somewhere in the middle of it, the ideas start flying. I always come home with new projects and big visions, and I know a lot of others do, too.” After a night in a suite at Progressive Field to see the Cleveland Indians battle the Detroit Tigers, the ELs completed the Field Trip the following morning
Members Meeting
with a half-day training on advocacy at all levels. Steve Young, AICC ambassador-at-large, reminded attendees of the value of the first amendment and shared the thoughts of Eric Elgin, owner of Oklahoma Interpak, who was unable to attend due to travel delays. Elgin encouraged attendees to start locally. Tim Ross, district director for U.S. Rep. Bob Gibbs (R-Ohio), helped attendees see the value of talking with staff members of representatives and encouraged everyone to invite their local and federal representatives to tour their plants. Lia Poteet, communications specialist at U.Group, encouraged all attendees to share their stories. She focused on the importance of giving specific examples of how legislation will impact the company and community. She also highlighted the importance of building relationships when advocating. Echoing Poteet, Todd Shelton, director of regional public affairs for the National Association of Manufacturers, focused on taking the time to build relationships and noted that technology and social media are important tools, but they cannot replace conversations. Mary Anne Hansan, president of the Paper and Packaging Board (P&PB), gave an update on the advocacy P&PB is doing for the paper and packaging industries, noting that paper and paperbased packaging industries continue to be viewed more favorably than other industries, including plastic. Lastly, all speakers came together on a panel to explain how they would advocate for an issue raised by the audience. AICC appreciates the support received from Alliance Machine
Representatives of A.G. Stacker, Haire Group, and Alliance Machine Systems International were on hand at Jamestown Container-Cleveland to answer questions.
Leaders networked in a suite at Progressive Field while they watched the Cleveland Indians battle the Detroit Tigers.
Systems International, A.G. Stacker, Haire Group, Jamestown Container Cos., Poteet Printing, Standard Printing Co., Tavens Packaging & Display Solutions, and Vanguard Packaging. The next AICC EL event will be held during the AICC 2019 Annual Meeting, September 16–18, in Toronto. It will
include a training on “Increasing Your Voice” and a networking event. More information is available at www.aiccbox. org/meeting. Questions about joining the AICC EL program can be directed to Scott Ellis, Ed.D., at leaders@aiccbox.org or at www.aiccbox.org/leader.
BOXSCORE www.aiccbox.org
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Ask Ralph
Paperboard, Boxboard, Containerboard, and Paper BY RALPH YOUNG
Forward-Looking Production Capacity in Millions of Tons CUP PLATE
FOLDING CARTON
LIQUID PKG
GRAPHIC
385,000
811,400
51,900
WEST ROCK
356,650
1,170,354
318,825
45,260
601,520
134,540
FOLDING BOXBOARD
URB BOXBOARD
URB CHIPBOARD
URB GYPSUM FACING
URB TUBE CORE
37,800
115,460
113,245
62,050
242,200
86,768
44,280
453,702
CRB BOXBOARD
CRB BOXBOARD C1S
558,250
413,990
225,160
410,285
81,720
150,045
109,570
149,600
SOLID UNBLEACHED SULFITE
COATED NATURAL KRAFT 1,428,560
1,050,730
COMPANY TOTALS 3,649,100 3,860,559
G-P CLEARWATER GREIF NIPPON
14,886
278,699
PAPERWORKS EVERGREEN
781,320 293,585 7,480
159,831
1,058,715
47,859
266,650
571,875
SONOCO
779,565 28,718
309,545
316,198
511,773
807,832
1,146,095
RAYONIER TOTAL
961,627
2,631,133
1,355,839
157,525
1,323,584
974,700
1,123,920
1,050,730
1,428,560
11,835,589
Note: Consolidation continues with Graphic Packaging’s July 2019 acquisition of the small White Pigeon mill with its 70,000 tpy production of CRB. There are now only four companies in this grade.
W
e have been attempting to publish this article for more than six months, but more relevant industry issues precluded this information being presented. What now makes this more timely are recent announcements in Scandinavia and Brazil about new virgin linerboard capacity with basis weights as low as 13#/MSF, Greif’s purchase of Caraustar, Georgia-Pacific’s June 4 announcement of removing 370,000 tons
per year of solid bleached sulfate (SBS)— or more than 6% of the capacity—out of the market, International Paper’s transfer of its 1.2 million tons-per-year solid bleached sulfate paperboard business to Graphic Packaging in January 2018 (it had previously removed 350,000 tons in 2011; rising imports, especially of folding boxboard, a grade just recently announced for production here), and the continued growth of microflutes into the folding carton and rigid box markets. As with containerboard, the majority of capacity is controlled by just a few companies. And it is interesting to note that the media talks of production backlogs while, for containerboard, the financial community and the media track roll stock inventories at the mills, in transit, and at the box plants. The same but different matrices. For perspective, SBS is by far the largest of the three domestic consumer-related boxboard grades at 5.3 million tons of North American capacity; the other two
major grades, coated unbleached kraft/ solid unbleached sulfite (CUK/SUS) and coated recycled board (CRB), are each around 2.5 million tons of capacity. The last major grade, with several subcategories, is uncoated recycled board (URB). SBS and CUK/SUS generally contain at least 80% virgin wood pulp and are typically used for applications requiring high-quality printing and good strength characteristics. Low-caliper SBS fits into single-wall corrugated, as top sheets for single-face laminations and E- and F-flute applications. Folding boxboard for North America will come in 14-, 16-, and 18-point versions. The export markets for some grades, such as CUK and SUS, are globally traded. Twenty to 25% of U.S. production is for export, and the global market is competitive. Significant capacity additions in China and more recently in Europe, the stronger U.S. dollar, the rapid drop in OCC prices, and import restrictions and tariffs may impact these
BOXSCORE www.aiccbox.org
15
grades. SBS is also globally traded. CRB and URB are not widely traded—there are minimal imports and exports. North American CRB producers have been reducing their capacity—and consolidating the market. About 5%–6% of North American clay-coated news back, bending chip, and other CRB-grade capacity was shut in 2015, and there was substantial consolidation, such that the market went from nine suppliers in 2014 to five in 2015. End-Use Markets First, the easy one. CUK and SUS are each produced by only one company; they’re the same product—only the brand names are different. And they “own” the beverage business with the need for wet- and tear-strength paperboards. There
is some spillover into folding carton applications where moisture can attack the carton, as in frozen foods. SBS folding carton goes into packaging—cup stock such as ice cream cartons, liquid packaging, and milk cartons. Bristols can also be a subset of this category. At the time of this writing, Rayonier Advanced Materials had announced the first conversion of a mill into folding boxboard, a multilayer construction grade popular in Europe but somewhat new to the North American market. URB consists of paperboards converted into tube and cores, separator sheets and partition stock, corner boards, composite paperboard cans, containers, canisters, tubes, cores, cones, fiber drums, spools, ribbon blocks, bobbins and related or similar composite
products, and automotive. Gypsum wallboard facing is part of the URB family. CRB (also called white-lined chip), clay-coated news back, and bending chip are made into a variety of products such as cereal boxes and powdered laundry detergent. In total, this boxboard market, at about 11 million tons per year, is just slightly more than one-quarter of the containerboard market. 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.
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BOXSCORE September/October 2019
The next generation WANTS to grow.
Help them.
Emerging Leaders, those roughly 35 years of age or younger, meet regularly at AICC’s National Meetings in sessions specific to their needs; they participate in active industry training programs; and they provide valuable input to the future of our industry. We develop at least 3 EL programs per year and occasionally offer ELs exclusive discounts on programs that we think are most relevant to them. Employees of AICC General and Associate Member companies are invited to apply. AICCbox.org/ Leaders When You Invest & Engage AICC Will Deliver Success.
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BOXSCORE www.aiccbox.org
17
Selling Today
5 Things That Inhibit Sales FollowThrough and What to Do About Them BY TODD M. ZIELINSKI AND LISA BENSON
I
f you are involved in any type of sport, you understand the importance of follow-through. Whether you are hitting a baseball, driving a golf ball, or shooting a basketball, executing proper follow-through can mean the difference between success and failure. Even in the business world, follow-through takes center stage as one of the keys to success. From job interviews to networking to sales, follow-through can turn “I tried” into “I succeeded.” So many people have fallen short of hitting their professional goals because they treated the interview, the first contact with someone, or the first sales call or quote as the end of the shot. There are many reasons why this happens. Some are afraid to appear pushy and will wait to be contacted, others feel overwhelmed while time gets away from them, and some just aren’t sure when to follow up. When it comes to sales, we have consistently seen the same issues arise among companies. Below we share five things that can inhibit sales follow-through and what to do about them. Prospect Doesn’t Immediately Return Calls or Emails Salespeople can lose contact with a prospect if they don't receive an immediate response from them. Sometimes it’s because salespeople have so much more on their plates that needs immediate attention and the lead gets lost, or it could be because they perceive a disinterest from the prospect. There could be many reasons why the prospect doesn’t contact you back that
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BOXSCORE September/October 2019
do not mean they aren’t interested—the project isn’t a top priority, they are evaluating multiple vendors, the timing isn’t right, they went on vacation—who knows? The point is that keeping your brand front of mind is critical to ensuring that when they do make the purchase, your product or service is being considered. If you wait too long, the vendor that did follow through may make the sale. Continue to follow up until you learn they are not a fit or they give you a definite yes or no. Call Reluctance One of the biggest fears many people face is the fear of rejection. Rejection can feel personal—as if you or your product isn’t good enough. But rejection is something every salesperson faces. Because of this fear, salespeople may be reluctant to pick up the phone and call prospects. If you don’t face your fear and learn to overcome it, your hesitancy to pick up the phone or reach out to new prospects and your reliance on doing what is more comfortable—managing current accounts—will grow, making you even less effective as a salesperson. Confidence and lack of courage can’t exist together. One of the best ways to boost your confidence level is through preparation. Before you call on any new prospect, make sure they have been thoroughly vetted—do they meet your requirements for size, revenue, annual spend, industry (whatever qualifiers you use)? Have you done your research—do they have a use for your product, what are the typical pains in the industry, how
is your solution different from those of your competitors? Be prepared to stop talking, listen to the prospect, and adjust your pitch to address their specific needs. Calling on new prospects is about respectful persistence. You need to be persistent but not annoying. If the prospect says not to contact them, then by all means, don’t contact them again. But be sure what you thought was a no really was a no. If they say it’s not in the budget this year, ask about next year. If they have a current supplier, find out who it is, whether there is anything that is not meeting their expectations, when the contract is up, etc. When you engage in friendly conversation, people open up, and you may find a way in or, at the very least, learn when the best time to call back may be. Lack of Knowledge Lack of knowledge can significantly inhibit follow-through. How do you know when to stop or when a lead is dead? Without tracking, it can be challenging to know how many touches (calls, emails, or another form of contact) it will take to get an appointment with a prospect. To make it worse, statistics available vary from source to source. We’ve seen an appointment made with the first contact, and we’ve seen it take as long as three years with a few monthly touches to crack a lead. It is going to depend on a lot of variables—your industry, your messaging, timing, even luck. If you track your activities, you should have a pretty good idea of how long it takes. A good rule is to not stop trying until they
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Selling Today
explicitly tell you to stop or you close the sale. Persistence will be your key to success. Poor Organizational Skills Planning and organizing upfront helps you to keep things on schedule down the line. So, what does this look like from a sales perspective? Do your homework and know what your prospects’ pains are and how you can help them. According to sales training and consulting firm the RAIN Group’s research, buyers say that 58% of their sales meetings are not valuable. Top salespeople bring value to the meeting. They have an understanding of the clients’ pain points and needs and can communicate how their company’s value proposition meets those needs. Ask when you should follow back up. Put it into your calendar or create a reminder in your CRM—just make sure when that time comes, you actually follow up. Keep your notes from your meetings well-organized in an electronic folder, CRM, or paper folder if you are still doing it old-school. You want to be able to quickly reference them if the prospect calls you or for review before the next follow-up call. Lack of Clear Communication Effective communication can assist you with follow-through. Trust can play a large part in making or losing a sale. When you fail to do what you say you will do, some of that trust is diminished. Earning it back can be an uphill battle. So if you are not able to meet your commitment, such as following up, communicate that as early as possible, and reschedule. We’re not suggesting it is intentional; things happen, and sometimes there is a misunderstanding of next steps. How
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many meetings have you left without a list of action items, only to return the following month with nothing completed? In a sales meeting, the next steps should be clearly spelled out with time frames. If you are expecting a request for quotation and you don’t get it in the specified time, call to find out when you can expect it (put this in your calendar if you need the reminder to follow up). Follow-through is something you need to be constantly aware of. Initially, you may need to remind yourself what needs to be done continually. Once you create good habits with follow-through,
they become a natural part of your sales process. 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.
Tackling Trends
The Packaging Industry: 2020 and Beyond BY JOHN CLARK
I
f history has taught us anything, it is that conventional thinking and the prognostications of “experts” are often wildly off the track—and far from the future that becomes reality. No one is driving to work in a flying car. As we approach the year 2020, it is a good time to speculate on where the packaging industry is headed and make some semieducated guesses as to what the next decade will bring. Our society and our economy are being transformed at an ever-increasing tempo, and these conjectures are simply for sport and a starting point for discussion. So, without further ado:
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shop other than at a grocery or hardware store to utilize the capability of digital technology, and what will be the impact of the world of virtual reality (VR). Poised to become the next big thing in technology, VR will let you enter a world that is interactive, three-dimensional, and lifelike. The standup display in the movie theater lobby and the Super Bowl display in the grocery store are now just holograms that require none of the services of a packaging company beyond the product packaging.
