March/ April AICC BoxScore: Searching for a Silver Lining

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

March/April 2022 Volume 26, No. 2

SEARCHING FOR A SILVER LINING Boxmakers address the challenges of recruiting and developing tomorrow’s workforce

ALSO INSIDE Hungry for Impact The Integration Inquisition Member Profile: Weber Display & Packaging

TABLE OF CONTENTS March/April 2022

•

Volume 26, No.2

COLUMNS

ON THE COVER Description

00

SEARCHING FOR A SILVER LINING Boxmakers address the challenges of recruiting and developing tomorrow’s workforce

46

HUNGRY FOR IMPACT

46

Smaller brands are leading the way in food and beverage packaging

52

THE INTEGRATION INQUISITION When a joint venture or acquisition is on the table, decision-making must be guided by several key factors

CHAIRMAN’S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

12

ASK RALPH

14

ASK TOM

18

SELLING TODAY

20

ANDRAGOGY

24

LEADERSHIP

32

MEMBER PROFILE

58

THE ASSOCIATE ADVANTAGE

60

STRENGTH IN NUMBERS

72

THE FINAL SCORE

DEPARTMENTS

FEATURES

40

3

10

WELCOME, NEW & RETURNING MEMBERS

29

AICC INNOVATION

64

FOUNDATION FOR PACKAGING EDUCATION

66

INTERNATIONAL CORRUGATED PACKAGING FOUNDATION

52

BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2022 AICC. All rights reserved.

Visit www.aiccboxscore.org for Member News and even more great columns.

Scan the QR code to check them out!

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Gene Marino, Akers Packaging Service Group, Chicago, Illinois First Vice Chairwoman: Jana Harris, Harris Packaging/ American Carton, Haltom City, Texas Vice Chairs: Matt Davis, Packaging Express, Colorado Springs, Colorado Gary Brewer, Package Crafters, High Point, North Carolina Finn MacDonald, Independent II, Louisville, Kentucky Immediate Past Chairman: Jay Carman, StandFast Packaging Group, Carol Stream, Illinois Chairman, Past Chairmen’s Council: Joe Palmeri, Jamestown Container Cos., Macedonia, Ohio President: Michael D’Angelo, AICC Headquarters, Alexandria, Virginia Secretary/General Counsel: David Goch, Webster, Chamberlain & Bean, Washington, DC AICC Canada: Renee Annis DIRECTORS West: Jack Fiterman, Liberty Diversified Industries, Minneapolis, Minnesota Southwest: Michael Drummond, Packrite, High Point, North Carolina Southeast: Ben DeSollar, Sumter Packaging Corp., Sumter, South Carolina Midwest: Casey Shaw, Batavia Container Inc., Batavia, Illinois Great Lakes: Josh Sobel, Jamestown Container, Macedonia, Ohio Northeast: Stuart Fenkel, McLean Packaging, Pennsauken, New Jersey AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd., Brampton, Ontario, Canada AICC Mexico: Sergio Menchaca, Eko Empaques Carton, Guanajuato, Mexico

DIRECTORS AT LARGE Kevin Ausburn, SMC Packaging Group, Springfield, Missouri Eric Elgin, Oklahoma Interpack, Muscogee, Oklahoma Guy Ockerlund, OxBox, Addison, Illinois Mike Schaefer, Tavens Packaging & Display, Bedford Heights, Ohio

EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com

EMERGING LEADER DELEGATES Cassie Malone, Corrugated Supplies Co. LLC, Chicago, Illinois Lauren Frisch, Wasatch Container, North Salt Lake, Utah John McQueary, CST Systems, Atlanta, Georgia

Copy Editor: Steve Kennedy

ASSOCIATE MEMBER DIRECTORS Chairman: Joseph Morelli, Huston Patterson Printers, Decatur, Illinois Vice Chairman: Greg Jones, SUN Automation Group, Glen Arm, Maryland Secretary: Tim Connell, A.G. Stacker Inc., Weyers Cave, Virginia Director: John Burgess, Pamarco, Roselle Park, New Jersey Immediate Past Chairman, Associate Members: Pat Szany, American Corrugated Machine Corp., Indian Trail, North Carolina ADVISORS TO THE CHAIRMAN Joseph M. Palmeri, Jamestown Container, Macedonia, Ohio Al Hoodwin, Michigan City Paper Box, Michigan City, Indiana Joseph Morelli, Huston Patterson Printers, Decatur, Illinois PUBLICATION STAFF Publisher: Michael D’Angelo, mdangelo@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org

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

Vice President: Serena L. Spiezio Content & Copy Director: Craig Lauer Managing Editor: Julia Berley Senior Editor: Sam Hoffmeister Art Director: Alex Straughan Account Manager: Max Lalwani SUBMIT EDITORIAL IDEAS, NEWS & LETTERS TO: BoxScore@theYGSgroup.com CONTRIBUTORS Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Conventions & Meetings Chelsea May, Education and Training Manager Laura Mihalick, Senior Meeting Manager Patrick Moore, Membership Services Manager Taryn Pyle, Director of Training, Education & Professional Development Alyce Ryan, Marketing Manager Steve Young, Ambassador at Large Richard M. Flaherty, President, ICPF ADVERTISING Taryn Pyle 703-535-1391 • tpyle@aiccbox.org Patrick Moore 703-535-1394 • pmoore@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

ABOUT AICC PROVIDING BOXMAKERS WITH THE KNOWLEDGE NEEDED TO THRIVE IN THE PAPER-BASED PACKAGING INDUSTRY SINCE 1974 We are a growing membership association that serves independent corrugated, folding carton, and rigid box manufacturers and suppliers with education and information in print, in person, and online. AICC membership is for the full company, and employees at all locations have access to member benefits. AICC offers free online education to all members to help the individual maximize their potential and the member company maximize its profit.

WHEN YOU INVEST AND ENGAGE, AICC DELIVERS SUCCESS.

Chairman’s Message

The Right People in the Right Seats

I

cannot recall a time when our industry was presented with the people challenges we presently face. Recent studies provide dismal news on what we can expect long-term, with an onslaught of sobering facts amid an already challenging and fatiguing pandemic. While we can certainly add pre-feeders and down stackers at machine centers, we are still and always will be a business that requires skilled talent in the form of operators, forklift drivers, designers, customer-facing staff—you get the picture.

There will never be a magic bullet for solving this issue, but proactively asking yourself what you can do on a daily, weekly, monthly, or quarterly basis to drive talent development in your business should go a long way in reducing turnover, aligning the right talent, and attracting new talent in a tough time that shows no signs of relief.

It is my opinion that the work Jim Collins did in Good to Great on getting the right people in the right seats is as “great” as it gets. The right person is someone who embodies the core values that define who you are and what you want from the culture of your organization. The right person is like a hand to a glove. If you could replicate this person, they would lead your organization to market dominance. Is that something you could say about every one of your people today? Because, make no mistake, the right person could point out the wrong person in an instant, and the wrong person is like carbon monoxide in a large room—you will not smell it or see it, but it will kill.

The right seat means that they are in the position they will be most successful in.

They have the skills, experience, ability, and desire to be great at their job. They clearly understand the role, the responsibilities, and the expectations as clearly defined, and they succeed.

This is where I can sense the “yeah, I get it. That’s not the problem. I cannot even find any people.” Part of the magic is that when you define the core values, the responsibilities, and the expectations for every person and position, you can reward and recognize people more objectively.

You must review and course-correct performance with a quarterly conversation, and not only get more with less but begin to create a more solidified culture based on concrete principles that will have existing employees inviting like-minded prospects to you, regardless of the sign-on incentive. This isn’t easy. It requires work daily by you and your executive team. It must be done, and there are employers in our industry today that work at this with the discipline and energy that it requires to be successful.

If it were a lack of customers, I doubt your response would be, “Gee, what will I do?

There are no good customers available anymore.” On the contrary, you would dig deep, develop a plan, and execute. This is no different.

Gene Marino Executive Vice President, Akers Packaging Service Group Chairman, AICC

BOXSCORE www.aiccbox.org

3

Scoring Boxes

Inflation Takes Center Stage

BY DICK STORAT

O

ne year ago, inflation was not even on the radar of most economists.

Back then, the headlines were about vaccinations, more fiscal stimulus checks, and when and how the economy would recover. Little mention, if any, was made of labor shortages and wage hikes. There was little awareness that the hyperstimulated consumer spending side of the economy would couple with pandemic issues that would soon strain the supply chain and result in higher prices for almost all goods.

The consensus annual average forecast of inflation for 2022 was 2% last January.

Six months ago, as supply chain bottlenecks became apparent, there was some concern about rising inflation, but analysts were focused on shortterm commodity prices, opining that inflation would be transitory and abate as commodity prices retreated. For example, the price of softwood lumber had gone through the roof, but it soon returned to trend levels. The forces driving labor shortages and higher wage offerings to attract needed labor were just developing. The consensus average annual forecast for the consumer price index (CPI) for 2022 had risen to 2.4%, but the emphasis was on its temporary nature, which would be resolved as soon as the supply chain difficulties were corrected.

As this year begins, it seems likely that the supply chain bottlenecks will persist longer than earlier thought and that wages will continue to rise as manufacturers and service businesses still find it difficult to attract enough employees.

The omicron variant of COVID-19 has brought fresh headwinds to the economy, driven by both demand and supply challenges. The CPI for December 2021 grew

4

BOXSCORE March/April 2022

Annual Employee Quits as % of the Workforce 30%

26%

25% 20% 15%

16% 12%

13%

13%

14%

15%

16%

17%

17%

18%

18%

18%

18%

10% 5% 0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: Bureau of Labor Statistics

by 7% from the previous December, the highest year-over-year growth in 39 years.

There is now a high probability of three or four interest rate hikes by the Federal Reserve in 2022 to tame the inflationary growth, which is now seen as persisting at least through this year, perhaps beyond, depending on whether higher prices lead to additional wage hikes to keep up with inflationary costs. Early in 2022, the consensus forecast is that the CPI will be up 4.8%, far above the Federal Reserve’s growth target of 2%.

Significant concerns remain about COVID’s impact on personal health, education, and child care matters, coupled with an unpredicted record number of employees quitting the workforce and retiring early or searching for better pay and working conditions. The chart above traces the annual employee quits as a percentage of the total workforce at year-end. From a low of 12% during the depth of the 2008–2009 recession, it rose slowly over the next 12 years to 18% as the pandemic began affecting workforce

Change in Select Consumer Prices

December 2020-2021 (Overall Change = 7.0%) Gasoline

49.60%

Used Vehicles

37.30%

Beef Steaks

21.40%

Bacon

19%

Lodgi ng

13.90%

Furniture

11.80%

Eggs Fresh Seafood Apples Total 0.00% Source: Bureau of Labor Statistics

11% 10.20% 7.80% 7.00% 10.00%

20.00%

30.00%

40.00%

50.00%

Scoring Boxes

Average Hourly Earnings by Industry

(% Change, December 2020-2021) (Total Private Prior Business Cycle = 2.4%/yr)

behavior in 2020. The quit rate for 2021 has jumped to a record high of 26%, as trended in the chart at the top of page 4.

Currently, inflation is growing faster for producers than for consumers. The producer price index for December was 9.7% higher than in the prior December, compared to the CPI’s 7% growth over the same period. The bottom chart on page 4 shows this trend and illustrates how higher producer prices end up costing consumers more over time.

The top chart at right shows average hourly earnings by industry for December 2021. Total private employee wages are now growing at 4.7%, nearly double the 2.4% growth rate over the last economic cycle. The manufacturing sector now reports the largest number of unfilled job openings on record.

While the growth rate varies by industry, independent box converters can anticipate that their customers will be facing pressures much like those currently being felt in the corrugated industry.

Historically low wages in the leisure and hospitality sector are the prime driver for the most rapid rise in their earnings.

Wages in the manufacturing sector, which has the largest share of corrugated consumers, have been growing at a 4.4% rate, almost twice the average growth rate as during the last business cycle.

The middle chart at right expands on the overall 9.7% rise in the PPI in December 2021 to show the range of growth of some key commodities and products. Recycled paper has increased the most but is a good example of a commodity whose price can change rapidly, depending on market pressures.

The final chart depicts the high growth rates of selected consumer products.

Gasoline’s hefty increase from December 2020 reflects the comparison to the many fewer miles traveled in the prior year.

To sum it up, inf lation will be a top-of-mind issue for consumers and corrugated converter customers for the

6

BOXSCORE March/April 2022

Leisure & Hospitali ty Transportation & Whsg

14.10% 5.60% 5.40%

Retail Whol esale Total Private

4.80% 4.70%

Construct ion Manufacturing

4.60% 4.40% 3.30%

Mini ng & Logging Information Technology

2.40%

0.00%

5.00%

10.00%

15.00%

Source: Bureau of Labor Statistics

Change in Producer Prices December 2020-2021 (Overall Change = 9.7%) Recyclable Paper

127.70%

Wheat

55%

Industrial Chemicals

47.90%

Slaughter chickens

46.10%

Plastic Construction Prod

32.50%

Truck Freight

16.30%

Consulting Servi ces

15.80%

Warehousing Serv ices

16.60%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

Source: Bureau of Labor Statistics

Change in Select Consumer Prices

December 2020-2021 (Overall Change = 7.0%) Gasoline

49.60%

Used Vehicles

37.30%

Beef Steaks

21.40%

Bacon

19%

Lodgi ng

13.90%

Furniture

11.80%

Eggs Fresh Seafood Apples Total 0.00% Source: Bureau of Labor Statistics

11% 10.20% 7.80% 7.00% 10.00%

next year and more, as interest rates are set to rise and while supply chain bottlenecks become unclogged. What remains most unclear presently is how much initiatives to tamp down inflation will also weaken overall economic growth. 

20.00%

30.00%

40.00%

50.00%

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

Legislative Report

Build Back Better? Congress Doubles Down on Inflationary Gamble

BY ERIC ELGIN

I

have never looked to the federal government to fix problems I may face in day-to-day business, but the economic conditions we now face—brought about in whole or in part by federal government policies—deserve federal government attention and the small business community’s action.

