July/ Aug 2015 AICC BoxScore by AICC, The Independent Packaging Association

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A PUBLICATION OF AICC—THE INDEPENDENT PACKAGING ASSOCIATION

July/August 2015 Volume 19, No. 4

ALSO INSIDE Better Prepress A ‘Next Generation’ Takes the Helm

BOXSCORE July/August 2015

TABLE OF CONTENTS July/August 2015

•

COLUMNS

Volume 19, Issue 4

38 FEATURES

38 DIVERSIFICATION:

DELIVERING THE WHOLE PACKAGE

Box manufacturers are discovering that diversifying their product offerings and services may be exactly what customers want.

BETTER PREPRESS

Minimize waste and lost time by giving operators the tools to get the job done right.

A ‘Next Generation’ Takes the Helm

SPECIAL SECTION: FOLDING CARTON AND RIGID BOX

Safe and Secure: Protecting Your Customers’ Products and Brands

CHAIRMAN’S MESSAGE

SCORING BOXES

LEGISLATIVE REPORT

ASK RALPH

INSPIRATIONAL INSIGHTS

TACKLING TECH

LEADERSHIP

ASSOCIATE ADVANTAGE

FINANCIAL CORNER

THE FINAL SCORE

DEPARTMENTS

46 50

40 YEARS OF AICC

NEW MEMBERS

GOOD FOR BUSINESS

NEW! POINT OF VIEW

ICPF UPDATE

Visit www.aiccboxscore.org for Member News and our Selling Today, The Hidden Factory, View From the Floor, and Sustainability columns. Scan the QR code to check them out!

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. AICC is an international trade association representing a majority of independent North American manufacturers of packaging products and the suppliers to the industry. AICC members are represented by 538 boxmaking locations and 482 supplier locations, both segments of which are offered a full array of membership services, programs, and benefits. 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. ©2015 AICC. All rights reserved.

BOXSCORE www.aiccbox.org

OFFICERS Chairman: Greg Tucker, Bay Cities Container Corp. First Vice Chairman: Tyler Howland, Sound Packaging LLC Vice Chairman: Mark Williams, Richmond Corrugated Vice Chairman: Tony Schleich, American Packaging Corp. Vice Chairman: Al Hoodwin, Michigan City Paper Box DIRECTORS-AT-LARGE Brad Albright, Touchpoint Packaging Jay Carman, Stand Fast Packaging Products Joseph Palmeri, Jamestown Container Companies Marco Ferrara, Cajas de Cartón Sultana Jana Harris, Harris Packaging Corp./American Carton REGIONAL DIRECTORS Region 1: Don Simmons, Empire Container & Display Region 2: Matt Davis, Packaging Express Region 3: Kevin Ausburn, SMC Packaging Group Region 4: Eric Elgin, Oklahoma Interpak Region 5: Jeff Ramsey, Central Florida Box Region 6: Clay Shaw, Batavia Container Inc. Region 7: Finn MacDonald, Independent II Region 8: John Forrey, Specialty Industries Inc. Region 9: Vacant Region 10: Peter Hamilton, Rand-Whitney Corporation Region 11-12: John Franciosa, Coyle Packaging Group Region 14: Yair Caballero, CorrEmpaques Overseas: Kim Nelson, Royal Containers Ltd. President: A. Steven Young, AICC Headquarters Immediate Past Chairman: Mark Mathes, Vanguard Companies Chairman, Past Chairmen’s Council: Chuck Fienning, Sumter Packaging Corp. Secretary/General Counsel: David P. Goch, Webster, Chamberlain, and Bean Counsel Emeritus: Paul H. Vishny, Esq. ASSOCIATE MEMBER DIRECTORS Chairman: Brian Kentopp, Bobst Vice Chairman: Keith Umlauf, Haire Group Secretary: Jeff Pallini, Fosber America Director: Ed Gargiulo, Equipment Finance Corp. Immediate Past Chairman: Kevin Widder, Automatän ADVISERS TO THE CHAIRMAN Kim Nelson, Royal Containers Ltd. Jerry Frisch, Wasatch Container PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Taryn Pyle, tpyle@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Executive Editor: Kelly Crane Winkler Managing Editor: Lori B. Racey Copy Editor: Steve Kennedy Assistant Managing Editors: Ashley Reid, Melanie Bracey VP, Marketing Services: Jack Davidson Graphic Designer: Zon Buckley Account Manager: Kali Eskew SUBMIT EDITORIAL IDEAS, NEWS, AND LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Director, Meetings: Cindy Guarino, cguarino@aiccbox.org Director, Latin America: Maria Frustaci, mfrustaci@aiccbox.org Director, Membership: Virginia Humphrey, vhumphrey@aiccbox.org Administrative Assistant: Chelsea May, cmay@aiccbox.org President, ICPF: Richard M. Flaherty, rflaherty@icpfbox.org ADVERTISING Information: Taryn Pyle, tpyle@aiccbox.org Opportunities: Howard Neft, InTheKnow Inc. 847-899-7104 • thneft@aol.com Folding Carton and Rigid Box Advertising: 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 BOXSCORE www.aiccbox.org

July/August 2015

Chairman’s Message

VALUABLE TRANSITIONS

ell, here we are on the other side of our 40th-anniversary extravaganza. We celebrated 40 years of your Association serving all of you, and many things have changed in those 40 years. Our industry has consolidated into a handful of integrated paper suppliers, independents have consolidated into fewer companies, and more will follow. The Emerging Leaders showed in force and learned the attributes of strategic leadership and a few entrepreneur lessons from Jason Lucash. They participated in the first “Eye Closer.” Holly Green demonstrated her magic and helped many of us understand the importance of building a professional company to move away from a lifestyle company. The demographics of the United States are changing as baby boomers are retiring in droves. Some estimates suggest that these folks are turning 65 at a rate of up to 10,000 per day. Our own industry will continue to consolidate, and many of our owners will be faced with what to do with their company. First, the transition has to be from a lifestyle to a professional one. Then what? My suggestion is to take a real hard look at becoming an ESOP (employee stock ownership plan). Yes, here is that rant of mine again. Yet if you look under the hood, it is a fantastic opportunity to give back the company to those who have helped make it successful. There are many other opportunities with an ESOP. Many times the transaction can be a tax-free event to the owner. One can convert the company and actually stay in it as the trustee. One of the greatest attributes is the change in attitude with all of the employees. To help many of you understand the opportunities of an ESOP further, I invited Chris Kramer from the Strategic Equity Group (SEG) to give us an overview of an ESOP. SEG isn’t only an ESOP adviser; they also advise on many straight transactions that result in the sale or valuation of a company. Chris and SEG are specialists in ESOPs and have become one of the experts in this field. I hope you gain a lot out of reading what Chris has to say. Hopefully we can get him to Fort Worth, where he can further discuss the difference between a regular sale and the transition to an ESOP. Remember, happiness is a quality box, and everything comes in one. You are part of a great industry and part of a great association. Get some value out of it!

Greg Tucker Chairman/CEO, Bay Cities Chairman, AICC

BOXSCORE www.aiccbox.org

Scoring Boxes

HOW TO SPEND $12.1 TRILLION BY DICK STORAT

ast year, U.S. consumers spent more than $12 trillion on goods and services to power the world’s largest economy. U.S. independent packaging converters have a great interest in how those dollars were spent, because many of those goods and services were packaged and delivered in corrugated and rigid boxes and folding cartons. We will take a look at that spending—how it was categorized and how fast some of the important industry sectors grew during 2014. Total consumer spending last year grew by 2.5 percent after adjustment for price increases. Nearly two-thirds of all consumers’ spending last year was for services, which advanced at a slightly slower 2.1 percent inflation-adjusted pace from 2013’s level. The remaining one-third was divided between goods intended to last for three or more years (durable goods) and nondurable goods. Generally, nondurable goods are more packaging-intensive and of more interest to packaging manufacturers. However, durable goods also consume a goodly amount of packaging and are

SPENDING ON SERVICES BY SECTOR 2.2% 2.0% 1.6% 3.2% 3.8% 4.4% 4.6% 5.6% 9.3% 10.5%

especially important in regional markets, such as furniture and electronics. Consumer spending on housing and utilities is the largest single category of spending and accounts for 27.5 percent of total consumer outlays. Add to that the 25 percent of spending that goes for health care services (excluding drugs and medical supplies), and more than half of the consumers’ spending is accounted for.

13% 66% Durable goods 22%

Nondurable goods Services

BOXSCORE July/August 2015

25.4%

Source: BEA

CONSUMER SPENDING BY SECTOR

Source: BEA

27.5%

Housing and utilities Health care Financial services and insurance Food services and accommodations Recreation services Other services Transportation Communication Education services Professional services Social services and religious activities Personal care and clothing services

Last year, Americans spent $576 billion at eating and drinking establishments, an increase of 6.2 percent from the previous year. This shifting preference by consumers for eating out comes at the expense of food and grocery store sales for off- premises consumption. Bar and restaurant spending is catching up to grocery store sales, which amounted to $663 billion last year and showed 3 percent growth from the previous year. Since the more institutional types of packaging used in restaurants and bars differ from the more consumer-oriented packaging found in grocery stores, understanding this shift is important to packaging producers. Outlays for nondurable goods accounted for 22 percent of all spending last year but grew at a slower rate than the overall goods sector. While total spending on goods racked up a 3.4 percent advance last year, that growth was fueled primarily by the durable goods sector. Nondurable goods consumption in the United States grew by only 1.8 percent last year, making fast-growing segments scarce. Nondurable goods consume more than 75 percent of the corrugated packaging

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Scoring Boxes

NONDURABLE GOODS SPENDING BY SECTOR 3.7% 3.1% 5.2%

Grocery store food and beverage purchases Pharmaceutical products

34.2%

5.4%

Clothing and footwear

6.5%

Gasoline and other energy goods Net expenditures abroad by residents Household supplies

11.6%

Personal care products Tobacco 15.8%

14.6%

Magazine, newspaper, and stationery

Source: BEA

produced in the United States, according to the Fibre Box Association, so this slower growth rate is rightfully of concern to independent packaging converters. The stagnant grocery sector accounts for more than one-third of nondurable goods spending. Within that sector, only nonalcoholic beverage and fresh vegetable consumption grew by more than 2 percent last year. Pharmaceutical products account for nearly 16 percent of last year’s nondurable consumption, and they offer growth opportunities for packaging. This $251

billion category, which includes prescription and nonprescription drugs as well as consumable medical supplies, grew by 6.5 percent last year. The clothing sector grew by 0.9 percent last year. While consumption amounts to 14.6 percent of nondurable goods spending, import levels are high, and the domestic opportunities for packaging are limited. Household products account for some 5 percent of nondurable goods consumption. At 2.4 percent last year, personal product growth outpaced the overall

DURABLE GOODS SPENDING BY SECTOR 8.4% 2.2% 28.7% 10.7%

Motor vehicles and parts Furniture/Furnishings Other durable goods* Video and audio equipment

13.3%

Information processing equipment Sporting equipment 14.3%

Source: BEA

BOXSCORE July/August 2015

23.0%

Books *Includes jewelry, watches, durable medical equipment, textbooks, luggage, and phones

nondurable goods category. Household products showed even stronger growth, advancing 3.7 percent last year. Despite the rapid growth in electronic media, consumption of paper products such as newspapers, magazines, and cut-size paper stationery goods posted a 2.4 percent gain. Spending on durable goods accounts for only 13 percent of consumer spending but has been growing at a rapid rate since the end of the last recession, advancing at 6.9 percent last year—more than 1.5 times faster than overall consumer spending. Unfortunately for packaging suppliers, the automotive sector is both the largest and most rapidly growing durable goods sector. Accounting for more than 28 percent of durable goods consumption, it grew at a 7.7 percent pace last year. While the automotive parts market offers some packaging opportunities, the sector as a whole is not a large consumer of transport or consumer packaging. Packaging is more important in the furniture and furnishings sector, especially in certain regional markets. Benefiting from low interest rates, this sector grew by a very respectable 6.1 percent last year and accounts for 23 percent of the durable goods market. Finally, growth remains healthy in the video/audio equipment and computer sector. Combined, these groups account for 24 percent of durable goods. It posted the highest growth rates of any sector, growing by 10.6 percent last year. So, that’s how to spend $12.1 trillion in one short year. The challenge that independent converters face every day is how to most effectively supply the packaging that enables those products to flow through the supply chain to their ultimate destination—the U.S. consumer. Richard Storat is president of Richard Storat & Associates. He can be reached at 610-282-6033 or storatre@aol.com.

Legislative Report

IT’S A WRAP: 2015 WASHINGTON FLY-IN BY JOHN FORREY AND STEVE YOUNG

Greg Tucker (at podium), chairman and CEO of Bay Cities, welcomes members to the 2015 AICC/ FBA Washington Fly-In.

he corrugated, folding carton, and rigid box industries were well represented June 1–2 at the 11th Washington Fly-In, a joint effort co- sponsored by AICC and Fibre Box Association (FBA). This year’s event was held in conjunction with the National Association of Manufacturers’ 2015 Manufacturing Summit, an annual gathering bringing together 400–500 manufacturers representing nearly every major industry in the country. Members of both associations met to discuss issues affecting their businesses and the impacts of related bills currently under consideration by lawmakers. The key issues sounded by the participants included: labor policy and the so-called “ambush elections” rule of the NLRB; the Affordable Care Act (ACA)/“Obamacare”; tax policy; environment, energy, and paper industry–specific environmental issues, including government recognition of carbon neutrality of biomass and ozone standards.

BOXSCORE July/August 2015

The 40 members who attended the Fly-In gathered at the Liaison Capitol Hill DC hotel in Washington on the evening of Monday, June 1, for an opening night reception followed by dinner. During the dinner there was a special tribute to the late Steven G. Hipley, formerly eastern regional sales manager for Fosber America, who passed away in October. Hipley was an AICC member who was dedicated to the Fly-In cause. His wife, Sharon Hipley, and son Sean were in attendance to accept a memorial plaque on his behalf. On Tuesday, June 2, the group met for a briefing breakfast featuring speakers Sen. Shelley Moore Capito (R-W.Va.), David Hallock, chief of staff for Sen. Mark Warner (D-Va.), and Ned Monroe, vice president, external relations, NAM. The speakers outlined some of the key debates currently taking place within the manufacturing industry and Congress, and discussed their legislative plans to address issues that are pressing to manufacturers.

Attendees then traveled to Capitol Hill for their appointments with their elected representatives in both the House and Senate. Group appointments were held with Sen. Rob Portman (R-Ohio) and Rep. Steve Chabot (R-Ohio). Chabot chairs the House Committee on Small Business. On the evening of June 2, attendees gathered with members from the NAM Manufacturing Summit at the Newseum for a congressional reception whose guests included members of the House of Representatives and Senate, as well as key congressional staff. Immediately following the reception, AICC and FBA attendees had the chance to unwind with some baseball, food, and fun at Nationals Park in the Silver Slugger Suite as the Washington Nationals took on the Toronto Blue Jays. (The Nats lost 7–3.) On Wednesday, June 3, members had the option of attending remaining NAM events or a plant tour of Atlas Container Corp. in Severn, Md., hosted by Paul Centenari. The Washington Fly-In allows members to actively advocate on behalf of the industry to build and maintain relationships with their elected representatives. The AICC/FBA 2015 Industry Fly-In was co-sponsored by Poteet Printing, Fosber, and Triad Packaging Design & Display, a division of Pratt Industries.