E-Commerce As Amazon continues its assault on the world of traditional retailing, an expanding network of Amazon warehouses poses a major threat to the amount of packaging required to get the purchased items the last miles to the purchaser. With Amazon building more and more distribution centers closer to the consumer in major metropolitan areas, the requirements for protection decrease markedly. Expect to find more of your items arriving in envelopes as opposed to corrugated boxes. Every envelope represents one fewer box.
Converting Cycle For those of us who have been around for a few years, a common metric for the plant was the amount of work booked and due for delivery. That gave management a quick way to see how the month was progressing and provided a quick snapshot of the likelihood of having a successful month. Today, if you ask the same question, the backlog is just a few days, with the order life cycle of date of booking to date of shipping now measured in mere days. This speedup of the order cycle forces greater organization, faster and more capable machinery, and better-trained technicians and operators on the factory floor.
Digital Printing and the Advent of VR Digital printing has been a godsend for marketers and producers of point-ofpurchase displays. Gone are the multiple print jobs requiring tooling changes and slug replacement. Now, with a push of a button, you can switch from printing A to B to C with no discernible loss of speed or quality. The question of the viability, utility, and lifespan of digital printing becomes twofold: Where are you going to
Logistics While the shortened order cycle has forced improvements in machinery and processes, the lag in the production cycle is the last link in the chain. Delivery costs have grown faster than any other expenses for many plants. Smaller orders delivered more frequently and delivered to a client base whose radius is constantly growing to provide the volume requirements for the plant is a recipe for cost creep.
BOXSCORE September/October 2019
Recycling Corrugated board has gone from roadie to rock star since the internet and e-commerce came to prominence. While some other packaging materials are denounced as problematic and harmful to the environment, corrugated is the perfect solution— it is incredibly strong for its weight, can be produced in a multitude of designs to ensure optimum protection, can be produced quickly at reasonable costs, and at the end of its intended use, it can be recycled, and the fibers that provide the internal strength can be reused over and over. A corrugated box that ends up in the ocean will biodegrade within two months. Alternative Fiber Sources Legalization of marijuana cultivation in many states opens the door to hemp production. Hemp for industry contains no hallucinatory properties, but it does contain very long fibers, has a higher yield than traditional pulp, is white by nature so it requires no bleaching, and if you’ll pardon the expression, it grows like a weed. Experiments are going on at several research and university laboratories to support introducing hemp into the fiber of packaging materials. Particularly in developing countries, hemp could become a consistent and viable source of packaging paper. Trying to predict the future is a risky exercise. Hopefully some of the topics listed above have given you food for thought as to the direction of your plant and company. John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.
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Andragogy
Corrugated Does It All
T
here are very few negatives to living in a college town. It’s a wonderful lifestyle with one daily challenge: parking—lots of construction, more cars than spaces, and narrow time slots for a guaranteed spot. In an effort to increase my commute flexibility, I recently ordered a $400 rechargeable motorized scooter from an online store. When it arrived, I noticed three things straightaway: 1. It was large. 2. It was heavy. 3. It was in a corrugated container.
Experience has taught me a few things about ordering something of this size, weight, and surface finish. It is going to be heavily protected with plastic film and foam; there will be small bags of hardware and parts tucked into convenient nooks and crannies; and the assembly instructions will be freely floating around, maybe torn, with difficult-to-decipher pictures and text. Despite the inevitable unboxing ordeal awaiting me, I was excited. Never again (weather permitting) would I have to crank up the car for the drive to campus, where I would endlessly cruise the parking lot hunting for an empty spot. Now, my eco-friendly scooter would allow me to leave my car in its private, shady spot while I zipped to campus, right up to my office door, in less than 10 minutes! I couldn’t wait. I was stoked, excited, and ready to scoot! But I digress. Before any scooting could happen, I first had to free my scooter from its protective prison. I reached for my box cutter, took a deep breath, and prepared myself to tackle this thing. What happened next was
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completely unexpected and left me shaking my head in wonder. The first thing I noticed was that I did not need my box cutter to open the box. There was no tape at all on the outside of the box, so the aesthetic was clean, which was nice. There were only a couple of straps fastened around it for security during shipping. The only thing I would change about the outer box would be to remove the drawing of the scooter. I can understand why it might be helpful, but studies have shown that (1) it is not ideal to disclose expensive products on parcel packaging, and (2) portrayal of robust products may result in increased handling damage from the carrier. Once the straps were removed, two tongue locks held the container in place and, when opened, revealed a printed panel. The design of this part of the experience was excellent. Using five pictures with English captions that each did not exceed two lines of text, I was able to understand exactly what was required to prepare the product for use before I even put my eyes on the product itself. I consider this a tremendous advantage of the corrugated design. This one-color print is from the same pass as the primary display panel and is an efficient way to disclose information on the corrugated panels. After lifting the printed inner top closure, a portion of the product was revealed, with custom C-flute corner guards that secured the product in place. The left corner guard (which is where I would predict the unboxer looks first), includes the product instructions and safety manuals, without any packaging, nested within a cutout and secured with two friction locks. Beneath the
Photo by R. Andrew Hurley, Ph.D.
BY R. ANDREW HURLEY, PH.D.
Class-A surface sticker.
instructions in the left corner guard, there was a void where one panel of the corrugated board touched the product, with an adhesive-backed Class-A surface textile applied to mitigate any abrasion between them. This thoughtful touch reduced the need for additional packaging on the product and was effectively used several times within this packaging system. The insert on the right was a one-piece corner guard customized to secure the product in two places. A fold at the top of the design included a hole for easy removal with one finger.
THE
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Andragogy
the product itself, my speculation is that the protective bubble wrap was used to minimize scuffing of the product surface. I learned a lot about e-commerce shipping containers and parcel packaging design through this experience. My main takeaways are as follows: 1. There are many ways to have printed surfaces without having to print each dieline. Components from one cutting operation can be used within nonprinted systems. 2. Class-A surface products do not require 100% Class-A surface packaging. Applying protection where it’s needed allows for a more cost-efficient design.
Bottom insert with printed die-cut lid.
The scooter itself sat in a custom bottom insert that stabilized both wheels, and the super simple design allowed me to easily lift the scooter out of the box. Amazingly, there was very little plastic in sight, and no plastic film to slice through. The well-designed corrugated bottom and corner guards were sufficient to keep the scooter in place. And it didn’t stop there. A small C-flute corrugated insert was used to control the location of electrical wiring on the handlebar. An Allen wrench and a polybag of four screws were nested within this insert, with a one-color design printed directly on the insert, illustrating the Allen wrench and four screws, Ikea-style. The insert had four holes that seemed to serve no purpose, and I’m guessing that the manufacturer initially manually inserted screws into the holes in an attempt to
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BOXSCORE September/October 2019
further reduce packaging, but ultimately opted to use a polybag and just kept the original insert dieline. I peered back down into the now empty box and saw that the bottom insert included a fully printed die-cut lid. Interestingly, the printed lid came from another dieline (potentially the tool insert) printed with a one-color illustration of the electrical charging components. An elongated tongue was designed into the lid so it was friction- held into the bottom insert. I think this was a great idea—leveraging printing efficiencies of other dielines and not printing the bottom insert to satisfy this piece of information. Finally, the remaining package, which contained two spare tires, was a C-flute RSC container encapsulated in bubble wrap. Because this container rested on
3. Progressive disclosure of information is simply critical. Many consumers do not default to manuals, and this design leveraged the entire packaging system as a set of instructions that was impossible to deny. 4. The better-than-average Allen wrench (with a handle) made a positive impression on me. 5. Having an initial positive experience significantly reduces returns—a major pain point for brands transacting online. R. Andrew Hurley, Ph.D., is an associate professor of food, nutrition, and packaging science at Clemson University. He can be reached at me@ drandrewhurley.com.
Leadership
Engage Capable (yet Unwilling) Employees BY SCOTT ELLIS, ED.D.
O
ver the past few years, the No. 1 complaint of CEOs I know has been the inability to find willing and capable people to work in our industry. This is fueled by several factors, including the perception of manufacturing jobs and an economy that has given job seekers the ability to be more selective. As I stated in my last article, many current and future employees may be converted to become both willing and capable. If a candidate for employment presents you with the perception that they are capable of doing the work but seem reluctant to do so, then I suggest that you encourage them to find their bliss elsewhere. However, if you have employed the person and invested time and resources in growing their capability, then I would recommend an aggressive plan to get them engaged. If they remain unwilling, then you can free up their future in good conscience for the sake of your company culture. How might a capable but unwilling employee be identified? They may do
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their jobs to keep their jobs, but they do them at their own pace, by their own methods, resisting standardization and attempts to improve productivity. They may become information bottlenecks by reticence to share process knowledge. This may be in part to ensure job security or just status. In these days of high turnover, perhaps they perceive that newer employees must prove their commitment before becoming worthy of training. My first consideration is always what is gained by these behaviors. Some grammatically challenged person has said that “people don’t do nothin’ for nothin’.” So, when I hear that additional warehouse space is needed for finished goods, I do not blame salespeople. Instead, I ask if they are paid when the product goes into the warehouse or when it ships to the customer. They are not doing it for “nothin’ ” if they are paid to put it in the warehouse. With regard to our capable but unwilling employees, the first consideration would be what they gain by the
lack of engagement. Are they protecting a secure position? Have they been fooled before by short-lived initiatives? Do they know that participation is not mandatory? The second consideration is how we can remove the obstacles to engagement. In order to make it safe and worthwhile to willingly participate, we will need to change the way we behave. An issue common to this economy is the bimodal workforce, in which employees of experience near retirement are averse to sharing knowledge with more recent hires for fear that they will be pushed out of their positions. There are legal and ethical considerations that would guide your course even if you did not value the wisdom of experience. The key is to unlock that knowledge so that greater bench strength is achieved. To accomplish this, I will suggest a course of action. State the Obvious Do this because it is not obvious to them. Have whoever handles human resource responsibilities in your facility sit in on a conversation in which policy and strategy are clearly stated. With very limited exceptions (pilots, law enforcement, air traffic control), age-based mandatory retirement is illegal, and this is likely stated in your employee handbook. Having said this out loud, and thereby taken the first step to removing that obstacle of fear, you can talk about company values. Value Training In the past, your company, like most, may have valued expert operation above all else. Employees have learned that being the one person who can solve a problem
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Leadership
or run a difficult job is the core of their value proposition. My next step would be to apologize to this employee, as this unspoken policy has fostered insecurity in the individual and limited the growth of the entire team. Let them know that you expect them to go beyond expert operation to become a lead trainer on all their processes. Let them know that you will be tracking and recognizing all employees and holding all accountable. Consider pay-for-​performance, in which those who operate and train others see a difference in their compensation. If training is
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uncharted territory, then resources are available on AICC’s Packaging School, www.aiccbox.org/packagingschool, to assist (e.g., Communication for Coaches and How to Train Anyone to Do Anything). This growth in your culture will pay dividends, in that training and mentoring will become a badge of honor rather than a threat to job security. When the job description includes training that is tracked and rewarded, it becomes a reasonable expectation. When the unwilling and capable employee is engaged, the whole company will gain strength.
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GOOD FOR BUSINESS
AICC TOOLBOX ................................................ 33 SUSTAINABILITY ........................................... 34
BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS
AICC Toolbox
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CARDCONNECT LAUREN NEAL 913-953-5320 www.cardconnect.com Did you know that your fellow AICC members are saving up to 40% on credit card processing fees by switching to CardConnect? CardConnect has created a payment solution that gives time and money back to your business. JUSTIFACTS SARAH TRUSILO 800-356-6885 ext. 1555 www.justifacts.com Mention AICC to receive a special rate on Justifacts Credential Verification Service—an information service providing preemployment screening and background investigation. PRINTERS 401K® JOSEPH P. TRYBULA 314-786-9000 www.printers401k.com Printers 401k® has been serving companies in the printing industry since
1985. The Printers 401k® Program is a collaboration of 401(k) specialists who assume specific fiduciary duties for your plan. They have a keen understanding of the concerns and needs these businesses and their employees face, from mitigating the fiduciary liability and costs on the plan-management side to the investment options and education on the plan-participation side. Learn more about all of these programs at www.aiccbox.org/savings.