As I write this article at the end of January, the day’s headlines report that the consumer price index for the month of December increased 7% year over year. According to the Bureau of Labor Statistics, inflation surged at its fastest

8

BOXSCORE March/April 2022

pace in 40 years, fueled by rising prices for energy, food, transportation, and other essentials in the bureau’s “market basket.” Despite these rising prices and the pressure they are putting on consumers and businesses, our congressional representatives and the current administration are still working to pass the multitrillion-dollar tax hikes included in the Build Back Better Act. My comments here are not news to AICC members. Rapidly rising costs for our raw materials, energy, and, increasingly, labor are posing a serious challenge

to us and to our longtime customers. I recently read a survey by the National Federation of Independent Business (NFIB), wherein the group’s members ranked ongoing worker shortage as the No. 1 challenge employers face. When we can find workers, we are paying higher wages to attract and keep them on the job. Over the past year, I’ve spoken to many AICC members who face this issue, especially those located in high-competition job markets, where companies like Amazon bid up the price for labor.

In this difficult inflationary environment, the Build Back Better plan and its prospect of higher business taxes will place further strain on the profitability of the small business community. Recent estimates show that more than $500 billion of the Build Back Better Act’s cost will be shouldered by family businesses, and the bill would impose top rates on these businesses exceeding 50%.

AICC, as a member of the Small Business Legislative Council and Council of Manufacturing Associations, adds its voice regularly to letters to Congress and the administration on issues of importance to its members. This is one such issue.

Raising taxes on America’s family businesses moves us in the wrong direction, and AICC joins in opposing these plans.  Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.

New & Returning Members

Welcome, New & Returning Members!

10

COLORINLAB LLC JUAN MARTORELL CLIMENT President 2749 NW Hunter Dr. Blue Springs, MO 64015 704-550-8070 www.colorinlab.com

QC INDUSTRIAL SOLUTIONS, LLC CALEB CHERRY President 6341 Hwy. 41-A Pleasant View, TN 37146 615-247-8720 www.qcindustrial.com

TWO10 TECHNOLOGIES JASON HOOSTON CEO 5521 S. Hampton Rd., #765328 Dallas, TX 75376 817-320-7769 www.two10technologies.com

FLEXO CONCEPTS KEVIN MCLAUGHLIN CEO 100 Armstrong Rd., Suite 103 Plymouth, MA 02360 508-830-9506 www.flexoconcepts.com

BOXSCORE March/April 2022

MOTIONALYSIS, INC. ERIN HOLLANDSWORTH Founder 553 N. PCH, Suite B230 Redondo Beach, CA 90254 310-591-7795 www.motional

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Ask Ralph

Microflute and Paperboard – Another Update

BY RALPH YOUNG

W

e have communicated significantly over many years about the status of very small-flute corrugated and paperboard conversations, as well as the growth trend. Countless BoxScore articles (47 actually), Ask Ralph inquiries during 15 years, webinars and seminars, emails, phone conversations, and face-to-face engagements at national meetings have encompassed this subject.

There have been direct exchanges with substrate producers.

During the past two years, with escalating paper prices, supply chain constraints, paperboard shortages, shifts in consumer buying habits, inflation, and wage increases, this plague, political bickering, and employee shortages gave way for opportunities to investigate microflute corrugated. On a somewhat tangential perspective is the reduction in ECT and therefore basis weights, not a movement to micro- and nanoflutes yet, by Amazon.

More of my packages have transitioned from 32 ECT to 26 ECT. It’s more than a matter of rightweighting by Amazon and plastic reduction.

“Ship in its own container,” or SIOC, is another Amazon initiative to decrease the need for reducing, recycling, and reusing the unnecessary.

When you read this article, AICC folding carton and rigid box technical advisor Tom Weber and I will have finished a three-part webinar, offering updates to extremely beneficial information.

Updates from all the actual participants were included in that series, since there have been improvements in equipment, adhesive applications, substrates, and process controls.

This movement to nanoflutes—N, G, and O—started around 1995 with Bob

12

BOXSCORE March/April 2022

Need for speed and more precise scoring and slotting are demanding that corrugated operations must learn from paperboard converting.

Nebeling as the champion at Bobst. It has now been 25 years since the start here in North America, and this small niche continues to grow somewhat quietly. We have also recently seen some commercial printers entering packaging production. With offset and digital quality, this just makes sense.

Early participants, adopters, and pioneers, concentrated on the West Coast and in the Midwest and Texas, were more forward in their thinking, going where others feared to tread. Although substrates as low as 4-point bleached were available, no one was daring to move a material that thin. These operations are now rooted in what it takes to move forward.

The filling and fulfillment segment of the supply chain for nano- and microflute options is such that combiners and converters have learned, in partnership with their customers, to overcome the obstacles of case erection challenges. Enhanced quality-control systems have appeared over the last three years. Need for speed and more precise scoring and slotting are demanding that corrugated operations must learn from paperboard converting.

Paper consistency via certificates of analysis from paper and board suppliers are assurance that variations in paper properties are kept to a minimum.

We hope you will explore the excitement of learning more about the structural aspects of very lightweight components and double-wall constructions such as E/E as they relate to the paperboard grades and

replacements for conventional grades. In this case, the board combination yields a 77 ECT, which is the equivalent of 500# double-wall with a fiber reduction of 45%. Most past conversions have also been based on a reduction in costs.

I have even learned about E/F doublewall combinations.

With the recent acquisition of Verso

by Sweden’s BillerudKorsnäs and the announcement of their conversion of at least one domestic paper machine, a combiner and converter could expect to see an increased domestic supply of rightweight white substrates for corrugated and/or additional paperboard capacity, such as folding boxboard.

Look for ever-increasing penetration of nano- and microflutes into such areas as meal-ready trays and fresh fruit trays, replacing plastic.

Be aware of the next issue of BoxScore, as we explore the strength of manufacturers’ joints of various widths. We have discovered, so far, that there is not much in the way of definitive public studies on this subject.  Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor.

Contact Ralph directly about technical issues that impact our industry at askralph@aiccbox.org.

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Ask Tom

Customer Markets With the Most Upside

BY TOM WEBER

T

here are a number of corrugated packaging goods company markets that had begun utilizing microflute very successfully several decades ago. Way back in July 2002, our own AICC expert Ralph Young and Vann Parker published an article in the Board Converting News white sheet, “Fiber Use Can Be Reduced on Small Flute Packaging,” indicating that they have “discovered that small-flute corrugated manufacturers and laminators have not entirely availed themselves of more recent and more value-oriented components. With paper and board prices rising, they would do well to assess buyers’ needs and test some different board combinations to offer differentiated packaging solutions.”

Image quality has long been used as a reason for not providing clients with microflute options. However, in recent years print quality on such substrates has significantly improved. Young and Parker provided the following list of potential end users who may find benefit in additional packaging options. This list has not substantially changed in over 20 years, which just shows the staying power of what was then a relative newcomer microflute alternative to the tried and true heavyweight paperboard packaging.

Recent History of Microflute Corrugated Microflute, or miniflute, refers to a subsection of corrugate that uses a high number of small flutes per inch to produce a flat surface. A printed top sheet is applied to give a corrugated box the look and feel of a folding carton. Microflute minimizes the “washboard” look of wider flutes, which allows it to have the appearance of a traditional paperboard folding carton but still provide excellent protection to the product

14

BOXSCORE March/April 2022

housed inside. The top sheet gives a smooth surface with great printability. The print, die cutting, and gluing technologies of 2022 within litho, flexo, and digital all provide a wonderfully robust platform for successful conversions of many microfluted products that were previously out of reach either through capital constraints, material specs, and lastly print-to-print/ print-to-cut registration standards.

Microflute is utilized in many applications, including primary packaging, POS display, shelf-ready, multipack, Bag-in-Box, barrier treated, and premium packaging. Given that the top sheet on microflute provides high-quality printing, it can be seen as an emerging and continued threat to folding cartons. In fact, microflute has been helping corrugated packaging to gain significant market share from traditional paperboard and folding carton packaging. This advanced printing on top of corrugated packaging has strengthened its presence in several major CPG Club Store categories.

Over the past decade or so, microfluted corrugated packing has gained favor from key customers, particularly big-box

retailers and warehouse clubs. Given their outsized influence on the overall market, this has led many manufacturers to consider options other than traditional paperboard packaging. Additionally, the closure of a number of mills, combined with consolidations in the industry, has necessitated that both customers and smaller manufactures seek alternatives to traditional paperboard options. At the aforementioned AICC 2018 Spring Meeting, Al Hoodwin, the AICC chairman at that time and CEO of Michigan City Paper Box, a rigid box manufacturer, noted that mergers, acquisitions, and mill closures were significantly reducing their supply of uncoated recycled board, and alternative substrates were needed.

Conclusions and ForwardLooking Questions Through technology, converting equipment improvements, and design innovations, microfluted packaging offers the warehouse club markets and major retail channels a cost-effective and 100% recyclable replacement for traditional paperboard and plastic structures.

E-COMMERCE

FOOD

TOOLS

COSMETICS

Retail-ready

Pharmaceuticals

Garden supplies

Signage

Shelf-ready

Hardware

Cleaning supplies

Countertop displays

Apparel

Housewares

Fast supplies

Wine boxes

Auto parts

Jewelry

Fast food

Bag-in-box

Pizza cartons

Office supplies

Hot beverage sleeves

Small appliances

Music

Sporting goods

Mailers

Glassware

Electronics

Toys

Envelopes

Pet supplies

Gift boxes

Paper products

Sporting goods

Ask Tom

At the same time, the use of microflute is reducing the overall environmental footprint through a variety of source-reduction practices already in place. It is a winning material combination and must be explored further as an increasing solution by our clients.

To continue our efforts, Young and I have already begun compiling a list of questions for yet another webinar series or roundtable event in 2023 (possibly): • How is the North American microflute market evolving by segment and region in 2022 and beyond? Is it still double-digit growth annually?

• What will the market size be in 2023, and at what rate will it grow in the next 10 years?

• What trends, challenges, and supply chain barriers are influencing the market growth?

• What opportunities or issues will the market face going forward?

• How will this market shape up to serve various food and nonfood end-use sectors?

• How will the market shape up for various other applications?

• Who are the key integrated and nonintegrated producers in the market, and what are their longterm strategies?

• What strategies can and should our AICC member microflute producers adopt to remain competitive?

We look forward to continuing this discussion in the coming year(s). Please feel free to reach out to Ralph or myself in the meantime with any questions or concerns.  Tom Weber is president of WeberSource LLC and is AICC’s folding carton and rigid box technical advisor.

Contact Tom directly at asktom@aiccbox.org.

16

BOXSCORE March/April 2022

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Selling Today

Three Steps to Generating Value Messaging That Will Resonate

BY TODD M. ZIELINSKI AND LISA BENSON

Below we provide three steps to help you create value messaging that will resonate with your prospects and assist you with converting them to customers.

Y

ou may be asking: What is value messaging, and why should I care?

Simply stated, the right valuefocused message can move you closer to making a sale. When we talk about messaging in this context, we mean what you communicate to your customers and prospects about your business, products, and services with the goal of creating a sale. The messaging could be verbal or written, online or offline. Your message plays a significant role in converting prospects to customers.

When you talk to prospects or generate content aimed at them, are you talking only about capabilities such as printing

18

BOXSCORE March/April 2022

ability, equipment, customization, or box sizes you offer? Many do. Unfortunately, if you are leading with capabilities or services, your messaging will become part of the pervasive messaging “noise” people are bombarded with daily. This noise is often ignored. This is where value messaging plays a vital role.

Creating dynamic value messaging can help you better connect with your customers. It is about understanding your customers and meeting them where they are with real value that will positively impact their businesses.

Creating impactful value messaging isn’t hard, but it does take effort and time.

Know Your Audience The first step to creating value messaging is to know your audience. This twopronged step entails gathering knowledge about the targeted person and the industry. This should be done after you have built your target market profile to narrow your focus to the types of accounts best suited for your business.

With regard to the person, you may have heard this referred to as a buyer persona. This isn’t an actual individual but a representative example of the person.

You will likely have a different persona for each job title and possibly each industry. This is important because the purchasing manager will have different perspectives and goals than a marketing manager, who will differ from a shipping manager. However, this doesn’t mean you should overwhelm yourself with a dozen personas. Keep it reasonable.

It is also crucial that you understand the industries. A produce distributor will have much different concerns and needs than a luxury brand or a pharmaceutical company.

Answering the following questions can help you better understand your target audience: • Who is buying your packaging?

• What packaging solutions are they buying, and what is important to the person or required by the industry (e.g., SFI certification, ISTA testing, food-safe materials, tamper

Selling Today

resistance)? What motivates them to buy or not buy (e.g., the purchasing manager may get a bonus based on savings, a shipping manager may be tasked with reducing damage and returns, a C-suite executive may be looking to improve the bottom line)?

• Why are they buying your packaging solutions, and equally important, why aren’t they buying them?

• When in the sales journey are they coming to you or investigating packaging?

• Where are they going for information, and what sources do they trust (e.g., blogs, word of mouth, industry organizations)?

• How do they buy (e.g., who is involved in the decisions, what impacts those decisions, what is the process)?

Take the time to answer these questions from the customer’s perspective and not from your perspective, meaning if you are making assumptions, your messaging might be off target. You can gather information by asking your current customers, conducting surveys, attending the events that they attend, etc. Your CRM and your sales team may give you additional insight into some of the questions.

Understand Your Audiences’ Pains and Costs Associated Understanding your audiences’ pains goes a bit deeper than knowing your audience. It involves defining the pains and understanding the cost and impact on your prospect. These may be different for each audience. This information can be gained in the same manner as in the previous step.