For more information about the AICC/FBA Washington Fly-In, contact Steve Young at AICC headquarters, 703-535-1381, syoung@aiccbox.org, or Rachel Kenyon at FBA headquarters, 847-364-9637, rkenyon@fibrebox.org.

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WELCOME AICC’S NEW MEMBERS FLINT GROUP JAMES WININGHAM Director of Sales – North America 2401 White Hall Park Drive Suite 100 Charlotte, NC 28273 Phone: 704-504-2625 Fax: 704-504-2638 james.winingham@flintgrp.com www.flintgrp.com GRAPHIC INNOVATORS INC. SCOTT KILEY CEO 855 Morse Ave. Elk Grove Village, IL 60007 Phone: 847-718-1516 Fax: 847-718-1517 skiley@graphicinnovators.com www.graphicinnovators.com

HAMPTON INDUSTRIAL SERVICES INC. DOUG WATKINS President P.O. Box 204 Granger, IN 46530 Phone: 574-227-8792 Fax: 574-277-8847 hisinc2@comcast.net www.hamptonindustrial.com POLYCHEM CORPORATION THOMAS CORBO Vice President of Marketing 6277 Heisley Rd. Mentor, OH 44060-1858 Phone: 440-357-1500 Fax: 440-352-9553 tcorbo@polychem.com www.polychem.com

POLYPACK INC. ALAIN CERF President 3301 Gateway Centre Blvd. Pinellas Park, FL 33782 Phone: 727-578-5000 Fax: 727-578-1300 acerf@polypack.com www.polypack.com QUALITY SYSTEMS ENHANCEMENT INC. BASKAR KOTTE President 1790 Woodstock Rd. Roswell, GA 30075 Phone: 770-518-9967 Fax: 770-518-9968 baskar@enhancequality.com www.enhancequality.com

WALLA WALLA ENVIRONMENTAL INC. NATALIE EDWARDS National Sales Manager 17208 E. Rosemont Lane Greenacres, WA 99016 Phone: 509-368-1974 Fax: 509-522-0351 natalie@wwenvironmental.com www.wwenvironmental.com XDS HOLDINGS INC. JEFFREY DEVRIES President 2461 Progress Court Neenah, WI 54956 Phone: 920-722-8123 Fax: 920-722-1226 jdevries@teamxds.com www.teamxds.com

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BOXSCORE July/August 2015

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Ask Ralph

OVERVIEW OF NORTH AMERICAN WHITE GRAPHIC MARKET: PART I BY RALPH YOUNG

t has been estimated that the production capability of white linerboard in North America approaches nearly 2.1 million tons. The breakdown by company is highlighted in the chart below. Since 90 percent of all manufactured goods in the United States go to market in a corrugated box, there is a tremendous opportunity for print advertisement on the outside of the package. The white background gives perfect contrast to multiple colors to have the message pop off the surface. Almost all graphic board mills in North America received capital investments in the last 20 years. Those that did not, closed. Overall, the industry moved the quality of both low-end and high-quality mottled white grades to white top. It must be understood that just because a white surface appears uniform, the lack of print mottle in the image reproduction is of major importance. Production The AF&PA reports total white top production at about 1,500,000 tons.

Our estimates are higher. Other research indicates that as much as 400,000 tons of 12-point or lower SBS-type folding carton stock also comes over into the corrugated market, either directly or through litho label printers. SBS producers have been invested in moving down in caliper, so eight-point is now common. Basis Weight and Grade Structure Generally, the most common substances are 33#, 38#, 42#, and some 69#. Compression grades in the areas of 35/36# and 55/56# are also available. These heavier grades find their way into the food packaging market and generally not into the industrial or retail industries. One must be careful not to get caught in the nomenclature game of the former mottled whites and white tops. It is best to quantify the surface characteristics of the different product offerings and establish price points along the lines of print reproduction. Proceeding with this thinking, one will discover at least four different quality levels of white top. The

Producer

Est. Yearly Volume

West Rock

1,500,000

International Paper

250,000

G-P

300,000

Others*

130,000

Total

2,180,000

coated high end of the market is expected to grow at twice the rate as the commodity entry-level white-top products. Cost Structure Financial contributions of white liners are typically the highest of all grades on a paper machine that produces a conventional mix of containerboard grades and basis weights, other than bleached linerboard. Wide swings in the cost of bleached pulp and pulp substitutes can distort the profit picture in the short term, but one needs to take the long-term view. End-Use Market Drivers The one key driver toward more white-surfaced printing substrates is the growth of big box stores, which may have stagnated with changing consumer buying habits of the millennials. These retailers have accounted for more than 60 percent of consumer purchasing and use graphics to sell the products. The package must act as the sales agent. This is especially true for consumer goods that are imported. Box shape is also becoming critical to the purchasing decision. Ralph Young is the principal of Alternative Paper Solutions and AICCâ&#x20AC;&#x2122;s technical adviser. Contact Ralph directly at any time about any technical issues that impact our industry at askralph@aiccbox.org.

*Others could include Kruger (K-Brite), Norampac, and imports (other than Canada). Mills that were deleted from this report include those previously owned by Weyerhaeuser, Inland, Cascade/ Norampac, Champion, Green Bay Packaging (2), and Tembec. Sources for these production estimates come from annual reports, 10Ks, company statements, security analysts, and RISI. BOXSCORE www.aiccbox.org

Inspirational Insights

ADJUST THE MARGINS BY MIKE NUNN

ll word processing programs automatically give you a standard set of margins to use when creating a document, but have you ever stopped to challenge that standard? I was putting a document together the other day at work when I found myself adjusting the margins of the page to make the copy fit better. By making minor adjustments to the working space I’m given rather than just accepting it, I am able to increase the performance, productivity, and capacity of a single page. The great thing about expanding the margins is that you don’t need a meeting of stakeholders, approval, or a second opinion to make it happen. It’s a minor step you can do on your own to get improved results. Let’s look at some other places where adjusting margins could yield greater results. Your morning. Most people choose to sleep until the very last and calculated minute they can get away with and still be on time to work. However, by getting out of bed 30–60 minutes earlier, you can see a dramatic increase in the most productive part of your day. Your packaging. Have you ever brought a new solution to your customer without them asking? If your customer is buying a plain or generically printed box, mock them up a sample with new graphics that match their brand or company image. Play with your margins and your customer’s margins to open the door for a tighter relationship. Your career. Too many people are caught in the “wait and see” trap—waiting to see what their boss or peers will do rather than owning their own future. You have more influence than you think you do; use it! Invest in yourself by taking on projects outside of your comfort zone without immediate expectation of compensation,

BOXSCORE July/August 2015

join a networking group, or simply speak up more—in a positive and productive way. I would bet that most people don’t play with the margins because they’ve never done it before, or it’s outside a perceived comfort zone, or it’s just “not a big deal” in the grand scheme of things. But I’m here to say it is a big deal. I was once told to mind the paper clips. If you are conscious of the paper clips in your business and where they’re going, then you have a good chance of not letting the bigger things get out of control. Success is in the little details and doing them consistently well, but at the same time always trying to improve on those little things. Margins are a big little thing. Don’t catch yourself saying or thinking, “That’s the way we’ve always done it.” Instead, push forward by telling yourself that if you continue to do the same you

will get the same results. You don’t want the same results; you want better results. If you’ve never adjusted margins before, then you have an opportunity, but first you’re going to need the mindset of challenging the status quo and not just accepting what you’re given. I challenge you to find your margins, personally and professionally, then learn how much you can adjust them, and do it. You’re free to adjust the margins however and whenever you’d like. Will you seize the opportunity? Mike Nunn is operations team leader at Ideon Packaging and is Lean Blackbelt Certified. He can be reached at 604-5240524 or miken@ ideonpackaging.com, or followed on Twitter @ mikednunn.

“Success is in the little details and doing them consistently well, but at the same time always trying to improve on those little things. Margins are a big little thing.”

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Tackling Tech

WILL THERE REALLY BE ‘AN APP FOR THAT’? BY GREG HEINZ

une 29, 2007. While this date may not initially conjure up any significant remembrance, a major event did in fact occur—Apple released the iPhone. In just eight years, 700 million iPhones have been sold. A year after the release of the original iPhone, Apple launched the App Store, featuring a whopping 552 applications. As of June 2014, the App store contained 1.2 million applications totaling more than 75 billion downloads—basically 10 app downloads for every human on earth. These facts serve as proof that, from a consumer perspective, smartphone technology has been one of the most transformative innovations of all time. What is still in question, however, is not if, but when enterprise will fully adopt this technology in the business- to-business (B2B) market. This holds especially true for the manufacturing industry, which has historically been slower to adopt consumer technology trends than industries such as retail and financial services. One of the primary reasons that retail and financial service industries are quicker to adopt these technologies is that the iPhone and App Store were initially developed as consumer products. The transfer to enterprise was never the intention, but instead it became a validation of a transformative innovation. In July 2014, Apple and IBM teamed up to form an exclusive partnership that would use IBM’s big data and analytics capabilities to bring a new class of business apps to the iPhone and iPad, essentially redefining the enterprise mobility landscape. The first round of the co-developed mobile apps, unveiled

BOXSCORE July/August 2015

in December, have been praised for their simplicity and intuitive design. Although there are not currently any Apple/IBM-developed apps for manufacturers, there is still hope. Forbes recently reported that more developers are focusing on building custom applications for enterprise industries. Currently a host of manufacturing-specific apps are already available on the App Store, some of which are even designed for the packaging industry and center on logistics, distribution, sales, and service. If the increased focus on enterprise app development isn’t enough to make you reconsider implementation within your plant, the general market conditions should. The price of mobile technology is falling, and device bandwidth is increasing. Today, there are also more device management tools that support both corporate-sponsored initiatives and users who bring their own devices (BYOD), making it easier and less risky for businesses to deploy new applications. The versatility of smartphones and their applications creates more opportunities for business leaders to mobilize employees—a tactic that will drive productivity, efficiency, and effectiveness. In order to accurately assess and identify opportunities for mobile deployment, manufacturers should consider targeted, role-based applications that are designed to achieve a specific business process. Functions such as supplier collaboration, inventory visibility, sales force automation, customer engagement, quality tracking, shipment scheduling, approval notification, and management reporting are just a few examples of mobilized opportunities that are currently available. If the apps are integrated with a company’s core business

system, business leaders can double down by using the data collected by the mobilized employee to make more-informed business decisions. Once the opportunities for mobility are identified, business leaders must prioritize those opportunities and immediately focus on the ones that will add the most value. As the best mobile rollouts can fail if not thoroughly planned and supported, companies must create a roadmap that will maximize that value along with user adoption. The mobile strategy needs to include training, deployment, and application support, especially when the application involves users in the field. Although mobile technology experts are not yet prevalent hires in packaging manufacturing, there are a select few industry suppliers that are qualified to help customers make this transition confidently. Smartphones, apps, and mobile technology in general have been nothing short of revolutionary. In such a short time, the business landscape has changed drastically, and transformation will continue at a rapid pace. As business leaders move forward, it is in their best interest to consider what role mobility will play in their future, because even if there is not “an app for that” today, there will be. Greg Heinz is director of marketing at Amtech Software and Futura Services, technology companies specializing in carton products. Greg can be reached at 215-6399540 or gheinz@ amtechsoftware.com.

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Leadership

GO TEAM! BY SCOTT ELLIS, ED.D.

BOXSCORE July/August 2015

agreements to be referenced. I have found this to be particularly helpful when resistance or lack of commitment is evidenced by passive aggressive behavior such as chronic lateness or lack of responsiveness to emails. There is no need for discussion of attitude or other immeasurables. There is an agreement that can be referenced and compared against performance. In fact, I will often close a meeting by checking in with the group to ask how we are doing at keeping charter promises to ourselves. Having weathered the storms, which occur again and again to check your resolve, the team will begin to perform. Goals will be achieved and productivity celebrated. After working with many teams, it has become clear that “adjourning” should be a stage that is part of the charter. Part of the scope of the team is its expected duration, and efficiency is lost when teams stay together when their

members could be contributing to the health of new groups formed to tackle different problems. The effectiveness gained with the inclusion of a team charter was illustrated in an exercise with the Emerging Leaders group at AICC’s Spring Meeting. In an activity called “team skiing,” participants were asked to mount two sets of skis. The task was rushed, and the only directive was to get everyone across the finish line as soon as possible. The team leaders delivered the message with sufficient urgency that the two sets of skis, piloted by four team members each, raced for the finish line. No one was surprised when the finish line moved midrace because, in a normal workday, team skiers expected deadlines to change. One group crossed the line in 36 seconds, while the other finished in triple that time. Everyone, however, received the longer time because the true goal—clearly

Photo by Virginia Humphrey

think team is a verb rather than a noun. A common request I receive is to help a leadership, management, or process improvement team to advance their performance. Upon investigation I often find that they are a team in name only. A team is a group of people with a common purpose; by contrast, I find that these folks often have conflicting agendas, varied commitment, and unclear goals. They are set up to fail by the ready-fire-aim approach to tasking the team. They are rushed to produce a result without a clear view of success or the means to achieve it. How healthy are your teams? An interesting, free resource for measuring team effectiveness can be found on Mind Tools (www.mindtools.com). It has been interesting to ask various team members to complete the survey and compare their views with the group. Again, the issue is that we focus on the task and ignore the process. To maximize team effectiveness, a team must be built intentionally. My belief is that teamwork is both unnatural to humans and necessary for our survival. So we must take time, when a group is tasked with a common purpose, to prepare for success. As far back as 1965, Bruce Tuckman described the stages of team development as “forming, norming, storming, and performing.” During formation, the team will benefit from a clear statement of its purpose, scope, and accountability. This can be aided by developing a team charter. Many skip this step in the misguided belief that they are saving time. When a team charter is utilized, the rules of engagement are discussed and accepted. The purpose is clear—the guardrails are set, as well as the expectations for communication, decision-making, and conflict resolution. So when the storming begins, there will be standards to discuss and

Emerging leaders participate in a team leadership building exercise at AICC’s Spring Meeting in Naples, Florida.

Leadership

FORMING

NORMING

FORMING PERFORMING

FORMING

NORMING FORMING

NORMING

STORMING

PERFORMING

PERFORMING Illustration by Katlin Inzero

“Having weathered the storms, which occur again and again to check your resolve,PERFORMING the team will begin to perform.”