BOXSCORE www.aiccbox.org
33
Good for Business
Sustainability
There’s Still Worth in Your Waste BY PAUL PIRKLE
I
t is rare to go to a conference or read an industry journal and not hear the term “sustainability.” Entrepreneurs, business leaders, and their employees are seeking business practices that recover and recycle waste in a more efficient manner. Even though the goal is to capture as much revenue as possible, the value of paper fiber and plastics has unfortunately been decreasing. Since January 2017, the Midwest price of double-lined kraft has fallen by 189%, and OCC has fallen by 267%. This is unprecedented. However, with sustainability being a key priority for the packaging industry, one’s focus must remain on positioning their business in such a way as to collect and process scrap that will maximize revenues and reduce expenses. In a cyclical economic environment, it is more important than ever to follow the process steps that will lead to identifying where waste is generated, establishing key collection procedures, and setting goals and objectives that will continually improve the revenue contribution to your business. This should be conducted through a comprehensive audit of your scrap and waste streams. The audit data will populate an action plan that will provide the data that your team will need to lead the change you envision and to help establish a sustainability culture. In addition, a waste audit will help determine what you are doing correctly and where there are opportunities for improvement. Through our audit process at corrugated and converting plants, we often find valuable waste materials ending up in a dumpster. This can be attributed to
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inadequate processes or noncompliance by employees. Regardless, waste hauler expenses are higher than if recyclable products were diverted directly to a processor. Moreover, companies save valuable materials from going to a landfill. Loose corrugated, pallets, metals, or plastics are examples of products that are often not recycled. As the result of recycling these products, your revenues will grow, and indirect costs will shrink. Another byproduct of an audit is discovering that training may be necessary to bring your employees up to speed and to bring continuity throughout the company. We find that second or third shifts may not be capturing and baling material as effectively as the first shift. Communicating and training all shifts will allow your company to become a more efficient recycler and will enable a greater capture of revenue-generating materials. The logistics and handling of the materials must also be evaluated. The greatest value is realized when your scrap materials are baled and mill-ready. Each touch point reduces your revenue potential, so if a product must be further processed, revenue is reduced. Likewise, you must verify the weight of product that is being shipped by scaling your outgoing waste prior to being loaded onto an outgoing trailer. Scaling and recording the weight of your bales or gaylords provides you with a manifest of materials that you can provide as proof of shipment. This will also provide you with proper accounting detail. By not putting a system in place to manage the outgoing materials into trailers or through your
live loads, you may be missing opportunities and creating financial discrepancies. Next, the proper waste-handling equipment, containers, and their positioning in the plant will enable your operations to be more efficient and effective. One must ensure that the loose materials and waste-capture processes are managed properly. A company should know how much overall waste volume they are handling so that the volume is aligned with the capacity of the current processing equipment. At times, we find that a company needs a new baler or material separation tools. Both enhancements will allow you to increase the worth of your waste by forming tighter, grade-specific bales. Lastly, tracking all results through reporting must also be implemented. This will ensure accurate accounting and promote one’s efforts toward continuous improvement. The tracked results can then be shared with the internal and external stakeholders in your business. The optimization of your sustainability strategy and incorporating best practices will enhance the worth of your waste, and the ups and downs of the market will be more easily navigated. Incorporating the best practices of a waste audit is a great place to start. To complete a waste audit survey and receive a free report on your waste stream, visit bit.ly/2OI2o0Z. Paul Pirkle is president of Mid America Paper Recycling. He can be reached at ppirkle@ midamericapaper.com.
Member Profile
Tyndell Photographic BY VIRGINIA HUMPHREY
COMPANY: Tyndell Photographic ESTABLISHED: 1978 JOINED AICC: 2018 PHONE: 800-827-6278 WEBSITE: www.tyndellphotographic.com LOCATIONS: Livonia, Mich. President & CEO: Ben Tyndell
S
ometimes sitting in a pile of snow at the bottom of a hill can change your life. That’s what happened to Allan Tyndell in the mid-1970s. He was then a well-known wedding photographer making a good living with his camera. But then he took a spill while skiing. As he sat in the snowdrift, worried that he’d broken his leg, he came to the realization that if something serious happened to his leg, he wouldn’t be able to support his wife and daughter as a photographer. So he opened up Tyndell Photographic in 1978 in the basement of his Livonia, Mich., home. He started out as a reseller of photographic supplies and photo packaging products—things he knew from firsthand experience that photographers needed.
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It wasn’t long before he realized that being a middleman wasn’t a sustainable position either, and 25 years ago, he decided to become a manufacturer, permanently transforming Tyndell Photographic into what it is today—a manufacturer of photo packaging products such as accessories, albums, bags, boxes, folders, folios, memory mattes, photo cases, sports mounts, and more. Allan Tyndell retired in 2015, and his son Ben Tyndell took over as president and CEO. “[My father] decided that, eventually, we would have to become a manufacturer if we were going to be around forever,” says Ben Tyndell. “He felt the middleman would go away, and manufacturers would sell direct. He started with no idea what to do or how. We bought our first machine, and it’s grown from there.”
Within the past five years, he says, the percentage of products they manufacture and sell versus buy and resell has doubled, and they have truly become a manufacturer. Now, especially after making several strategic changes and getting support from the network that is AICC, they are a competitive manufacturer that owns its niche in the industry. But it didn’t start out that way. “We really had no idea what we were doing when we started,” says Tyndell. “I remember, as a child, my dad coming in and being super excited. He had an old clamshell automatic gluer that was handfed. I remember looking at these machines and seeing his face glowing. There would be piles of scrap, and they had to throw away everything they had made. He’d be sad about that and say we’re not there yet, but we’re going to be there eventually. It
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was that never-die kind of attitude that was pretty special.” In the past several years, Tyndell says, they made several strategic changes to their staffing. They are a small company with 32 employees, and they recruited some industry professionals who were experts in their fields. They had jobs that they didn’t know how to do until they recruited and hired people who had that expertise. They then engaged in what he called “addition by subtraction.” They let two people go who had 26 years’ and 15 years’ experience, respectively. “It’s so hard losing expertise and experience,” says Tyndell. “But while they were both solid, skilled people, they didn’t have the right attitude. If you have people who are just there to get a paycheck and go home and tear other people down, they don’t belong here.” He says that while they took a hit initially with an experience and capability gap, it allowed other people around them to rise, and they are now better off than they were before. Tyndell, who is now 34, says that when he started, he was the youngest person there by probably 20 years, and he’s now in the middle third if not the upper third in age, something that happened organically. As some people retired, they brought on younger people. “We value a diverse workforce in every way possible, especially in age,” Tyndell says. “We want people who are young and fresh with ideas and others with experience who can say, ‘We tried this before, and here is what happened. What can we do differently this time?’ ” At 34, he wants the company to have a long life ahead of it. It’s led him to make smart investments and to start building a network through AICC where he can learn more about the industry. It’s also meant being smart in an industry that has fundamentally changed. With digital taking over the photographic
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industry, the need for a lot of paper products and packaging diminished. Tyndell says that while the overall pie shrank dramatically, the individual slices got bigger because so many people dropped out of the market. Where there used to be five really big manufacturers that supported the industry, there are now two, plus one importer. Then there are lots of printing companies and packaging companies that indirectly supply the industry. Tyndell Photographic is separated from a lot of its competitors in that it was founded by a photographer, and a lot of its policies and procedures are designed for meeting the needs of its target audience. They understand the need for speed and carry a lot of finished goods. Their tools are built around delivery speed. “Photo professionals like dealing with us,” says Tyndell. “That’s how we operate and how we feel like we’ll continue to grow. We have pretty great decorating capabilities because of our core industry. We have the ability to do very low volume and high decorating with screen printing. Whether doing small or large runs, we can be very affordable.” He says they chose not to specialize in either high- or low-volume runs but to be able to do both. He says they’ll do huge runs and stock them, and do small runs and customize them by hand. They also acquired two companies this year and one last year to help capture market share and position themselves for growth. It will expand their distribution and let them differentiate their product line. All of these decisions are to ensure that they’re around not just for the next five to 10 years, but for the next 50 to 100 years. Tyndell Photographic joined AICC in March 2018, in part because Tyndell realized they didn’t really have a network outside of their vendors and customers to turn to when they had struggles or needed answers to questions about manufacturing.
So, when he started researching, AICC kept coming up. They joined the Association, and he became part of the Emerging Leaders group, through which he has participated in several plant tours. “It was really eye-opening for us,” he says. “We have a lot to learn and a lot we can grow to, which is exciting. It has really been a breath of fresh air with regard to how open everyone is to help and mentor and share. It’s been just great to be surrounded by so many like companies.” He says he connected with the current chairman of Michigan Box Co., another AICC member, and shared some of the challenges they were having. Michigan Box opened its doors and invited Tyndell in. He took his operations manager and one of his operators to spend a whole day with people from Michigan Box. “They gave us a lot of tips, and they solved a lot of what we were missing,” Tyndell says. “They shared a lot of best practices; they shared some tips and tricks they’d picked up over the years, some good vendors and bad vendors. It was really awesome.” He praises the leadership at Michigan Box and says the things they have learned from them, other AICC members, and newsletters and presentations have been long overdue for them as they mature and grow into more than just a niche packaging provider. “We feel like we now have a great partnership group and trade organization to grow with,” says Tyndell, adding that he looks forward to the day when they can give back and open up their plant to others who need it. Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-5351383 or vhumphrey@ aiccbox.org.
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APPETITE FOR EXPANSION How independents are growing and competing through acquisitions and joint ventures By Steve Young
A
ccording to reports from Fastmarkets RISI, since 2013 there have been upwards of 50 acquisitions of independent companies in our corrugated industry. The period 2013–2018 has, in fact, been the most active in our industry’s history in terms of independent companies being acquired (see the table on the next page). Calling the phenomenon a “feeding frenzy” among integrated companies, the Fastmarkets RISI report catalogs several case studies in which integrated companies have paid upwards of 10–13 times EBITDA (earnings before interest, tax, depreciation, and amortization) to acquire privately held converting assets. But what about the independent buyers on this list? Companies such as RandWhitney, Hood Container, Buckeye Corrugated Inc. (BCI), Rusken Packaging, and Liberty Diversified International also appear alongside the publicly traded companies. These independents—and others—have been active players for several years now on the growth-by-acquisition stage. Major trade press reports often overlook these buyers, first because information about private transactions is, well, private, and in-depth analysis of the public companies’ strategies is more readily attainable from stock analysts and other industry observers. Larger companies’ motives and drive for acquisition targets are well-documented. For example, as investment in mill capacity increases, raising the level of vertical integration is a key objective. Packaging Corporation of America’s 2016 move with TimBar’s five-plant system in the Mid-Atlantic and Southeastern states and their 2017 acquisition of Sacramento Container Corp. on the West Coast demonstrate this strategy.
BOXSCORE www.aiccbox.org
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North American Independent Corrugated Converter Mergers/Acquisitions (2016–2019) YEAR
2019
2018
CONVERTING ASSETS US Corrugated
Kraft Group
Specialty Industries
Central National Gottesman
Premiere Packaging Industries
New-Indy Containerboard
Proactive Packaging and Display
Golden West Packaging Group
Allpak Container
Hood Container
Custom Packaging
Orora
Pollock Packaging
Schwarz Partners
Mid-Atlantic Packaging
DS Smith
Corrugated Container Corp.
Green Bay Packaging
Grand Traverse Container
Green Bay Packaging
Wisconsin Packaging
Liberty Diversified
Preferred Packging & Crating
Universal Forest Products
North American Container
Hood Container
Cardinal Container
Hood Container
Ideal Box
WestRock
Plymouth Packaging
Cascades
Coyle
PCA
Sacramento Container
Atlantic Packaging
York Container
Ruskin Packaging
Great Southern Industries
Georgia-Pacific
PAX Corrugated Products
New-Indy
Dixie Reel & Box
Hood Container
Richmond Corrugated
Golden West Packaging
Cal Sheets/four sheet plants
WestRock
Island/Combined Container
WestRock
US Corrugated
2017
2016
BUYER Bio-Pappel
WestRock
Star Pizza
Liberty Diversified
Miller Container
BCI (Buckeye Corrugated)
Bell-Pak
New-Indy
Container Services
New-Indy
TriPAQ
Hood Container
Action Box
Hood Container
Packaging Unlimited
PCA
Columbus Container
PCA
TimBar Packaging
Georgia-Pacific
Excel/Five Star Sheets
Smurfit Kappa
Scope Packaging
Smurfit Kappa
Empire Packaging/Displays
Table courtesy of Pulp & Paper Week.
