May/ June 2019 BoxScore

A PUBLICATION OF AICC, THE INDEPENDENT PACKAGING ASSOCIATION

May/June 2019 Volume 23, No. 3

DESIGNED to SELL

Talent and expertise combine for award-winning packaging

ALSO INSIDE Packaging Up E-Commerce Steve Young: A Cut Above the Rest

iris

Getting the correct color has always been one of flexo's biggest challenges. Anilox selection plate type, substrate, and other conditions all play a part in hitting LAB targets, but starting with the proper press-ready ink is critical for repeatability. In response to this need, Pamarco has released for sale its automatic precision proofer: Iris.

Utilizing the company's well-known hand proofers and hand proofers with doctor blades in an automatic system, Iris removes operator inconsistencies. Speed, impression, and a selection of anilox rolls built to converter specifications combine to produce highly consistent results.

Contact us today for your Pamarco Iris Proofer katie.graham@pamarco.com or 678-799-5915

www.pamarco.com | katie.graham@pamarco.com | +678-799-5915

TABLE OF CONTENTS May/June 2019 • Volume 23, Issue 3

COLUMNS

3

CHAIRMAN'S MESSAGE

4

SCORING BOXES

8

LEGISLATIVE REPORT

12

MEMBERS MEETING

21

ASK RALPH

24

ASK TOM

26

SELLING TODAY

30

TACKLING TRENDS

32

ANDRAGOGY

34

LEADERSHIP

38

FROM FLEXO

66

THE ASSOCIATE ADVANTAGE

68

WHAT THE TECH?

FEATURES

70

STRENGTH IN NUMBERS

50

76

THE FINAL SCORE

50 DESIGNED TO SELL Talent and expertise combine for award-winning packaging

56

PACKAGING UP E-COMMERCE

56

Elevated demand continues to present marketing and growth opportunities

60

A CUT ABOVE THE REST One man’s undying fortitude has taken AICC—and an entire industry—to new horizons

60

BoxScore is published bimonthly by AICC, The Independent Packaging Association, PO Box 25708, Alexandria, VA 22313, USA. Rates for reprints and permissions of articles printed are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of AICC. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to BoxScore, AICC, PO Box 25708, Alexandria, VA 22313, USA. ©2019 AICC. All rights reserved.

DEPARTMENTS

10

WELCOME, NEW MEMBERS

43

GOOD FOR BUSINESS

46

MEMBER PROFILE

74

ICPF UPDATE

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

Scan the QR code to check them out!

BOXSCORE www.aiccbox.org

1

OFFICERS Chairman: Joseph M. Palmeri, Jamestown Container Companies First Vice Chairman: Jay Carman, StandFast Packaging Vice Chairwoman: Jana Harris, Harris Packaging/ American Carton Vice Chairman: Matt Davis, Packaging Express Immediate Past Chairman: Al Hoodwin, Michigan City Paper Box Chairman, Past Chairmen’s Council: Tony Schleich, American Packaging Corp.

President: A. Steven Young, AICC Vice President: Michael D’Angelo, AICC Secretary/General Counsel: David P. Goch, Webster Chamberlain & Bean Counsel Emeritus: Paul H. Vishny, Esq. AICC Canada Director: Jana Marmei DIRECTORS-AT-LARGE Kevin Ausburn, SMC Packaging Group Gary Brewer, Package Crafters Marco Ferrara, Cartones Sultana Finn MacDonald, Independent II Nelva Walz, Michigan City Paper Box DIRECTORS David DeLine, DeLine Box Company Ben DeSollar, Sumter Packaging Eric Elgin, Oklahoma Interpak Guy Ockerlund, OxBox Mike Schaefer, Tavens Packaging & Display Stuart Fenkel, McLean Packaging AICC Canada: Terri-Lynn Levesque, Royal Containers Ltd.

AICC México: Pedro R. Aguirre Martinez, Tecnología de Cartón Overseas Director: Kim Nelson, Royal Containers Ltd.

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

EMERGING LEADER BOARD DELEGATES Josh Sobel, Jamestown Container Companies Daniel Brettschneider, CST Systems

CONTRIBUTORS Michael D’Angelo, Vice President Maria Frustaci, Director of Administration and Director of Latin America Cindy Huber, Director of Meetings and Conventions Chelsea May, Education and Training Manager Laura Mihalick, Senior Meetings Manager Taryn Pyle, Director of Education and Leadership Development Alyce Ryan, Marketing Coordinator Patrick Moore, Administrative Assistant Richard M. Flaherty, President, ICPF

ASSOCIATE MEMBER DIRECTORS Chairman: Dave Burgess, JB Machinery Vice Chairman: Pat Szany, American Corrugated Machine Corp.