STORMING

BOXSCORE July/August 2015

stated and universally unclear—was to get everyone across the line as soon as possible. My badly communicated directive encouraged the competition, which included attempts at sabotage. Now we were ready for a real agreement, a team charter for a very small task. First, STORMING the problem must be stated and a clear understanding of the desired result must be formed. I asked them about the goal, and they told me what success would look like: everyone on both sets of skis getting safely across the line in minimum time. The next step was developing the guidelines that included warnings about proscribed methods or failure paths. In this case there were very few, but one was “no, you may not pick them up and carry them across the finish line.” Third was exploring the available resources, such as training, budgets, and recommended methods. While looking for a resource, they asked if anyone in the room had any experience with team skiing, and I was shocked to find that mine was the solitary hand in the air (I had hoped it would be a demonstration sport

in the next Olympics). As their resource, I then coached them in best practices. Next we discussed accountability—how and when we would measure progress. It was decided that speed and safety would be the balancing measures, and spotters were STORMING added to ensure stability. Finally, we discussed rewards that can be intrinsic to the task or in the form of some incentive. So, I promised them candy. The team took a few minutes to practice, encouraged and cajoled one another, and crossed the line in half the previous time. This admittedly contrived activity mirrors real-life experience in that the difference between poor and improved performance was not experience or personnel, but in intentional agreement on the team’s purpose, goal, method, and rewards. Go team! Scott Ellis, Ed.D., is a partner in P-Squared (P 2). He can be reached at 425-985-8508 or scottellis@psquaredusa.com.

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BOXSCORE

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GOOD FOR BUSINESS

ON COMMUNICATION

YOUR ASSOCIATION AT WORK

HEALTH CARE

BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

ON COMMUNICATION The Problem With ‘No Problem’ BY STEVE YOUNG Some of you might know that over the past few years I’ve been tilting against windmills because of an annoying trend in our language. It started with the baristas at Starbucks and the clerks at The Apple Store, which led me to conclude at the time that it was a generational, “millennial” thing. Then I started hearing it more from people closer to my age, and now it’s become an accepted, but little-thoughtabout, part of our speech. I’m referring to the phrase “no problem” in response to “thank you.” Why am I in such a snit about this? Well, aside from the fact that the English language as we know it is going to heck in a handbasket, let’s analyze the formerly correct response of “you’re welcome” in relation to its replacement. If you say to someone, “Thanks,” and they say to you, “You’re welcome,” the first word in this response is “you.” You are welcome. The focus is immediately back to the other person, almost as a return form of gratitude and recognition. This, in the

course of human interaction, is a polite and self-effacing expression—a way of turning attention away from the speaker back to the listener and thus, in the process, ingratiating oneself to the other. “You’re welcome” says, in effect, you are deserving of my gift, my time, my attention in this regard. It elevates the recipient in relation to the giver. It is a noble expression. Now compare this to “no problem.” If you say to someone, “Thank you,” and they say to you, “No problem,” what does that say to you? The way I hear it, it says, “Hey, it’s no sweat off my back—I was going to do that anyway, I didn’t have to go out of my way, or it wasn’t any trouble to me.” What’s the common theme here? My, I, and me. It’s all about me, about my convenience and what I want to do—or not do—at the moment. The other person is out of the equation entirely. So let’s put a business purpose on this. Take a walk around your company. Listen to your customer service representatives, your salespeople, and even to your own speech and that of your immediate family. What do you hear? What’s being said? Is it saying, “You are important to me”? Is it saying to

BOXSCORE www.aiccbox.org

Good for Business

ON COMMUNICATION “You’re welcome” says, in effect, you are deserving of my gift, my time, my attention in this regard.” the customer, “We value you and what you mean to us and to our business; you are welcome to receive our best service”? Or is it saying, “Hey, it’s no sweat off our backs to deliver that truckload to you tomorrow. We were heading that way anyhow”? Now, I can see the eyes rolling and shoulders shrugging through my computer screen here, and I can even hear the counterarguments that other languages—even English—adopt a “no problem” equivalent. Heck, the Aussies are famous for “no worries,” and in Spanish, in response to gracias, one can say, no hay de que—literally, “there is nothing to it,” or de nada, “it’s of nothing.” And perhaps in our global world, this is the reason our language evolves, and I need to get over it. However, when we are speaking English, and when we do business in English, why not consider setting yourself and your company apart and ingratiating yourself to your customers and your fellow associates in this small, little way. “You’re welcome” is a gracious and courteous response to anyone—and if you are the only one using it these days, you’ll stand apart from the rest. And you’re welcome for this advice, unsolicited as it is! Steve Young is president of AICC— The Independent Package Association. He can be reached at 703-535-1381 or syoung@aiccbox.org.

BOXSCORE July/August 2015

YOUR ASSOCIATION AT WORK Associations Diversify, Too BY VIRGINIA HUMPHREY In June 2011, AICC announced that the Association would open its membership to folding and rigid manufacturers and suppliers. The initial press release stated: Starting in April 2012, AICC began actively recruiting and accepting members from the folding carton and rigid box sectors of the paperboard industry. The key factor is that the new members be privately held, independent companies. Equipment and consumable suppliers to this market segment are also being added. “The strength of our organization has always been our focus on independent, entrepreneurial businesses. This sets them apart from their larger, integrated competitors,” stated AICC President Steve Young. “There is a commonality of purpose among independents that generates their uniquely high level of energy and engagement. In this regard we have found very little difference between the needs and interests of converters of a broad range of products. We have found that the concerns of independent packaging manufacturers are extremely similar, no matter which process or substrate.” Adaptability and creativity are also brought up as key attributes of independents. Their focus is on finding new ways to serve their customers and providing solutions rather than just commodities. Evidence of this is perhaps most noticed in

the design departments of many independents. It is typical for an independent packaging manufacturer to employ five to seven times the number of designers and structural specialists per location as their integrated counterparts. According to Young, “It’s our belief that it’s the independents who are providing the majority of innovation, whether it be packaging for shipping, point-of-purchase, retailready shelf items, or the many other areas that they first conceive and then generate solutions which serve their customers and advance our industry.” AICC diversified to best serve our customers—you. As the press release stated, many of our corrugated members were branching out, and possibly even more importantly, they were collaborating with companies that specialized in different substrates. AICC is a place for independents to come together and learn from each other and collaborate together. AICC members have an independent perspective, and this Association will work to provide our members and the industry with opportunities to harness and grow that attitude. Virginia Humphrey is director of membership of AICC. She may be reached at 703-535-1383 or vhumphrey@aiccbox.org.

Annual Meeting Sets Record Attendance “The 14th Annual Meeting and Trade Fair AICC Mexico held June 10-12, in Monterrey, Nuevo Leon, broke all previous attendance records,” said Yair Caballero, President of CorrEmpaques in Queretaro and President of AICC's Mexico chapter. The meeting drew 175 members, suppliers and guests to the Camino Real Hotel for a production training seminar, meeting, trade fair and plant tours. “We had a most successful meeting in Monterrey,” said Caballero, “with a very high attendance and 38 exhibitors in our trade fair. We are very happy with the results.

The meeting also featured presentations about new technology, speciﬁcally about digital engraving of exographic printing plates and digital printing technology. Luiz Furlan of Esko spoke about “Digital Engraving and Advancements in Flexography,” while Gianluigi Rankin of HP covered advancements in digital print processes for corrugated. Closing the meeting, Dr. Jose Elizondo, a motivational speaker and business communications consultant, presented “Like Leader, Like Team,” illustrating how workers will emulate the actions, moods and direction of senior management, reminding owners and senior executives present that they have to set the example for the members of their teams.

The meeting began on Wednesday, June 10, with a production seminar, “Best Practices for Achieving Peak Performance on Flexo Folder Gluers and Rotary Die Cutters.” Taught by Les Pickering of Quadrant 5, San Francisco, the full-day program featured classroom instruction on principles of lean manufacturing followed by in-plant demonstration and instruction at Cajas de Carton Sultana in nearby Santa Catarina. The seminar was attended by 30 production AICC Chairman Greg Tucker accepts supervisors, plant managers and recognition from AICC Mexico President general managers from around Yair Caballero at opening session of AICC Mexico Annual Meeting Mexico. On Thursday, June 11, AICC Mexico President Caballero welcomed members to the meeting and introduced AICC Chairman Greg Tucker and President Steve Young who gave an overview from AICC's national level. Greg Tucker, CEO and Chairman of Bay Cities, Pico Rivera, Calif., discussed helping members to become more professionally run companies and transitioning out of what he calls “lifestyle” companies. He discussed his company's transition into an Employee Stock Ownership Plan (ESOP), a US ownership vehicle giving employees shares in the company. The keynote speakers for the day were economist Dr. Roberto Manriquez, who spoke about the Mexican economy, Ketan Mamtora of Bank of Montreal, who gave the outlook for the North American containerboard sector, and Holly Green, CEO of The Human Factor, whose presentation, “Using Your Brain to Win in Business,” entertained and challenged the audience to think differently about how they react to business problems.

The AICC Mexico trade fair drew 38 exhibitors to the meeting, and over a combined 5 hours of exhibit time. More than 100 customers circulated through the ballroom to meet with their suppliers of equipment, inks, printing plates, software and computer technology and material handling systems.

To conclude the week, on the morning of Friday, June 12, the group headed to tour Papeles y Mexico (PCM), a 100% recycled paper mill outside of Monterrey, where Agustin Anaya welcome AICC Mexico members, and El Centro Abre, a packaging and logistics testing lab, UDEM, afﬁliated with the Technological University of Monterrey. In addition to the regular meeting speakers, members of AICC Mexico took time to remember Ralph Silva, former General Manager of Danhil de Mexico's plant in Apodaca. He passed away earlier this year following a brief illness. AICC Mexico honored Ralph as the recipient of its ﬁrst annual Hall of Fame award. Humberto Trevino of Washington Box, AICC Mexico's founding President, presented the award. Ralph was a founder of AICC Mexico in 2001 and in 2012 he celebrated 50 years in the box business. For more information about AICC Mexico, contact Maria Frustaci at AICC Headquarters, +703-836-2422, extension 1382, or email mfrustaci@aiccbox.org.

T HE I NDEPENDENT P ACKAGING A SSOCIATION

Good for Business

HEALTH CARE

The Affordable Care Act and 1095-C Reporting BY STEVE VOCE According to BXA consultant, former Super Bowl champion NFL player and Olympian Willie Gault and Steven Voce, BXA vice president/founder, there are important Affordable Care Act reporting requirements that are pertinent to address and understand immediately. This is especially true since the Supreme Court recently ruled to allow the federal government to provide nationwide tax subsidies for qualified individuals to buy health insurance on federal exchanges. The 6 to 3 Supreme Court ruling means that it is all but certain that the Affordable Care Act will survive after President Obama leaves office in 2017. If you were hoping that the law would be struck down so that you did not have to waste time and money preparing for ACA compliance and reporting, you now need to move even faster. As a citizen of the United States, nearly every one of us is mandated to have a health care policy that meets the minimum standards set by the government under the Affordable Care Act. As an individual, the insurance could have been acquired by participating in an employer-sponsored plan, an exchange plan, Medicaid, Medicare, or a host of other means. In 2015, employers with more than 100 full-time equivalent employees are required to offer a compliant and affordable plan. Effective January 1, 2016, the threshold for the employer

BOXSCORE July/August 2015

mandate to provide a compliant and affordable plan will start at 50 full-time equivalent employees. An employee of a firm required to offer health insurance in 2015 may ask themselves: Why would I pay for insurance if I can possibly get it free from or subsidized by the government? The employee should take care not to waste too much time pondering that one. Once an employer makes an “offer” of a compliant and affordable plan, the employee has to either accept or reject it. If they reject it, the employee is not allowed to go to the federal or state exchanges for subsidized health care insurance. Rather, the employee would be considered officially without health insurance and will be subject to a penalty. If you don’t have coverage in 2015, you’ll pay the higher of these two amounts: 1. Two percent of your yearly household income. (Only the amount of income above the tax-filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan; or 2. a fee of $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975. The penalty will be assessed in 2016 when income tax returns are filed. How the government will know that an employee did not have health coverage will once again fall on the shoulders of the employer and the insurance carriers. Employers will be required to issue an IRS 1095-C document. Think of it as a W-2 for health care coverage for every month of the year. Employers are required to report month-by-month participation of employees and their dependents covered by their

plan. If an employee declines the employer’s offer of coverage, they will also receive a 1095-C indicating they were offered coverage and elected not to participate. In order to issue penalties, it will be the job of the IRS to link one’s 1095-C and W-2 by employer tax identification number. Employers are scrambling to solve how to gather the information on a monthly basis and then interpret that information while applying up to 18 unique codes required on the 1095-C form. Unfortunately for employers, the 1095-C document needs to be postmarked or hand-delivered to full-time employees at the exact same time the employer is issuing the employee’s W-2. Likely, January 2016 will be an incredibly busy time for nearly all employers in America. The net of all this: Regardless of your opinion of the Affordable Care Act, the processes are in place to ensure you are offered health insurance, and your participation—or lack thereof—is tracked for all 12 months in 2015, resulting in the compilation, issuance, and filing to the IRS of your 1095-C. So, love it or leave it, one way or another, Uncle Sam is destined to find out if applicable employers offered affordable and essential coverage in 2015. Steven Voce is vice president and founder of BXA, a national insurance brokerage consulting firm specializing in employer group health brokerage and consulting. He can be reached at 949-297-2860 or svoce@bxall.com.

Willie Gault will be speaking at the AICC Fall Meeting on Tuesday, September 29 in Fort Worth, Texas. Visit www.aiccbox.org/meeting for more information.

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Point of View

How do you maintain the corporate “personality” of your original company—the culture that drew your core group of committed, trained staff—while still working to diversify and expand? If you aren’t diversifying, please share your viewpoint on why this is important to you.

“Tyoga Container is located just a few miles south of the New York state line [in Pennsylvania]. Over my 18-year career with Tyoga, we have seen a complete changeover of who our top customers are, due to plant closings and a changing business climate. We have also seen our culture change from [that] of a small and intimate family business to a larger, more complex, growing entity. “Therefore, diversification has been a method of survival. We now have four divisions: corrugated, packaging supplies, FIBCs/bulk bags, and transit protection/cargo securement. Corrugated will account for approximately 60 percent of our revenue this year, and that will most likely be under 50 percent next year. We have also been able to expand our geography with two of our segments where we can sell anywhere in the United States. We have hired sales reps in both Texas and Chicago, and we have product in a public warehouse in Houston, Texas. [We] most likely will do the same in Chicago in 2016.” — Charlie Frysinger, president, Tyoga Container

BOXSCORE July/August 2015

“The issue of maintaining a suitable corporate culture is really based on what works and what can be sustained. I think the major danger of growth and diversification is how to keep the philosophical basis of what made your enterprise successful. The major way to manage growth and diversification—which is really change—is to make sure that you bring your staff along. Employees need to understand the ‘mission’ and clearly see that there is growth, not only for the company, but also for them as individuals. I think the danger in any corporate venue is becoming too rigid in your approach, both internally and externally. You need to retain the flexibility of action—serving the needs of customers and employees alike. As independent operators, what distinguishes us in the marketplace is that ability to react quickly—to respond to situations that arise without notice. It still comes down to basics. Whether you categorize your business model with some new template or not, it is time-honored business values that I believe keep things on track.” — Bob Cohen, president, Acme Corrugated Box Co.