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“It’s true that the bulk of the merger and acquisition [M&A] transactions over the past few years have been driven by the need for mill-based companies to have less of their tonnage subject to the open market,” says Mitch Klingher, partner at Klingher Nadler LLC in Englewood Cliffs, N.J. Klingher says that since North America exports approximately 500,000 tons of containerboard every month, a large percentage of the tonnage that these companies cannot consume domestically will be exported. “The combination of generally lower export prices and freight costs make this a far less attractive scenario for them.” Among independents, however, whose need for further vertical integration is in most cases less prominent, other factors surface as key drivers; customer needs across geographic regions, capital assets, good management teams, and new market niches are prominent motivating factors in independents’ acquisition strategies. This article explores these and other reasons independents are mixing it up. Geography and Culture Jamestown Container Cos. began in 1956 as a one-plant operation in the Jamestown, N.Y., area. Joseph R. Palmeri, chief operating officer and one of founder Glenn Janowsky’s first five employees, explains how the company’s growth to six locations serving a four-state market area was motivated. “Many of our acquisitions have approached us, or we knew the principals and had a business relationship with them,” he says. That alone, however, did not automatically qualify them as a desirable target. “Their book of business must fit our business model. It has to fill out our machine centers and be within our target market of 150–200 miles from our corrugator.” Geography plays to an independent’s hometown or regional “cred.” Local customers, regional name recognition, and
good reputation provide the foundation for regional expansion and growth. Recent acquisitions by Rand-Whitney, based in Worcester, Mass., and the largest independent corrugated producer in New England, illustrate the importance of regional reach in determining acquisition targets. In 2015, Rand-Whitney’s NewIndy unit, a joint venture with Schwarz Partners, acquired Carolina Container, based in High Point, N.C., to establish the New England company’s footprint in the Southeastern states. However, that created a gap in their service area, so to fill the hole, Rand-Whitney in July acquired Specialty Industries, a corrugated sheet plant in Red Lion, Pa. “Carolina Container goes as far north as Virginia and Rand-Whitney as far south as Connecticut,” explains Nick Smith, president and CEO of RandWhitney. “Our customers want us to service them nationally, and the Specialty Industries acquisition will allow us to support them in the Mid-Atlantic region.” Doug Bosnik, CEO of BCI in Fairlawn, Ohio, has been involved in five acquisitions and three joint ventures over
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BOXSCORE September/October 2019
the past 10 years, the most recent being Bellotti/Bell-Pak in the Syracuse, N.Y., area. BCI has nine sheet plant locations and joint ventures in three sheet-feeder operations: Alliance Sheets in Bristol, Ind.; North Star Sheets in Cottage Grove, Minn.; and Niagara Sheets in North Tonawanda, N.Y. Bosnik says geography played a key role in two acquisitions during his tenure at BCI: The Hawkeye Corrugated division in Cedar Falls, Iowa, and Dakota Corrugated in Sioux Falls, S.D. “When we acquired Hawkeye, we also had our eye on Dakota,” he says, noting that the geographic proximity— plus the fact that the owners of the two companies were brothers—made the acquisitions attractive. Rusken Packaging has staked out a large swath of the Deep South from its base in Cullman, Ala., where the company maintains a corrugator. In addition to the Cullman location, Rusken has converting plants in Harrisburg, Ark., and Jackson, Tenn., along with a kitting operation in Heflin, Ala. Rusken also has joint venture sheet-feeder partnerships with Corrugated Supplies Co.—RusCor
in Cullman and CSC Atlanta in Conyers, Ga. In recent years, Rusken has acquired four other sheet plants in the South: Cougar Packaging in Clarksville, Tenn.; Great Southern Industries in Jackson, Miss.; E. Smith Box Co. in Conyers; and Mullen & Co. in Canton, Ga. In describing these acquisitions, Greg Rusk, president and CEO, looks not only for geographic fit, but cultural fit as well. “When I think back on the ’70s and ’80s, there were a bunch of sheet plants in Birmingham and Huntsville [Ala.] markets, and these entrepreneurs capitalized on an opportunity to take care of the customer,” he says. “By the mid-1990s, many of those same players had sold, and we felt as if we were the last man standing in the area.” Rusk says that as the big companies grew, the market lost the entrepreneurial spirit: “The personal touch was gone,” he says. So, Rusk set out to reinvigorate the culture in his market area. “As I traveled around, I met 60- and 70-year-old owners with children who had no desire
to stay in the business,” he says. “I enjoy growth, and I felt that I could keep a culture alive and well in our industry by acquiring companies and bringing them into our family.”
“You have to be mindful of a lifetime of blood, sweat, and tears; there is a legacy to deal with in addition to simply buying a business.”
What About Customers? Apart from the geography of an acquisition decision, are customer — Kim Nelson, president, Royal Containers needs a motivating reason to drive a business to seek joint-venture partners there is a legacy to deal with in addition “It’s very important [for Jamestown or acquisitions? “Often, a company to simply buying a business.” Container] to keep existing managers,” has a customer or group of customers says Palmeri. “Looking at many of the who are expanding or moving to a new Equipment and Capital Assets companies we have purchased over the geographic area,” says Klingher. “In As critical as good management is, years, the plants are still open, and the this case it makes sense for them to look the corrugated converting business is company’s employees and managers are to acquire someone in those areas and capital-intensive, and so good equipment leverage the situation using their existing still working for us.” that’s properly maintained and operating Smith adds, “Talent is hard to come customer contacts.” at optimum utilization is key to a by in our industry, and acquiring a Nick Smith agrees: “We could buy or company’s productivity and profitabilcompany with a strong management build a building and install equipment ity. How an independent looks at an anywhere, but without a strong customer team in place not only allows for a acquisition target’s equipment mix varies smoother transition of the company, base and dedicated employees, it would by company and strategic objectives. but also allows us to grow our internal be significantly more challenging.” Klingher says that while it seems that management team.” Bosnik, however, expresses caution paper mill capacity can be calculated “For us, we look for people we get to about following customers to new locadown to the nearest ounce of paper, know over time at industry events like tions. “When customers drive you to go AICC and Fibre Box Association [FBA],” converting capacity is elusive. “What somewhere and there isn’t a fit, it’s diffiwe do know is that almost every plant says Bosnik. “We want to know how cult,” he says. “In our view, a customer’s has additional capacity, and this trend they would fit our culture, so when a needs are only one piece of the decision company owner decides to sell and wants is being increased by the speed of the process. A customer could close a plant, new converting equipment,” he says. “If to remain part of the management team, and the reason that brought you there is a target company can be acquired and we have already done the diligence to no longer in place. Your customer wants all of its orders moved to the acquirer’s make it work.” you to be a sustainable, viable operation facility, the increase in profitability can Kim Nelson is president of Royal to support their needs. That means a be exponential.” broad, stable customer base that provides Containers in Brampton, Ontario, Palmeri echoes this, saying it has to Canada, whose mission statement is enough converting synergy to support fit Jamestown’s business mix. Palmeri, “Building Partnerships in Packaging.” all of the customer requirements of that who has been involved in 13 acquisiRoyal has closed three acquisitions in facility. There has to be more than one tions over his 63-year career, tells of reason to acquire or build new locations.” the past 10 years and operates two sheet plants they acquired and then rolled plants—one in Brampton and the other in London, Ontario. The company is also business into other facilities because Good Management Teams a Must-Have the mix of equipment didn’t fit the a shareholder in Tencorr, a sheet feeder Dedicated employees and seasoned, model. “We’re always excited to get into in Mississauga, Ontario, and Greenpac in-place management are also markers a plant to see their equipment lineup to Mill in Niagara Falls, N.Y. About the for good acquisition targets. Among curevaluate what’s new, what will compleimportance of key management in rent industry complaints, the loudest is ment our existing mix in other plants, place—especially first-generation ownthe inability to find good people to work and what may have more features than ers—she says, “You have to be mindful in leadership roles or, more critically, in what we already have,” he says. of a lifetime of blood, sweat, and tears; the plant.
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BOXSCORE September/October 2019
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“The [Atlantic Packaging] joint venture positioned us well in the Chicago marketplace.” — Jay Carman, president, StandFast Group
Nelson says Royal’s acquisition process includes an evaluation of the target’s current equipment mix. “We look at what is viable, what fits well, and what needs to be sold,” she says. “We are also mindful of moving costs and the wear and tear on a machine that moving imposes.” She adds that a good equipment mix can improve efficiencies in their product mix: “Where do synergies exist? Can we
reduce overhead and redundancy across our machine centers?” Joint Ventures as a Path to Growth If an outright acquisition isn’t a viable option, many independents have turned to joint ventures. All the companies interviewed for this article are involved in some kind of a joint venture, but most common in the industry today is the sheet feeder.
As noted, BCI is part of three sheet feeders—Alliance Sheets, North Star Sheets, and Niagara Sheets—and this has been part of BCI’s strategic vision for a number of years. “Twenty years ago, sheet supply was more certain,” says Bosnik. “The integrated sheet feeder systems and independent sheet consortiums were popping up everywhere.” He goes on to say that with the industry’s increasing consolidation, the supply situation changed, and with it, BCI’s outlook. “With consolidation, much of that [sheet] supply has been diverted internally, and the levels of vertical integration are much higher, so we needed to make sure our sheet supply was secure to reliably serve our customers.” Jay Carman, president of StandFast Group in Carol Stream, Ill., also looked to
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“The biggest thing we employ in our acquisitions is patience.” — Doug Bosnik, CEO, Buckeye Corrugated Inc.
a joint venture for similar reasons. In 2015, StandFast entered into a joint venture agreement with Atlantic Packaging in Scarborough, Ontario, to form Blackhawk Corrugated. “There are a few reasons we partnered with Atlantic Packaging,” says Carman. “First, the joint venture enabled us to secure a long-term source of supply for our sheets and to have a future possibility to be part of a paper mill. Second, because StandFast was landlocked in Addison [Ill.], the joint venture allowed
us to move to a larger facility and combine our corrugator and sheet plant under one roof. Finally, the joint venture positioned us well in the Chicago marketplace.” According to Carman, other factors were at play as well, including geography and the reputation of the Atlantic Packaging management team. “It became apparent to us quickly that Atlantic is a large company that is entrepreneurial and has an action bias that suited our culture well,” he says.
For Rand-Whitney, a specific market niche, rather than reliability of supply, was the driver in their joint venture with Atlas Global Solutions. “We merged RandWhitney with Atlas to create a protective packaging joint venture,” says Smith. The UN1F1ED 2 joint venture, he says, provides “economies of scale” in the competitive protective specialty packaging market. Parting Advice In talking to AICC’s independent members about their acquisition strategies and asking for any words of advice, we heard similar themes: Do your due diligence, one size does not fit all, know where your company is going, know who you’re dealing with, and exercise patience. “The biggest thing we employ in our acquisitions is patience,” says Bosnik.
BOXSCORE www.aiccbox.org
49
Do not be afraid of taking a minority position if that position will help your company grow. We have done that very successfully.” — Joseph R. Palmeri, COO, Jamestown Container Cos.
“We’re employee-owned; we can be more choosy,” he says. “It’s our money—if we don’t take care of it, we’ll lose it.” Palmeri agrees: “This is an area you cannot rush. You need to be sure your due diligence has been done correctly.” Nelson, for her part, cites the uniqueness of each transaction. “Each deal is unique,” she says. “Why is the seller selling? Are your values aligned? Do you seek to understand the seller’s needs first, then determine your appetite for risk?” This advice, as well as the comments shared by those interviewed, amplifies the point that growth by acquisition and joint venture is not to be undertaken by the fainthearted. There are unique reasons in every case, and buyers and sellers need to be aware of their primary motivators. “Everybody has a different business model,”
says Palmeri. “The question I would ask is, ‘Does this [acquisition, merger, or joint-venture] company fit your business model and help your supply chain?’ Do not be afraid of taking a minority position if that position will help your company grow. We have done that very successfully.” Independents looking to grow have as many opportunities as there are independent converting operations. “It’s important to see the bigger opportunity,” says Nelson. “In my case, I never want to miss out on an opportunity.”
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BOXSCORE September/October 2019
Steve Young is AICC's ambassador-at-large. He can be reached at 202-297-0583 or syoung@ aiccbox.org.
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Innovation and expansion continue to drive the rigid box market By Robert Bittner
J
ust over 200 years ago, the first cardboard box was born. By all accounts, it was an early version of what we know today as a rigid or setup box. The box appeared in 1817, the packaging for a German board game, and it arrived nearly 40 years before the invention of corrugated and almost 60 years before a misaligned bag-cutting machine in Brooklyn inspired the folding carton. Although rigid boxes have shifted over time from first to niche, they remain an important segment of the market. They continue to be used for packaging games and puzzles. But they are perhaps best known as the “celebration” box, the popular choice for jewelry, candy, and other gifts, as well as higher-end products seeking to stand out in the marketplace. Chipboard Challenges Rigid boxes are often discussed alongside folding cartons, but the two styles have little in common. Rigid boxes are usually made of chipboard, while folding cartons may be made from a variety of substrates.
Because the chipboard is thicker than folding carton substrate (.040–.080 inches, compared to folding carton stock, which is usually in the .01–.036-inch range) rigid boxes are known for their strength and durability. Chipboard makes sense because all finishing is done to a separate wrap applied to a plain box. However, that brings challenges as well as benefits. Says Steve Keyser, president of Utah Paperbox, “We’re five times the size in folding carton than we are in rigid. And the thing is, rigid is a lot more complicated to manufacture. There are a lot of different board thicknesses and the need to run different tolerances. There are a lot of ways to mess up a rigid box.” “One of the most significant challenges of manufacturing rigid boxes is the registration of the graphics to the box structure,” says Keith Thomas, director of strategic initiatives and business development at the Michigan City Paper Box Co., which is devoted nearly 100% to rigid box. “When manufacturing
BOXSCORE www.aiccbox.org
55
“Rigid is a lot more complicated to manufacture. There are a lot of different board thicknesses and the need to run different tolerances. There are a lot of ways to mess up a rigid box.” — Steve Keyser, president, Utah Paperbox folding cartons, laminated corrugated, and direct-print corrugated, graphics are applied to cartons while the substrate is still flat. One of the reasons why rigid boxes are also referred to as setup boxes is that the base substrate is set up into a three-dimensional structure prior to receiving the graphics that are glued to—and wrapped around the edges of—a rigid chipboard shell. This creates registration concerns at all corners, all edges, and between base and lid crossovers as well. “The ‘spotting’ of the chipboard shell to the printed graphics was previously carried out by some of the most patient and steady-handed folks on earth, as they placed the chipboard boxes between mitered corners of the flat wrap lying on a glue belt. Since the early ’90s, this process has been automated. In fact, at Michigan City Paper Box, we have 34 robotic spotters for our wrapping machines, with a majority of them using high-precision cameras to spot the box precisely between all four mitered corners of the glued wrap.” “There is a learning curve when it comes to rigid box,” acknowledges Jim Haglund, chairman and owner of Central Package
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BOXSCORE September/October 2019
& Display, whose rigid box division accounts for about 10% of the company’s business. “There are lots of different paper coatings and glues and adhesives. Quality is also an issue. You’re laminating so much of the time—laminating a sheet into a box—and your corners [need to be] perfectly square, folding just right inside the top and bottom covers. “Customers are very particular,” he continues. “With corrugated, some people often don’t even see the box. With our products, and in this setup arena, corporate presidents are inspecting our boxes. If you have a little fisheye or a little wrinkle, they’ll reject them. It’s a different market. We have to do 100% inspection.” Worldly Competition In addition to managing a unique range of manufacturing details, rigid boxmakers have been especially vulnerable to overseas competition—particularly from Asia, where cheaper labor costs have enabled boxmakers to achieve superlative
quality thanks to a high level of skilled handwork. The cutting-edge quality featured in the China-made Apple iPhone box, for example, has not gone unnoticed by U.S. boxmakers. “The Apple boxes have had a huge impact on the industry,” notes Keyser. Thomas says, “The iPhone box—and its many related cousins now—is a good example of how a well-executed, basic two-piece box can serve as an artistically crafted package that is exceptionally functional and green at the same time. After all, is there another empty box that is retained as often as an iPhone box?” John Ray, president of Ray Products, whose product line is 90% rigid box, says, “Asia came on the scene in a big way as a competitor. I thought that was good in some ways. It brought the setup box back to the forefront in people’s minds when they think about premium packaging. Look at the iPhone, the iPad. The more people see a premium product in a setup box, that’s good for everyone.”