Secretary: Joe Morelli, Huston Patterson Printers Director: Greg Jones, SUN Automation Group Immediate Past Chairman: Ed Gargiulo, Equipment Finance Corp.

ADVISORS TO THE CHAIRMAN John Bollender, Niagara Sheets LLC North Greg Arvanigian, Arvco Container Dave Burgess, JB Machinery PUBLICATION STAFF Publisher: A. Steven Young, syoung@aiccbox.org Editor: Virginia Humphrey, vhumphrey@aiccbox.org EDITORIAL/DESIGN SERVICES The YGS Group • www.theYGSgroup.com Vice President: Jack Davidson Senior Managing Editor: Ashley Reid Senior Editor: Sam Hoffmeister Copy Editor: Steve Kennedy Associate Editor: Drew Bankert Creative Director: Serena L. Spiezio Art Director: Mike Vucic Account Manager: Brian Hershey

ADVERTISING Information: Virginia Humphrey, vhumphrey@aiccbox.org Opportunities: Taryn Pyle 703-535-1391 • tpyle@aiccbox.org AICC PO Box 25708 Alexandria, VA 22313 Phone 703-836-2422 Toll-free 877-836-2422 Fax 703-836-2795 www.aiccbox.org

ABOUT AICC AICC, The Independent Packaging Association, is uniting and celebrating the success of inspired, independent packaging companies. We are a growing membership association which has served independents since 1974.

WHEN YOU INVEST AND ENGAGE, AICC WILL DELIVER SUCCESS.

Chairman’s Message

Sales Trends That Make Independents Shine

T

his issue of BoxScore is focused on sales, design, and marketing trends affecting our industry. There are certainly many, because sales opportunities change every day with the fickle ways our customers’ customers demand their products. In this letter, I want to look at two trends that I have noticed over the past few years that give us independents a leg up on our competition.

The first is a renewed demand for environmental sustainability. We saw the first salvo of the sustainability battle a dozen years or more ago, when Walmart issued its first sustainability manifesto. Our customers flocked to Bentonville, Ark., to fill the retail giant’s demands—and our industry followed, buoyed by the knowledge that our products were renewable, recyclable, and reliable in Walmart’s vast supply chain.

As Walmart ruled the retail environment then, Amazon does now, and we’re seeing a renewed emphasis on being environmentally conscious. Though overall sustainability has always been a concern, we used to have much more leeway regarding protective packaging. That meant if you needed to use other packaging materials such as foam to get the job done, that was fine. Today, more and more customers are requiring the packaging to be 100 percent recyclable, outside to inside. We have been told by many customers, and by all that sell via Amazon, that foam is no longer an option.

Everything must be 100 percent recyclable, which is great for our industry and a new challenge for our designers as they focus on inner packing and protective elements of the interior of the box. Better designs mean increased sales.

The second trend we’re seeing is a continual decrease in order quantities customers are requesting in the quote and in the order size being produced. Customers want smaller quantities with more frequent deliveries. You can handle this the traditional way by filling up your warehouse with finished boxes and releasing smaller quantities to your customer, or by getting better at running small quantities more often. We have tackled this in our Jamestown Container Cos. system by focusing on our setup times and the efficiency of our material handling, moving work-in-process through the plant more quickly, or redesigning items to limit the number of moves among machines in the first place.

Both of these trends—the renewed focus on sustainability and the reduction in order size—play to independents’ strengths. While our larger competitors focus on longer runs to feed the demand posed by the Amazons of the world, it is we independents who will be redesigning and running the more sustainable corrugated inner packing that online consumers are demanding. And those smaller order quantities? Well, we’ve been doing that for our customers ever since our company was founded in 1956, and we’ve been improving on that model ever since.

Look at your business mix in light of these two trends, and I wish you higher profits as a result!

Joseph M. Palmeri President, Corrugated Packaging, Jamestown Container Cos. Chairman, AICC BOXSCORE www.aiccbox.org

3

Scoring Boxes

Impact of Trade on Independent Paper Packaging Converters

BY DICK STORAT

F

or an independent corrugated or carton converter, trade policy might seem remote from the daily challenges of attracting new business or keeping existing customers satisfied. Yet, changes in international trade can be at the core of why it is so hard to find new customers, or why existing customers order fewer packaging materials. But something as far from the shop floor as changes in the value of the U.S. dollar compared to trading nations’ currencies can be a major culprit.