“We acquired a sheet plant about 25 years ago. It was owned and managed by three men, Pete Taylor, Don Fleegle, and Dave Turnbull. The business was a brown box business—simply brown. We have stayed with that basic strategy. We believe that although it’s an extremely competitive business, we can be successful if [we] do the little things right every day, [which is] much easier said than done. It’s all in the blocking and tackling. Much like Vince Lombardi said, we can win championships by going right up the middle. But we know the most important factor is the quality and training of our people.” — Paul Centenari, CEO, Atlas Container

September/October Point of View:

What do you see unfolding in the world of digital printing? What changes are on the horizon for the industry? What trends are emerging? Please send all responses to

boxscore@theYGSgroup.com.

Designersâ&#x20AC;&#x2122; Lab and Independent Packaging Design Competition STRATEGIC

LEADERSHIP

SEPTEMBER 28-30, 2015 OMNI FORT WORTH HOTEL FORT WORTH, TEXAS

THIS FALL we’ll continue to explore the various aspects of strategic leadership and succession planning in your company. As always, AICC offers box plant discounted group pricing for their Greg Tucker corrugated, folding carton and rigid box members. This way you can send more of your employees and experience more of the benefits of AICC for one low price. We have a full line-up of exciting guest speakers and presenters including Dr. Tom Deans, Best Selling Author, Speaker and Expert on Wealth, Retirement and Legacies Management; Scott Clemmons, Financial Analyst and Investment Strategist; Willie Gault, Former Professional Football Player, Actor, Businessman and Philanthropist; Bill McCartney, Former Univ. of Colorado Coach, College Football Hall of Fame um of Fort Worth Muse story Hi & Science

Inductee and Founder of Promise Keepers and Road to Jerusalem Ministries; International Business Consultant and Best Selling Author Holly Green and more! We’d like to thank local member companies; American Carton Co., Liberty Carton Co., Thacker Industrial, Lone Star Container and Smurfit Kappa Fort Worth (formerly Bates Container) and the Recycle Mill in Forney who have all graciously offered to host tours of their facilities.

The 2015 Independent Packaging Design Competition – Big Design Roundup is being held in conjunction with the meeting. This year’s competition features corrugated, folding carton and rigid box categories, providing a wider reach into the entire packaging market and a greater diversity of ideas. AICC will hold its biennial designers’ lab co-sponsored by ESKO, Gerber Innovations, Arden Software North America, HP and PriscoDigital LLC. in conjunction with the meeting. Designers will have the opportunity to learn new techniques in both structural and graphic design from experts in the field and to share knowledge and experiences with peers. I hope you and your colleagues will join us this fall in Fort Worth, Texas! Sincerely,

Greg Tucker, Chairman/CEO, Bay Cities Chairman, AICC 2014-2015

Fort worth COWBOYS & CULTURE

While Fort Worth enjoys a strong Western identity, the city also has some of the most highly acclaimed cultural institutions in the country. From world-class museums and art galleries to top-notch ballet companies to talented theater troupes, Fort Worth’s cultural attractions offer something to pique every interest. Whether it’s the thrill of tasting a new dish or driving a race car at the Texas Motor Speedway, Fort Worth has something to satisfy everyone’s

BOXSCORE July/August 2015

appetite for adventure. There’s horseback riding and helicopter tours, daytime cattle drives through the Stockyards National Historic District, and nighttime canoe rides along the Trinity River, and that’s just a snapshot of what Fort Worth has to offer! Downtown/Sundance Square Fort Worth is a success story few cities can boast. Texas sized excitement, food, fun, shopping, history, and much more awaits you in Fort Worth!

Bill McCartney

Scott Clemons joined Brown Brothers Harriman & Co. in 1990, and has held a variety of investment roles at the firm over the past 25 years. His career began in international equities, where he was an analyst and portfolio manager of European and Asian equities, working out of BBH’s New York and London offices throughout the 1990s.

led the University of Colorado football team to the national championship in 1990. Coach “Mac”, as he is affectionately called is credited with taking over a struggling football program and turning it into a national powerhouse.

McCartney served as head coach at Colorado from 1982 to 1994, compiling a record of 93 –55 – 5 and winning three consecutive Big Eight Conference titles from 1989 –1991. His 1990 team was crowned national champions by the Associated Press, splitting the title with Georgia Tech, which topped the Coaches poll. McCartney was inducted into the College Football Hall of Fame in 2013 and is a member of the Orange Bowl Hall of Fame and the Colorado Sports Hall of Fame. He was honored as Big Eight Conference Coach of the Year in 1985, 1989, and 1990. He won National Coach of the Year honors in 1989 and also received the Honorary Doctor of Ministries from Azusa Pacific University for extraordinary work in the field of racial reconciliation.

In 2001 Clemons broadened his responsibilities into domestic equity management and research as well, and then from 2005 through 2010 managed the New York office of the firm’s private wealth management business. In 2010 Clemons was appointed Chief Investment Strategist and is today one of BBH’s primary writers and speakers on topics related to the economy, financial markets and investing.

After retiring from coaching, McCartney founded Promise Keepers men’s ministry and later The Road to Jerusalem ministry. He is the author of five books – Ashes to Glory, Sold Out, Sold Out TwoGether with Lyndi McCartney, Blind Spots and Two Minute Warning.

Clemons is a Chartered Financial Analyst, a member of the New York Society of Security Analysts, and the CFA Institute, and is a frequent contributor to print and broadcast media. Outside of his professional interests, he serves as President of the Grolier Club in New York City, and Chairman of the Research Corporation for Science Advancement, the oldest foundation in the United States dedicated to basic scientific research.

Willie Gault

Tom Deans, Ph.D. is the

is a former professional football player, actor, businessman and philanthropist A world class athlete, Gault was the first round draft pick for the NFL in 1983 for the Chicago Bears and played on the 1985 Super Bowl Championship team. He was a member of the 1988 USA Olympic Bobsled Team, World Championship medalist in Track & Field, and a 1991 recipient of the Jim Thorpe Award –“Best Athlete in the World”. He has starred in numerous films and television programs. Gault is also the founder of the Athletes for Life Foundation. The Foundation is a unique partnership of world-class athletes, medical professionals, and key individuals – all focused on saving lives through health education and by providing medical access for everyone, through the use of revolutionary heart monitoring technology with new detection capabilities. As a businessman, Gault has more than 25 years experience in sales, marketing, and production. He specializes in capital funding for investors and corporations, and has been successful in building relationships with colleagues, businesses, and accounts. Gault is also a business consultant for Benefit Exchange Alliance.

author of the all-time best-selling family business book, Every Family’s Business and Willing Wisdom. He now speaks on the international lecture circuit full time. Having delivered more than 500 convention keynotes and seminars in 14 countries, he has built an international reputation as a thought leader on the subject of intergenerational wealth transfer. Dr. Deans explores how wealth can be transferred successfully without destroying the recipient and the wealth itself. It is a question for the times, as the greatest generation of wealth creators move toward retirement and death in record numbers. He presents the idea that communication is crucial to the success of that transfer, and indeed to the success of individuals, families and communities. Dr. Deans has been featured in numerous magazines and journals including Profit, Money Sense, Investment Executive and The New York Times and a frequent guest on CBC, MoneyLine and BNN.

ALL ATTENDEES WILL RECEIVE A COMPLIMENTARY COPY OF DR. TOM DEANS’ BEST-SELLING BOOKS: EVERY FAMILY’S BUSINESS or WILLING WISDOM.

BOXSCORE www.aiccbox.org

AICC 2015 ANNUAL MEETING

DYNAMIC

WORKSHOPS

INTENSE LEARNING, SHARING & TAKEAWAYS TWO DAYS • Tuesday, September 29th & Wednesday, September 30th

AICC is offering in-depth workshop track sessions during the AICC 2015 Annual Meeting. The workshop sessions will be held concurrently on both days. Plan to attend BOTH DAYS for the optimal learning experience! Take advantage of "box plant" multi-group pricing to allow key company associates to take advantage of these education opportunities! Workshops are for box and carton makers and supplier members too!

Workshop Track: STRATEGIC LEADERSHIP

Workshop Track: SUCCESSION PLANNING

Workshop Track: DIGITAL PRINTING

DAY ONE: “Using Your Brain to Win”– Part II

DAY ONE: Protecting Your Wealth

DAY ONE: Digital Print – Current & Future Market Trends – Panel Discussion

Presenter: Holly Green

Succession Expert and Best Selling Author Tuesday • 10:00 am – 11:45 am

CEO and Managing Director of THE HUMAN FACTOR, Inc. Tuesday • 10:00 am – 11:45 am You learned about the basics of your brain at the AICC 2015 Spring Meeting. Now we dive deeper and explore how to use it as a powerful competitive weapon. Leveraging the latest in neuroscience, you’ll get tools, techniques and tips for learning how to: • Refresh on the basics of how you make assumptions, behavior, and conclusions • Avoid getting blinded by your own data • Effectively explore multiple perspectives • Expose yourself • Ask great questions • You’ll practice how to use your brain to win and learn tools you can immediately put to use to be even more successful!

DAY TWO: Living & Thriving @ The Pace of Change Presenter: Holly Green Wednesday • 8:30 am – 10:00 am The human brain was not set up to work effectively at the pace of today’s expectations. Living & Thriving Explores: • Why parts of the brain are not well suited for today’s hyper-fast world • How and why we get caught in inefficient and non-productive business • Typical reactions to change and how to navigate through them effectively • How we can maintain/rebuild resilience • How to remain focused and energized on achieving desired results The session uses a self-assessment, development worksheets, and enables participants to better understand how to truly thrive. BOXSCORE

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July/August 2015

AICC 2015 ANNUAL MEETING

Presenter: Tom Deans, PhD.

Dr. Tom Deans, The New York Times ‘TopTen’ author of Every Family’s Business offers a compelling new approach to protecting family wealth. Never before have business owners concentrated so much wealth in their operating business, but are facing longer and more expensive retirements. Dr. Deans offers 12 common sense questions every owner can ask. Influenced by his own family business, which eventually sold their private and publically traded companies for more than $100 million, Every Family’s Business is about building wealth, preparing heirs and building multi-generational families.

DAY TWO: Educating the Next Generation: Because Wealth Doesn’t Come with Instructions

Tuesday • 10:00 am – 11:45 am Robert Seay, HP, Business Development Director, Packaging |Strategy & Market Development compares/contrasts the latest HP digital print technologies and solutions for the corrugated industry and how AICC members can use them. Terry Amerine, Durst Image Technology U.S., LLC, Director of Product Marketing will provide an overview of the latest digital technology and how it will provide printers and retailers with opportunities to improve efficiencies and address constantly changing market dynamics.

DAY TWO: Digital Print – Use in the Market – Panel Discussion Wednesday • 8:30 am – 10:00 am Marty Englander, President, Englander Container and John Tatum, CEO, Heritage Paper Hear from members currently using digital printing in their companies. They will discuss various market opportunities and how this technology has improved business.

Presenter: Scott Clemons CFA, Chief Investment Strategist, Brown Brothers Harriman & Co. Wednesday • 8:30 am – 10:00 am The mechanics of transferring wealth are relatively easy. Attorneys, accountants and a host of advisors are well-versed on the legal and technical aspects of preserving wealth for future generations. Yet families often fail to preserve wealth for generations because of family dynamics, the adequate preparation of heirs, communication, and understanding the family wealth. Preparing heirs for the transition of both wealth and values is a critical investment. Clemons examines the softer side of a family’s transfer of wealth.

AICC ROUND TABLE DISCUSSION SESSIONS: Tuesday • 1:00 pm – 2:00 pm

Round Tables are moderated group discussions on specific topics of interest. The round tables may feature a presenter and/or presentation, but will allow for moderated group discussion.

ROUND TABLE TOPICS include: • • • •

Plant Safety Healthcare/Affordable Care Act (ACA) Sales Compensation & Anti-Trust Emerging & Developing Leaders Hot Topics

Folding Carton & Rigid Box: HAPPY HOUR AND DINNER

Monday, September 28, 7:45 pm – 9:45 pm Del Frisco’s Double Eagle Restaurant in downtown Fort Worth

This is a networking event for folding carton members and their suppliers. All are welcome to attend to meet new folks and hear about new markets. Price per person is $100 (limited space available – first registered basis)

ROUND TABLE DISCUSSION for Folding Carton & Rigid Box Makers Wedesday, September 30, 7:15 am – 8:15 am

This is a special group discussion forum. Come ready to share and learn from industry colleagues.

AICC Emerging Leaders:

Innovator of the Year:

Sunday, September 27, 2015 1:00 pm – 5:00 pm

The 2015 Innovator of the Year competition, co-sponsored by AICC, BCN and Corrugated Today features innovations in the Information Technologies and/or Training fields which enhance efficiency, quality, productivity, customer service or knowledge and skill levels in the paperboard industry.

EMERGING LEADERS TRAINING SESSION EMERGING LEADERS NETWORKING EVENT Sunday, September 27, 2015 6:30 pm – 10:00 pm

EMERGING LEADERS NETWORKING BREAKFAST Tuesday, September 29, 2015 7:00 am – 7:45 am

These events are for Emerging Leaders only.

ENTRY DEADLINE: Friday, August 21, 2015

Full competition details and deadlines are available at aiccbox.org/innovator.

AICC 2015 Independent Packaging Design Competition: Big Design Roundup ENTRY DEADLINE: Friday, September 4, 2015

This year’s competition features corrugated, folding carton and rigid box categories, providing a wider reach into the entire packaging market and a greater diversity of ideas. Full competition details and category descriptions available at www.aiccbox.org/pdc.

AICC 2015 Designers’ Lab: Co-sponsored by Arden Software North America, ESKO, Gerber Innovations, HP, and PriscoDigital LLC

Schedule of Events:

Designers will have the opportunity to learn new techniques in both structural and graphic design from experts in the field, and share their knowledge with peers at the 2015 Designers’ Lab. Designers will get a chance to show-off their skill and talent, and receive recognition as they participate in the “real-world” design-to-problem challenge. Open to corrugated, folding carton and rigid box graphic and structural designers.