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In fact, Thomas believes that it is largely due to what he calls the “iPhone packaging revolution” that he expects demand for rigid box packaging to be on an upswing for the next five to 10 years. “While the construction and tolerances of rigid boxes have become much tighter as a result of the iPhone package engineering, the overall industry has received a muchneeded puff of air,” he says. “The future looks bright.” Keyser agrees, despite the quality of the Asian product. “Even though we do a lot of handwork, we cannot run an Applequality box,” he says. “But due to the Asia tariffs, I think we’re seeing some interest from companies that didn’t used to be interested in us.” For Haglund, whose rigid box division specializes in small runs of custom boxes for customers willing to spend $50, or even up to $75, for a single box, the competition is not Asia or even other boxmakers. “Our real competition is the customer’s price point and our ability to meet that while also delivering a high-quality product.” Marketplace Changes Keyser is seeing increasing demand for short runs and quick turnaround, requests that no overseas supplier can fulfill. “It seems like we have someone come in almost every day who’s starting a business and wanting a small run of boxes. We put in a Fuji digital press so we can do runs of 500 boxes. That’s been good for our business.” In addition, he says, “A lot of people make rigid boxes and then just buy out the print. We’re one of the only rigid shops that also controls print. We do the print, the foil stamping, the whole bit. And recently the exciting thing here has been cold foil on rigid wraps. A lot of our competitors don’t offer it.” The rigid box segment has not felt the impact of e-commerce in the way that corrugated has. Yet new markets continue
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“Our real competition is the customer’s price point and our ability to meet that while also delivering a high-quality product.” — Jim Haglund, chairman and owner, Central Package & Display
to arise, expanding customers’ reliance on rigid boxes. “Traditionally, you’ll see setup boxes used for cosmetics, smartphones, media packaging,” says Ray. “Jewelry boxes are a big part of our industry, too. If you’re looking at what’s new today, though, I have to say the cannabis industry is big. We haven’t done that much of it yet, but there’s a call for higher-end packaging for various cannabis products.” Central Package & Display has also seen the impact of the growing cannabis industry. “We don’t have legalized marijuana here in Minnesota,” says Myron Schmitz, business development manager for the rigid box division, “but we see this type of packaging being very popular in California and Colorado. We run boxes for them and ship to them.” Forecast Rigid boxes continue to fill a valuable niche for boxmakers and customers alike. Even so, “there are a lot of questions when it comes to the future,” says Ray. “Who knows where the economy is headed over the next four to five years?” Says Keyser, “Rigid box makes up about 15%–20% of our business, and our main focus is confectionery. We’re growing a little this year, but it’s not leaps and bounds. The biggest threat—especially given our niche in confectionery—is the pouches that candy comes in these days. I don’t know how sustainable that packaging is compared with rigid box, so I don’t know if we’ll see fewer pouches
going forward. But we have seen them take away some rigid business in places.” Thomas believes that “as import prices continue to rise due to labor, freight, and tariffs, our design houses and marketing departments will begin to forgo the addition of magnets, ribbons, etc. into their package designs,” which typically require a lot of costly handwork and often lead to manufacturing shifting to an off-shore alternative. “For the future,” he says, “I see customers moving more of their packaging back to the U.S. and utilizing boxes that can be automated within our capable and well-equipped domestic factories.” “[Rigid box] is a nice niche to be in,” Keyser says. “It helps you stay deep with your customers. If rigid is what they’re looking for, you’re able to sell it.” Ray Packaging has been selling rigid boxes since the company began. “This company started out manufacturing stationery boxes for Hallmark,” Ray says. “It was my grandpa’s decision to make setup boxes. We’ve stuck with it. It goes to show the longevity of the setup box.” It’s a legacy he continues to honor. “The demand for setup boxes is still very strong. In terms of our product’s presence in the marketplace—its recyclability, its sense of value as a presentation piece—I don’t see anything poised to take its place.” Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.
Do you want to grow your business year over year? Renew Your Company’s Membership. Contact Virginia Humphrey at vhumphrey@AICCbox.org or 703.836.2422.
FREE ONLINE EDUCATION Over 60 courses are available and the catalogue is growing every month! Many are in English & Spanish. Courses include: • Build a Visual Workplace with 7S • Corrugated Basics 101, 102, 103 • How to Spec a Box • Introduction to Polymers • Keeping Score: How to Read a Financial Statement • Maintenance Mapping • Overall Equipment Effectiveness • Packaging Foundations • Paperboard Cartons • Sustainable Packaging Learn more at www.aiccbox.org/packagingschool.
MEETINGS, WEBINARS, & SEMINARS Check out our calendar for upcoming meetings, webinars, seminars, and summits throughout North America to receive the best industry training and the chance to network with others in the packaging industry. View AICC’s upcoming courses and events at www.aiccbox.org/calendar.
ASK THE EXPERTS - Ralph Young, Corrugated Technical Advisor - Tom Weber, Folding Carton Technical Advisor - Doug Friel, Safety & Risk management Advisor Start asking your industry questions today at www.aiccexperts.org.
When you invest and engage, AICC will deliver success.
RAKING IT IN
Sales compensation sees double-digit growth
A
ICC has released its 11th Sales Compensation Report. Based on a survey conducted over the last few months, it is the most comprehensive survey of key sales compensation salaries and benefits being paid by independent corrugator plants and sheet plants in the United States. “Benchmarking is a critical way for AICC member companies to ensure best practices and leadership,” remarks AICC President Michael D’Angelo. “Knowing where you stand is vital information in the competition for people, and especially vital when looking at the sales function.” This report is based on data from 56 independent corrugator and sheet plants. These companies employ more than 5,600 full-time employees spread across all the U.S. in aggregate, and these plants sold approximately $2 billion of corrugated products in 2018. The report is presented in two sections, one covering plant characteristics and sales compensation policies and the other covering base salary and total compensation. Each of these sections is further divided into tables for sheet plants and tables for corrugators. In the report, salary and compensation data are broken down by AICC region, annual sales, number
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of employees, age of salesperson, years of industry experience, and gender. As of January 1, 2019, the mean base salary for sheet plant salespersons in the U.S. was $72,558, which is 19.0% higher than reported in 2017. This represents an increase substantially larger than that observed between 2015 and 2017 (3.3%), between 2013 and 2015 (1.5%), or between 2011 and 2013 (7.5%). Total compensation, which adds actual commission/ bonus paid in 2018 with the 2019 base salary, averaged $141,517, a substantial increase (21.5%) from $116,482 in 2017. Most often, sheet plant respondents indicate that their organization uses salary plus commission (60.4%) as their sales compensation method. It is far less common to observe any other compensation model, although nearly 3 in 10 (29.2%) use straight salary, with slightly smaller proportions reporting that their company uses straight commission with expense accounts (27.1%) or salary plus commission and bonus (25.0%). The mean base salesperson salary at U.S. corrugator plants as of January 1, 2019, was $66,140, a decrease of 17.7% compared to the average reported ($80,339) in 2017. Still, the 2019 mean base salesperson salary was higher than that reported in
2015 ($57,911) or 2013 ($64,405). Total compensation averaged $208,053 and showed an increase from the $164,908 reported in 2017 and was also higher than was reported in 2015 ($137,039) and 2013 ($123,953). Among those who pay commissions, half say commissions are typically paid before invoices are paid. More than one-quarter base commissions on either gross profit or revenue (28.6% each), but 42.9% base commissions on some other factor. The report offers detailed information on sales objectives, base salaries, bonus basis, CRM usage, social media activity, and more, as both a national and regional view to allow independent sheet plants and corrugator plants to benchmark their companies. All responses to this survey were collected and compiled by Association Research Inc. in Gaithersburg, Md., and have been held in strictest confidence. None of the data received have been seen by any AICC member or staff member. The full report is available for electronic download for $210 for AICC members. To order the full report, visit www.aiccbox.org/ store or contact Patrick Moore at 703-8362422 or pmoore@aiccbox.org.
Commission Rate Basis Sheet Plants 56.8%
Revenue
29.5%
Gross Profit Other
55.8%
of commissions are typically paid before invoices are paid.
20.5%
New Accounts
4.5% 0%
10%
20%
Characteristics of Participating Plants
30%
40%
50%
AICC REGION
COUNT
100%
48
West & Southwest
20.8%
10
Midwest
33.3%
16
Great Lakes
18.8%
9
Northeast
8.3%
4
Southeast
18.8%
9
Fewer than 40
18.8%
9
40–59
18.8%
9
60–99
27.1%
13
100 or more
35.4%
17
Less than $10 million
8.3%
4
60%
Commission Rate Basis Corrugator Plants
EMPLOYEES
42.9%
Revenue
28.6%
Gross Profit
28.6%
Other New Accounts
COUNT PERCENT TOTAL
0% 0%
10%
20%
30%
ANNUAL SALES
50%
of commissions are typically paid before invoices are paid. 40%
$10–$19.9 million
37.5%
18
$20 million or more
54.2%
26
50%
Average Base Salaries — January 1, 2019 U.S. Sheet Plants
Annual Sales Less than $10 million
$72,500 $69,221 $73,979
$10– $19.9 million $20 million or more
Industry Experience $58,242 $61,551 $63,964
Fewer than 5 5–9 10–19 20 or more
$83,932 $72,558
All Respondents $0
$20,000
$40,000
$ 60,000
$ 80,000
$100,000
Average Base Salaries — January 1, 2019 U.S. Corrugator Plants
Annual Sales
$50,811
$75 million or less
$117,875
More than $75 million
Industry Experience $54,250 $56,333
Less than 5 5–9
$83,964
10–19
$67,852
20 or more
$66,140
All Respondents $0
$20,000
$40,000
$ 60,000
$ 80,000
$100,000
$120,000
$140,000
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SPECIAL SECTION
AICC EDUCATION CATALOG AICC is the leading educator for independent corrugated, folding carton, and rigid box converters. With more than 60 free online courses, instructive seminars across the country, topical webinars throughout the year, and informative workshops at national meetings and summits, AICC can help everyone in your plant maximize their potential and your company maximize its profit. Encourage your team to participate in the benefits available. When you invest and engage, AICC delivers success.
Getting Started & Refreshing Your Skills Best Practices for Corrugator & Maintenance Operations
Flexographic Printing: Raising the Standard
(Wed.–Thu.) October 9–10, 2019 Hosted at Green Bay Packaging & BW Papersystems, Green Bay and De Pere, WI
January 29–30, 2020 & May 20–21, 2020 Hosted at Printcon, Clemson, SC
During the seminar, operation and maintenance experts will emphasize the prevention of problems and breakdowns by establishing a series of daily checks and observations to maintain an environment of continuous improvement. Each participant will return to his or her facility with a plan to improve daily operations and maintenance.
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This popular seminar will focus on producing clean solids and line work, as well as halftones and spot colors by balancing classroom sessions and time on press. By this method, participants will have a deeper understanding of the concepts and gain experience building standard works. Many troubleshooting issues will be addressed, from dot gain and die cutting to proper graphic design for corrugated to ensure the best results.
Corrugated Fundamentals March 11–12, 2020 Chicago, IL This seminar is a comprehensive, interactive exploration of corrugated packaging technologies. It covers everything from raw material choices to packaging design, printing, converting, sustainability, and end use. Attendees will analyze various packaging solutions and examine the performance attributes of containerboard and corrugated board, including appearance, printability, and runability.
RDC Fundamentals June 16–17, 2020 Hosted at Fox Valley Technical Institute, Appleton, WI AICC’s new two-day course will focus on how to safely produce quality boxes at speed on fewer-than-4-color machines. Participants learn the why behind best practices and then learn by doing. They will gain experience as they explore each section of the machine with expert trainers and suppliers. By this method, participants will have a deeper understanding of the concepts, practicing them in a hands-on environment and building standard operating procedures to take best practices back to their home plants by the construction of standard operation procedures, one-point lessons, and checklists.