When we talk about pains, we are talking about challenges they are facing, the things that keep them up at night, the things that motivate them to seek a solution. Be sure that you are not looking at your solutions and creating a pain around them. For example, a company has a

water-resistant product and then creates messaging around preventing product damage from using the wrong packaging in wet conditions. This company should have data to back up its assumptions. If this isn’t a widespread issue, the company loses an opportunity to address a real pain and risks putting off some prospects by assuming they are using unsuitable cartons. This is a simplified example, but it’s used to demonstrate the importance of knowing your audience.

Sometimes the pain may be an industry pain, like current supply chain constraints. Or the pain may be impacting one persona more than another, such as the impact of price increases on the purchasing manager or the effect of long lead times on a production manager.

Again, understanding your audience will help you better pinpoint their pains.

Once you have the pains listed, prioritize them to the extent possible and then determine what these pains are costing your prospects in terms of money and productivity. A basic example is a prospect that needs small runs, but their current supplier requires minimum quantities.

What is the cost of this to them? It might include the cost of the extra unused boxes; costs related to storage, maintenance, and disposal; costs associated with holding off or eliminating programs; or revenue loss and damaged product costs from using the wrong packaging to avoid buying a large quantity. One way to get this information is to have your sales team ask prospects, when they speak with them, about their pains, then have your team share the feedback with sales and marketing so messaging can be refined if needed.

a given. The point of understanding your prospect’s pains and the costs of those pains is to offer a solution to address them that brings value and differs from your competition.

Once you have the list of pains, assign examples of how you have solved them with current customers, including the value your solution brought to them. Your solution should provide value in terms of operational efficiency or increased productivity, cost reduction, or an increase in market share or sales growth.

With the example above of a prospect needing small quantities and using the wrong box size to make do, by offering them optimized packaging in quantities they can use, there is direct cost-savings as well as potential to reduce costs from damaged products or by eliminating excess packaging.

Describe How You Alleviate Those Pains Many companies, across all industries, will say the value they bring in is their people or their quality. It is true; most companies hire good people and have a quality system in place. These are usually

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

Putting It All Together to Create Value Messaging That Resonates The three steps above will have provided you with the information you need to create your value messaging. Remember, prospects will be asking, “What’s in it for me?” When your prospect sees that they will reduce costs, increase productivity, or see sales retention and growth because you can resolve the pains challenging them, you will more likely convert them to a sale.  Todd M. Zielinski is managing director and CEO at Athena SWC LLC. He can be reached at 716-250-5547 or tzielinski@athenaswc.com.

BOXSCORE www.aiccbox.org

19

Andragogy

There’s No Time Like the Present

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

T

he new year is most certainly upon us at this point! I’m sure most of your social feeds were inundated with the cliché “New Year, New You!” as January 2022 officially appeared on our calendars. It’s likely that many of you have already started and subsequently fallen off the wagon of your lofty (or even not so lofty) New Year’s resolutions—signing up for that gym, scrolling less on social media, traveling more, picking up a new hobby, etc. We’re most certainly not snubbing the idea of setting new goals for yourself, but we are questioning the idea embedded in our subconscious that January is the best time to start these new ventures. As we are now several months into the new year and some of us (cough, cough) may or may not have even begun our resolutions, it’s time to reframe our thinking. If you want to make a change, a date on the calendar doesn’t mean a thing—pick the timing that is best for you. But what to resolve?

According to Forbes, the most common resolutions involve some form of self-improvement, followed by a determination to meet new career goals.

How would these goals translate for packaging professionals working within the paper and corrugated industries: Could there be professional development with hybrid events and webinars? Or how about participation in virtual summits and tours? Maybe online training courses that build your employee’s industry knowledge? If any of these suggestions ring true for you, we have a convenient way to incorporate not just one but all of these elements—become a member of AICC. AICC represents independent corrugated packaging manufacturers

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and their suppliers. Membership is split between general and Associate members.

For example, companies that convert corrugated or paperboard (privately held—do not have majority mill ownership) are general members, while industry suppliers and boxmakers that do not fit into the general category are Associate members. Most importantly, AICC is dedicated to strengthening the position of these manufacturers and suppliers in the marketplace through dynamic programs that empower their members to compete successfully in a rapidly changing industry and an increasingly competitive and global business environment.

To put the benefits of AICC membership into perspective, we had the

pleasure of interviewing AICC’s Virginia Humphrey, director of membership and marketing, and Patrick Moore, membership services manager. Let’s get to know them a bit.

Humphrey spends her days connecting with members, answering their questions, and helping them fi nd the resources they need. “I love my members. It is really about the people I get to talk to and know and help,” she says.

Working with membership engagement activities, reviewing or creating marketing materials for the Association and their benefits and events, and reaching out to new prospects are just a few of the other areas she lends her expertise to.

THE BIG ASSOCIATE ISSUE

EQUIPMENT

Hitek Equipment, Inc. Hitek meets demands from challenged box making industry With all of the challenges our industry has faced in the past two years, Hitek has noticed a demand for quicker set-ups, easy maintenance, and shorter runs. Hitek has been leading the industry for over 30 years in just-in-time packaging. The demand for this has never been higher.

All these demands on our customers have resulted in a significant increase in tooling. With this has come an unexpected need for a larger footprint in many plants to store all this new tooling. Hitek introduced BCM Storage Systems to the market in 2008 and has put in systems all over the country. Hitek works with customers to examine their space constraints, tooling quantities, and budget to create a custom solution to our customer’s specific needs for cutting dies and print plates.

The Marumatsu Diamond has led the way for our customers to be incredibly profitable with the latest shifts in the market. Whether it is long or short runs, the Diamond is an excellent solution with the capability of setting up in under 5 minutes and speeds of up to 4,000 sheets per hour.

The Marumatsu Diamond can set up and run an order faster than most machines can even set up, all while removing the

scrap with no tooling. These advantages and advanced technologies make the Marumatsu Diamond the perfect machine to put the maximum profit in any order.

Lian Tiee Rotary Die Cutters and Flexo Folder Gluers are reliable, accurate, low maintenance machines that any company can use for years. Lian Tiee uses a top-loading counter ejector, so you no longer have to worry about your print getting smeared or scuffed. The folding accuracy is one of the best in the industry. The machines also come with a state-of-the-art touch screen with an order memory storage capacity of up to 10,000 orders.

The Cavec Maxi Box is the perfect boxmaker for orders of 1 to 10,000 boxes.

Many boxmakers have been around for a long time and are not true production machines. The Cavec Maxi Box is different since they use the latest technology with servo motors, a visual print quality control system, and an auto feeder. The Maxi Box allows you to stock only one sheet size and trims down as you produce your order.

The KT Semi-Automatic Platen Die Cutter is the perfect simple machine to run displays on. It is a true one-man operation. The KT uses a chaseless die system which lets it set up in as little as 5

minutes. The KT is capable of running a variety of different materials, from paper to double wall corrugated. The KT can be hand fed for thinner materials, or it can use an automatic feeder. The KT is the most versatile die cutter on the market.

The BCM Mobilator allows larger cutting dies to be mounted onto a machine by only one operator. With the shortage of operators these days, the Mobilator is a crucial advantage with its quick attachment and easy operation.

The Mobilator allows customers to set up their machines faster and safer.

The CleanFlex print plate washing system is the latest in labor-saving equipment. The CleanFlex can wash and dry a 100” print plate in as little as 2 minutes. The CleanFlex cleans your plates while freeing up operators to perform other tasks.

Ryan Ashley Sales Consultant ryan@askhitek.com 262-842-1700 www.askhitek.com

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Andragogy

When asked about a typical day in membership services, Moore says, “My role is all about serving our members!

AICC lives by the motto, ‘When you invest and engage, AICC will deliver success,’ and my role is to make ‘engaging’ with AICC as easy and as pain-free as possible.”

To say this team is busy is an understatement, but Humphrey and Moore are always ready to help existing and future members find their passion in AICC. When asked about some of AICC’s key member benefits, Moore speaks to the wide range of resources and welcoming community that membership opens the doors to: “AICC is a resource because we offer many products and services that you can lean on in order to benefit your business (e.g., education, workforce development, industry information, exposure, and health care). AICC is a community because we bring together the industry in meaningful ways and offer you the opportunity to find your place.

The ‘resource’ idea and ‘community’ idea often work together as well—seminars, webinars, summits, and advisory groups all help create the community aspect.”

As far as education goes, AICC provides many opportunities for growth and learning alongside fellow members through seminars, summits, and national meetings. These events give members from different companies the chance to broaden their skills and network with other industry experts. Humphrey notes, however, that registration fees, travel costs, and time away from work for these in-person events can be barriers. “While the value of live training is exceptional, it isn’t always possible,” she says.

To balance the equation, AICC gives all team members a way to increase their knowledge and skills through free online education. They partner with The Packaging School to allow member companies and all respective employees the value-add of training programs for

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BOXSCORE March/April 2022

free (in case you didn’t catch that the first time). And with more than 80 online courses in both English and Spanish, all related to the packaging industry and the manufacturing environment, there’s something for everyone.

Overall, Humphrey’s simple yet resounding advice is to get involved.

“There are so many resources included with membership—free white papers, BoxScore magazine, access to the AICC experts, and free online education—that can help employees at member companies thrive,” she says. “Then to really get to know others, build connections and a strong network, the in-person events and peer groups come into play. But all of this means nothing if people don’t get involved and engage.”

Whether you’ve already jumped into your New Year’s resolution or you’re taking

the plunge now, AICC and its membership team are ready for you. Contact Humphrey at vhumphrey@aiccbox.org and Moore at pmoore@aiccbox.org to see how they can assist in your current or future membership with AICC.  Julie Rice Suggs, Ph.D., is academic director at The Packaging School. She can be reached at 330-7748542 or julie@ packagingschool.com.

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

Do You Support Industy Education & Growth?

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Leadership

A Productive Stance

BY SCOTT ELLIS, ED.D.

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e are all suppliers of goods, information, or services. In another moment, we are customers. From the end user, the purchaser, the sales contact, customer service, design, prepress, and manufacturing, to shipping, we are a chain of suppliers and customers.

Within our company walls, our roles can change by the minute. As a machine operator, I am a customer of all prior processes, and their speed and accuracy will allow me to be a good supplier, producing a quality product on time to keep the promises they have made. So, most of us fill the role of customer and supplier at different points of the day. A key to effective communication is remembering your role in the moment and acting responsibly.

In day-to-day experience, the tyranny of the urgent often blurs what should happen in the service of what needs to happen right now. In these times, we face problems with a fighting stance ready to argue for the priority of a particular job,

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BOXSCORE March/April 2022

defending our position, and even seeing those who complain or disagree as a part of the problem.

Consider the construction of a date of delivery. How many fudge factors were really added by the purchaser, the salesperson, or the CSR? And why did they game the system? Most often, the answer is that they were trying to avoid disappointing someone. But what would happen if they just told each other the truth?

The supply chain has been completely disrupted, and no one is happy. In blurry memory of bygone pre-pandemic times, we experienced isolated interruptions to the supply chain. When delinquent materials or tooling caused a delivery promise to be broken, we had choices. We either assigned blame to those people, whoever they might be, or we took responsibility with weeping and gnashing of teeth while vowing that it would never happen again. Under current conditions, we are tempted to throw up our hands and say,

“Yep, it’s gonna be late, and oh by the way, so will your order for next week.”

I will not propose a one-size-fits-all solution or pretend that any order is easy today. However, I will point out the futility of waiting for things to calm down before taking time to focus on improving the process. While we cannot fix the world supply chain, we can address the parts of the problem that we do influence.

Toward that end, I will propose an alternate strategy to the fighting stance: a productive stance.

To employ the productive stance, new habits must be formed. To get us out of the old habit, it might be helpful to invite members of the daily production meeting to come early. Over coffee, we could discuss and commend our fierce loyalties while agreeing to beta-test the productive stance. If we give it 30 days, we can always go back. Even if the team refuses to try a new method, an individual can choose the productive stance and influence change.

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Leadership

Three aspects of a productive stance are: (1) remember who you work for; (2) tell the truth; and (3) face the problem.

Remember Who You Work For Folks in sales and customer service spend a great deal of time and energy trying not to disappoint a customer. The inherent problem is that a CSR may be conflicted trying not to disappoint the end user, the salesperson, or the production scheduler.

Under normal circumstances, this has a very low payoff; now, it is impossible. This is often a silent struggle in which we comply with the spoken rule to promise dates that are based on machine backlogs, until we come up against an unspoken rule such as to prioritize the jobs sold by the person whose name is on the building. It is OK to speak openly about this conflict, asking for guidelines to aid decision-making.

Given the example above, many owners enjoy the benefits of priority without noticing. If asked to clarify the decision-making strategy, most would provide guidance based on customer importance and what is best for the company. It may be uncomfortable to speak openly about the issues, whatever they may be in your case, but it will result in greater clarity. If you are not working for the productivity of the team, the entire string of internal customers, then you will continually find yourself in fighting stance.

Tell the Truth No matter the past practice required to prioritize the jobs you expedite, make an announcement: “Henceforth, and for at least 30 days, I will not exaggerate the urgency of a job. Rather than shave a day off the actual lead time required by the customer, I will tell you when the job needs to be at the customer’s dock. I will redouble my efforts to negotiate the date it is needed and try to reduce their fudge factor as well.

That is my plan, and I hope you will join me, but either way, it is what I am doing.”

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Face the Problem The productive stance requires that we stop seeing other customer priorities (internal or external) as the problem. For example, envisioning the upset scheduler as being on the other side of the problem assumes that he or she has a conflicting goal. The key to problem-solving is to first define the problem and then get everyone attempting to face it together. If the salesperson and scheduler take a moment to gain perspective, they can agree on a common goal (i.e., to please as many of the right customers as possible). Then, they can define the current problem, which might be, “We have three important customers who have been promised delivery of large and complex jobs on Friday, and we have neither the machine capacity nor the staffing to please all three.”

Though you have taken a productive stance, the problem has not been

simplified; someone—perhaps everyone— is going to be disappointed. The difference is that now both people are on the same side of the problem, using the facts as they understand them (truth) and working for a solution that will serve the productivity of the company. This will allow a fighting chance to please more customers and raise productivity in the long term.  Scott Ellis, Ed.D., delivers training, coaching, and resources that develop the ability to eliminate obstacles and sustain more eff ective and profitable results. He recently published Dammit: Learning Judgment Through Experience. His books and process improvement resources are available at workingwell.bz. AICC members enjoy a 20% discount with code AICC21.