If the value of one U.S. dollar becomes 25 percent stronger than the value of, say, one Canadian dollar, then that U.S. dollar goes 25 percent further in buying a wheel of cheese from Canada—and the corrugated packaging made in Canada that protects it during shipment.

So, a customer decides to buy the less expensive cheese at the grocery store, and the cheesemaker in Wisconsin is out of a sale—and doesn’t need a box for that unsold cheese. Now, suppose that cheesemaker in Wisconsin tries to sell his cheese in Germany. For the German grocer to buy that cheese, he must buy dollars with his local euros, which now buy 25 percent less. That makes the cheese from Wisconsin more expensive than other cheeses in the German’s dairy case, and so that cheese is not exported; again, the cheesemaker is out of a sale, and his packaging partner doesn’t make the box to package that cheese.

Actually, that 25 percent appreciation is exactly what has happened to the U.S. dollar relative to a broad basket of global trading currencies since the middle of 2014. And it remains that overvalued now compared to economic fundamentals of

4

BOXSCORE May/June 2019

Exports, Imports, and Trade Balance $ Millions

Nondurable Products

700,000 600,000 500,000 400,000 300,000 200,000 100,000 (100,000) (200,000) (300,000)

(125,285)

(144,552)

2013

2014

Trade Balance

(178,001)

(185,191)

(182,905)

2015

2016

2017

Exports

(221,282) 2018

Imports Source: U.S. Census, RSA

High Performance Automatic Palletizers

Robotic

Loadformers

High Speed Pre Feeders

Higher Productivity is Your Competitive Edge Alliance innovations and engineering designs have advanced finishing machine productivity in the corrugated box industry for over thirty-five years. Customers can rely on support from our experienced global network of sales and service experts to assist in achieving their goals.

This long-term commitment to pressing the boundaries of automation keeps Alliance at the forefront of productivity by providing an edge for the Alliance customer today and into the future.

Want to gain a competitive edge?

Visit us at www.alliancellc.com

Customer Care

509 535-0356 5303 E. Desmet Spokane, WA 99212

Intelligent Productivity

www.alliancellc.com

Scoring Boxes

the otherwise competitive U.S. manufacturing sector.

Scale the cheesemaker’s lost sale up to the $40 billion annual U.S. market for cheese.

In 2016, the annual trade deficit for cheese products doubled from $50 million to $99 million—$49 million of lost business opportunity for both U.S. cheese producers and those who make their packaging.

Nondurable goods account for about 75 percent of U.S. corrugated demand. The chart on Page 4 shows the value of U.S. trade in nondurable goods—here, the sum of food, beverage, clothing, paper, and chemical and plastic products. The trade balance is the difference between exports and imports. First, the chart shows that our country imports more nondurable goods than it exports. Last year, exports amounted to $372 billion, but imports were a larger $593 billion.

The trade balance was a negative $221 billion. To learn whether manufacturers and boxmakers were better off last year than they were five years ago, we need to evaluate whether exports grew and imports shrank over those years.

In 2013, exports were valued at $364 billion, so they did grow, but at a paltry rate of only 2.3 percent over the five-year period. Imports, however, totaled $489 billion in 2013 and grew by a tenfold-larger 21 percent during the past five years, reducing by $104 billion the amount of packaged goods that Americans bought from domestic producers. On balance, over the past five years, the $8 billion growth in exports was swamped by the surge in imports, resulting in a $96 billion, or 77 percent, decline in the trade-related market that could have been supplied by U.S. producers and protected by U.S.-made corrugated boxes.

6

BOXSCORE May/June 2019

Exports, Imports, and Trade Balance Food & Kindred Products

$ Millions 80,000 70,000 60,000 50,000 40,000 30,000 20,000

15,951

13,491

10,000

4,700

3,564

3,200

-

(985)

(10,000) 2013

2014

2015

Food Trade Balance

Food products are packaging-intensive and accounted for nearly one-quarter of 2017 box shipments, according to the Fibre Box Association. They also amounted to 18 percent of last year’s nondurable goods exports. The chart on Page 4 shows the trade performance of these commodities over the past five years.