Available Anytime—Free Online Courses »» Avoiding Antitrust Liability: Through the video, you will learn what antitrust law is, along with basic principles and guidelines to follow to avoid costly violations that could cause lasting and significant harm to yourself, your company, and the industry as a
whole. AICC’s Antitrust Manual is included with this course. »» Corrugated Basics 101, 102, 103: Currently set up as a three-part series, this course covers the history and industry overview, corrugated board and its uses, and manufacturing and converting board. (Available in Spanish) »» Corrugated Containers: This course discusses the use of corrugated fiberboard in packaging by providing a thorough summary of manufacturing, specifications, and use of the substrates. The science of selecting the correct corrugated board specification for your packaging application will be discussed, with examples and proper calculations. »» The Corrugator*: This course, focusing on the corrugator, dives into key sections and systems of the corrugator, including the wet end, dry end, and the corrugator control system. This course was created with the support of Fosber. »» Essential Principles of Water-Based Inks*: While there are choices when it comes to the different inks you can use for printing, one thing
is certain—inks are critical to a successful print job. This course will give you the basics you need to know as a printer or supplier of water-based flexo inks and how to engineer these inks for consistent quality printing. This course was created with the support of BCM Inks. »» Flexographic Print Fundamentals: This course demonstrates how to produce clean solids and line work as well as halftones and spot colors. This course is based on core objectives covered in the live workshop held at Clemson’s Printcon facility. »» Glass Packaging: This course defines the composition of commercial glass, its manufacturing process, and how to choose the correct type of glass and bottle design for various applications. »» How to Spec a Corrugated Box: In this course, you will learn how to determine what type of box you will be measuring, determine the box construction material, prepare the box for accurate measurement, and finally determine the inside length and width of the carton. (Spanish availability pending)
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»» Introduction to Polymers: In this course, we examine all the types of plastics, the application of the material, how it is created, its raw materials, and how it is used in the packaging industry. »» Machinery: In this course we overview the packaging production line and examine the purpose and process of each individual station in the line. You will learn how to identify bottlenecks and make use of buffers to improve efficiency. »» Maximize Training ROI: This course addresses proven methods of effective employee engagement, planning, and application of training. The planning process is
explained, and resources are provided. Finally, a plan for overcoming cultural resistance to training and implementation is shared. »» Metal Packaging: In this course, you will learn the definition and types of metal, as well as the different can styles. Applications for different types of metal and can styles will be taught. »» Packaging Foundation: In this course we cover the essentials of packaging, beginning with an industry overview that covers common functions and terms, the evolution of packaging, its role in society, and how it applies to the industry.
»» Packaging Production Math: This course is a practical guide to how math skills are used in packaging production. Math instructor Greg Davis refreshes your knowledge of fractions, use of a tape measure, converting standard and metric measurements to decimals, and estimation of product counts. (Spanish availability pending) »» Packaging Regulations: Laws and regulations are used to protect people and limit environmental damage that is caused in the packaging process. There is not one sole governing body for packaging regulations, and as such, individual agencies and their pertinent laws are examined.
Software looked good on paper?
Has it kept pace with your evolving business? You have invested in new machines. Customers have more challenging requirements (more orders, less volume, shorter lead times and more last minute changes). Products are more complex and yet you want to manage working capital effectively. In this new world, you need to efficiently manage your assets to deliver the perfect order. The OMP solution supports your ever changing business aligning your strategy & operations with your customer’s demand. SUPPLY CHAIN DESIGN •SALES & OPERATIONS PLANNING•ORDER PROMISING•MASTER PLANNING•CORRUGATOR OPTIMIZATION•PRODUCTION SCHEDULING•SHOP FLOOR INTEGRATION•TRANSPORTATION PLANNING Optimize your supply chain management. For Excellence in Supply Chain Software: www.ompartners.com
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»» Paperboard Cartons: You will learn how paper is sourced and manufactured, what paperboard grade is best for your application, and the possibilities for creating unique, eye-catching paperboard packaging designs. You will have access to powerful tools that help you select styles, designs, point sizes, print processes, and pricing. »» Rightweighting*: Rightweighting can be used to find substrates that optimize the performance of the box and appeal to both the end users and box manufacturers in terms of cost, sustainability, and efficiency. The shift to rightweighting did not happen overnight. This course will dive into the origin of
rightweighting, its application today, the technology, and where the future of rightweighting is headed. This was created with the support of Kruger Packaging. »» Rotary Die Cutting Operation*: Rotary die cutters are used in two main industries: the manufacture of corrugated packaging with high printing and die cutting requirements and the production of in-store displays from corrugated board. This course covers the fundamentals of rotary die cutting operations, major sections of the machine, and housekeeping and maintenance procedures for your machine. This was created with the support of SUN Automation Group.
»» Safety Basics 101, 102, 103: This course provides employees with the knowledge and skills required to safely perform their assigned duties, and to recognize potential hazards and avoid them. (Available in Spanish) »» Understanding Anilox Rolls: We will look at the function, operation, cleaning, and maintenance of anilox rolls for peak performance in printing. »» Understanding Combined Board Combinations: Any given ECT can be made from a variety of containerboard grades. Linerboards and mediums come in a wide range of strength properties. It’s always
Improve Revenues with Food Safety Packaging Certification ✓ Do you know what standards are recognized by GFSI (Global Food Safety Initiative)? ✓ Do you know which Food Safety Packaging Standard is best for you? Is it, FSSC 22000, SQF, BRC, IFS or AIB? ✓ Do you know how to Get Certified Faster & Easier in less than 5 months? Contact QSE for ALL your Answers and Your Simplified Food Safety Packaging System Development
Quality Systems Enhancement, Inc. 1790 Woodstock Road, Roswell, GA 30075 Ph: 770-518-9967, Fax: 770-518-9968 Email: info@enhancequality.com
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a matter of selecting the highest strength at the least basis weight at the lowest cost.
Moving Up Customer Service Seminar October 23–24, 2019 Chicago, IL This two-day training course covers customer service communication skills and key organizational skills for those who are on the front line with direct contact with customers. The first day, attendees will hone their communication skills, including how to deliver bad news, handling customer complaints, and improving listening skills. We’ll elevate the conversation on the second day, when we discuss how to leverage communication and process improvement skills to build stronger and productive relationships with the departments we work with. Feeling overwhelmed, overcommitted, or unorganized? The second day, we will tackle getting organized!
Selling Digital Print February 5–6, 2020 Bentonville, AR Digital sales opportunities are exploding! This new two-day seminar provides you the time to gain substantial information to keep up with the rapid changes related to selling in the new digital age! Attend this course and receive a clear understanding of the drivers of the digital revolution and why growth is happening so quickly. Find out how you can get a piece of the digital market, even if you don’t have a digital machine! Learn how to do a
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retail audit with visits to a local club shop and retailers.
The Sales Train: Building LongTerm Customer Relationships March 3–4, 2020 Atlanta, GA It is well understood that the art of sales involves the successful execution of a long list of steps that are involved in the sales process, sales cycle, sales funnel, etc. Regardless of what you know it as, the interconnectivity of this series of events is crucially important as well. A good symbolic representation is a sales train, which indicates the lead locomotive, a bunch of box cars, and the caboose. We likely share the belief that the lead locomotive is the prospecting phase that drives the whole process. While we may have some different names, or slightly different ordering, we would capture many of the same titles for the boxcars. However, many may believe that the caboose represents the close of a particular deal. In this course, we will challenge that philosophy and build a case that the close is two cars forward of the caboose. The caboose is a better representation of your clients’ trust, and this should be what you are ultimately shooting for during every stage of the sales process. Trust will have your client ordering the second project from you, eventually positioning you to be the organization with which they prefer to work in all cases.
Design Workshop March 25–26, 2020 Hosted at The Packaging School, Greenville, SC AICC partners with The Packaging School to bring designers relevant and
impactful knowledge centered around packaging design. The program begins with identifying key pain points in design and covers how to understand your customer, build the brand, and create artwork. We will explore how to design efficient and effective designs and discuss print strategy, 3D design, and structural design solutions. We will also cover how to maximize e-commerce structures and the future of e-commerce packaging. Attendees will also participate in hands-on projects to help break down package design, evaluate the good and bad aspects, create e-commerce redesigns, and work with other designers to help create the designed packaging product.
Productive Machine Measurement Seminar March 2020 Chicago, IL Today’s workforce is most productive and engaged when trained and equipped, and when it receives consistent feedback. Participants will leave with tools for process improvement and communication to gain speed of setup and production with greater quality.
Sales Management Forum, in Conjunction With the AICC Spring Meeting April 1–3, 2020 Carlsbad, CA Participants will learn how to build a sales team for the modern day with the idea of not hiring “the best” salespeople, but organizing a collaborative team—to prospect, develop business, and wrap up with a mutually beneficial close.
Sales Compensation Sees Double-digit Growth AICC 2019 Sales Compensation Report
See detailed information from independent U.S. corrugator plants and sheet plants about base compensation, commissions, bonus structure, benefits and more! National & regional information is included.
$210 for members $395 for non-members Learn more at AICCbox.org/store
Management by the Numbers May 5–6, 2020 Hosted at SMC Packaging Group, Springfield, MO This seminar goes far beyond the favorite measures of production: MSF per staff hour and machine speed. You’ll gain the ability to understand and communicate the costs of materials and staffing, allowing you to develop a successful plan to increase productivity and profitability.
Digital Print Operations Date TBD This premier workshop is based on the movement to digital printing taking place in paper packaging and the need for a well-thought-out plan for meeting customer expectations. Learn from knowledgeable developers and users in digital print for corrugated. By the end of the seminar, you will leave with the knowledge you need to go further in digital printing and get the results you are looking for when you return home. You’ll have a vastly expanded set of possibilities for getting started in digital and building a digital platform for your customers at the level and pace that works for your company.
Available Anytime—Free Online Courses »» 18 Ways to Sell Value: The marketplace is getting more competitive, and there are companies that are willing to do almost anything to land an account—including compromising quality. Learn 18 ways to sell on value instead of price. »» Benefits of ERP Software Solutions for the Packaging Industry: Told through firsthand accounts of professionals
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in the packaging industry, this course focuses on how ERP software solutions can help your company with financials, operations and logistics, sales and marketing, and customer satisfaction. »» Communication for Coaches: Modern management requires coaching skills, and first among these skills is communication. Participants complete a short survey that provides real-world feedback on business. »» Convergent Selling: Imagine a world without traditional salespeople, linking creativity, communication, and delivery to increase sales momentum in the new marketplace. Pursuing business with the traditional road-warrior framework has become cost-prohibitive. This framework is designed around your customers’ experience and how you make their business better. »» Distribution: In this course we assess all the ways to distribute a package, including space optimization and various green methods, to ensure best shipping methods. The complete supply chain overview is taught. »» Fingerprinting the Flexographic Press: Fingerprinting demonstrates the capability of your press to print an image with consistency and quality. Learn to validate the settings on any flexographic press in order to diagnose issues for improvement and to gain speed, quality, and repeatability of print. »» Flexographic Print Plates: This course was prepared by Jason Cagle, who is a contributor to AICC’s live Flexo Best Practices course at
Clemson University. In this course, Cagle explains the best practices for storage and cleaning of print plates for quality print and extension of print plate utility. »» Giving Motivational Feedback: This course provides a step-by-step plan for delivering both positive and negative feedback through the most effective methods. Participants practice using the steps to work through real workplace interactions. »» How to Train Anyone to Do Anything: This course is provided to train the trainer in best practices for engaging employees and transferring critical knowledge for a safe and productive workplace. It’s perfect for seasoned employees who are tasked with training a new generation. »» Maintenance Mapping: John Kravontka, CMRT, CMRP, teaches the process and benefits of maintenance mapping for improved safety, quality, and productivity. This technique brings the skills of value stream mapping to the maintenance department with benefits to machine health, speed of response to production issues, organization of the shop, and reduction in chronic productivity losses. »» Navigating Time: Time Management for the Job Shop: This course guides you through the process of goal-setting and scheduling to achieve greater balance and get more done on the things that matter most. »» Package Printing: This course covers the different aspects of printing, its uses on various
materials, and how different types of printing are used to achieve desired results. The course will also cover how graphics are used to attract customers and successfully market the product. »» Project Planning: MAPP the Project for Success: This course gives an essential understanding of the tools for analysis and improvement of material and information flow. The various uses of value stream mapping will be described. »» Situational Leadership: Professional coach Leah Ashford shows the various leadership styles and offers strategies for adapting the managerial style to fit developing employees. »» Standardized Work: Make it easy to do the right thing in your company. This course teaches the creation of standard operating procedures, one-point lessons, decision trees, checklists, and more. Templates and guidelines will equip you to provide clear standards for important tasks that will improve productivity and speed of training. »» An Understanding of Accounts Receivable and Cash: Learn how every department in your company influences cash flow, specifically accounts receivable, and why collections are important to everyone in your firm. »» WARP, and How to Control It: Learn how paper or combined board reacts to moisture or tension and how operator adjustments can correct warp. (Available in Spanish)
Reaching the Top E-Commerce Xperience Conference February 2020 This year’s Xperience will bring together e-commerce experts from all over the country to discuss topics including an overview of the current market, brand owners’ perspective on consumer packaging, Amazon’s new packaging regulations, and how to help brand owners maintain brand identity in the e-commerce arena. You will hear from packaging manufacturers, brand owners, and successful e-commerce distributors about this rapidly evolving segment for packaging.
Human Resource Workshop March 2020 Hosted at JobPath, New York, NY Human resources is a hard job. As the key employee-hiring strategist for the organization, you are responsible for keeping up with employment laws and pertinent compliance mandates. You are a key member of the leadership team, and you’re often forced to be a bad-news messenger—thanks to ever more complex laws and escalating benefit costs. You’re responsible for making sure your organization’s supervisors and managers understand organizational policies and procedures and apply them consistently. It’s a big job that does not always get the appreciation it deserves. This workshop will cover a host of topics and make your tough job easier. You will leave with practical tools, techniques,
strategies, and guidelines you can use immediately.
Production Leadership Seminar: Next-Level Supervision of People & Process March 2020 Chicago, IL Keep your best people, improve productivity, and make best practices become your common practices. With constant changes in the marketplace and workforce, supervisors must be continuously equipped to improve productivity and retain their best people. This course provides any manager in the packaging industry (corrugated, folding carton, or rigid box) education and hands-on experience with the tools of leadership and process improvement.