MONDAY, SEPTEMBER 28

WEDNESDAY, SEPTEMBER 30

Design Lab - 1:00 pm – 5:00 pm

Designers welcome to attend all AICC Annual Meeting workshops and general sessions 8:30 am - 12:35 pm

TUESDAY, SEPTEMBER 29 Design Lab - 8:00 am – 4:00 pm Design Lab Presentation to Judges 4:00 pm – 5:00 pm Package Design Happy Hour Awards Reception - 6:00 pm – 7:00 pm

Designers Plant Tour of American Carton Co. (Optional ) 1:00 pm - 3:30 pm BOXSCORE www.aiccbox.org

AICC 2015 ANNUAL MEETING

Sunday, September 27, 2015

Tuesday, September 29, 2015

AICC Emerging Leaders Training Session*

AICC Continental Breakfast

AICC Plant Tour*

(Emerging Leaders only)

(Sponsored by Oklahoma Interpak)

1:00 pm – 5:00 pm

7:00 am – 9:00 am

(Optional)

AICC Board of Directors Meeting

AICC Emerging Leaders Breakfast*

(Board Members only)

(Emerging Leaders only)

3:00 pm – 5:00 pm

7:00 am – 7:45 am

Departure from Omni Fort Worth Main Lobby

AICC Optional Off-Site Event* Dallas Cowboys’ Staduim Behind the Scences VIP Tour

AICC Emerging Leaders

AICC Designers’ Lab*

(Emerging Leaders only)

8:00 am – 4:00 pm

3:15 pm – 5:45 pm

AICC Independent Packaging Design Competition and Voting for People’s Choice Awards

4:00 pm – 5:00 pm

Off-Site Optional Event* 6:30 pm – 10:00 pm

Monday, September 28, 2015 AICC Plant Tours* (Optional)

8:00 am – 5:00 pm

AICC General Session I

AICC Designers’ Lab Judging* AICC Independent Packaging Design Competition Happy Hour and Awards Presentation

7:30 am – 3:30 pm

8:00 am – 9:45 am

(Sponsored by Amtech)

Plant Tours include all the locations

Keynote Presention:

6:00 pm – 7:00 pm

Tom Deans, Ph.D., Best-Selling Author “Willing Wisdom”

Departure from Omni Fort Worth Main Lobby (Continental breakfast and lunch included)

American Carton Liberty Carton Smurfit Kappa Fort Worth Thacker Industrial

AICC Package Design Competition Judging (Judges only)

9:00 am – 5:00 pm

AICC Designers’ Lab* 1:00 pm – 5:00 pm

AICC New Member & First Timer Orientation & Reception (Invitation only)

Dynamic Workshops Concurrent Track Sessions I: DAY ONE 10:00 am – 11:45 am (All held concurrently)

Strategic Leadership Succession Planning Digital Printing

AICC Spouse/Guest Optional Off-Site Event* Texas Museum Tours & Lunch and Wine Tasting at the Clay Pigeon

Wednesday, September 30, 2015 AICC Continental Breakfast 7:00 am – 9:00 am

AICC Folding Carton/Rigid Box Session Round Table Discussion 7:15 am – 8:15 am Continental breakfast in room

AICC Independent Packaging Design Competition Open 8:00 am – 10:00 am

5:00 pm – 6:30 pm

10:00 am – 3:00 pm

Dynamic Workshops Concurrent Track Sessions II: DAY TWO

AICC Opening Night Reception

Networking Luncheon and Keynote Presentation:

(All held concurrently)

(Sponsored by CTI)

6:30 pm – 8:00 pm

AICC Folding Carton & Rigid Box Happy Hour & Dinner* at Del Frisco’s Double Eagle Restaurant 7:45 pm – 9:45 pm

Willie Gault, Former Professional Football Player, Actor, Businessman and Philanthropist “Leadership - On and Off the Field”

12:00 pm – 1:00 pm

Round Table Concurrent Sessions: 1:00 pm – 2:00 pm (All held concurrently)

Healthcare Reform/ACA Plant Safety Sales Compensation Emerging & Developing Leaders *Events requiring separate registration and fee Times, locations and events are subject to change. ICPF event is shown in purple.

34 6

Lone Star Container 2:15 pm – 5:30 pm

BOXSCORE July/August 2015

AICC 2015 ANNUAL MEETING

ICPF Board of Directors Meeting (ICPF Board Members only)

2:30 pm – 4:30 pm

8:30 am – 10:00 am Strategic Leadership Succession Planning Digital Printing

AICC General Session II 10:15 am – 12:35 pm

Keynote Presentions:

Scott Clemons, CFA, Chief Investment Strategist, BBH “Economic Outlook” Bill McCartney, Hall of Fame Football Coach, Author and Founder of Promise Keepers “Teamwork is the Key to Success”

AICC Plant Tour* (Optional)

Smurfit-Kappa Recycle Mill (Lunch included) 1:00 pm – 5:15 pm

Departure from Omni Fort Worth Main Lobby

All events are being held at the Omni Fort Worth Hotel unless otherwise noted.

OPTIONAL

CULTURE AND FLAVOR OF FORT WORTH TOUR

MONDAY, SEPTEMBER 28, 7:30 am – 3:30 pm Cost: $100/person Round-trip transportation, continental breakfast and lunch will be provided.

Tuesday, September 29, 10:00 am – 3:00 pm

FORT WORTH AREA PLANTS INCLUDED IN THIS ONE DAY TOUR:

$165/person, includes round trip transportation, museum admission, lunch & wine tasting at the Clay Pigeon Restaurant and all fees.

First you will visit two premier art museums: The Modern Art Museum of Fort Worth and the Kimbell Art Museum. At The Modern, all major international movements are represented. Pop and Minimalism are particularly strong, as is German art. At the Kimbell, view artwork from B.C. to the 20th century. Major works included are by Duccio, Fra Angelico, Rembrandt, Goya, Monet, Cézanne, Picasso, Mondrian, Matisse, and more. Following the museum tours you will have a “tasting- style” lunch accompanied by wine pairings at the Clay Pigeon Restaurant. Rated as one of the hottest restaurants in the area, the menu changes frequently to reflect local, organic and fresh ingredients. It is their mission to translate this passion for food preparation to your dining experience.

DALLAS COWBOYS’ STADIUM – BEHIND THE SCENES VIP TOUR Tuesday, September 29, 3:15 pm – 5:45 pm

$65/person, includes round trip transportation, guided tour and fees.

AT&T Stadium is more than the home of the Dallas Cowboys, it’s a world of facts and figures about the world’s largest domed structure, an art museum and a classroom. The things you can do inside AT&T Stadium are endless, and you can experience them all. Guides lead your VIP Guided Tour. Beginning at the Main Club the tour stops include: a private suite, the print media press box, the Cotton Bowl office vestibule, and the Dr. Pepper Star Bar or the Ford Motor Company Fountain. After you've seen these areas, your guide will take you down to the event level where you'll see all of the stops on the self-guided tours, including the field, the Miller Lite Club, the post-game interview room and both the Cowboys locker room and the Cheerleaders locker room.

”PrimeTime” NETWORKING OPPORTUNITIES AICC OPENING NIGHT RECEPTION (Sponsored by CTI) Monday, September 28, 6:30 pm – 8:00 pm

The AICC 2015 ANNUAL MEETING will officially kick-off with an opening night reception at the hotel. This is a “heavy” reception, so there will be plenty of food! Get in the “Fort Worth” spirit and wear your cowboy hats and boots!

AICC PACKAGE DESIGN COMPETITION AWARDS – HAPPY HOUR RECEPTION (Sponsored by Amtech) Tuesday, September 29, 6:00 pm – 7:00 pm

Announcement of the winners of the 2015 Independent Packaging Design Competition will be made at the hotel.

American Carton Co.

In 1992, Harris Packaging expanded business offerings to include folding carton design and manufacturing by establishing American Carton Company. As an independent, full-service, folding carton company, ACC designs and manufactures innovative packaging solutions for industries such as: food, neutraceutical, pharmaceutical, retail, and cosmetics & beauty.

Liberty Carton Co. 2018 will mark the 100th year of this fourth genera-

tion, well-established, family-owned manufacturer of corrugated and solid fiber paper products. What you will see on the tour is a corrugator plant that operates very much like a sheet plant with a wide range of equipment typically seen in both. In addition to corrugated and solid fiber manufacturing, Liberty operates a fulfillment/contract packaging facility enabling them to be a one-stop shop for packaging and distribution for customers.

Thacker Industrial

(TISCO) is a full service company to the corrugated industry to include corrugated plant and sheet plants. TISCO offers turnkey installations including mechanical, electrical and debugging; Turnkey Mechanical and Electrical Rebuild and Reconditioning of an expansive range of equipment for the corrugated industry. TISCO also offers new machines and machine upgrades including Counter-Ejectors, folding rails, vacuum bridge guides and new Harper part, print stations and RDC sections.

Smurfit Kappa Fort Worth

(formerly Bates Container) is a corrugated plant that was originally built in 1976 as a sheet plant. Expansions include a corrugator in 1980/81 and a 50,000 sq. ft. shipping area in 1985. The plant currently includes a 98” corrugator, four flexo folder-gluers, three rotary die-cutters and a specialty folder gluer. The Fort Worth plant serves the greater DFW corrugated market and supplies sheets for the recently expanded Smurfit Kappa Sheet Plant in Longview, Texas.

TUESDAY, SEPTEMBER 29, 2:15 pm – 5:30 pm

Cost: $50/person

Round-trip transportation will be provided.

Lone Star Container

Founded in 1959, Lone Star Container began as a first-rate provider of quality brown boxes. Responding to an ever-changing marketplace, and embracing a tireless work ethic, today Lone Star does much more than brown boxes. Now, with three in-house litho presses, Lone Star is involved with anything and everything that is corrugated. Retail packaging, elaborate temporary POP displays and protective packaging. From concept to supply chain fulfillment, Lone Star is a single source packaging solution provider.

WEDNESDAY, SEPTEMBER 30, 1:00 pm – 5:15 pm

Cost: $50/person

Round-trip transportation and lunch will be provided.

Smurfit Kappa Recycle Mill

This mill has an annual production of 270,000 tons of linerboard (33# – 57#), 86,000 tons of medium (23# – 40#), as well as single face and laminated products. The off-line coating operation produces over 1.0 billion sq. ft. of functional and specialty coated papers annually. The tour will include a close-up look at both the linerboard mill and off-line coating operations. Smurfit Kappa is a leading global producer of paper based packaging solutions with operations in 32 countries. Only registered attendees of the 2015 Annual Meeting may participate in these tours. Space secured on a first registered basis. No photos/video allowed inside the plants BOXSCORE and a signed confidentiality agreement is required. www.aiccbox.org

AICC 2015 ANNUAL MEETING

ACCOMMODATIONS AT THE OMNI FORT WORTH FORT WORTH, TEXAS THE AICC HOST HOTEL: The Omni Fort Worth represents progressive luxury and offers amenities illustrating the Western spirit embodied by the exciting city that surrounds it. Conveniently located in the heart of Fort Worth’s downtown, the hotel is adjacent to the Fort Worth Convention Center and within walking distance from the city’s cultural centers, restaurants, and nightlife. Sculpted from native stone and rich hardwoods, and wrapped in glass, the Omni Fort Worth Hotel is the place to retreat in the Lone Star State. The Omni Fort Worth is conveniently located approximately 20 minutes from Dallas Fort Worth International Airport (DFW). AICC HOTEL ROOM RATES AT THE OMNI FORT WORTH: Traditional Single & Double Accommodations: $234 per night (plus applicable taxes and fees –currently 15%)

GROUP DISCOUNT CUTOFF DATE – FRIDAY, SEPTEMBER 4, 2015 Attendees are encouraged to make their hotel reservations before the group cut-off date of Friday, September 4, 2015 in order to be guaranteed availability, and to ensure you receive the group rate. The AICC hotel block could sell out prior to the cut-off date so please book early.

To make your hotel reservations directly into AICC’s group block, call 1-800-THE OMNI (843-6664) (reference AICC 2015 Annual Meeting)or book reservations online directly into the AICC group block at www.aiccbox.org/meeting

2015 ANNUAL MEETING REGISTRATION, OPTIONS & FEES STANDARD SINGLE ANNUAL MEETING REGISTRATION:

DESIGNERS’ LAB REGISTRATION:

$1,300/person – Super Early Bird, on or before 8/14/15 $1,400/person – Early Bird, on or before 9/4/15 $1,500/person – After 9/4/15

$450/person – Super Early Bird, on or before 8/14/15 $550/person – Early Bird, on or before 9/4/15 $650/person – After 9/4/15

BOX PLANT MULTI-DISCOUNT GROUP PRICING: Send More People for Less! AICC is offering box plant group pricing for corrugated, folding carton and rigid box members. Send more of your employees and experience more of the benefits of AICC for one low price!

$2,700 – up to 3 Employees from the same location $4,800 – up to 5 Employees from the same location $7,000 – up to 8 Employees from the same location

SCAN THIS QR CODE TO REGISTRATION ONLINE OR VISIT: www.aiccbox.org/meeting

DOWNLOAD THE NEW MOBILE APP for the AICC 2015 Annual Meeting

SCAN THIS QR CODE TO DOWNLOAD OR SEARCH AICC mobile in your App Store.

Designers’ Lab and Independent BOXSCORE 36Packaging July/August 2015Design Competition

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Diversification

BOXSCORE July/August 2015

Digitally printing wood veneer label stock

IVERSIFICATION Delivering the Whole Package BY ROBERT BITTNER

ot every family-owned Main Street store dreams of one day being the next Wal-Mart or Amazon. But a number of box manufacturers are discovering that diversifying their product offerings and services may be exactly what customers want. Businesses of all sizes benefit from at least asking themselves if they are delivering the range of products and services that can keep and draw customers in the years to come.