In 2013, U.S. food producers supplied a market in which exports of $69 billion exceeded imports of $53 billion by $16 billion. As the chart above depicts, that favorable trade balance eroded over the five years during which the U.S. dollar strengthened by 25 percent so that last year’s trade balance was a negative $1 billion, a $17 billion decline in market opportunity.

The same trend of stagnant or declining exports overtaken by rapidly rising imports that characterized

2016 Food Exports

2017

2018

Food Imports Source: U.S. Census, RSA

nondurable-goods trade appears here, wiping out a favorable trade balance and the opportunity to supply packaging to it. Exports declined by 3.5 percent since 2013, while imports advanced by 29 percent, decreasing from the favorable food trade balance in 2013 by 77 percent.

Certainly, more factors than just trade influence the size of packaging markets available to domestic independent corrugated and carton producers. However, in the wake of the U.S. dollar’s 25 percent appreciation, adverse trade impacts rank among the largest.

Dick Storat is president of Richard Storat & Associates.

He can be reached at 610-282-6033 or storatre@aol.com.

THE

Let’s print it.

Sure, we’ve got new facilities in Dallas and New Jersey, boasting the highest speed and best quality large format printing in the market, plus a plethora of other cool new stuff...but rest assured, you can expect the same LPC quality you’ve grown accustomed to over the last century. What you decide to do with all our new capabilities is your business.

Meeting your expectations is ours.

Legislative Report

How AICC Advocates for You

BY ERIC ELGIN

D

espite all the recent partisanship and excitement in Washington, D.C., lately, your AICC Government Affairs Subcommittee is quietly and effectively discussing, considering, and implementing ways to keep the voice of the independent converter heard in the corridors of power.

Advocacy is a core mission of AICC and is one of its founding tenets. The primary way this is accomplished is through AICC membership in organizations that have the size and the reach to effectively convey your needs to various political and regulatory bodies.

AICC has long been a member of the National Association of Manufacturers (NAM) (www.nam.org) through its Council of Manufacturing Associations (CMA) (www.nam.org/alliances/councilof-manufacturing-associations). NAM has more than 14,000 manufacturing company members, and its access to and advocacy success with the White House and Congress is well known. They represent on any number of issues that are important to the broad domestic manufacturing community. AICC receives the NAM Update, which outlines important news, on a daily basis. AICC shares this document with membership through a link in inBox, AICC’s weekly e-newsletter.

If you have not been opening inBox, this content should cause you to rethink.

The CMA is just what the name implies: It is a group of manufacturing associations that work together to advocate for their members’ needs through NAM. Because NAM’s regular membership includes individual manufacturing companies, ranging from small businesses to conglomerates, the CMA is the right

8

BOXSCORE May/June 2019

mechanism for an organization such as AICC to be heard. Until this past January when his term ended, AICC President Steve Young was a very active member of the CMA board of directors.

In March of this year, AICC became a member of the Small Business Legislative Council (SBLC) (www.sblc.org). SBLC members are trade and professional associations that share a common concern for the future of small business. The purpose of SBLC is twofold: to maximize the influence of business on legislative and federal policy issues of importance to the entire small business community; and secondly, to disseminate information on the impact of public policy on small business. AICC shares SBLC alerts through inBox. The first one we shared was on the Department of Labor’s proposed changes to overtime rules for salaried employees.

Perhaps the best-known example of AICC member advocacy is the Print & Packaging Legislative Summit, formerly known as the Washington Fly-In. AICC members go to Capitol Hill to meet with their representatives to discuss issues that are important to the printing and converting industry. This is done in

partnership with the Fibre Box Association and Printing Industries of America. Be advised that because of the dysfunction in Washington and the fact that next year is an election year, the Government Affairs Subcommittee has decided to not hold a Legislative Summit in 2019. Rather, we'll host the next Summit in 2020.

Finally, the most engaged form of advocacy is that which you do with your local and state governments and your federal representatives. I know many of you have close relationships with people at various levels and that you advocate for yourselves and the broader industry in very effective ways. If you are not engaged locally, please let me know, and we will work with your fellow AICC members to give you the assistance you need to get started.

AICC has a voice. We use it, and we are heard.

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.

NOW with Auto Plate Washing in just minutes!

KleenPlate 3.0

®

Optimized Productivity & Superior Quality    

KleenPlate 3.0 ®

NEW Auto plate wash in minutes Printing defect elimination Minimized color variation Optimized productivity & superior quality

®

More than a wash to your bottom line

+1-203-544-0101 | Fax +1-203-544-0202 | 9 Sasqua Trail | Weston, CT 06883 USA | www.jbmachinery.com

New Members

Welcome, New Members!