Safety Summit April 28–29, 2020 Hosted at Niagara Sheets, North Tonawanda, NY This two-day workshop will cover all the aspects of safety in a packaging manufacturing environment. Using best practices and OSHA requirements, the Safety Summit will help operations managers, line supervisors, and people responsible for plant safety learn how to effectively integrate safety management into your overall management program and help supervisors improve safe management skills that encourage employee participation. We will help you build a stronger safety culture by empowering your employees to actively participate.
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Converter Conference June 9–10, 2020 Grand Rapids, MI With industry experts and peer support, this summit will help groom up-and-coming leaders, develop effective plant operations, plan for the future, make decisions that grow your business, and give you the tools to make it happen. This summit is a key step in the development of your employees and your business.
Available Anytime—Free Online Courses »» Build a Visual Workplace With 7s: The five S’s are described, and the two desired results are also included so that employee motivation is aligned with company goals. The concepts and best practices of organization activities and employee agreements necessary to sustain progress are described. (Spanish availability pending) »» Corrective Counseling: Human resources consultant and attorney Grace Schmitt gives direction for coaching and retaining employees in a tough labor market. She shares best practices for preparing for and conducting the difficult conversations that help employees to be successful. »» Delegation DIY: Learn to be more productive while investing in the knowledge and skill of your direct reports. Learn to evaluate the level of delegation at which others delegate to you. In both cases, you will gain skills to attain the next level of delegation effectiveness.
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»» Faster, Better, Smarter With Value Stream Maps: This course gives an essential understanding of the tools for analysis and improvement of material and information flow. The various uses of value stream mapping will be described. Participants will learn to map material flow through the supply chain, production, and warehousing to eliminate bottlenecks and reduce inventory costs. »» GO TEAM: How to Make Your Team More Productive: This course was updated in August 2018. Understand the stages of team development so that you can lead them to higher productivity. You will learn to build a team charter, identify the functional stage, and equip them to accomplish more and enjoy the process! »» How to Help an Upset Customer: Terri-Lynn Levesque offers a strategy that will assist anyone with managing their own emotions while helping to find a solution for the customer. This very brief course uses the acronym SPAA to equip you to calmly manage these difficult conversations. »» Internal Staff Development Guide: The internal staff development guide is a tool for onboarding and ongoing professional development. The course provides key human resources training and provides people with resources to help effectively train new employees and to make sure an employee understands the requirements and expectations of the company. »» Keeping Score: How to Read Financial Statements: Demystify the four most common financial
statements: the purpose of the balance sheet, the income statement, the cash flow statements, and the ratio analysis. This course offers a practical approach for people of all levels of your packaging company to keep score using these tools. »» Mentoring Best Practices: Mentoring is an essential component in today’s workforce. Seasoned employees at all levels of the organization have a wealth of knowledge that is critical to future success. This course describes the best practices and provides tools to allow anyone to form an effective mentoring relationship. »» OEE for the Packaging Industry: In this course, overall equipment effectiveness, or OEE, is defined and shown to be a balanced and practical measurement for productivity. Scott Heilmann walks us through the steps to gather baseline measures, calculate OEE, quantify related savings, compensate for the changeover effect, and set motivating production goals. Additional resources are provided. (Spanish availability pending) »» Optimizing the Flexographic Printing Process*: How many of us know how to become the perfect version of ourselves? Many of us do not, and neither do our flexographic print processes. However, this course is designed to showcase the cutting-edge technologies and systems within the flexographic printing industry that can help make your press the best version of itself. This was created with the support of Pamarco, JB Machinery, Printron, and Absolute. (Spanish availability pending) »» Packaging Design Workflow: This course features the overall strategy
utilized in developing a packaging system. After a recap of terms and basic design attributes, learn how to develop a design brief, kick off the project, brainstorm packaging ideas, and set up a timeline to production. »» Preventative Maintenance Optimization: This course explores and explains operator preventative maintenance activities and equipment visuals. John Kravontka, CMRT, CMRP, explains the primary causes of most breakdowns and demonstrates the use of the diagnostic tools to prevent them.
»» Setup Reduction: Lean manufacturing techniques are explained in this course for the purpose of eliminating waste in the changeover time between jobs. The waste-reduction tool TIMWOOD is used by all the participants to identify seven types of waste. Using video of a 10-minute setup, operators are tracked using a spaghetti diagram, then the process of prioritizing and leveling the work is described. The duties, as well as the time it takes to accomplish them, are analyzed, and the necessary training is completed. Most often, this results in a setup time cut in half. (Spanish availability pending)
Current AICC Education Investors include: Fosber, BCM Inks, SUN Automation Group, Pamarco, Absolute, JB Machinery, Printron, Bobst, EFI, HP, Kruger.
»» Sustainable Packaging: This course outlines ways in which professionals can increase sustainability. This involves increased use of life cycle inventory and life cycle assessment to help guide the use of packaging, which reduces environmental impacts and ecological footprints. More courses are available for all levels of experience. Learn more at www. aiccbox.org/packagingschool and www. aiccbox.org/calendar. *Created with the support of AICC Education Investors.
To become an AICC Education Investor, contact Mike D'Angelo, mdangelo@aiccbox.org, or Taryn Pyle, tpyle@ aiccbox.org.
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BOXSCORE www.aiccbox.org
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The Associate Advantage
The More Things Change, the More They Stay the Same BY PAT SZANY PAT SZANY AMERICAN CORRUGATED MACHINE CORP. VICE CHAIRMAN PSZANY@ACM-CORP.COM
DAVE BURGESS JB MACHINERY CHAIRMAN DBURGESS@JBMACHINERY.COM
JOE MORELLI HUSTON PATTERSON PRINTERS SECRETARY JMORELLI@HUSTONPATTERSON.COM
GREG JONES SUN AUTOMATION GROUP DIRECTOR GREG.JONES@SUNAUTOMATION.COM
ED GARGIULO EQUIPMENT FINANCE CORP. IMMEDIATE PAST CHAIRMAN EGARGIULO@EFC-FINANCE.COM
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know that it is one of the all-time contradictions in terms, but change is constant. In this issue of BoxScore, the big picture is a moving picture that cannot be captured in a snapshot. It shows that the packaging industry continues to evolve to meet the challenges of the day. Independents already lead in terms of customer focus and customer service, but they constantly strive to do so in the most clever and innovative of ways. No one can rest on their last great idea any more than they can rest after they’ve booked their newest customer. The paper-based substrates that AICC members work with enjoy high marks for sustainability, reuse, and recyclability, but box plant designers come up with new structures and new ways to wow brands: digital printing, e-commerce, subscription boxes, the end of retail as we know it—yada, yada, yada (shoutout to Seinfeld, which debuted 30 years ago). These are just a few of the change drivers in the packaging business. Then there is the box business itself. Consolidation—is it a change, or is it a constant? On Page 40 of this issue, you’ll read about the various ways in which independents have gone about their business in an environment that’s seeing a shrinking number of box plants and a growing number of box company footprints. Choices are made, strategies are executed, and hopefully, results are achieved. In the meantime, your suppliers have been evolving as well. This, by its nature, must be done in accordance with the direction in which our customers are
evolving. As the industry consolidates, efficiency becomes more and more important. Equipment suppliers have responded with the most productive machines ever. Auxiliary suppliers have brought tremendous innovation to all aspects of the printing and converting process. Lighter-weight board and board combinations are more in vogue. Inks and coatings are more complex chemically, even as they become easier to handle and clean. Previously owned equipment is renewed in more robust and modern ways. Plant operating software performs more and more tasks. The day-to-day activities of an AICC Associate member can have a certain Groundhog Day aspect to them. Engineers engineer. Assemblers assemble. Technicians tweak. Betas are tested. The next big idea. Just like always. We’ve been a part of your change for as long as you have. Pat Szany is president of American Corrugated Machine Corp. and vice chairman of AICC’s Associate Board.
Thank you Education Investors These companies are making a significant contribution to the online education available to all AICC members.
For more information, contact Mike D’Angelo, Vice President, 703.535.1386 or mdangelo@aiccbox.org.
What the Tech?
My Most Important Sales Point BY CHUCK DELANEY
I
n spite of the two complaints that I hear about salespeople (see July/ August BoxScore, “Lessons From Software and Fast-Food Giants”), rarely are salespeople the core problem. Their performance is an outgrowth of how you have positioned your company in the market. Their performance is a result of how you craft and tell your story to your customers. You could wipe out your entire sales force and replace them with a whole new crew. If you don’t change the story you tell, if you don’t change what makes you different in the market, you’ll be right back in the same position with the same complaints in a very, very short time. (Please call or email me if you would like to discuss this point.) In spite of what you might think, your most important job is not motivating your sales team. Your most important job is figuring out what problems you can most effectively solve for your customers and then working to get them
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(your customers and your sales team) to understand that you can solve them better than anybody else. Just as Microsoft and McDonald’s did—and continue to do! But first, and most importantly, you need to decide what specific problems you are going to solve. (Hint: It’s not putting ink on board. That is not their problem; that is your problem.) You have to be able to tell your customers and potential customers quickly and concisely exactly what makes you different from the other four, or eight, or 10, or 100 boxmaking or graphic packaging firms with which you compete on a daily basis. The process of developing this idea and this mindset takes time and a whole lot of blood, sweat, and tears, but it is well worth it in the long run. The downside is that you won’t be able to take the easy way out and blame your salespeople, your management team, your customers, or even your competitors anymore. You’ll be the one really managing your
own future. (Don’t underestimate this downside, as it is very easy to blame others for your problems.) What you come up with is called a variety of fancy names—unique selling proposition (USP), value proposition, creating a brand, go-to-market plan, what do you want to be when you grow up?, etc. But the important thing is that you can explain to a customer in just a few seconds what it is that sets you apart. By the way, most corrugated companies can’t do this. Instead they say things like “We’re a graphic packaging provider,” “We have an EFI press,” “We are a one-stop shop box manufacturer,” or “We serve the greater Chicago area.” Balderdash. Your statement needs to be much better than that and really needs to set you apart. Otherwise you will be playing the me-too game, and that leads to meager profits and no fun. Unfortunately, I can’t just “give” you a USP, nor can you just read a book or an article that will magically provide it for you. You need to work through it for yourself. Everybody is the hero of their own story. Make an impact on your customers’ lives by looking at things from their perspective. Your customers will better understand your business and be more likely to give you theirs. Chuck Delaney is managing director of GROW Retail Technologies. He can be reached at 708-491-5090 or cdelaney@growrt.com.