Photo courtesy of The Boxmaker

GOING BIG For Richard Brown, president of Seattlebased The BoxMaker (see sidebar on p. 43), diversification simply means not focusing on one specialized packaging medium, but embracing whatever packaging solutions clients may need— including paperboard, corrugated, foam, digital printing, labeling, and

fulfillment. Rather than dealing with multiple suppliers who may or may not communicate or coordinate well with one another, clients have a single contact responsible for handling multiple parts of a project. For The BoxMaker, the decision to diversify was “driven by feedback from clients as well as opportunities to meet market demand,” Brown says. “We added flexographic label printing because we have learned that 70 percent of all retail purchasing decisions favor the most visually appealing packaging label. We then added foam fabrication to be a further resource to our clients who required more advanced protection for their products,” he adds. “We saw the increased demand of business services from our client base who wanted help with assembly, labor, quality

BOXSCORE www.aiccbox.org

Photo courtesy of Spencer Kabelac of 4th Avenue Media

Cutting polyethylene foam on bandsaw

control, warehousing, and logistics. That prompted the inception of our fulfillment services division.” Like The BoxMaker, New Jersey–based President Container has embraced diversification completely. Brothers Marvin and George Grossbard started out as corrugated jobbers in the late 1940s. Over time, they added a sheet plant, purchased their own corrugator, and expanded to include point-of-purchase displays, stock cartons, and industrial supplies. Today, the company occupies a 522,000-square-foot “superplant.” Such incredible growth brings its own challenges, however. Each new product or service that looks profitable and appropriate for your business at the outset

At C&M Conveyor, we’ve enhanced our ability to meet the demands of today’s corrugated marketplace by adding products and manufacturing capability. The benefit to you: maximum throughput with the flexibility to meet your customers’ ever-changing needs. Our project management approach means we’ll identify your requirements, manufacture to your specs and install on time. Contact us today; let us solve your toughest problem. Leading supplier to the corrugated box industry 4598 State Rd. 37 • Mitchell, IN 47446 812-558-7960 • 800-551-3195 www.cmconveyor.com

BOXSCORE July/August 2015

may end up shifting your company away from the core competencies that made it unique and marketable in the first place. Expansion may also result in temporary lapses in customer service as new machinery goes online, new and existing staff undergo training, and departments (if not an entire operation) move to new locations—perhaps even a new state. DIVERSIFIED,YET SPECIALIZED Of course, not every expansion into new services happens on a large scale. For many smaller companies, diversification may simply be a matter of adding one or two additional products. John Joseph Ray, president and owner of Ray Products, has chosen to keep his

Digital print allows companies to create unique product packaging and displays that customize the product.

more. “Diversification allows us to ride industry trends, capitalize on ‘flash’ opportunities, and be a part of emerging markets,” he says. “As an example of an industry trend: Corrugated-only businesses are limited in the amount of impact they can provide when it comes to sustainability. It’s mainly in the areas of post-consumer-recycled content

and internal-waste-stream management. But as a continually diversifying solutions provider, we began sourcing pressure-sensitive label face stocks and adhesives with better recycled content and bio-ingredients in our label division. Our foam division began sourcing cushioning materials with higher concentrations of recycled/regrind content, as well as partnering with a disruptive

Photo courtesy of Spencer Kabelac of 4th Avenue Media

THE BENEFITS OF DIVERSIFICATION While diversified products and services can expand profitability and streamline service, The BoxMaker’s Brown believes that diversified growth does much

Photo courtesy of The BoxMaker

company focused on just the folding carton and rigid box industry. For him, diversification really “depends on what your customer base looks like. There are a lot of variables there. It makes sense for us, because we have customers that use a combination of the two packages. For us, it’s a great selling point. You don’t want a buyer saying, ‘Well, this setup box doesn’t fit the folding carton sleeve.’ When one company is handling both, that doesn’t happen,” Ray says. It’s a frequently heard cliché: “If you’re not moving forward, you’re going backward.” But forward does not always have to mean “growth” or “expansion.” In fact, it is possible that growth and expansion actually could be a backward step that negatively affects a company’s corporate culture and employee satisfaction, which can lead to quality-control and customer-service issues.

The BoxMaker offers fully digital printing and finishing using HP wide-format press and Kongsberg XP-Autofinishing machine.

BOXSCORE www.aiccbox.org

company manufacturing a 100 percent compostable/biodegradable alternative to polyethylene and polystyrene foams. Most recently, we’ve begun partnering with a global innovation leader striving to make mushroom (mycelium) packaging a viable alternative for mainstream applications. And then our supplies division kicked in by providing our clients with more biodegradable and earth-friendly packaging in the form of bubble wrap, stretch wraps, loose-fill packaging, and inflatable pillows. It continues in the same vein with full lines of earth-friendly janitorial, sanitation, and office supplies.” For Brown, “flash” opportunities are those grab-them-or-they’re-gone situations that cannot be planned for but that can make a dramatic impact when it comes to increasing name recognition and boosting client confidence.

“When flash opportunities pop up, most companies read about them after the fact and wish they were in a position to capitalize on them,” Brown says. “Our diversification and innovation continually put us in place to rapidly help clients whenever an emergency situation arises. When a Gulf of Mexico oil spill occurred, we fielded a panicked call for massive amounts of closed-cell foam designed for oil spill containment. Through our national partnerships, we had the materials sourced and sent to the hard-working cleanup crews who needed them immediately. “Emerging markets are another source of great opportunity for companies with a culture of diversification and innovation. The window of opportunity within emerging markets fluctuates drastically, but the time required to react is always the same—you need to have been planning for it yesterday.”

For The BoxMaker, one such emerging market is cannabis. “In Washington State, the cannabis industry is booming. But while cannabis itself is nothing new, the retail packaging and protection of it is. All cannabis products legally sold in a retail marketplace need some form of childproof protection, regulated labeling, and a way to ship it safely from point A to point B. Additionally, brand owners need a package design that helps their product compete for sales in the emerging retail marketplace. Retail consumers shopping for cannabis products are likely unaware of brand reputation, but we are able to help them establish their reputation through labeling and quick-turn digital printing technologies. This particular market resembles the Wild West in terms of its growth,” Brown says. “But our strength in diversification has allowed us to quickly Continued on page 44

BOXSCORE July/August 2015

SOMETHING DIFFERENT BY RICHARD BROWN, PRESIDENT, THE BOXMAKER One constant in our universe is change. Some people call it chaos, physicists call it entropy, and others might call it disorienting. But for The BoxMaker founder Dave Hill and co-owner Dave Taylor, change is seen as something else entirely: opportunity. Since its inception more than 34 years ago, our company, The BoxMaker, has made a name for itself in the industry as a dynamic change agent, driven by embracing opportunities to innovate. Over time, what began as a sheet plant in Renton, Washington, evolved into something much more—a company that could address its clients’ challenges with multifaceted solutions: from foam, digital printing, and labels, all the way to kitting, fulfillment, and logistics. In the early 1980s, Hill interviewed with a life insurance company. The problem, as he saw it, was that in business you were given a list of things to sell without the opportunity to adapt products to a customer’s needs or environment. Hill realized then that he wanted something different, with more potential for growth, as well as potential to revolutionize. After gaining experience at three Northwest integrated paper-manufacturing companies, Hill became fascinated by the prospect of selling a product that he could influence. Whereas commodity products such as life insurance offered only features, advantages, and benefits, Hill believed custom solutions provided the excitement of recreating the wheel each day while making clients successful. It also offered collaboration with buyers that Hill would call “friends” over the next few decades. This kind of innovation became the pillar of The BoxMaker’s strategy, which is “Do Something Different.” Rather than seeing the world through products, all our BoxMaker team members see challenges

and solutions in every type of industry imaginable. It’s the drive to continually learn and hone our craft, while adapting through innovation and disruption, that fuels our fire every day. The BoxMaker is driven by the desire to do something different within each industry we touch, expanding markets for our clients while also expanding our own. Sometimes one really does just need a brown box, but as we have learned from each of our unique clients, more often than not businesses need a customized— and often complex—solution to their packaging problems. We realized the need to diversify beyond simple box production and organize our business into five divisions to better align with the clients we serve: the varying but cohesive worlds of corrugated, supplies, labels, foam, and fulfillment. The BoxMaker was founded in 1981 as an independent corrugated converter. It began offering general industrial supplies a few years later, realizing these offerings would go hand in hand with helping clients streamline and consolidate their supply chain. Shortly after expanding down the I-5 corridor into Portland and Eugene, the company added flexographic label printing, which enables clients to distinguish their products and brands through appealing packaging and labeling. We then added foam fabrication as a further resource for clients who required more advanced protection and damage control for their products. As a full packaging house with a variety of open and closed cell foams, The BoxMaker can match a client’s foam project with corrugated material, pressuresensitive labels, full service assembly fulfillment, and transportation logistics. More and more companies are discovering

the advantages of locally outsourcing warehousing, assembly, and shipping. Expanding The BoxMaker into these related packaging markets has allowed us to become a “single source supplier,” with the ability to more thoroughly help our clients by solving more of their supply chain needs. Embracing diversification has grown The BoxMaker into an expansive provider of custom packaging design, manufacturing, supply, and fulfillment services. For us, diversification is driven by feedback from clients as well as opportunities to meet market demand. With each new job, we aim to be our clients’ packaging partner, understanding that every industry has unique challenges. Some products are extremely fragile, others are extremely large or heavily regulated, and many need to stand out from the crowd. Everything we know, we have learned by doing. And in turn, each of the many innovations we have made or adopted—from design and materials to processes and technology— has been the result of our role as a trusted adviser to a client in one of the many industries we serve. The BoxMaker is one of the few companies a business can rely on for boxes, internal foam, and other packaging, as well as labels, wide-format digital printing, assembly fulfillment, and logistics services. We will even close the box and put the tape on it. In a world of chaos and transformation, The BoxMaker has found success through innovating and evolving, and constantly embracing changing markets and packaging opportunities. Ironically, our accomplishments and flexibility are made possible only by the one thing that has never changed—the unwavering dedication of our long-term staff.

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Photo courtesy of Spencer Kabelac of 4th Avenue Media

Operators making pressure-sensitive labels on eight-color flexo

Continued on page 44 become the go-to provider for existing and new packaging concepts.” While cannabis is currently a very specialized product with highly regulated distribution, other new opportunities are constantly coming to the fore. For example, the recent rise of home- delivered, subscription-based food and apparel services—such as Blue Apron, Trunk Club, and Birchbox—have increased the need for higher-quality, nationwide corrugated shipments. Independent packaging consultant Sharon Eucce notes, “The subscription model of business is a hot ticket these days. Whether it’s dog food or organic specialty food or cosmetics, these companies curate boxes that arrive at your home based on your personal profile. That’s more of what I call ‘corrugated that delights’ or higher-end corrugated. “The subscription model, especially, relies on that box to delight customers when they see it on their doorstep. This is the important ‘next touch’ of brand exposure to the customer after they’ve left your website. I worked with Birchbox early on to develop their shipper and, consequently, the rigid box that fits inside,” Eucce says, noting that getting to the best solution for the customer may involve ad-hoc partnerships.

BOXSCORE July/August 2015

“Working together, Utah Paperbox and Wasatch Container were able to provide the high quality needed for this startup brand. Startups in particular benefit from companies that can manage and produce both packaging requirements.”

planning committees. Our input helps give them the competitive edge they need to stay on top of their markets and industries. Clients then start to look to us as a strategic partner as opposed to just a supplier.”

EXPANDING SERVICES Just as the local butcher and baker have been replaced by the modern super market, it may seem that diversification is inevitable for every box manufacturer. Yet expanding into multiple packaging media and services is not right for every company. And there is no guarantee that investing in new square footage, expensive machinery, and employee training will result in more customers or more profits. One alternative is to diversify in the area of services rather than products. “We’re diversifying in our sales and marketing approach to better reach different segments and support the needs of today’s decision-makers,” Brown says. “We’ve pivoted some of our focus away from products and begun spending more time in specific industries, to better understand how these industries work to meet their clients where they need it. This has allowed us to get in front of marketing teams, board rooms, and

MAKING CHOICES Whether or not to diversify—and how and when to do so—is a question every box manufacturer must answer based on market position, capital, client needs, corporate values, and a host of other variables. Not every operation can or should try to transform itself from a specialty supplier to a superplant offering all things to all customers. For some, though, the benefits clearly outweigh the challenges. “Handling projects of wide variety and complexity over the years has enabled us to develop the capabilities to confidently handle any new challenge that comes our way,” Brown states. “And we’re able to do it in a responsible, efficient and timely manner.” Robert Bittner is a Michigan-based BoxScore columnist and a freelance journalist. He can be reached at rmbittner@ gmail.com.

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BETTER PREPRESS Minimize Waste and Lost Time BY BEN URQUHART

elieve it or not, the summers I spent as a surly teenager feeding flexos at New England Wooden Ware (NEWW) did not teach me much about setup reduction and waste control. My adult tenure at my familyâ&#x20AC;&#x2122;s business began four years ago as corrugator supervisor. Today, as prepress manager, I am responsible for graphic arts, structural design, the die room, and the ink lab. In this new role I have learned that prepress has just as many opportunities to create mountains of waste and hours of lost run time as any other area in the factory.

BOXSCORE July/August 2015

Every day we make decisions about how to produce packages and displays. Should this case be run as a two-out or a four-out? Are we willing to rotary die cut this intricate countertop unit? Will the customer accept a flexo-printed version of this artwork, or are they willing to pay for litho-lamination? The decisions we make carry consequences for the factory weeks into the future, by influencing whether or not we receive the actual purchase order and predetermining the difficulty of each step of production. For operators to efficiently create quality product, they must receive accurate instructions, functional tooling, and good ingredients (paper, starch, and ink) to run on well-â&#x20AC;&#x2039; maintained machines. Success in prepress

creates the opportunity for success in production, but we must learn and respect the limits of each machine while we seek to minimize the variability of our material inputs. KNOW YOUR LIMITS When a sales opportunity is left on my desk for routing, I often carry the samples down to the factory to solicit opinions from those who will be running the actual orders. We have operators with 30-plus years of experience at NEWW who are always eager to offer their expertise, especially when I make a mistake. We have younger associates with experience running much more complicated presses in other industries; 1/32" of trap and mandatory spectrophotometer measurements are not intimidating to these guys. Unusually complicated, risky, or large-volume orders require in-person group meetings so we all can look for pitfalls and opportunities. The more eyes I can enlist to look at an item, the better our chances of making a product that will look good and perform as expected. As you might imagine, conflicting opinions are inevitable. The two shifts always seem to disagree on the best lead edge to ensure that a large E-flute item will float gently into the stacker on our 66" rotary die cutter. Our team associates will insist this structure be

routed through a flatbed die cutter so when the item hits the next machine it is properly folded. Recommendations like these are taken into consideration, even though this additional machine pass will increase the price. Relatively simple decisions become the subject of intense arguments, but after collecting the opinions and weighing the options, the ultimate decision falls to prepress, as does the responsibility when an order goes awry. What is particularly challenging, and a source of constant irritation to the customer service department, is there are few black and white rules when it comes to machine routing at NEWW. For example, the midsize flexo-folder gluer could, in theory, slot so deeply into a box as to cut it in half. So why, then, do we set a 5" minimum depth for RSCs (regular slotted containers) created on this machine? Simply put, going below that limit will cause increased waste and longer setups. Adding an extended glue tab or skip slots will help if the customer will tolerate the modifications, but when the machine crew has to spend an additional 15 minutes and 100 sheets tinkering with the settings to make a square box, that time and material may not have been included in the original price from a standard-based costing system. This principle applies to most of our minimums and maximums throughout the factory: “Yes, this machine could do what the customer is asking, but we would regret it.” As we get better at prepress, we are learning when and how to say no, and becoming better at finding cost-effective alternatives. MINIMIZE VARIABILITY Ink, tooling, and paper cost money. The waste and downtime created by dealing with less-than-perfect raw materials and tools are also expensive. Even when prepress plans a job correctly, ink colors shift, corrugated board warps, and cutting dies may not always behave as expected. When problems arise, supervisors are forced to make judgment calls on whether to proceed with an order. Do we stop to fix the problem and reject

the offending material and risk delaying delivery, or do we suffer through with higher waste and setup time, intending to fix the problem later? After the orders have been placed, it is part of my job to prevent these problems from getting to press in the first place. One of the first projects I was given at NEWW was the purchase and installation of an ink kitchen. Our business has been moving in the direction of increased color and graphics, but our machine operators were opening a new bucket of ink, dumping in a few cups of water, and then running a few sheets to see color. As you can imagine, the setup time and sheets lost on multicolor jobs was high. Today we have a dedicated employee making swatches, mixing ink, and responding to press problems. Every bucket arrives on press having

been proofed and measured against an approved color standard. As anilox rolls wear, we have the ability to adjust the color accordingly. Ink-related downtime on our presses is a fraction of what it once was, and we are delivering better, more consistent color to our customers. Proofs from each print plate and strikes from every cutting die are inspected by a graphic artist or structural designer, while the die room inspects the actual tooling. When the tooling gets to press, it should be ready to run with a minimal amount of tinkering. Add or remove rubber if necessary, but major modifications should not happen on press when the clock is ticking. Major defects should be photographed and sent to the company that made the tool. If quality is compromised due to worn anvils or other maintenance issues in the machine, pull the job until