TILIA LABS GEORGE FOLICKMAN Business Development 1758 William Howard Taft Rd. Cincinnati, OH 45206 Phone: 614-271-6296

DIGITAL PRINT INCORPORATED STU BROWNELL Director of Corrugated Applications 217 Performance Lane Cresson, TX 76035 Phone: 817-512-3151 www.digitalprint.com

CORRUGADOS LOGO, S.A. DE C.V. FRANCISCO GONZALEZ LOZANO Director General Industria Electronica 500 Parque Industrial Escobedo Escobedo, NLE 66062 Mexico Phone: +52 81-8676-3993 www.corrugadoslogo.com

10

BOXSCORE May/June 2019

PRECISION DIGITAL PRINTING JUSTIN BEST Vice President, Graphics & Production 2603 Moore Rd. Jonesboro, AR 72402 Phone: 870-393-5060 www.precisiondigitalprinting.com

ARDENT DISPLAYS AND PACKAGING DONALD BUDNICK CEO 95 Leggett St. East Hartford, CT 06108 Phone: 860-214-2233 www.ardentdisplays.com

KEY CONTAINER CORP. DAVID STRAUSS President P.O. Box 2370 21 Campbell St. Pawtucket, RI 02861 Phone: 401-273-2000 www.keycontainercorp.com

KARSTEDT PARTNERS KEVIN KARSTEDT CEO 8843 Hammond Drive Eden, NY 14057 Phone: 716-992-2017 www.karstedt.com

CUTTING DIE STRIPPING DIE BLANKING DIE CUTTING PLATES MAKE READY SAFELY IN CASSETTES

Manual or Fully Automatic Flat Die Storage Systems by BCM

Rack up more space, productivity and efficency WhyAgonize.com Info@AskHitek.com 262-842-1700

Members Meeting

An ‘Xperience’ Like No Other

A

Photos courtesy of AICC.

ICC welcomed 215 attendees to Digital Xperience, AICC’s first comprehensive conference on digital printing, February 26–March 1 in Charlotte, N.C. The conference brought together AICC members from around the world to discuss the technology, the business case, and how to sell digital printing.

Participants gathered at the Sheraton Charlotte Airport Hotel the first evening for a networking reception. The conversations and connections of that evening continued throughout the week.

The first full day of the conference, Wednesday, February 27, began with Simon Goldsack and Linda Hadar of HP presenting “What Makes Digital Intriguing to Brands” during the opening general session. They were followed by Chris Heusch of ARCH Inc. and John Kelley of Dusobox, explaining “The Business Case for Digital Print.”

AICC members shared their companies’ experiences with a digital transition with more than The final piece of the general session 200 attendees. was a panel discussion of current users about the “Dichotomy of Multipass and The second day of Digital Xperience After taking many questions from Single Pass.” Panelists included Brad began with a general session that the audience, the panel concluded, and Albright of ColorHub, John Ballentine featured: Nick Benkovich presenting attendees were able to choose from three of Tango Press, Howard Bertram of “Incorporating Digital Into Your Present concurrent breakout sessions: “The Complete Design & Packaging, Tony Business Mix”; “Critical Things That Real-Life Transition to Digital: Customer Corsillo of Atlantic Packaging Products, Lead to Digital Success,” presented Case Studies,” presented by Slingerland; Jim Nelson of Green Bay Packaging,

by Jeff Tedder of Sonoco Display “Understanding the Costs of Digital,” Chuck Slingerland of Abbott-Action, & Packaging; and “The Customer presented by Liz Logue of EFI; and and Kelley.

Experience: Emerging Trends and “Maintenance Role in Digital Printing,” This lively discussion began with Market Challenges Impacting Brands,” presented by Frank Jaeger of Sonoco panelists giving brief overviews of their presented by Loretta Sebastian of Veritiv Display & Packaging. companies’ digital printing journeys.

Retail Packaging.

Then, nearly 200 attendees departed Then they answered questions from Then, attendees had the opportunity to to tour Complete Design & Packaging Heusch, the session’s moderator, and the take part in three rounds of concurrent in Concord, N.C., and CompanyBox, audience. Panelists stressed the need to breakout sessions. Sessions and presentCharlotte, N.C. Upon their return, they review workflow in the plant, be patient ers included: enjoyed a networking reception that with the process, install a customer base • “How to Turn Your Digital Printer allowed them to continue the conversabefore installing a machine, and properly Into a Digital Printing Production tions that began during the day. train sales teams.