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Member Communications

Breaking Down Boxes: Hear the Voice of the Independent

A

ICC, with hosts Gene Marino, executive vice president of Akers Packaging Service Group and AICC board chair, and Joe Morelli, vice president of sales and marketing at Huston Patterson Printers and AICC Associate board chair, is launching the Association’s first podcast, Breaking Down Boxes.

During Breaking Down Boxes, Marino and Morelli interview key individuals in the independent paper and board packaging space. Michael D’Angelo, AICC president, says, “AICC members have so many compelling stories to share and, with them, lessons to embrace. The independent experience is fascinating and relatable on so many levels. Breaking Down Boxes with Gene and Joe is the best way to share these stories. Listen anytime.

There is something of value in each one.”

Marino and Morelli share an interest in leadership and understanding the story behind the successes and failures of those in the independent packaging space.

Morelli says, “AICC’s membership is full of people who have such powerful stories of growth, success, and even

failure. Gene and I have been fortunate over the years to hear firsthand what their experiences have been like, and ultimately, a lot of it has helped shape our own careers. We are both really excited to help share their valuable insight!”

A podcast trailer and a bonus episode, which offers background and insights into the lives of the hosts, are currently available, as well as the first episode, which features an interview with Greg Tucker, chairman and CEO of Bay Cities.

The second episode, available Monday,

April 4, will feature John Bird, chairman and CEO of JB Machinery.

“Joe and I are excited to deliver to the membership stories and advice from successful industry entrepreneurs,” Marino says. “We have been fortunate enough to enjoy similar stories over the years and feel that sharing to a broader audience provides insights into being a better leader. We hope you enjoy.”

Subscribe to Breaking Down Boxes on all major podcast platforms, or visit www. aiccbox.org/boxes.

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AICC Innovation

Leadership and Management

What Do ‘Certain’ Leaders Know?

AICC Emerging Leader Contribution

BY JOHN MCQUEARY

H

ow do you lead with certainty when everything around you is so uncertain and seems to be changing daily? In my experience, it is by admitting that you are certain that you do not know everything. Mark Twain is often credited with a famous quote that goes something like this: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

If I were a politician, I would probably never win an election, as I would freely admit I do not know all the answers.

While that might be bad politics, in my experience it is the ideal management style.

As a leader, I am of course expected to know the answers to most of my team’s questions, but I do not pretend to know everything. With changes in the economy, supply chain disruptions, and the general uncertainty in many areas of the current business climate, I choose to admit I have my share of uncertainties.

However, I am certain that we’ll find a way to get through it. That is what I tell my team. When I am asked how potential lockdowns or visitor restrictions at client facilities might disrupt our business model, I confidently reply that I do not know for sure, but I know we have been through worse before and will adapt as necessary.

I often think of good managers as I do of good sports coaches. The best coaches have played the game before, do not act better than their players, and would never ask them to do something they have not done or could not do themselves. While the coaching concept of management is

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certainly not new, I believe it has become especially important in the last couple of years due to the dramatic changes in people’s work and personal lives with the COVID-19 pandemic. I think highly of a Little League coach my son had one year.

The coach would pull my son aside after practice to check in when he was clearly having an off day. That kind of insight and display of genuine care helped my son play better baseball. It does the same thing with employees.

My team is made up primarily of salespeople, and salespeople, like many of us, are notoriously susceptible to making emotional decisions. Not all, but many will get in a “slump” due to a bad couple of meetings or a negative situation at home, and that negativity can become a self-fulfilling prophecy if not addressed.

Knowing your employees’ individual personalities and being able to pull them aside for a chat and some encouragement can make a big difference.

I have read countless articles in business publications or in major news outlets about the “change in management style” that managers had to employ as a result of employees working remotely or juggling new challenges in their personal lives. As I read of leaders having to learn to “check in” and “open new doors for communication” for their employees, I could not help but smirk. I thought to myself, “If these managers were not taking time to check in with their employees and build a culture of open communication, what were they even doing before?”

When honest and open communication is standard, formal check-ins are often

redundant. My team knows they can come to me with anything, business or personal, and I will show them respect, listen, and offer suggestions, encouragement, or direction when needed. I believe this builds natural trust. When you couple that trust with a generally positive outlook, then your team will know that even when you do not know all the answers, you are making decisions with them in mind and leading for the good of the company. My fellow leaders: You can have confidence that you don’t have to know everything, as long as you know your people.

John McQueary is national sales manager at CST Systems. He can be reached at john@ cstsystems.net.

AICC Innovation

Thought Leadership

Redesign Your Expectations

AICC Emerging Leader Contribution

BY SARAH MOZINGO

A

s we entered 2022, I sat down and gathered my thoughts on the new year and listed my goals and resolutions. With new projects, ideas, and significant dates on the horizon, I was—and still am—hopeful for a successful year. What I didn’t expect to enter, however, was yet another unprecedented year.

While “unprecedented” might be the most overworked word of the past two years, it fully applies to what we have been experiencing in the corrugated industry. In the past, we could get board overnight, tooling in just a few days.

Pallets, glue, ink, and other supplies were easy to come by and were affordable.

Though many of us were busy, it wasn’t uncommon to be able to easily squeeze a hot order into the scheduling lineup.

This was our everyday life, and we grew to expect these types of processes and lead times.

Now, it takes two to three weeks just to get board. The lumber shortage made it nearly impossible to get pallets, and worldwide supply chain issues clogged our means of purchasing other important supplies such as adhesives and machine parts. The use of e-commerce skyrocketed, and with the demand for corrugated products at an all-time high and supplies at record-setting lows, we were—and still are—faced with unprecedented circumstances.

This is something we never expected. It is stressful, frustrating, and at times frightening. But for reasons beyond me, we continually apply our expectations

of years past to today’s problems. This won’t work anymore.

We are all guilty of setting unrealistic expectations for ourselves and others.

But unrealistic expectations, when unmet, can lead to fear and unrest. We wonder why something happened and what could have been done differently, and we waste too much valuable time and energy thinking of how to solve the problem when the solution is simple.

While some expectations of others should be upheld, such as punctuality, open communication, and honesty, abolishing unrealistic expectations leads to inner peace and strengthened relationships. Below are three simple ways to redesign your expectations as we move forward in 2022.

1. Move toward empathy. Remember that when an expectation you create is not met by someone, there is likely a good reason (i.e., this person has something going on, personal or professional, that caused them to be unable to accomplish what you subconsciously thought they could). Take this as an opportunity to set aside your ego and reflect on the fact that we are all struggling with something.

2. Have flexibility. Expectations cannot stay the same year after year in the ever-changing landscape of life.

When an expectation of yourself or others no longer serves your lifestyle or experiences, adjust accordingly. We must allow ourselves and others the grace to change and adapt.

3. Release resentment. It can be painful when an expectation goes unmet, no matter how large or small. Harboring resentment and disappointment, however, never leads to personal growth. Recognize when you have an emotional reaction to an unmet need, then let go and forgive.

In early January, I learned that a close contact at a customer of mine had suddenly passed away due to a heart attack. As shocking as this news was, it reminded me that our time here is limited.

It forced me to remember that we are all just people trying to make a go at it and that, generally speaking, we are all doing our best, whatever that may look like. If letting go of our unrealistic expectations of one another truly does lead to peace and strengthened relationships, I recommend letting go now.

Sarah Mozingo is marketing coordinator at Complete Design & Packaging. She can be reached at smozingo@ completedesign packaging.com.

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Member Profile

Weber Display & Packaging: A Storied Past, A Determined Future

BY STEVE YOUNG

COMPANY: Weber Display & Packaging ESTABLISHED: 1893 JOINED AICC: 1992 Photo courtesy of Weber Display & Packaging.

PHONE: 215-426-3500 WEBSITE: www.weberdisplay-pkg.com LOCATIONS: Philadelphia, Pennsylvania OWNERS: Jim Doherty III The Weber families, from left: Bob Doherty, executive vice president of sales; Keira Zambon Bergvall, accounting manger; Kevin Doherty, sales manager; Jim Zambon, chief financial officer; and Jim Doherty III, president and CEO. Not pictured: J. Ryan Zambon, general manager, co-packing division, and process manager.

T

he roots of Weber Display & Packaging grow deep into the fertile industrial history of the city of Philadelphia. Founded by the entrepreneur David Weber in 1893 at the corner of Fifth and Locust Streets, the company fi rst made wooden boxes.

Later, in a partnership with machine manufacturer Samuel Langston, Weber developed the fi rst single-facer to produce single-faced corrugated paper, primarily for the men’s hat industry, which was prominent in the Northeast at the time. “Our fi rst product was for a company called Stetson Hats,” says Bob Doherty, executive vice president of sales for Weber. “Every man wore a hat back

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in the day, and our company produced the single-face wrap that protected the hats in shipment.”

Expanding with the Philadelphia industrial landscape, in 1925, Weber built a 110,000-square-foot plant at the corner of Richmond and Tioga Streets in the northeast quadrant of the city. “David Weber started making corrugated boxes here and developed a number of different patents all around the world for single facing. He built the business from there,” Doherty says. “It’s certainly a great story about a company that has been in one industry and one location since the late 1800s.”

The David Weber Co. was considered “a very high-quality” manufacturer of

corrugated boxes. Weber served a 100mile radius in and around Philadelphia, including the produce and seafood industries of southern New Jersey.

It was, in some way, shape, or form, run by members of the Weber family until the 1950s, when the family sold portions of it to Chesapeake Corp. and Interstate Container Co. Chesapeake later bought out Interstate’s shares and became the sole owner of the plant, and it remained in Chesapeake’s control and operated under the Chesapeake name until 1991. It was during these Chesapeake years that the Doherty brothers, Bob and the late Jim Doherty Jr., were involved—Bob as sales

ˍLeading automation

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have that, I want the David Weber name manager and his brother, Jim, as an back,’ and they agreed,” he says. independent broker.

The Weber name, says Bob Doherty, As Bob tells the story, Chesapeake had had a longstanding reputation in the made the decision in the late 1980s to Philadelphia market, and the new owners close the plant. The company had faced of the company recognized the value a prolonged labor strike, and the basic it had with the customer base. “People infrastructure of the plant was beginning called it ‘Weber’ when it was Chesapeake,” to wear. Jim was brokering a lot of busihe says. “They could not get that name ness for the plant, and out of concern for out of their heads. the company’s employees and customers, “We took advantage of that,” he adds. he attempted to delay Chesapeake’s deci“We went out to tell the customers, sion. “At the time, Jim thought that we ‘We’re going to be here; nothing is could help employees get other jobs, get customers resituated,” Bob recalls. “But in changing; we have the same equipment; give us a chance.’” the end, the conversation started flowing The driving force in the newly toward, ‘Are you interested in selling?’” established business, however, was Jim After what Bob calls three to four Doherty Jr. himself. Bob recalls, “Jim was weeks of “Wharton [Business] Schoolvery inspirational on the plant floor—very style” negotiations, Jim assumed inspirational. He got everybody behind ownership of the plant in January 1991 him and behind us. He really came and began operations on August 1 of that across that he was just a Philly guy like same year. all of them—a young guy that grew up Today, Weber Display & Packaging in Philadelphia, moved to South Jersey. ‘I is a $95 million company, employhave a family just like you guys; this is my ing 190 people on three shifts, and money; I need all of you to pull on the last year producing 720 million rope in the same direction.’ And they did.” square feet of board out of its four facilities in the Philadelphia A Solid Family Foundation area: its main 110,000-square-foot The founders of modern-day Weber plant on Richmond Street; an Display & Packaging found value in 80,000-square-foot co-packing facility; restoring a recognized name and the a 67,000-square-foot just-in-time appeal of working in a family-run orgawarehouse; and a recently opened nization; the next generation is building 30,000-square-foot printing, die-cuton this tradition. Jim III joined his ting, and fi nishing site on nearby father in the business in 1992. He had Ontario Street. Weber also owns a his own successful career in residential small semipermanent display division to serve its point-of-purchase customers real estate, and he was reluctant to come into the family business in part, he says, who frequently require permanent fi xtures in their product merchandising. because he felt his father’s personal sales relationships were unique to him and wouldn’t guarantee future success.

It’s All in the Name “I told my father, ‘You’re a broker, and Jim Doherty III, the son of Jim Doherty all the relationships are with you. If Jr. and now the president and CEO of something happened to you, it doesn’t the company, remembered that his father, automatically mean that all the business when buying the company, wanted to is going to go forward with me.’ So I did keep the name Chesapeake Display and not see a bright future there,” Jim III Packaging, but the sellers refused. “So my says. In time, however, Doherty made father went back and said, ‘Well, if I can’t

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the decision to come into the business, reasoning, “If I’m going to jump off the cliff, I want to do it now and not 20 years from now.”

Jim III says he started in sales to “get his feet wet,” and jokes that “I was on probation after six months due to lack of sales, so they had to move me to production.” Eventually, though, Jim III settled into key roles of purchasing roll stock and converting equipment, responsibilities which he still carries in his role as CEO. Kevin Doherty, sales manager, is the son of Bob Doherty and thus succeeds his father in that role. Kevin is a relative newcomer to the Weber team, joining a mere nine years ago following a successful career at Lockheed-Martin. Says Kevin of his transition into the business: “At Lockheed-Martin, I was one of 130,000 people. Even if I did a good job, I felt as though I were irrelevant. When I looked at what was happening at Weber, I could see that the business was growing. I didn’t really expect to get into it, but I could see it was growing. It is very motivating to be part of the group that controls it.”

Jim Zambon is the brother-in-law of Jim III, having married his sister Barbara Doherty Zambon. Zambon also began his career at Weber early on—in 1992— moving from Indiana, where he was a regional manager of a small pharmacy chain. “The company’s first accountant didn’t last very long, and Weber needed one,” he says. “Jim Doherty asked me if I was interested in coming aboard.”