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REGISTRATION OPENS DECEMBER 2019
AICC/TAPPI 2020 SUPERCORREXPO
SEPTEMBER 14–17, 2020 REGISTRATION OPENS SPRING 2020
Orange County Convention Center | Orlando, FL
AICCBOX.ORG/CALENDAR
Strength in Numbers
Future Trends in the Converting Business BY MITCH KLINGHER
A
ICC was founded at a time when paper was in short supply and the integrated producers were not setting aside enough tonnage to allow the independent producers to service their customers. The affected independents banded together to form AICC. It was a great time to be a converter, because the economy was still growing rapidly, so there were still plenty of new customer opportunities. The effects of Asia and other emerging manufacturing markets across the globe had yet to have a major effect on the United States. Over the next decade, North American containerboard capacity grew, the growth in demand cooled down, and other markets, most notably in Asia, began to grow exponentially. The balance between supply of containerboard and the demand for it found an equilibrium in which all converters could operate without supply issues. In 1990, North America accounted for 40% of the global containerboard markets, and today this number is less than half of that—yet most of the mills that were in existence then are still in existence. Millions of additional tons of capacity have entered the market (and millions more are scheduled to come on line over the next few years), which leaves us in the current situation of excess supply. North American mills are currently exporting more than 500,000 tons of containerboard to markets, many of which are developing their own mill systems and will not need our paper in the long run. Export prices have been dropping lately, and while there are always ebbs and flows to these markets,
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it is unlikely that growth in domestic demand will account for all of the new mill and paper machines that will be coming on line in the next few years. To make matters worse, lightweighting (or “rightweighting,” as AICC’s Ralph Young refers to it) is here to stay. The average basis weight of corrugated board sold in North America in 1990 was almost 140 pounds per thousand square feet. Today this number is in the mid- to high 120s and dropping every year. The mill system here is heavily invested in making 42-pound kraft paper at a time when basis weights of combined corrugated board are dropping quickly. This trend is expected to not only continue, but accelerate, which is why the bulk of the new tonnage coming on line in the near future can make very low-basis-weight paper. Europe has been a leader in ultralow-basis-weight board for years, with many of their mills making paper that is less than 20 pounds per thousand square feet. Many of the customers of the European converters also operate here and are pushing for a move to lower-weight board here. The U.S. investments by European-based companies such as DS Smith and Smurfit Kappa will likely serve to accelerate this trend toward lighter board. In 1990, 16 integrated producers accounted for 74% of the market, and there were more than 50 companies who owned mills. Today, four integrated producers account for 76% of the market, and there are about 20 companies overall who own mills. This concentration of economic power has been successful so far in keeping prices high, which has
been good for both integrated and independent producers. But in my opinion, there is a limited amount of time during which they will be able to buck the fundamental laws of supply and demand. The export markets are drying up, the new competition is going to be pushing lighter-weight paper, and the new mills coming on line will be able to make lighter-weight paper. RISI has announced two $10-per-ton decreases in the price of linerboard in the past two months. The entire notion of a free market for containerboard in North America is a stretch, anyway, since so little tonnage is bought by independent producers. In any event, unless the big integrated producers start shuttering mills, I would expect this trend of falling prices to continue. Technological innovation continues to change the face of converting, as well. In 1990, the standard for corrugators was a width of 87 inches and an average speed of 500 lineal feet per minute. The standard today is a 110-inch machine running at 1,000 lineal feet per minute. Converting equipment that used to take a half-hour to set up and would top out at 5,000 pieces per hour now routinely sets up in two minutes and runs more than 20,000 pieces per hour. Digital printing has gone from being just a curiosity to becoming an integral part of many converting operations. Digital presses are now running at better than 200 feet per minute with a width of up to 6 feet, giving them a gross potential of 5,376,000 square feet per eight-hour shift. As the speeds increase and the quality of the print continues to improve, they will begin to give flexography a real run for its
Strength in Numbers
money. Many converters have purchased die cutters and flexos with inside and outside print, and many more have them on order. With the increase in internet sales and more and more demand for retail-ready packaging, this trend will also continue and is likely to accelerate. The biggest issue that my clients and friends tell me about is the difficulty in attracting qualified employees at all levels. Unemployment rates are at historically low levels, and attracting and keeping quality employees is becoming problematic for most small to medium-sized businesses. In addition, the younger employees have a different work ethic and overall mentality than do we aging baby boomers; new strategies need to be developed in figuring out how to motivate younger generations. More downtime and the quality of their work environment seem to be far more important to them than overall compensation levels. They also don’t seem to like to stay in the same position for more than a couple of years. Everyone also seems to be worried about a recession rearing its ugly head in the near future. The current economic expansion has now broken the old 120month record for the longest continued period of growth in history. Surely, this expansion must end sometime, and when it does end, some companies will be in trouble, and people will get hurt. So, what we have here in North America is a market that has way too much paper supply, slow growth in demand for corrugated products, expensive equipment that must be bought to stay competitive, a probable shift to lower-basis-weight boxes on the horizon, and a general difficulty in attracting and maintaining employees. One might think that this would lead to a bleak outlook for the converting business. However, every cloud has a silver lining, doesn’t it? In this case, converters must embrace these trends and figure out how to move forward. In my opinion, this is
a great time to be a converter in North America, and here’s why: 1. While the excess supply problem isn’t going away, converters must learn to adapt to a period of falling prices for containerboard. Prices have been on the rise for so long that it’s hard to remember how to manage customer relationships in an environment of falling prices. But it certainly can be done, and the independent sector must begin to formulate these plans immediately. Customer contracts must reflect this new reality, and negotiations with suppliers will need to be a little more aggressive. 2. While the cost of new capital projects is high, interest rates are still at historically low levels, and the current tax environment allows for a 100% write-off in the year that you buy the equipment. In addition, the overall high cost of equipment and industrial real property (which is also at very high levels in almost every major market) is a tremendous barrier to entering the business. The days when a salesperson could go into competition with you by buying an old piece of equipment and setting up shop in an old building are over. If someone wants to get into the converting business, they are going to have to write some very large checks. 3. While everyone seems to fear recessions, they also create opportunities. A company with a strong balance sheet entering a recession will find that there will be some good deals on property and equipment to be had. Similarly, there should be some qualified employees who will be looking for new homes. The key is to be financially strong when
the recession hits. Now is the time to get all your financing in place, since rates are still low, and clean up your receivables and inventory. Take greater notice of your customers who are slow-paying, and make sure that you are not carrying any excess inventory for them. It is also the time to get a little tougher on credit, because if a recession hits, there will be more bankrupt and insolvent customers to deal with. 4. Increase your knowledge and experience in working with lower- basis-weight board. See which machines can convert it and which machines can’t, and start to develop a long-term strategy for converting this board so that when the market goes lighter and your customers start asking for it, you will be ready. 5. Embrace high-speed converting and start to develop the metrics to understand its effects on your operation. Make sure you take time into account when you are evaluating the profitability of an order. Change seems to be the only real constant in the universe. Businesspeople who look for future trends and begin to plan for them will have a leg up on their competitors who are more reactive to changing market conditions. This is still a great time to be a converter, if you embrace the changes that are happening in your marketplace. Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.
BOXSCORE www.aiccbox.org
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International Corrugated Packaging Foundation I N T E R N AT I O N A L
PACKAGING
CORRUGATED
F O U N D AT I O N
Recruit Student Interns and New Grads Successfully Through ICPF!
T
his past 2018–2019 school year, more than 750 packaging engineering, sales and marketing, graphic design, packaging design, business, supply chain management, chemical engineering, mechanical engineering, industrial engineering and design, and related upcoming graduates and students demonstrated interest in corrugated packaging careers by posting their résumés in ICPF’s Résumé Bank, applying for ICPF corporate partner student internships or entry-level openings through ICPF’s Career Portal, attending ICPF’s Student/Executive Dialogue Dinner, participating in ICPF’s annual Teleconference on the Business of Corrugated Packaging and the Careers, and joining ICPF’s interactive Careers in Corrugated Packaging social network. As in the past several years, and at the time of this July writing, more than 130 student interns and new graduates already have been hired by ICPF’s official Corporate Partners through ICPF resources during the 2019 hiring season. This September and October are the times to post 2020 summer internships and openings for upcoming 2020 graduates on ICPF’s Career Portal. As they say, a picture is worth a thousand words. Following are some snapshots of this year’s recruiting success. Photos courtesy of ICPF
Jake Hughes, University of Florida (UF) (chemical engineering major and packaging science minor, ’19) was hired by WestRock as a paper mill process engineer after serving in student
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internships with the company. “I had a chance to attend an ICPF Student/ Executive Dialogue Dinner that exposed me to just how broad the industry is and how strong the companies are. Since then, I have been an official ICPF student representative at UF and have been able to bring other students into the corrugated packaging network.” Mary Beth Greene, Indiana State University (graphic design with minors in packaging design and computer- aided design and drafting, ’19) was hired by Tavens Packaging & Display Solutions as a packaging and graphic designer. “ICPF is a fantastic tool for the college student to make that networking connection that is necessary in today’s world when on the job hunt. I was looking for a career where I could make an impact, but also where I could learn a great deal and be a member of a team that cares about their employees. I never would have found that without ICPF. ICPF connected me with four openings, eventually leading to me accepting a position at Tavens, where I have found exactly what I was looking for.” Tavens’ president, Michael Schaefer, adds, “Today’s labor pool is difficult to negotiate, and acquiring the best people for our business has been one of our biggest challenges. ICPF has allowed Tavens to more easily identify and network with the box professionals of the future. Through ICPF’s guidance, when we found the qualities we wanted in a future Tavens employee, we put aside corporate red tape and pursued that talent. It was a seamless hiring experience.”
Jacob Businger, Bowling Green State University (visual communications technology with packaging focus, ’19) was hired by Landaal Packaging as a digital print production supervisor. “ICPF was an invaluable resource in searching for my career. Thanks to ICPF’s Teleconference and Student/Executive Dialogue Dinner, my passion for the industry was able to grow. I obtained a package design co-op at Green Bay Packaging using ICPF resources. I was able to find the position at Landaal via the Career Portal on ICPF’s website, and I could not be more excited to start my new career!” Taylor Jensen, Michigan State University (packaging engineering, ’19) was hired by Landaal Packaging as a sales development associate after an earlier student designer internship there. “Using ICPF’s Career Portal, I obtained my first student internship, which was at Landaal Packaging Systems as a packaging designer. This experience helped me decide that I wanted to pursue the corrugated industry upon graduation. I also served as the student moderator of ICPF’s 2019 Teleconference and attended ICPF’s Student/Executive Dialogue Dinner. Both provided me with insight to the opportunities in corrugated sales and generated several career offers in the corrugated industry, including the sales career opening I accepted at Landaal Packaging Systems. Thank you, ICPF!”
International Corrugated Packaging Foundation I N T E R N AT I O N A L
PACKAGING
CORRUGATED
F O U N D AT I O N
Mark Landaal is vice president of the In-Store division at the Landaal Packaging Innovation Center. “Landaal Packaging has been successfully using ICPF hiring resources since 2011 and started using the ICPF Career Portal four years ago to specifically recruit and hire for our six-month structural design internship. We were always satisfied with the quality and character of the intern candidates, knowing they were especially interested in a career in corrugated packaging. We also use the ICPF portal to hire full-time positions within our organization where a recent graduate’s skill set and desire for career growth would be a perfect fit. We saw that recent graduates available through the ICPF portal have the necessary technical skills to be successful, but more importantly, they demonstrated an interest and drive to develop their career in the corrugated industry.” Erin Wilson, Virginia Tech (VT) (packaging systems and design and Packaging Club president, ’20) is a 2019 summer student intern at Buckeye Corrugated Inc. (BCI). “I used the ICPF Career Portal to acquire my first packaging- focused internship with AICC. ICPF also assisted me in securing a winter break internship with Pratt Industries. My older brother, Clay, who is a 2018 VT packaging grad, also used the ICPF portal in 2017 to gain his full-time position at BCI.
Carolyn Cook, Michigan State University (packaging engineering, ’19) was hired by Smurfit Kappa as a packaging and design trainee. “I am grateful to ICPF for introducing me to all the opportunities there are within the corrugated industry; especially the ICPF Career Portal, which equipped me with the necessary resources to land my dream position!” Ryan Litzinger, Clemson University (packaging science, ’19) was hired by WestRock to work in the quality and safety arena. He also is considering corrugated sales for the future. He was introduced to ICPF by his professor, and ICPF staff met him at Pack Expo in 2017, where they invited him to meet the ICPF board of directors and participate in the upcoming Teleconference. “Through the ICPF board meeting, I received several internship offers, which included the 2018 summer internship I conducted at WestRock. The internship, along with my teleconference experience, led to my career here. The February 2018 ICPF Teleconference was a great way to see how innovative ideas from students can have a real and practical effect in the industry. It was an eye-opening experience to see the connection between e-commerce, sustainability, and the next generation of corrugated manufacturers. As a proponent of corrugated, I served as the ICPF student representative at Clemson packaging in 2018 and the first half of 2019.”
Retention includes recruiting the right match. Kevin Talamantes, Clemson University (graphics communications, ’17; pictured left) will be entering his third year as a packaging designer at Lawrence Paper Co. in Kansas. “I first heard of the ICPF resources through my professor. I created an account, attached my résumé, and started searching for open positions. The Career Portal was easy to navigate and led to my career here at Lawrence Paper.” All three of the Lawrence companies— Lawrence, JayHawk, and American—have successfully used ICPF to recruit new graduates. Mike Cordaro, design and tech service manager at Lawrence, says, “The ICPF Career Portal was very helpful. I was looking for people with interest in corrugated packaging and who had an aptitude and willingness to learn the skills to be a packaging designer. I was able to both post the opening on the Career Portal and search the student [résumé] database to identify potential candidates. I was very happy to have found Kevin and have enjoyed watching him become a very valuable member of our design team.” To learn more about recruiting through ICPF, contact ICPF at info@icpfbox.org, 703-549-8580, or visit www.careersin corrugated.org. Richard Flaherty is president of the International Corrugated Packaging Foundation.
BOXSCORE www.aiccbox.org
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The Final Score
Not What You Think
I
had the great pleasure to attend the ICCA/WCO Global Summit in Florida back in May. One of the featured speakers at the meeting was Cecilia Alcoreza, manager, forests, for the World Wildlife Fund (WWF). Her presentation was titled “A Perspective on Our Forests.” She provided an excellent overview of the WWF mission and several major threats facing our planet. She then turned to the topic of deforestation and presented several slides’ worth of data related to the severity of this ongoing problem. She claimed much of it is due to increasing paperbased packaging consumption throughout the world. She then appealed for leadership against deforestation by citing programs that work toward this goal. Alcoreza shared slides showing that world deforestation is taking place primarily in the Southern Hemisphere, with virtually none occurring in North America and Europe. Her message was that not enough is being done to combat deforestation. Most of the assembled crowd reacted with polite indignation, correctly pointing out that of the many causes of deforestation, paper and packaging are not the major offenders, even in southern regions. Alcoreza bravely stayed on message during the Q&A period. Does the fact that North American and European companies are paragons of sustainable forestry practices mean that they should not use their relationships and voices to encourage best practices elsewhere in the world? The following day, Saverio Mayer, CEO of Smurfit Kappa Europe, spoke about plastic packaging’s impact on the paper-based packaging industry. As a nod to the WWF presentation, he began with an anecdote that “even my 90-year-old mother considers me to be a tree killer,” although Smurfit Kappa practices sustainable forestry. Saverio suggested an innovation model that gives paper-based packaging a role in working with plastic packaging to create new structures that combine the advantages inherent in both. In so doing, the amount of waste going to landfills is reduced. He said that “plastic is not the enemy. Packaging waste is the enemy.” He challenged those assembled to action: “Let’s design packaging waste into extinction.” AICC’s board of directors has made engagement and fraternity with similar international organizations a goal in the Destination Model for the new fiscal year, which began July 1. Steve Young and I met with representatives from five international corrugated associations during the ICCA/WCO conference, hailing from Canada, Europe, Japan, India, and Taiwan. With these partners and others, there is a role that AICC can play in encouraging best practices here and elsewhere in the world. In so doing, we reinforce the already winning proposition paper-based packaging has in North America, and we get the chance to work with our faraway colleagues to improve conditions in their countries and for their people. I went to ICCA/WCO knowing that our great industry is in a good place relative to factual arguments on how green and sustainable we are. This remains a bedrock truth. I left the meeting also knowing that there is still a lot of work that we all can do—starting with understanding perspective and how we frame challenges.
Michael D’Angelo AICC President
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