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the actual problem is solved and explain why we didn’t address this issue before it happened. Admittedly, this is the area of my job where I am least experienced and most likely to second-guess my decisions. For example, a couple of months ago I replaced the four-out cutting die of an unusual multidepth one-piece folder, because the previous order ran for 12 hours longer than expected. The new twoout die ran twice as fast, because the scrap stripped properly, which was not the result I had expected the first time I routed that item. Machine utilization does not equal machine efficiency. Flat, smooth, bonded corrugated sheets are always the goal, but corrugation is a complex process involving

heat, starch, water, and compromised fiber. When warped or wash-boarded sheets arrive for an order, I have seen operators sigh and prepare for a frustrating run. A little bit of down warp on a full coverage E-flute die-cut can double the setup time, waste, and run time. Unfortunately, this is a continuous fight, which requires constant monitoring. When problems are discovered, the response procedure is unsatisfying. Do the best you can, save samples of the offending board, and do not pass the problem downstream to the next machine or customer. Successfully minimizing variable quality from a corrugator requires preventive maintenance, talented operators, and a

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BOXSCORE July/August 2015

“The decisions we make carry consequences for the factory weeks into the future.” documented feedback cycle to reinforce the consequences of warped stock. We are not a modern, perfectly equipped box plant; but we try to ensure that each machine in our museum of printing technology receives the cleaning, grease, and maintenance it needs on a weekly basis. Our most productive rotary die cutter was purchased new in 1981, and it still pounds out simple

work at more than 5,000 kicks per hour. With a prefeeder on one side, a four-bin stacker on the other, and a whole suite of upgrades on the horizon, this machine remains a dependable and profitable work center. In a similar fashion, our smallest flexo-folder gluer is shut down for a six-hour overhaul every Tuesday. The first-shift crew and a dedicated maintenance team clean the pans, check bearings, and replace belts. Since this maintenance program has been reinstated, average hourly production has increased by 50 percent and average setup time has decreased to four minutes. Obviously this takes time and money. The maintenance department keeps a tremendous inventory of spare parts, and our factory is full of

busy people every weekend, whether we are producing product or not. Prepress has been an effort to provide production with the opportunity for success by staying within our machine capabilities and minimizing the variability of materials. I keep a sheet of E-flute next to my desk to write down the major mistakes I have made over the past year. The line between success and failure is not always clear in advance, but when my operators are given good instructions, quality material, and functional tools, they find a way to get the job done right. Ben Urquhart is production manager of NEWW. He can be reached at 978-6323600 or burquhart@newoodenware.com.

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Clockwise from top left: Rich Eastwood (left) and Bill Flinn, both past presidents of AICC, saw the need for a “next generation” committee in the early 1990s; “It’s just as important to work on your business, as it is to work in it.” — Craig Hoyt, president, Buckeye Boxes; At an AICC national meeting sometime in the late ’90s, the “next generation” of AICC members talked about coming into the business. From left, Rick Eastwood, Central Graphics; Cindy Baker, Scope Packaging; and Gary West, Custom Packaging; In training: A very young Tom Nelson (left) with younger brother Andy enjoy a ride while sweeping the floors of Nelson Container in Germantown, Wisconsin. Pushing the sweeper is company founder Jim Nelson. This is probably not an OSHA-approved method; Greg Arvanigian, president of Arvco Container Corp. “I was born into it,” he says of the corrugated industry.

BOXSCORE July/August 2015

AICC’s 40th Anniversary: The Year 2000 and Beyond

A ‘Next Generation’ Takes the Helm BY STEVE YOUNG

t the turn of this century, a new generation of AICC leadership was emerging, and with it a fresh set of eyes on the industry, its future, and the role of the Association in it. Here’s how it started. In the immediate postwar era, a wave of acquisitions and consolidations took place, which built up what we now know as the publicly traded, vertically integrated sector of the industry. According to pulp and paper industry researcher Hannes Toivanen, 13 mergers during the 1950s reduced more than 50 leading corrugated firms to 15 national, vertically integrated companies.1 This activity has continued to characterize the forest products and paper converting sectors. Today, five vertically integrated firms control nearly 80 percent of containerboard capacity and 65 percent of the corrugated box market.2 A look at AICC’s membership over the years reveals that many of the entrepreneurs who started their own companies did so after spending time in the ranks of a larger enterprise. The salespeople, production managers, designers, and financial officers who “didn’t play well with others” were the candidates most likely to strike out on their own. And they did. It was in the 1960s and ’70s, in the wave of mergers and acquisitions, that so many of today’s AICC member companies were founded. For example, Hoerner Boxes, later Hoerner Waldorf, saw a number of its rising stars jump

ship after its acquisition by Champion. Southern Missouri Containers, Golden Bear Packaging, and Columbus Container are examples of independent companies founded by Hoerner alumni. A ‘Next Generation’ Emerges When the 1990s rolled around, these members of what we can now call AICC’s own “greatest generation” were looking to pass the torch. Bill Flinn, then-president of Scope Packaging, Orange, California, joined with Rich Eastwood, president of Central Graphics, Mississauga, Ontario, Canada, to start AICC’s Next Generation Committee, also known as the “Sons of Bosses.” Their goal? Get their sons and daughters involved in the industry and thereby ensure the successful transition of their companies to the next generation of leadership. These two entrepreneurs, both past presidents of AICC, were wildly successful. Cindy Baker, vice president of Scope Packaging, Orange, California, was a founding member of AICC’s Next Generation Committee. She, along with her brother Mike Flinn—now president of Scope—attended many of those early next-generation events. “Bill Flinn, my father, was very proud of being an independent and believed strongly in giving back to the industry that has given our family so much,” she wrote. In 2005–2006, Baker served as AICC

chairman, the first woman to do so. She served a decade following her father. Working Outside First ... Or Not Baker’s trajectory into the business followed many of the next-generation group: working outside of the business for a few years and then being brought in based on the experience gained. “In the early ’80s I worked for a publisher selling advertising,” she said. “At the time, Scope was beginning its journey into graphics with a litho laminator, and since I had a few years under my belt dealing with graphics, my father Bill felt my knowledge would be helpful.” Craig Hoyt, president of Buckeye Boxes in Columbus, Ohio, was also a member of AICC’s early “next-gen” group, and he, too, worked outside the company before joining it full-time. “My dad founded Buckeye Boxes when I was a sophomore in high school. I decided on my own that I wanted to work outside the company. After three years with Continental Can Co., I decided that if I want to be in this industry it would be better to work for myself.” For some of AICC’s next generation, though, their tenure in the company began immediately out of school. Tom Nelson, president of Nelson Container in Germantown, Wisconsin, remembers that after he got his packaging degree from the University of Wisconsin–Stout, he wanted to find a job in the box business, but not

Hannes Toivanen, “Antitrust and the Competitive Structure of the U.S. Pulp and Paper Industry, 1950–1990,” Georgia Institute of Technology, Atlanta, Ga. Deutsche Bank, Bank of America, Keybanc Capital Markets, 2014 analysis and reports.

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BOXSCORE www.aiccbox.org

in his father’s company. He recalled, “I clearly remember one of my interview questions with an integrated [company]: ‘Why should I hire and train you so you can go back and work for your father?’ So with that, I started selling boxes for Nelson Container.” Likewise for Greg Arvanigian, president of Arvco Container in Kalamazoo, Michigan, who said family expectations led him to his current position. “I was born into Arvco,” he said. “My dad [George Arvanigian, founder of Arvco Container Corp.] started the company when I was 10 years old, and I didn’t know anything different. He was pumping into my head that I was going to be president of the company someday, so I assumed it was going to happen.” That transition, Arvanigian says, was not immediate, however. “I started making samples when I was 13,” he said. “My dad had it in his head that the only way to come up in the

BOXSCORE July/August 2015

business was to first tail the corrugator. They put me on the stitcher instead— stitching triple wall. That was worse.” Now at the Helm The ascent of this next generation into the leadership ranks of independent companies has been marked by industry involvement and contribution, just as their forebears. Many of them recognized early on the value of AICC’s network, largely through their families or company founders. “I remember my father taking me to AICC meetings in the late ’80s,” said Tom Nelson. “We met gentlemen who [had] spent years in the business. We learned how they got their start in the industry, how they decided to go out on their own, and how much fun they were to be around.” Craig Hoyt’s early AICC experiences were more personal: “I count several of my fellow members as my best friends,” he said. By the year 2000, AICC’s next generation of leadership had positioned itself as

young, focused, and motivated to take their companies—and the Association—to the next level of excellence. Craig Hoyt served as AICC president in 2000–2001; Greg Arvanigian followed him. Arvanigian was AICC’s first elected leader whose father had also served in that capacity in the Association’s early years. Jay Wertheimer, a third-generation owner of Wertheimer Box in Chicago, was after him. In Canada, Larry Cooper of C&B Corrugated took the reins of his father’s company and also AICC, serving as chairman in 2003–2004. Cindy Baker, as noted earlier, served in ’05–’06. The list goes on. Advice for Emerging Leaders Today, as this “next generation” is now the “current generation” of owners, their outlook is naturally toward those following them. Mark Mathes, president of Vanguard Companies in Kansas City, Missouri—himself a second-generation owner whose father and mother founded Vanguard—noted during his recent year

as AICC chairman the “preponderance of gray hair” in meeting rooms. He supported and encouraged the development of an Emerging Leaders group to “encourage member companies to develop their next generation of leadership and instill a habit of participation in the industry.” Recognizing the benefits they have received from the industry and from being involved in its associations such as AICC, current owners offer advice to those who are now part of a new set of “emerging leaders.” The first piece of advice, according to Tom Nelson, is not being afraid to fail. “The great leaders of the past weren’t afraid to make a mistake,” he said, adding that those who are successful in business are those who also have a strong support network. “The past generations were committed to a lifetime of learning, and their families were always close by.” “Get involved!” This is Cindy Baker’s recommendation. “Attend meetings.

[I guarantee] you will always come away with something you can apply.” Craig Hoyt offers a similar but slightly different take, saying that AICC and other industry engagement such as CEO Advisory Groups—small groups of CEOs and owners who act as advisers for each other—offer opportunities to “work on your business, not just in it.” Greg Arvanigian adds a note of caution about one’s motives for involvement: “Those who get into it for themselves don’t get as much out,” he said. “Those who get into it for the good of the Association or the industry get far more out of it.” The challenge for the current generation is in motivating the next to ensure that their companies remain independent. For many, family succession is not a ready option at the time, or the family has decided it’s in their best interest to sell or merge with another company. Bates Container, Fort Worth, Texas, is a recent example, as is Pearce-Wellwood in Brampton, Ontario,

Canada. Both companies were acquired in the past year by larger entities, yet news such as this doesn’t deter the current generation of leadership. On the contrary, they see it as part of the landscape of our industry, and the challenge and opportunity for AICC’s Emerging Leaders. “The industry is changing,” says Hoyt, “as it’s been in every generation of AICC leadership.” He concludes: “Ours is a wonderful industry with a vibrant, independent Association and a great future. There will always be an independent converting industry, and there will always be a smarter generation of entrepreneurs coming in to lead it.” Steve Young is president of AICC, based in Alexandria, Virginia. He can be reached at 703-535-1381 or at syoung@aiccbox.org.

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Folding Carton/Rigid Box

SAFE AND SECURE: PROTECTING YOUR CUSTOMERS’ PRODUCTS AND BRANDS BY ROBERT BITTNER

n Wednesday, March 14, 2007, 63-year-old Hetty Palant was arrested in her suburban West Palm Beach, Florida, home for the sale of counterfeit luxury goods. For five years she had operated what was essentially a retail store from her home, keeping regular business hours and earning a total of $500,000. When the police arrived, they seized more than $1 million in counterfeit goods, including watches and high-end jewelry, shoes and handbags—all packaged in boxes that looked legitimate but were just as fake as their contents. Chances are, most of Palant’s customers didn’t really believe they were buying authentic luxury brands. They wanted the prestige of a well-known brand without the investment, and they were willing to accept the trade-off in quality. Unfortunately, counterfeiting doesn’t end with “entrepreneurs” like Palant, the obvious Gucci and Rolex knockoffs sold by street vendors, or the “Apple iPhones” sold overseas. According to Sharon Flank, Ph.D., CEO of InfraTrac, a security- focused supplier to the box industry, some studies show that counterfeit and repackaged pharmaceuticals now account for upward of 90 percent of all Internetbought medications in America. In addition, a number of other counterfeit products have made their way onto legitimate retail shelves, standing alongside authentic products in packaging that looks identical to the real thing. At the very least, the result is a packaged product that does not represent the brand’s true quality, syphoning off profits even as it weakens the brand’s reputation. But when the counterfeit product is a

BOXSCORE July/August 2015

“The more you and your sales staff know about the security options available to you as a folding carton/rigid box converter, the better prepared you’ll be to protect your client’s packaging and product integrity.” drug, a beverage, a cosmetic, or a food, the results can be much, much worse. One solution is for brands to use packaging that incorporates anti-counterfeiting measures. The use of one or more such measures on a given box is driven by the customer, of course. But any customer with a luxury or health product, widespread distribution—especially overseas distribution—or a well-known brand should at least be made aware of the available solutions. The more you and your sales staff know about the security options available to you as a folding carton/rigid box converter, the better prepared you’ll be to protect your client’s packaging and product integrity. Layered Solutions “Tackling counterfeiting requires savvy,” Flank notes. “You’re dealing with an adversary who is constantly trying to stay ahead of you. That requires a multilayer approach. “Ten years ago, we thought all counterfeits had misspellings on them. Now, spelling has improved. Colors always used to be slightly off; now, you can’t always tell by the colors. We’ve tried holograms, color-shifting inks, UV inks, fluorescent inks, and on and on.”