Keeping things in the family and family relationships are important to Zambon. His son, J. Ryan Zambon, is the general manager of the company’s packout division and Weber’s process manager.

His daughter Keira Zambon Bergvall is now the accounting manager.

Ryan Zambon joined the company in 2012 following the start of his career in management consulting. “I went to undergraduate school for operations and information management and

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Member Profile “I think that our success is unique in what we’ve been able to offer the marketplace. There will always be a place for value and service.

—J. Ryan Zambon, general manager, co-packing division, and process manager, Weber Display & Packaging worked for Deloitte & Touche,” he says of his career prior to Weber. “I grew up around the family business and worked in the office and on the plant floor over the years on summer breaks and holidays. When the business eventually needed some help in IT, I saw an opportunity to try to take what I had learned inside and outside of Weber to help improve the family business.”

Zambon Bergvall, for her part, started in 2015. After graduating from Villanova in 2014, she became a CPA and worked for the accounting firm KPMG. When Weber’s accounting manager announced her retirement, Chief Financial Officer Jim Zambon asked Keira if she wanted to become a part of the business. “Of course, I said ‘yes!’” she recalls.

Other key players on the Weber management team include David de la Rosa, vice president of operations. A 40-year veteran of the corrugated industry, de la Rosa joined Weber in 2003 following a long career in production supervision and management with Owens-Illinois, Packaging Corp. of America, and Southern Container.

‘Design Through Delivery’ How does a 129-year-old company continue to be successful year after year, generation after generation? “Our mission statement is ‘design through delivery,’” says Kevin Doherty. “Our best accounts are the ones who use us for all our strengths.” Those “strengths,” he says, are a 15-person sales force, a dedicated team of graphic designers, a co-packing

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facility, a permanent display division, and a mix of equipment that can satisfy the needs of its diverse mix of food and beverage, pharmaceutical, agricultural, and industrial customers.

“I don’t think it’s all that common— even among AICC members—for a company to be able to cover such a broad waterfront,” he says. “You’re either making brown boxes, or you’re making displays; you’re buying sheets, or you’re making board; you’re involved in co-packing, or you don’t touch it.”

Jim III adds, “It goes back to my father’s mantra: He didn’t care if it was a 50-lot or a 10,000-lot. As long as he could serve the customer, he was going to do it.

I think that’s pretty much our philosophy; we do that to this day. We are definitely a sales-driven company.”

An independent corrugator plant, Weber has a 98” Corrugator—a BHS wet end with a Fosber dry end—that produces, B, C, and E flutes, as well BC and EB double-wall. The company has a strong affiliation with and affinity for Bobst and Marquip Ward United (now BWPaperSystems) converting and finishing equipment. The company’s workhorse printing machines are a six-color Bobst DRO rotary die cutter and a six-color MarquipWardUnited rotary die cutter. Rounding out its flexo printing capability are two Bobst flexo folder gluers—a four-color 1228 50” and a three-color 618 Mini Martin—and a two-color Bobst ExpertCut flatbed die cutter. A Stock label laminator, a Bobst MasterCut flatbed die cutter, and a

Bobst MasterFold specialty folder-gluer complete the list of current equipment.

Weber’s capital investment strategy is driven by its “design through delivery” philosophy. Bob Doherty credits Weber’s printing excellence today to its competition early on, namely Triangle Container, now Menasha, also in Philadelphia. “We had Triangle around the corner, and its owner, Jack Grollman, and they were printing the Mona Lisa directly on corrugated,” he says, referring to the industry’s flexographic printing innovation in the late 1980s and early 1990s. “I wanted to be that. I felt that was the direction we needed to go. In the end we wanted to be everything to everybody, and that was a challenge.”

So, how does a company excel at producing such diverse and demanding product mix? “You pay some tuition along the way,” says Kevin Doherty. “You learn through stubbing your toe from time to time, but if you have good people and good processes, you find a way.”

Process management and automation are key, says Ryan Zambon. “I think that our success is unique in what we’ve been able to offer the marketplace. There will always be a place for value and service.

Doing so in the confines of efficient manufacturing will continue to be the challenge,” he says, adding, “Whether it’s through automation, technology, or better processes, that’s going to be what Weber will hang its hat on in the future.”

Keira Zambon Bergvall agrees, saying, “The ownership of the company has to continue its capital investment, making sure we have the equipment to make things more efficient.”

‘Relationships Are Key’ It sounds trite to say, but like any independent in the corrugated or paperboard packaging business, Weber believes relationships are key to success.

As noted earlier, the company’s founders had two principal goals in acquiring

Member Profile

Chesapeake’s Philadelphia plant: Ensure jobs for the current employees and make sure its current customers were taken care of.

The long-tenured employees of Weber—one was retiring after 51 years at the time of our visit—were the ones who stuck with the change of ownership and remained loyal. “We have a group of individuals here who understood at the beginning, saw the challenge we were facing, and saw the growth of the company,” says Jim III. Zambon Bergvall recalls the day in 2013 when Doherty Jr. passed away. “I had just started my senior year at Villanova when I had heard that my grandfather had passed away,” she recalls.

“My dad and I went to the plant to be with everyone as the news was being shared. I appreciated the love and stories that everyone shared at that time. My grandfather had close relationships with employees across the company.”

This familylike atmosphere pervades everything the company does. It is useful in the marketplace, too. “Customers like that we’re family-owned,” says Kevin Doherty. “They like the story; they like the banter between our families; they get a kick out of it. They root for us because some of them have the same story themselves.”

Commenting on the longevity of some of Weber’s current customers, he adds, “If you’re aligned with the right people, then their growth becomes your growth. We’re partnered with some good customers that have been very loyal to us.”

Resilience in the Face of Challenges Commenting on current challenges in the industry and the aftereffects of the COVID-19 pandemic, everyone on the Weber team agrees that the company’s long-maintained employee, customer, and vendor relationships have insulated them from the most damaging market

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conditions, namely extended lead times and scarce labor.

Says Jim Zambon: “I think [the pandemic] has fortified relationships—vendor and professional relationships, customer relationships, equipment relationships, employee relationships. And I think that’s probably the key thing that most successful independents do very well: They establish those key relationships with vendors who are going to do whatever it takes to get us the raw material the same way that customers rely on us to get them their boxes.”

Ryan Zambon adds, “If you’d gone back five years and said, ‘You’re going to lose dozens of people all at once across your whole company,’ I’m not so sure we would have been so prepared to work through it. I think the pandemic has taught us that we have really good tenacity, and our resilience is certainly strengthened and improved by the challenge. You get harder steel through fire.”

Outlook Weber is a member of a distinct class of independents that has shrunk with industry consolidation—independent corrugator plants without mill affiliation or sheet feeder ownership. “The competitive landscape is very different,” says Kevin Doherty. “In the past five years, our biggest competitors have been swallowed up or sold. And as soon as they sell, they’re different. That has created opportunities for us.”

Adds Jim III, “We’ve had our fair share of offers to take out the corrugator and become part of a sheet operation, but there is nothing like having your own corrugator and being nimble. We’ve never been one to follow the herd instinct.”

He says he thinks independents are best suited to the changes ahead: “You have to see what the new world is going to bring and adapt to it in many ways. I think that’s what independents have done so well over their history.”

The company credits its AICC relationships in their success story as well. Bob Doherty tells a story of a major account early on in their business that needed a three-color box, which Weber did not have the capability to print. Weber approached Schiffenhaus Packaging, another AICC member, to look at converting the box to preprinted linerboard.

“I called Anton Schiffenhaus, and he treated me like a son,“ Doherty recalls.

“I went back to the customer and said I think I have a solution. That whole thing with Schiffenhaus got us that customer’s business for another seven or eight years.

That’s what AICC was all about.”

Kevin Doherty adds, “I’m the only sales manager here. You go to AICC meetings, and you talk to four or five others. It’s very helpful to find other people you’re in sync with.”

Jim III, for his part, contributed his time and expertise to AICC’s growth, serving six years on the AICC board of directors, from 1994 through 2000, first as a regional vice president for the Mid-Atlantic states and then as a director at large.

In a video presentation marking Weber’s 125th Anniversary, shown at AICC’s 2018 Spring Meeting in Phoenix, Jim III closes with the words, “The future looks very bright for Weber Display & Packaging.” The company’s operating philosophy, its long-term, loyal relationships with employees, customers, and vendors, and its Doherty and Zambon family heritage will prove his words true for many years to come.  Steve Young is AICC’s ambassador-at-large. He can be reached at 202-297-0583 or syoung@ aiccbox.org.

BREAKING DOWN BOXES

Compelling Conversations with Entrepreneurs with Hosts Gene Marino and Joe Morelli

Subscribe Wherever You Listen to Podcasts AICCbox.org/Boxes

SEARCHING FOR A SILVER LINING Boxmakers address the challenges of recruiting and developing tomorrow’s workforce

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By Robert Bittner

W

ell before COVID-19, boxmakers and other manufacturers were challenged with labor shortages. Now, as the box business booms, the ongoing lack of workers is affecting growth, delivery times and fulfillment, and customer service.

“Labor has been challenging across the board—from drivers to warehouse to production,” says Finn MacDonald, president of Independent II. It isn’t just entry-level employees who are hard to come by. “We have highly skilled, experienced operators in converting,” MacDonald says, “and they’re getting to the point where they’re looking

BOXSCORE www.aiccbox.org

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at retiring. So we have an experienced workforce that is, essentially, aging out, which raises the challenge of training a new generation of craftspeople. How do you train printers in the art of printing?

How do you train die-cut operators or teach the art of stacking, the art and finesse of gluing? We face that challenge day in and day out.”

Qualified Strategies Boxmakers are trying several different strategies to meet labor challenges while continuing to develop a strong workforce.

Some are increasing collaborations with high schools, trade schools, and community colleges to nurture an informed and skilled workforce for the future.

Some are changing how they recruit and retain workers. And some are evaluating which steps in the boxmaking process can benefit from additional automation, freeing up existing employees to shift into positions currently going unfilled.

Christine V. Walters, an independent industry consultant with FiveL Co., has seen some manufacturers go even further to find the workers they need. “Their philosophy is, if we’re having trouble finding enough qualified people to fill our jobs, maybe our qualifications aren’t what they need to be in light of the current climate,” she says. “So they’re making

adjustments. I’m seeing employers asking if new hires really need to come in with two or three years of experience. Maybe one year is enough. Maybe six months is enough. Do we really care if you have a high school diploma or GED? Maybe not. I’ve seen employers eliminating testing for marijuana and other drugs and relaxing their standards regarding background checks. People are reaching out to populations that they might not have reached out to before—including so-called second-chance hiring programs that serve people with criminal histories.”

Donna Roberts, human resource manager at SMC Packaging Group, has mixed feelings about lowering qualifications across the board. “Having high expectations is important,” she says. “Gallup polls will tell you that 80% of people will rise to meet your expectations.”

At the same time, she notes that many of the most successful people at SMC did not come to the company with a full complement of skills. “We taught them those skills. So a willingness to learn is important,” she says. “Character is also very important to us. We can absolutely give people the training they need to run machinery and make boxes. What we can’t train people on are things like aptitude and capabilities and character.

Those have to come with the candidate

“More hours can keep someone from taking the job in the first place. …

We’re having to find a balance between employee needs and customer needs.

That means we’re also investing in equipment and processes that allow us to make the most of every hour in the day.”

—Finn MacDonald, president, Independent II

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and are not negotiable. I would not lower my standards on those.

“I do think we’re going to have to take on a bigger burden of skilling people up for the work we need them to do,” Roberts continues. “We’re going to have to help young people develop the work ethic that we used to just naturally see 20, 30 years ago. When you teach people to work, show them they have value, and support and appreciate them, they’ll rise to your standard. Leadership really has shifted from supervising to focusing more on equipping, supporting, and training.”

Connections and Careers Roberts believes employers may need to adjust how they recruit if they want to reach today’s workforce. “I was at an HR conference recently,” she recalls, “and some of the individuals there were really frustrated with their recruiting eff orts. They had published some ads and put hiring signs on their front lawn, and they didn’t understand why people weren’t beating down their doors to get a job there. They weren’t even getting applications.”

For Roberts, the reason was clear: “The next generation doesn’t do business that way. They’re not driving around looking at the outside of your building deciding whether they want to work there. They also probably have outdated ideas of what a manufacturing career looks like. They’re thinking ‘dark, dirty, dangerous assembly lines,’ and we’ve got to get them past those images.”

SMC has had success using social media to deliver a more accurate, more appealing story to younger workers.

Instagram and Facebook have been the company’s main channels; others may find Twitter, TikTok, or YouTube more effective. The key, Roberts says, is to know your audience and know where they spend their time online. Then create promotions tailored to those channels and

them in with less knowledge, skills, or abilities than they otherwise would have had,” Walters continues. “This is where it can really help to [offer] a more extensive onboarding experience, a longer orientation period, partnering and job shadowing relationships—those sorts of things. That gives you a foundation from which to make sure these folks get the training and skills they need to do the job. And you’d hope that new hires would then see the time and investment you’re putting into them and feel more committed to their jobs and the company. The more we can engage our folks, the better.”

Finally, Walters believes it’s important to learn from your current employees, especially your star performers.

Interview them—she refers to this as a “stay” interview, as opposed to an “exit” interview—and ask, What keeps you here? What do you appreciate about this company? Why is this a good place

to work? “Use that information when presenting your company to potential employees. Your long-term employees can be some of your very best sales and marketing people.”

Turning to Technology When seeking creative solutions to workforce development, it’s important that nothing be kept off the table. MacDonald notes that his company is looking at how to be competitive and creative when it comes to both pay and benefits, how to best manage the calendar workweek and various shifts—for example, the cost, livability, and sustainability of what a second or third shift would mean for a Saturday—and how those changes might impact current and future employees.

Traditionally, offering more work hours meant more dollars in employees’ pockets, MacDonald points out, and that was seen as a good thing. But nowadays,

Image courtesy of SMC Packaging Group.

to your target market. “We’ve gotten a lot of interest that way,” she notes.

Once a potential employee is interested, the company encourages an in-person tour. “When we bring candidates in, we always give them a tour,” Roberts says. “I want them to see what people are doing and see if that is for them before they make a decision.”

Walters recommends highlighting, early on, the benefits of building a career in the industry. “Yes, the fast-food place down the street might pay a higher hourly rate at the start,” she says, “but where will that job take you? What other benefits can they offer? How much training and professional development will you get?

This kind of indirect compensation is something boxmakers could emphasize from the very first interview.

“It’s also important to pay attention to what’s happening once you’ve got someone in the door, especially if you’re bringing

SMC Packaging took an outside-the-box approach to address its hiring needs, which included creating this ad to catch the eye of potential talent.

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“Job seekers like a company that’s giving back to the community, that cares about its people and puts its money where its mouth is.”

—Donna Roberts, human resource manager, SMC Packaging Group

he says, “More hours can keep someone from taking the job in the first place.

They don’t want to work 10 hours a day or on Saturdays. So we’re having to find a balance between employee needs and customer needs. That means we’re also investing in equipment and processes that allow us to make the most of every hour in the day.” That means looking at the efficiencies provided by technology, including robotics and automation.

MacDonald stresses that adding robotics and other automated processes on the shop floor does not mean you’re decreasing your head count. “You’re reallocating your human resources,” he explains. “You’re saying that the two, three, or four people that automation will replace can now go fi ll the two, three, or four jobs that have been unfi lled. Or they can be freed to move over to this new piece of machinery I want to buy. No one’s walking out of the company. They’re just walking somewhere else in the company to get the job done.”

Equipment, robotics, and automation will be increasingly critical when it comes to managing labor challenges, MacDonald believes. “I only see that changing if there is some sort of influx of labor that has a different set of priorities than what we’re currently seeing—people who want more hours, who are eager to learn, who want to put their head down and do the job,” he says. “I don’t know if we’ll ever see that again.”

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At the same time, he says, there is a limit to just how much of the work can be relegated to technology. “There’s no getting around the fact that our type of manufacturing depends on some hard work, some sweat and tears, and some truly skilled craftspeople,” he says.

A Fantastic Choice SMC Packaging may be a rarity among boxmakers and other manufacturers these days: Roberts reports that all of their positions are currently filled. “I know a lot of boxmakers are struggling to find workers, but we have fared really well,” she says.

She attributes the company’s unusual success to the decision to distinguish SMC as an employer of choice.

“Our leadership has always been very active in the community, serving on different boards and making a difference,” Roberts says. “I think that has helped establish a reputation for us as an employer of choice. Others in the community recognize SMC Packaging because of our community involvement, since we volunteer at community events and support local charities. That’s good branding, but it’s also the right thing to do. These days, people care about the company they’re joining and what that company stands for. Job seekers like a company that’s giving back to the community, that cares about its people and puts its money where its mouth is.”

Practically speaking, that means the company is committed to taking care of

its people and then trusting those people to take care of the business. “We make sure they’re trained and equipped to do their jobs well,” Roberts says. “Once they’re equipped and part of the family, we do what we can to hold on to them.

So we have worked a lot on leadership training, which I believe is the key to retention. And then, we do everything we can to avoid having any kind of ‘us and them’ mentality, which often happens between leadership and employees in manufacturing. We’re all on the same side here. We try to make sure that’s evident in how we do things every single day. I think that’s been a big difference maker for us.”

A Silver Lining?

Despite the current wave of challenges, there may be a silver lining to the labor issue that too often gets overlooked: “I believe there are enough qualified people out there to fill the positions,” Walters says.

Roberts agrees. “There are plenty of people taking jobs every day out there,” she says. “The challenge is figuring out what it takes to make them choose you.

We need to understand what job seekers are looking for and then do our best to accentuate what we have to offer that distinguishes us from other employers in our area.

“Too often we assume people know a lot about our company and our business.

Chances are they don’t, unless they have a friend or family member who’s worked here. It’s our responsibility to make sure we’re marketing well the jobs that we have and making sure people understand that, if they choose our company, they’re making a fantastic choice for their future.”  Robert Bittner is a Michigan-based freelance journalist and a frequent BoxScore contributor.

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Hungry for

IMPACT Smaller brands are leading the way in food and beverage packaging

By Lin Grensing-Pophal

P

rior to March 2020, while e-commerce already represented a significant percentage of overall food and beverage sales, once the COVID-19 pandemic hit and consumers turned en masse to the digital world for much of their purchasing, e-commerce growth ticked up significantly.

The food and beverage industry saw much of this growth as consumers turned to online purchasing and delivery rather than shopping indoors—in some cases, because physical stores were closed; in other cases, due to their own concerns about the potential for exposure.

In fact, according to a EuroDev blog: “While a lot of industries suffered from a worldwide decline in demand since the outbreak of COVID in early 2020,

revenue in the food and beverages industry skyrocketed. Worldwide revenue is expected to reach $342 billion in 2021, an increase of 97% compared to 2019’s revenue ($174 billion), almost doubling the revenue in just two years.”

Amid this growth in demand, brands both big and small are addressing challenges and finding new opportunities to stand out and make an impact while still being mindful of cost considerations and sustainability.

Design Considerations for a Hybrid World Kristi Duvall is vice president of sales with The BoxMaker Inc. in Kent, Washington. She’s observed, fi rsthand, some of the shifts in packaging needs

for food and beverage brands since the beginning of the pandemic. While many parts of the country are now widely open for in-store sales, consumers continue to shop online—not only due to pandemic concerns but also because they’re discovered the ease and convenience that online shopping can provide. In addition, with rising gas costs an ongoing concern, saving money by making fewer trips to physical store locations is also a benefit.

“Brands are focused on trying to connect with the e-commerce market while also improving their shelf presence for retail applications,” Duvall says. Th at, she says, has been an impact of the pandemic, and one that is likely to continue. “Brands are having to have

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a sort of multichannel or multifaceted approach where they’ve got to be able to connect with the customer and deliver an experience to their doorstep as well as catching their eyes in retail stores.

A related challenge has been the ability to predict just how much and what type of packaging materials will be needed as shopping patterns continue to shift.

Boxmakers are finding themselves taking an increasingly just-in-time approach to packaging.

Just-in-Time Approach Efficiency and cost-effectiveness are as important as ever—perhaps even more important in a tight and increasingly competitive market. Duvall says one of the things she’s seeing is more brands taking advantage of digital printing: “buying what they need when they need it instead of buying large volumes and then sitting on inventory.”

The ability to stand out is another requirement in a hybrid, and very competitive, market.

Customization and Co-branding Retailers want to feel special, and they want their consumers to believe they’re special, too. Seeing the same packaging on the same product from one store to another doesn’t help retailers stand out in meaningful ways.

Instead, says Duvall, retailers are increasingly seeking personalized experiences. “They want to see something

that’s exclusive—that you can only buy at one retailer,” she says. “They don’t want to know that the consumer can go somewhere else to buy the same thing.”

For instance, she says, in a community two brands could pair up and then get together with their favorite charity and do something unique tied to an online campaign.

Influencer Kits Connecting with influencers has also been an area of new opportunity.

Social media—especially channels like YouTube and Instagram—have given rise to an explosion of influencers, people with large followings whose opinions can move the needle for sales of a wide variety of consumer-packaged goods, including food and beverages.

Getting the attention of these influencers can be challenging, though. Th at’s giving rise to a trend in using “influencer kits” to break through the clutter and stand out.

Also called “influencer marketing boxes,” these kits are designed to attract attention as well as drive an impactful unboxing experience.”

Influencer kits might include product samples, for instance, along with some swag, Duvall says. They’re usually printed both inside and out. “And I think the brands expect somebody to do an unboxing video—unboxing videos still get a lot of clicks online.”

While big brands have tended to have better budgets to provide exceptional

“The food label is the voice of the brand, creating an emotional connection between the company brand and the consumer, making it a crucial part of the packaging.”

—Lisa Barrieau, banding sales manager, food, Felins

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experiences and create creative packaging concepts, smaller brands have gained traction during the pandemic.

As Jessica Paige points out in an article for Packaging Gateway: “One positive to come out of the pandemic disruption is consumers’ growing appreciation of small and local businesses. ‘Support Local’ was one of the many slogans that were thrown around over the pandemic in a bid to save local economies and protect jobs, and websites supporting local companies experienced a boom in interest.”

Emotional Connections and Interactive Packaging Food and beverage brands have an opportunity to make emotional connections with consumers, says Lisa Barrieau, banding sales manager, food, at Felins. “In the world of retail food, the label is more than just a means of advising the consumers of the nutrition facts, ingredients, and expiration dates,” she explains. “The food label is the voice of the brand, creating an emotional connection between the company brand and the consumer, making it a crucial part of the packaging.”

Creating an emotional connection, says Barrieau, “is the first step in forming a relationship with the customer, and therefore encouraging repeat purchases, so companies must pay close attention to their packaging and labeling decisions to foster this relationship.”

Digital packaging can also be combined with interactive packaging, Duvall says, using Digimarc—the watermarking and interactive packaging. Also, from a sustainability standpoint on digital packaging, every time that customer changes the art, they’re not having to worry about those plates having to go into a landfill at the end of life.

Also, if somebody is using a traditional print method such as a litho-lamp, you’re not having to worry about using all that

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“I think a lot of consumers are really trying to make those decisions when they’re at the shelf or when they’re purchasing online. They want to know, ‘Where is this coming from?’ ‘How far away is it?’ ‘Is the packaging recyclable?’”

—Kristi Duvall, vice president of sales, The BoxMaker Inc. extra material to register colors. Your first sheet is available with a digital print job.

Sustainability Another top-of-mind consideration, and concern, for consumers today is sustainability. These concerns are rising as online ordering has become more prevalent.

“Today, we are seeing strong consumer demands for reductions in packaging waste by decreasing the amount of packaging material, sustainable and environmentally friendly products, brand recognition or a relationship with the brand, and a positive overall food experience,” says Barrieau. “An alternative to adhesive labels and sleeves, adhesive-free labeling and automatic sleeving using ultrasonic technology allows users to meet all of these demands,” she says.

“Ultrasonic banding uses a minimal amount of packaging materials and has the ability to switch between recyclable paper or plastic material or a compostable film, meeting consumer demands for a sustainable solution,” Barrieau says.

“Additionally, ultrasonic banding allows for stunning graphics to be printed directly on the label or sleeve, allowing for easy brand recognition and contributing to a positive experience with the product.”

The ebb and flow of consumer demand for online access when buying food and beverage brands has certainly created challenges—but it has also illuminated new opportunities for brands and the boxmakers they turn to for efficient, effective, and sustainable packaging solutions.

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The Pandemic Difference For some brands a suddenly more digital environment has off ered benefits they might not have immediately anticipated, Duvall notes. For instance, she says, “I think it’s been easier for smaller brands to get noticed because they’re not having to fi ght for the same kind of shelf space that they get squeezed out of at a large retailer.”

In the digital world, she says, small to midsized brands are getting notices on social media through channels such as Instagram and TikTok, where they can do some interesting and fun things—they can take more risks to see if they could potentially capture a different audience. “I think a lot of brands took advantage of that,” she says. Even today, she says, the brands that haven’t done that kind of experimentation still have the opportunity to make changes and connect with consumers in a different way. “It’s still evolving.”

Looking Forward Looking ahead, Duvall predicts that some of the larger brands are going to begin replicating some of the creativity and experimentation that small to midsized brands have been leveraging during the pandemic. “The smaller brands are getting recognized, and there’s a lot of focus,” she says.

Duvall predicts that there will also be a continued focus on buying local and sustainability: “I think a lot of consumers are really trying to make those decisions when they’re at the shelf or when they’re purchasing online. They want to know,

‘Where is this coming from?’ ‘How far away is it?’ ‘Is the packaging recyclable?’”

Even e-commerce behemoth Amazon has taken note of these concerns and has begun offering “frustration-free packaging” and delivery options for consumers who prefer to bundle multiple orders into single shipments to save costs and minimize environmental impacts.

Making an impact will continue to be important for food and beverage companies, Duvall notes, pointing out that one trend that is likely to continue is creating packaging that will be saved rather than tossed out—packaging that becomes part of the product which, she says is already a trend in Europe. Brands, she says, are thinking differently about their packaging. “Long after my product has been used, could this box that it shipped in be used in some other form?

Could it become a piece of furniture, or some sort of holder, or a keepsake, or is it personalized with a person’s name on it?”

As smaller food and beverage brands are gaining a toehold during the pandemic, larger brands are beginning to follow their lead to get attention both on product shelves and on doorsteps. This heightened demand and hybrid environment is creating both challenges and opportunities for packaging that is impactful, cost-effective, and environmentally friendly.  Lin Grensing-Pophal is a Wisconsin-based freelance writer and a frequent BoxScore contributor.

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THE INTEGRATION INQUISITION When a joint venture or acquisition is on the table, decision-making must be guided by several key factors

By M. Diane McCormick

I

n an age of uncertainty, plotting for strategic growth demands a sharp eye for opportunity and capacity. Businesses best positioned to emerge from the pandemic with a growth mindset are those that apply a smart approach to joint ventures, acquisitions, and vertical integration.

“It’s very hard to grow organically,” says Gene Marino, AICC chairman and executive vice president of Akers Packaging Service Group. “There are not new companies that wake up today and decide they’re in need of finding boxes. Sometimes, your ability to acquire a really good ongoing concern in a market or space you’re interested in can be beneficial to growth.”

Joint Venture vs. Acquisition To enter into a joint venture or to flat-out acquire a business? That is the question.

The growth-oriented nature of horizontal acquisitions can strengthen an individual company’s control over supplies while also creating efficiencies and geographic strategies that cut down on lead time. In acquisitions, personnel from the purchased business might retain daily operational responsibilities, but the complex decisions

BOXSCORE www.aiccbox.org

53

“All suppliers have struggled the past year. Integrating and having more control of our supply was a distinct benefit for Welch. We have certainly benefited from having input or control rather than being at the mercy of the free market.”