Short of using a proprietary security solution, the best approach is to use a variety of overt and covert methods, almost all of them involving steps in the printing process. Overt protection is like the sticker on your front door telling would-be thieves that your house is protected by an alarm system. This is where unique holograms and specialty inks come into play, along with specialty synthetic fibers and even hologram glitter. Where counterfeiters are concerned, overt protections should be either hard to get or difficult to reproduce. In 2006, 69 percent of companies surveyed by the Coalition Against Counterfeiting and Piracy (CACP) claimed to use overt protection. But 82 percent said they also used covert protection, which at the time included hidden technologies such as “invisible” bar codes, polarized hidden images, UV inks, photochromic dyes, etc. One drawback at that time, however, was that covert usually meant costly; because of their “hidden” nature, these protections required large and expensive custom lights to verify a product. Integrated Security InfraTrac is one of several industry suppliers that is taking the 2006 concept

To Learn More Not surprisingly, none of the folding carton/rigid box converters contacted for this column were willing to talk about whether or not they use anti-counterfeiting measures. Industry suppliers were also unwilling to provide information about their box customers. However, you can learn more about the options and costs by contacting suppliers directly, including: of covert protection to a new level. Rather than relying solely on inks or other surface features, these companies are adding chemical “taggants”—unique chemical signatures—directly to paper wraps, substrates, and even the clay-starch slurry used for stiffening by paperboard manufacturers. “One of the things we’re most pleased with is that we’re able to use commodity chemicals in our taggant recipes,” Flank says. “We don’t have to manufacture a molecule,” which keeps costs down. In addition, InfraTrac’s taggants can be “read” with an off-the-shelf handheld light. “Within a few seconds—even with an unsophisticated user—you can do an authentication in the field. That development and the tremendous decrease in price [due to inexpensive taggants and less-costly lights] makes it possible for anyone anywhere to figure out if this product is real/ marked or not. You can do more testing more easily. That means you’re spending your test money in a smart way. You’re not just limiting your testing to 1 in 1,000 because of high costs. The easier, faster, and simpler the test is, the safer everybody is.” What will such measures add to the customer’s production costs? According to Flank, “most anti-counterfeiting measures try to stay below a penny per piece.” Why Worry? Holograms and specialty inks are one thing, but it may seem like serious overkill to think about integrating chemical taggants in your

manufacturing/converting process. After all, not every folding carton/rigid box supplier is fulfilling orders for internationally known brands or drug companies. Isn’t this level of security something only a few suppliers really need to worry about? “Brand owners that believe they don’t have or will never have a brand protection problem should consider that the more successful they are and the better-recognized their brand becomes, the more likely it is they will be a victim of counterfeit product,” write Rod Kinghorn and Jeremy M. Wilson in a 2013 report for Michigan State University’s Center for Anti-Counterfeiting and Product Protection. “The question is, should brand owners wait to implement a program until after they have become a victim and identified counterfeit product in the marketplace?” That is a question only your customers can answer. But as you help them make informed decisions and weigh the issues and options, you will undoubtedly strengthen your company’s relationship with those customers and become an even more valued partner in their overall brand strategy. And there’s nothing counterfeit about that. Robert Bittner is a Michigan-based author and freelance writer. He is a frequent contributor to BoxScore.

H.W. Sands Corp. www.hwsands.com InfraTrac Inc. www.infratrac.com SunChemical www.sunchemical.com In addition, a number of organizations are clearinghouses for information and research related to brand protection and product counterfeiting, including: Center for Anti-Counterfeiting and Product Protection (Michigan State University) www.a-capp.msu.edu Coalition Against Counterfeiting and Piracy www.dangerousfakes.com The Global Intellectual Property Center of the U.S. Chamber of Commerce www.theglobalipcenter.com International Anti-Counterfeiting Coalition www.iacc.org

BOXSCORE www.aiccbox.org

The Associate Advantage

PACKAGE DIVERSIFICATION BRIAN KENTOPP BOBST NORTH AMERICA INC. CHAIRMAN BRIAN.KENTOPP@BOBST.COM

KEITH R. UMLAUF THE HAIRE GROUP VICE CHAIRMAN KUMLAUF@HAIREGROUP.COM

JEFF PALLINI FOSBER AMERICA SECRETARY PALLINIJ@FOSBER.COM

ED GARGIULO EQUIPMENT FINANCE CORP. FIRST ALTERNATE EGARGIULO@EFC-FINANCE.COM

KEVIN WIDDER AUTOMATÄN IMMEDIATE PAST CHAIRMAN KWIDDER@AUTOMATAN.COM

BOXSCORE July/August 2015

number of independents are redefining themselves through packaging diversification. This is happening through the inclusion of folding carton or rigid box, specialty packaging, or corrugated displays via multicolor rotary die cutters, preprint and label laminating, and digital printing. What is driving the constant change in packaging requirements? Ultimately, it is the consumer. Years ago, we embraced the large box store with big shopping carts, wide aisles, and bulk bins with colorful graphics. Today, there is another new trend on the horizon: A smaller, neater, wellorganized store that offers a broad selection of products in reduced quantities. Shelves in these new stores are filled with RRP (retail-ready packaging) and SRP (shelf-ready packaging), designed to get products from case to shelf in one smooth movement, rather than decanting single units. They are available in folding carton, corrugated, and rigid box. Products are clearly identified with high-quality colorful printing or preprint and lithographic packaging to offer greater ease during the shopping experience. One study found a 75 percent increase in product recognition when packaged in RRP. A select group of independent owners with folding carton and/or corrugated and rigid box operations are now positioned to capitalize on these shopping and packaging trends. Many grocery and specialty food stores in Europe have embraced SRP and RRP, and the momentum is building in the States. Grocery chain giant Kroger led the charge by unveiling its own shelf-ready packaging guidelines in January 2010. The great strength of the independent is found in the entrepreneur who continually seeks packaging solutions for the

customers. Numerous independent box plants from coast to coast are innovating as they strive to meet the unique needs of customers by offering groundbreaking packaging solutions. Recently I attended the ICCA Global Summit in Taipei, Taiwan. Representatives of many of the world’s largest corrugated paper and packaging companies were present to discuss a wide range of topics, which included packaging trends. Kim Nelson, AICC overseas director and president of Royal Containers in Brampton, Ontario, spoke on the continued growth of striking graphics to attract the visually driven consumers in North America. One major supplier of rotary die cutters shared that more than 50 percent of the machines they sold in the past few years have been supplied with four or more print units. Many rotary die cutters purchased today are being fitted with dryers as the consumer pushes toward tighter registration, higher cell count anilox rolls, and greater overall control of the printing process. On the other side of flexo post-print is the preprint and litho market. Manufacturers of both automatic flatbed die cutters and litho laminators report increased sales as the tide toward graphics packaging continues to roll. What lies in store for the corrugated companies of the future? Will the scales of the cost of digital printers be balanced with increased speed and size? Is there room for yet another major acquisition or merger in North America? All these questions will soon be answered. It is an exciting time to be part of what remains the best solution in the world for product packaging, the corrugated industry. This article was written by Keith Umlauf.

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Financial Corner

MANAGING COSTS IN DIVERSIFIED BUSINESS BY MITCHELL KLINGHER

anaging variable costs in theory is pretty easy, with the key quantitative factor being how to minimize them. Lower variable costs mean higher contribution, and as long as there are no quality or timing issues that increase reject rates or reduce plant efficiencies, that is generally the prevailing philosophy of how to manage them. However, qualitative factors can never be ignored. What good is a cheap supplier who always delivers late and/or delivers an inferior product? The best managers must successfully balance these quantitative and qualitative factors to maximize company profits. One might argue that the key factor in managing fixed costs is simply to minimize them, and from a quantitative measurement perspective, that may be true. The concept of utilization is also important in the management of fixed costs. If you plan to run that brand-new, multimillion-dollar piece of equipment for three shifts instead of one, the implications to the bottom line are far more dramatic, and the investment is much easier to justify. Similarly, a piece of equipment that sets up more quickly and runs faster will almost always look better from a quantitative measurement perspective, but it isn’t always the right investment based upon other qualitative factors. Ultimately, the capabilities of the machine viewed through the perspective of market analysis, space timing, and available capital are often the key factors in the decision-making process. In my opinion, the keys to managing fixed costs begin with proper classification.

BOXSCORE July/August 2015

Looking at your income statement from a high level, one can argue that your fixed costs can be broken down into three categories: people costs, capital costs, and overhead costs. You employ people in many different departments, and even though they don’t show up on the balance sheet, most successful businesses feel that their people are their most important assets. But how can you objectively determine how many people you need in each area? What about training? Providing performance objectives, goals, and evaluation? How much of your resources should you devote to that? Capital costs are often shown on your balance sheet (plant, property, equipment, vehicles, debt, etc.) and are usually some of the biggest line items on the income statement (rent, depreciation, interest), but what is the optimal level of capital that your business needs? Successful companies often go out and buy the latest and greatest things, whether they really need them or not. Less profitable companies often have to run less efficient operations because they don’t think they can afford the capital items that they need. Overhead costs are everything else, from office expenses to sales expenses right down to paying your CPA (which has always been important to me!). How nice do you want your offices and conference rooms to be? How much should you spend for marketing and sales? The answer is to be able to group these costs multiple ways and look at them

within the context of your business. Just as you should model sales and contribution in multiple ways (by salesperson, by customer, by product styles, and ultimately by profit center and machine hour), you can similarly model your overhead. A typical income statement shows manufacturing overhead, delivery, selling, and general and administrative expenses. Nowhere does it break things down by people, capital, and overhead costs, as discussed here, nor does it break out the direct costs of operating profit centers or the cost centers that support your company. You need to start thinking of your costs in multiple ways and change the groupings that you use for budgeting and reporting to see how things fit in as part of the plan to be profitable. In the ensuing issues of BoxScore, I will begin to move away from contribution and machine hour reporting and start to focus on budgeting and reporting using nontraditional ways of looking at your business. Many of you have diversified into nontraditional businesses by adding digital print and other capabilities, and the data gathering and reporting ends of your businesses need to catch up to your business needs. Mitchell Klingher is a partner of Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.

International Corrugated Packaging Foundation

MIKE HARWOOD INDUCTED INTO CIRCLE OF DISTINGUISHED LEADERS RICHARD FLAHERTY

Richard M. Flaherty is president of the International Corrugated Packaging Foundation. He can be reached at 703549-8580 or rflaherty@icpfbox.org. For more information about the International Corrugated Packaging Foundation, visit www.careersincorrugated.org.

I N T E R N AT I O N A L

PACKAGING

BOXSCORE July/August 2015

CORRUGATED

F O U N D AT I O N

ICPF wishes to thank those who nominated and recognized Mike Harwood by making a donation to ICPF in his name to officially induct him into the Circle of Distinguished Leaders. Mike’s nomination was initiated by a major donation in his name from the Fibre Box Association. To date, additional donations and pledges of donations have been made by AICC, Mid-Atlantic Packaging, Landaal Packaging, Dennis and Elaine Colley (FBA), Bobst North America, Equipment Finance Corporation, Fosber America, Pacific Southwest Container, Mark and Jodi Sanders (Bates Container), Packaging Express, Central Package & Display, Akers Packaging Service, JB Machinery, Haire Group, Pratt Industries, Green Bay Packaging, WestRock, Jim and Pam Porter (WestRock), Kathy and David Halligan (WestRock), Dale Nolden (WestRock), Packaging Corporation of America, Tom and Jan Hassfurther (PCA), Schwarz Partners, Smurfit Kappa, Buckeye Corrugated Inc., ICCA, AF&PA, KapStone Paper & Packaging, International Paper, Bill and Barb Hoel (IP), Liberty Diversified International, Dermot Smurfit, Vanguard Packaging, Harris Packaging, Richmond Corrugated, American Packaging, Donna and Frank Mollenhauer (CNG), Sumter Packaging, New England Wooden Ware, Yuri Suzuki (Tri-Wall), Greg and Bette Tucker (Bay Cities), Oklahoma Interpack, StandFast Packaging, Independent II, Scope Packaging, Empire Packaging & Displays, Wasatch Container, Batavia Container, Royal Containers, Central Group, Specialty Industries, Corrugated Synergies International, BCM Inks, and Jim Curley. Spotlight on President Container As a feature of this column, starting with President Container, there will be a periodic spotlight on an ICPF corporate partner and its work to recruit new graduates for its future. President Container became an ICPF corporate partner in October 2013 by making a partnership pledge of $50,000, to be paid over 10 years, in support of ICPF’s educational initiatives with students and faculty. The company has been working with a local high school for several years providing plant tours, encouraging and supporting corrugated chair, snow sled, and most recently, boat design competitions. There are even plans in the works for 2–3 week summer internships for qualifying high school students. President Container indicates that its primary focus is to recruit those science and technology students in rural Middletown, New York, who show capabilities, but who may not have the means to attend college, as well as to introduce college-bound students to the corrugated packaging industry and ICPF’s college and university partners. Either way, it is a win for both the industry and the high school students. ICPF has been supporting this local effort by providing the high school teachers and counselors with DVDs (containing videos on the diverse corrugated packaging career opportunities and a plant tour), manuals on the industry, and corrugated curricula that include an outline of specialized weekend, weeknight, or summer workshops to introduce packaging to high school students. All the information provided is additionally available online via ICPF’s website, www.careersincorrugated.org.

AICC 2015 Annual Meeting

and Independent Packaging Design Competition

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The Final Score

WHO’S AN INDEPENDENT?

’ve been asked this question by some very prominent members in the industry lately. It is a question that merits discussion within our “independent” association, especially as we reflect back on 40 years and look forward to 40-plus more. Back in 1974, the answer to “Who’s an independent?” was as black and white as all those old pictures of AICC’s first meeting in St. Louis. It was someone who did not own a paper mill. Period. The industry’s wave of postwar vertical integration had produced many companies with both mills and box plants, and many of these “integrated” companies sold containerboard to independents (without mills) and competed simultaneously on the street in the box market. Hence, there was a natural marketplace tension in this “dual distribution” environment. Back then and in many subsequent years, “independents” could be defined by the “mill ownership” standard, and there was very little disagreement about that. Fast-forward, and today we have a number of companies that have vertically integrated in raw material supply, most notably in terms of sheets, but also increasingly in containerboard. So, are these “independents” that have acquired these vertical assets still “independent”? One way we’re trying to answer this question is to better understand the degree to which our members are diversifying in this way. Earlier this year, we sent out our Census of the Independent Sector survey to find out. At this writing, results are still being tallied, but it is our hope that with the results of this census we will begin to understand the extent to which AICC’s independent members are expanding their asset base to ensure their supply, quality, and reliability of raw material, whether sheets or containerboard. I would be very interested in your view about this. Remember, some prominent members in our industry are asking these questions, and I would like to hear the opinions from prominent AICC members like you. So, if you chance to read this, call me or send an email. My direct line is 703-5351381; my email address is syoung@aiccbox.org. I’ll follow up in a future column.

Steve Young President, AICC

BOXSCORE July/August 2015

ONE OF THE TOP TEN REASONS TO JOIN AICC

STRENGTH 1. YOU BUILD A BETTER BOX,

WE’LL HELP YOU BUILD A BETTER COMPANY AICC represents a majority of the independent packaging manufacturers and their suppliers. We are dedicated to strengthening the independent’s position in the marketplace, empowering our members to compete successfully in a rapidly changing industry and an increasingly competitive and global business environment.

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