—Scott Welch, founder and president, Welch Packaging

remain in the hands of the buyer, says Marino—“whether or not to make significant capital investment, whether or not to divest of a business line or a unit, whether or not to distribute capital, whether or not to take on additional capital or additional debt.”

No matter the rationale behind an acquisition, the key to avoiding trouble is adhering to “a clear set of strategic must-haves and nice-to-haves in terms of how you go to market or find what fits you best,” says Marino. “It’s not just doing it for the sake of doing it, because then, you wind up simply spending a lot of capital and increasing the complexity of your business. It really is going to depend on what you’re focused on trying to accomplish by virtue of an acquisition.”

Joint ventures among two or more players can take multiple forms—perhaps a 50-50 or 60-40 split in fiscal and management duties of a newly purchased or created asset. There are no rules that dictate the split or which entity runs and manages the venture on a daily basis. “It’s an element where both companies are potentially contributing something to the business, and they choose to effectively share resources, share operations, and ultimately share the profits and losses of that entity,” says Marino.

Resources and expertise came into play with Welch Packaging’s newest joint venture, initiated in early 2021.

The Indiana-based company was already stocked with capabilities in corrugating, retail packaging, custom boxes, and packaging boxes when it

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entered into a deal adding a corrugated sheet feeder, acquired from bankruptcy proceedings in Ohio, to support its box plants.

The acquisition also included a small medium mill, “an added benefit, as we wanted to understand that type of operation,” says Scott Welch, founder and president of Welch Packaging.

To further that effort, Welch Packaging took a joint venture partner that knew the mill side of the business. The partner provides the expertise needed for a successful first foray into mill operations that support the corrugator, as well as serve as a supplier for external customers.

The new entity that emerged is now called Green Meadows Paper Co. “We have invested heavily in both the sheet feeder and the mill to improve the product quality from both operations,” says Welch.

Welch notes pros and cons to integrating operations. On the con side, the internal customer is “at the mercy of the vertical supplier,” subject to disruption along the entire chain if something goes wrong with service, quality, or any other element.

On the other hand, integration offers the ability to control cycle time and quality, plus the freedom to innovate with products. Costs come down, too, through synergies in administration, freight, and talent management.

The Green Meadows mill is a recycled paper processing mill with “a nice niche,” Welch adds. “We intend to keep it small and focus on strategic customers that

value the products and service experience that we will deliver.”

The mill joint venture dovetails with Welch Packaging’s focus on serving as a high-performing local converter. In that atmosphere, producing as well as buying sheets contributes to “a competitive advantage,” Welch says. “Every supplier has a unique proposition to the market, and we feel fortunate to optimize everyone’s strength as well as streamline our operation.”

Strategic Integration Industry insiders agree: Integrating corrugating capabilities into boxmaking isn’t a universal solution to the challenges of supply chain, but it helps.

Welch Packaging’s full-sized corrugator runs only about half of the company’s volume needs, so two partners, plus the Green Meadows sheet feeder, provide the rest.

Internal integration of corrugating capabilities creates redundancy and enhances flexibility by adding more options for every situation. A supplier can’t deliver, just when a major customer needs a shipment? Divert trucks from a less urgent route. A COVID-19 outbreak forces a supplier to shut down a shift?

Step up production in-house to cover the difference.

“The beauty of having your own corrugator is that you can allocate the product across the system to complement and leverage with your suppliers,” Welch says. “You have all that optimization you can achieve by having those partners,

“It’s the ability to rely on other locations to continue to be responsible and meet customer demand versus the singlesite facility that, let’s say, had a COVID outbreak that took half the shift down.”

—Gene Marino, AICC chairman and executive vice president, Akers Packaging Service Group but at end of the day, you still have the security blanket.”

And of course, suppliers will return the favor. If Welch Packaging’s own corrugator goes down, “it’s nice to know that they could ramp their volume up,” Welch says.

“They can help us.”

Ensuring a return on the investment in corrugating capabilities demands that the machinery be steadily occupied. “The capital to put in a corrugator is very significant, and if you don’t have the volume to operate that corrugator every day, it can be a very expensive,” says Welch.

“You can lose money pretty easily if your trim pool is not good, your waste is high,

and you don’t have enough volume to absorb the fi xed costs of the operation.”

Marino agrees that strong vendor relationships remain necessary to fill the strategic but inevitable gaps in vertical integration. “There are certain grades we don’t run on our corrugator,” he says. “I still have to make a call to a vendor who will make sheets for me because I choose not to carry different grades or different varieties of paperboard.”

While vertical integration offers multiple advantages, including independence from suppliers, it also runs complexities upstream or downstream, adds Marino.

A box plant that invests in making its own sheets now has responsibilities for buying and storing containerboard and maintaining expensive equipment. A mill, once acquired, demands a constant supply of personnel and feedstock that keep it running almost 24/7, plus strategically planned preventive maintenance breaks in order to reap returns on the costly investment.

That’s why it’s important to remember, when contemplating any sort of integration, that “there are some very efficient and very well-run suppliers out there,” Marino says. “It’s really like anything else.

What will be the return on the investment in capital in order to make that move?”

Pandemic Agility Even as the global economy experienced upheaval from the COVID-19 pandemic, Welch says that the acquisition that led

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to creation of Green Meadows Paper Co. “could not have come at a better time.”

“All suppliers have struggled the past year,” he says. “Integrating and having more control of our supply was a distinct benefit for Welch. We have certainly benefited from having input or control rather than being at the mercy of the free market.”

But as Marino notes, an economic crisis can exacerbate the existing challenges of integration, depending on the business model. Some in the industry run their own truck fleets, while others choose to outsource transportation.

Even before the pandemic, the driver shortage—worsening now as the last of the baby boomers age into retirement— created roadblocks for both.

It’s a dilemma that Welch and his team manage every day, but one that extensive integration makes manageable. “Having the ability to build redundancy plans and alternative options, that’s where having control is an advantage,” he says.

“I’d rather fail myself than get mad at somebody else for holding me up.”

Few companies have been immune to the supply chain and personnel challenges of the current economic climate, Marino says. “We’ve just had to be a little more proactive in how we maintain and turn over inventory stock and work with our suppliers to make sure we’ve got the least amount of interruptions possible,” he says.

In its 50 years, Akers Packaging Service Group has acquired or started 13 paper and packaging businesses—13 sites in six states. The size that comes with those acquisitions and that integration has allowed Marino’s Akers Packaging “more responsiveness and more flexibility because we could rely on other plants for spikes in business,” he says. “It’s the ability to rely on other locations to continue to be responsible and meet customer demand versus the single-site facility that, let’s say, had a COVID outbreak that took half the shift down. The size speaks to

our ability to have replicated assets that we can leverage and rely on across our platform.”

Every business in the corrugated realm is adapting to a new normal of people and supply shortages, Marino says.

Integration offers a tool for managing.

“Ultimately, if push comes to shove, if I have the board and a vendor tells me they can’t do a job, I have the ability to run it,” he says. “Industrywide, many would tell you that for larger customers, they’ve increased their safety stock so they don’t run out. They can try to be a little more strategic in how to manufacture when that call comes in. You have to take care of best your customers.”

As companies build capabilities through acquisition or joint ventures, the key to successful integration and growth is retaining a strong company culture across sites. In the case of Welch Packaging, it’s a commitment to community and to each other, as Welch saw when the entire enterprise stepped up to help a newer employee who lost his home in a fire.

New ventures, such as a corrugator purchase, demand the confidence that “we can sustain something that we bought,” Welch notes, especially to avoid devastating the people who work the site and their families if the initiative fails.

“That you have to control supplies is just the reality of this business, but more important to us are the other pieces—the ability to recruit talent, the ability to develop talent, and most importantly, the ability to expand your company culture,” he says. “Those are the real things when you think about integration or expansion.

If we can do those things, we feel we are on the right path.”

M. Diane McCormick is a Pennsylvania-based freelance writer.

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57

The Associate Advantage

Recruiting, Retaining, and Rewarding Your Employees

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

JOE MORELLI HUSTON PATTERSON PRINTERS CHAIRMAN JMORELLI@HUSTONPATTERSON.COM

TIM CONNELL A.G. STACKER INC. SECRETARY TCONNELL@AGSTACKER.COM

JOHN BURGESS PAMARCO DIRECTOR JOHN.BURGESS@PAMARCO.COM

PAT SZANY AMERICAN CORRUGATED MACHINE CORP. IMMEDIATE PAST CHAIRMAN PSZANY@ACM-CORP.COM

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BOXSCORE March/April 2022

W

ith the ever-increasing competition for talent, what can companies do to attract the right individuals? It will require creativity.

We will need to reward in ways that will encourage, motivate, and ultimately serve to help retain prospective employees. This is a challenge most companies are facing— critical as we move toward our goals.

Having now entered my 10th year at SUN Automation, I can humbly say that I recognize and deeply appreciate the industry itself. It’s something I can’t quite express. I had spent my first 25 years in other related B2B spaces, from food and beverage to hardware and insurance. I can assure you that the greatest of these is packaging. What makes it even more special are the relationships and camaraderie felt throughout—expanding beyond our individual jobs and continents. Having the privilege to be part of AICC and engaged with other associations throughout the world, I have even more respect for our industry and the folks in it.

We know we have a lot to offer prospective employees, and the industry has invested greatly in generating public awareness. Many fellow AICC members created diverse work incentives and in-house programs to entice new recruits interested in R&D or green initiatives. We’ve partnered with colleges and engaged on social media to attract younger talent. There is a renewed commitment to employee recruiting overall.

However, how do you reward and retain talent once it’s through the door?

The initial thought goes to compensation.

However, I’ve come to realize it’s more the opportunity to feel valued. We have been fortunate at SUN to hire individuals

over the last five years whom I never thought we would be able to recruit. Early into conversations with new recruits, it was made clear that they wanted to be somewhere where their voices were heard and they could make an impact. We just needed to create the opportunity.

Another great reward and retention tool that many of you should consider is an employee stock ownership plan (ESOP). An ESOP allows for employees to be rewarded for company growth and establishes accountability throughout the organization. Employees gain shares in the company every year, so everyone has an interest in how we are performing financially because it impacts their individual bottom line. Having worked for a Fortune 200 company and now an ESOP, I can honestly say it is an entirely different mindset. It’s much easier for the individual to see the value in every job and to have the desire to work together as a collective, when the results are shared.

No matter how you recruit, retain, and reward your employees, stay vigilant in your efforts, and look for unique ways to separate from your competition. Whether it’s through an ESOP or value-driven initiatives that fuel employee growth and training, it’s important to understand that employees want more than a paycheck.

It’s our job as leaders to help them feel valued and create an atmosphere in which they see the potential in giving their time and talent to organizations like ours.  Greg Jones is executive vice president at SUN Automation Group and is vice chairman of AICC’s Associate board.

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Strength in Numbers

Capacity Calculus for the Converter

BY MITCH KLINGHER

E

ven the largest independent converters are pretty small players in the overall world of paper and packaging.

The marketplace is dominated by large integrated producers that control enough of all the papermaking resources to be considered an oligopoly. We know this because it seems that we have the ability to measure paper making capacity to the nearest pound. But what about our capacity to manufacture corrugated sheets?

What about our capacity to convert corrugated sheets into finished boxes? Can any of this be measured accurately? If we knew how close we were to these capacities, would it affect decision-making?

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Last year was characterized by the largest price increases and highest levels of profitability that I have ever seen among independent converters—and I see a lot of data. The key question is whether these levels of profitability are sustainable. In my experience, independent converters always pick up short-term profit gains when the price of paper goes up rapidly, and the past year has been no exception to this rule. Paper prices always seem to backslide when there is a series of rapid price increases, and when this happens, independent converters generally begin to lose margin. Is this what is going to happen

in 2022 and 2023? Even in a market dominated by a small number of paper producers, the fundamental laws of supply and demand always seem to have the final say. If we accept the premise that the integrated producers have a vested interest in keeping available domestic supply as tight as possible, then what are the key factors to look at to help us predict future performance and make solid decisions with respect to the marketplace?

Paper Supply and Availability The overall domestic supply for containerboard is expected to grow by at least 10%

over the next few years. Producers have kept supply as tight as possible by exporting tonnage, often at little or no profit.

During the past year, export tonnage dropped dramatically, partly because the spike in demand caused a real short-term paper shortage here and partly because new tonnage is coming online rapidly in almost all export markets. In my opinion, the integrated producers will continue to show the discipline required to keep supply tight enough to continue increasing prices.

Demand for Packaging Demand has been off the charts for the past 18 months, most likely fueled by all of the government stimulus payments, which are ending. It also seems unlikely now that the Democrats will be able to pass any more spending bills that are even close to what they originally proposed, so it is likely that the pace of demand will slow or even backslide somewhat. However, in the absence of an overall recession, there is likely to be continued growth in the demand for consumer products, nondurable goods, and all other sectors of the economy that utilize paper-based packaging.

Continued Inflation in the Overall Economy The global supply chain problems that we have all been experiencing are real, and there don’t seem to be any quick fixes for them. Here again, the fundamental laws of supply-demand indicate that when supply is limited, prices tend to go up. In addition, with the Federal Reserve planning to raise interest rates, the cost of capital will increase, thus adding fuel to the need for companies to raise prices. I think those of us who lived through the 1970s will tell you that once this pattern starts, it is hard to reverse, so my feeling is that inflation is going to be part of this calculus for the foreseeable future.

BOXSCORE www.aiccbox.org

61

Strength in Numbers

Labor Markets It seems that everyone is having trouble finding qualified employees. COVID issues, government support payments, almost zero growth in the population of working-age people, and the lack of any cohesive immigration policy have made this a major problem. Many converters tell me that even if they had all of the paper or sheets they need, they would still have trouble meeting customer demands because they don’t have enough qualified people to operate every machine and work every shift.

Investment in Corrugators There are a lot of new corrugator projects underway across the country at both the integrated and independent levels.

However, there are a limited number of manufacturers, and lead times are in

the 12- to 18-month area, so it is going to take a while for increased corrugator capacity to affect the markets. This is also a regional issue in that many independent sheet plants still tell me that they cannot get any more footage from the corrugators in their regions, and this has been a serious impediment to their ability to take care of customers and grow. This will continue to be an issue for at least the next 12–18 months and probably longer in some regions of the country.

Investments in Finishing Equipment While walking the floor at SuperCorrExpo in Orlando, Florida, last summer, I was struck by how few people seemed to be there. There seemed to be far more vendors than potential customers to my eye, yet most of the vendors who I spoke with indicated that they went home

with lots of orders and good prospects for more in the future.

Converters are making money and looking to invest in their plants and equipment. Almost every independent that I am involved with has equipment on order or is planning to order equipment in the next year. Some are also increasing their physical plants. All of this equipment will greatly increase their production capabilities and in many cases allow them to increase their product lines.

In addition to allowing them to produce more footage per man-hour, much of it will allow them to reduce overall head counts in the plant. Pre-feeders, robotics, palletizers, and an overall increase in conveyorization are all in the plans for most independents in reaction to the continuing labor shortage. However, as with corrugator investments, they

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BOXSCORE March/April 2022

Strength in Numbers

are experiencing very long lead times from manufacturers and encountering shipping delays due to the ongoing supply chain issues.

New Plant Initiatives While both integrated and independent manufacturers continue to invest in their capabilities, building a new state-of-theart corrugator plant could cost upward of $50 million, and building a new state-ofthe-art sheet plant could cost upward of $25 million. Several integrated companies and a few independent companies are in the process of doing this, but most of them are doing it in response to existing demand or to consolidate existing plants.

The notion that someone is going to do this on a speculative basis is highly unlikely. The days of someone buying an old flexo and die cutter and setting up

shop in an old building are over. Real estate is way too costly, and good used equipment is hard to find today.

The past 18 months have radically changed the overall market for paperbased packaging. The markets are far less price-competitive than they used to be, and most customers don’t have a lot of good options when it comes to finding new vendors. This is especially true for small and midsized customers, as well as jobbers, brokers, and other resellers.

Customers have had to accept longer lead times and higher prices, and based upon the aforementioned factors, this trend is likely to continue for the foreseeable future.

My advice to independent converters, based upon the above capacity calculus and market analytics, is carpe diem.

Almost all of the external factors are

in your favor, and in the absence of an overall economic recession, they will be in your favor for the foreseeable future.

Our papermaking capacities, corrugating capacities, and converting capacities will continue to be tight. New equipment initiatives will take a long time to have an effect on the markets. The labor market will continue to be problematic for you.

This is the time to take care of any pricing and other customer issues. Put your bets on the table for increasing your production capabilities and reducing your labor force. Seize the day, converters.  Mitch Klingher is a partner at Klingher Nadler LLP. He can be reached at 201-731-3025 or mitch@ klinghernadler.com.

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BOXSCORE www.aiccbox.org

63

Foundation for Packaging Education

Foundation for Packaging Education Announces 2022 Fundraiser

W

e are always pleased to keep you apprised of the progress the Foundation is making toward its goals. As of this writing, there are 43 companies or individuals that have pledged approximately $1.5 million to the cause of training AICC member company employees.

Now that we are embarked in 2022, in addition to pledges and contributions, the Foundation will also benefit from fundraising efforts on two fronts.

AICC’s annual Independents Cup golf tournament, always a popular fi xture at the AICC Spring Meeting, will designate its proceeds for the benefit of the Foundation going forward.

The 8th Annual Independents Cup will be held on April 7 at the Marriott Desert Springs Resort’s Palm and Valley Courses.

The courses were designed by acclaimed architect Ted Robinson Sr. and built in the mid-1980s. Robinson was renowned

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BOXSCORE March/April 2022

as the “King of Waterscapes,” and these golf courses incorporate 35 acres of sparkling streams, lakes, and cascading waterfalls—providing a tropical oasis in the desert.

The golf competition offers participants more networking opportunities and generates an atmosphere of fun while raising money for a great cause. In addition to playing, there are several sponsorship opportunities available as well. Visit bit. ly/33K7Pok for more information.

Later in the year, the Foundation will hold an event at The Sanctuary at Kiawah Island Golf Resort in South Carolina. Th is was the site of the 2021 Ryder Cup Golf Tournament. The dates are Tuesday, November 8, through Thursday, November 10. The two golf courses that our group will play on are the Ocean Course and Osprey Point.

The Ocean Course is a links-style course designed by the legendary Pete Dye and

is consistently ranked as one of the top courses in the country. Osprey Point was updated by renowned designer Tom Fazio into a championship-level resort course.

There will also be an off-site event in Charleston for nongolfers. We’ll welcome everyone with a reception on Tuesday. There will be golf and the off-site event on Wednesday, followed by a dinner at the hotel. On Thursday, we will close with another round of golf. Sponsorships will be available at www.aiccbox.org/calendar. These are two exciting developments for the Foundation. We hope that you can join us at these two events. Space will be limited for both.

If you have not pledged your support for the Foundation, we hope you consider joining your peers and doing so soon. Visit www.packaginged.org to get involved.

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PACKAGING

CORRUGATED

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ICPF Partners With Students and Recent Graduates for Campus Outreach

Emily Anderson, Clemson University “My name is Emily Anderson. I am from Tampa and just entered my senior year at Clemson University. I am pursuing a B.S.

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Photo courtesy of ICPF.

O

ver the years and throughout the COVID-19 pandemic, ICPF has continued to leverage outreach, education, and the recruiting of students and new graduates into the industry through unique partnerships. One of the most significant partnerships has been with students and new hires in the industry who have attended ICPF events and used ICPF resources to acquire internships and full-time positions.

For example, ICPF’s student advisory board members have provided valued input on the establishment of ICPF’s virtual Student/Executive Dialogue Dinners and assisted with plans and implementation for converting ICPF’s Teleconference on the Business of Corrugated Packaging and Displays and the Careers to a virtual format.

ICPF also continues to recruit and work with designated ICPF student representatives on 18 campuses who promote corrugated packaging careers, participation in ICPF’s initiatives, and the utilization of ICPF resources among their fellow students.

ICPF’s industry mentoring program, which matches ICPF-selected students with students who are seeking internships or full-time positions has proved successful as well.

ICPF additionally recruits exceptional students to serve as student program manager interns to provide assistance with its outreach to students. More on ICPF’s current student intern, Emily Anderson, follows.

Emily Anderson, ICPF’s student program manager Intern, will graduate from Clemson University in December 2022 with a major in packaging science and a minor in business administration.

major in packaging science with a minor in business administration, with plans of graduating this coming December 2022.

“For as long as I can remember, I have possessed a creative mind and a curiosity

about the inner workings of different systems. I love hands-on experience to see how a product is developed from start to finish. In my sophomore year after taking an introduction to graphic

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International Corrugated Packaging Foundation I N T E R N AT I O N A L

PACKAGING

communications and packaging science class for fun, I became fascinated by the elective. I immediately joined the Clemson Packaging Science Club to participate in club meetings and to network with professionals. I then applied to change my major from industrial engineering to packaging science and was accepted.

“Coming into the game a year late, I learned a co-op rotation was required to graduate. I quickly started following industry trends and encountered Richard Flaherty, president of the International Corrugated Packaging Foundation, on LinkedIn, and through Clemson’s packaging program. His encouragement and concern for students to succeed in the industry were very reassuring and supportive. After being introduced to the ICPF, I was invited to ICPF’s virtual Student/Executive Dialogue Dinner over winter break, where I had the opportunity to speak with a dozen representatives from corrugated packaging companies that had earlier posted openings on ICPF’s Career Portal. Zoom breakout rooms made it possible to speak to multiple executives and gain direct insight from each after asking my questions. I was amazed by some of their display rooms and campaigns they had shared there online. I learned about the business side of packaging, the sustainability of corrugated packaging, and career opportunities, while connecting with roughly 35 students across the country who had a diversity of majors from different schools.

All of the students’ various majors and interests meshed with the corrugated packaging industry.

“Following the event, Richard Flaherty called me to personally follow up about my being nervous about being able to secure my first co-op/internship rotation.

He shared his knowledge about finding that first professional role and where to search. He reminded me of the Career Portal on the ICPF website and made me

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aware of dozens of Corporate Partners that recruit from ICPF. I decided to post my résumé and profile and get started with the job hunt. Kelsea Potthast, ICPF’s student program manager intern, was a huge help as I looked for co-op positions and talked me through her personal ICPF application experience. I applied to several of the many corrugated packaging solutions internship programs through the ICPF Career Portal and was grateful to hear these companies had an interest in me as well. I could sense these corrugated companies were genuinely intrigued by getting to know me and provided me with a solid foundation in the corrugated and displays industry and each department involved. I scheduled interviews and was able to tie down a co-op with the WestRock Corp. in South Carolina.

“My co-op at one of WestRock’s sheet plants was a great introduction to corrugated packaging. I learned about the production and sales side and worked beside the design team editing CAD files and running the CAD table. The business unit quality manager taught me so much about the quality side of corrugated, and I was able to participate in continuous improvement projects. I worked on over 12 customer issues independently and qualified $12,000 in immediate savings, with a forecasted savings of $15,000 a year. I traveled to Georgia and had the opportunity to see a full-scale corrugator along with shadowing sales reps on clients’ plant tours.

“My summer co-op would not have been possible if not for the ICPF Career Portal. I am so thankful for my experience there, as it meant so much more to me than just checking off a box to get my degree.

“Following my co-op, I emailed Richard Flaherty expressing thanks and asking if there were any other ways I could get involved. The president invited me to be a part of the ICPF student advisory board and an ICPF representative for Clemson

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University—two special opportunities to expand student engagement and participation at events, share the resources the ICPF has to offer for undergraduates and recent graduates, and to help brainstorm ways to recruit students and new graduates into the industry.

“This past year, I ran for leadership in Clemson’s Packaging Science Club and was elected secretary. I now am proud to represent the club this year as its president.

My passion for this packaging major and the people in it continues to grow, and I want to be able to share it with fellow students.

“Over the past six months I have been serving as ICPF’s program manager student intern. My principal work has been in coordinating and assisting in campus outreach including working with ICPF’s student representatives on individual campuses; scheduling and participating in ICPF presentations on the industry at college student packaging clubs across the country; creating and updating industry promotional information, scholarship, and other ICPF web content for students; and assisting in coordinating various elements of ICPF’s student advisory board meetings and upcoming teleconference.

I look forward to working with the ICPF over the next year, spreading the word about its resources, and gaining more exposure to the corrugated and displays industry!”

Emily is seeking a corrugated packaging student internship in Florida for summer 2022 and a full-time position upon her graduation in December 2022. She is interested in sales, design, operations, and production internships. Emily’s résumé is available by visiting ICPF’s Career Portal.

Richard Flaherty is president of the International Corrugated Packaging Foundation.

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The Final Score

Let the Good Times Roll?

I

t seems incongruous that the box business should be enjoying such good times amid a resurgent COVID-19 omicron variant, unprecedented supply chain challenges, high inflation, and government dysfunction. But that is the recurring theme among AICC members.

Independents have always risen to challenges as they’ve come along. That is not a new trait. But in the past two years, dealing with the pandemic and all that it has entailed—including labor shortages and increasingly high product demands—independents have flourished. They’ve satisfied customers as best they could. They’ve installed new equipment and become even more efficient. Many have expanded plants and entered into new partnerships. Independents have adapted and grown.

There are several factors behind the strong demand for boxes. Online holiday sales growth was up 10% in 2021 compared to the previous year. U.S. e-commerce, according to Digital Commerce 360, surpassed the $200 billion mark for the first time, hitting $211.41 billion. This is 55% growth compared to 2019, pre-pandemic. Again, this is just holiday growth. We know that e-commerce demand has been up throughout the previous two years. Manufacturers’ demand for boxes has also been strong, fueled by demand, fueled by supply chain disruptions, and anecdotally fueled by the reshoring of operations back to the U.S. Meanwhile, automobile production has scaled back due to chip shortages and other factors. When car plants come back fully online, there will be resurgent demand from that sector.

In retail, U.S. consumers spent $933 billion on e-commerce in 2021, up 17.9% from the previous year. This number represents 15.3% of total retail sales, so still just a scratching of the surface. Shoppers returned to in-person shopping in 2021 as the delta variant eased and before omicron became a factor. These numbers come from eMarketer.

In the B2B environment, U.S. manufacturers, distributors, and wholesalers saw combined growth in 2021 that sent total online and offline B2B sales to $13.09 trillion—up a healthy 15% over 2020. Without including manufacturers, B2B sales by distributors and wholesalers surged 25% last year to $7.10 trillion from $5.09 trillion in 2020, according to data from the U.S. Department of Commerce.

Industry statistics indicate a flattening in box demand based on a read of Q3 and Q4 2021 estimates from the American Forest & Paper Association and others. Like the broader industry numbers cited above, our members are currently telling us a different story.

AICC monitors numbers, data, and the sentiment of our members. What they see in their own businesses is reflected in the activities of our committees and programs because these are populated and led by AICC members. We plan relevant events, education, and information, and we measure the impact and the use of the products and adjust our direction—just like you do.

Our crystal ball is no clearer than yours. How long will strong demand at independent box plants last? What is going to happen in the paper pricing arena with a fourth increase announced? When will supply chains detangle? Will inflation continue to rage, or will it be tamed? What about our ongoing political divisions and their impact?

I have the sense that our members and our industry are in decent shape for whatever the future holds. The restrictions on labor have kept plants lean during these strong times, and that means they are able to adeptly respond to changes in the business cycle. New capacity is scheduled to come online in the next couple of years, and this will affect paper supply for the better or not. Consolidation continues unabated.

No new challenges—but certainly challenges dressed differently from what we have seen in the past. For now, let the good times roll.

Michael D’Angelo AICC President

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