12

BOXSCORE May/June 2019

Members Meeting

Line,” presented by Randy Banks, SHARP International.

• “Digital Workflow – Information and Materials,” presented by Kerry Drake, PXI Digital Solutions, and Les Pickering, Quadrant5.

• “Selling Strategies: Getting Beyond the Purchasing Agents and Marketing to the Brands,” presented by Liz Logue, EFI. • “How to Use Your Machine as a HighProduction Tool,” presented by Jeff Tedder, Sonoco Display & Packaging.

• “Sales Value Proposition for Digital,” presented by Sean Moloney, SUN Automation Group.

• “The Costs of Digital & Litho,” presented by Garrett Bradley, Barberán Corrugated US. • “Lessons Learned When Transitioning to Digital,” presented by John Ballentine, Tango Press.

• “Finishing for Digital Packaging: Cutting & Creasing,” presented

by Heather Roden, Zünd, and Jim Smith, Highcon.

• “Reality & Future of Color Management Systems for Packaging,” presented by Juan Martorell, ColorInLab Color Consulting S.L. Participants came together again for the closing general session, which featured Logue, Bradley, Stu Brownell of Digital Print Inc., Jürgen Gruber of Koenig & Bauer, Steve Shannon of HP, and Wolfram Verwuester of Durst, who shared their experiences on a panel on digital press supplier equipment, which was moderated by Heusch and Martorell.

The closing networking reception that evening gave participants another

Simon Goldsack, with Linda Hadar, both of HP, presented “What Makes Digital Intriguing to Brands” during the opening general session.

Mike D’Angelo, AICC Vice President, welcomed attendees to AICC’s first comprehensive conference on digital printing.

Digital Xperience set a new standard for AICC conferences.

opportunity to share their experiences with one another and leave with actionable ideas.

The following day, nearly 100 attendees participated in a tour of Sonoco Display & Packaging in Winston-Salem, N.C. AICC thanks the sponsors and supporters who made Digital Xperience possible: Poteet Printing Systems, HP Inc., Durst, Barberán Corrugated US, SUN Automation, ESKO, Complete

Design & Packaging, CompanyBox, and Sonoco Display & Packaging.

More information about upcoming AICC seminars and webinars can be found at www.aiccbox.org/calendar. Questions about seminars or webinars and the value a well-trained workforce brings to a company can be directed to Taryn Pyle, director of education and leadership development, at tpyle@aiccbox.org, or to Chelsea May, education and training manager, at cmay@aiccbox.org or 703-836-2422.

BOXSCORE www.aiccbox.org

13

Members Meeting

AICC Members Invest in Their Future

14

BOXSCORE May/June 2019

Photos courtesy of AICC.

A

ICC hosted nearly 700 people during the Spring Meeting, April 1–3, at the Trump National Doral in Miami. The meeting explored key economic indicators, succession planning, the impact of generations in the workforce, recruiting and retaining employees, and the latest innovations impacting the containerboard and paperboard markets.

The Sales & Customer Service Management Forum, a pre-conference two-day seminar, which began Sunday, March 31, was the first event to bring members together. Led by Wayne Millage of WM Investments LLC and Suzy Cummins of Next Gear Consulting, the first day taught sales managers how to build a strong team and identify trends, while the customer service managers focused on metrics and profitability. Day two brought the two camps together to explore strategic alignment between the departments and within their companies.

Monday, April 1, began with a tour of Atlas Packaging & Displays, a designer and manufacturer of custom corrugated packaging and point-of-purchase displays.

Their products range from die-cut corrugated to retail packaging to other specialty products.

Later that afternoon, moderator Kevin Ausburn, chairman and CEO, SMC Packaging Group, brought together: Mitch Klingher, CPA, partner, Klingher Nadler LLP; George Staphos, managing director, Bank of America Merrill Lynch; Matthew Poirier, director of trade policy, Canadian Manufacturers & Exporters (CME); and Ken Waghorne, vice president, global packaging paper, RISI. Each gave perspective on the future of the economy, which was relatively positive; the United States-Mexico-Canada

Nearly 700 people came together during the meeting to make new memories and learn about the industry.

Agreement (USMCA, “NAFTA 2”); and market forces that will impact AICC members in the coming years.

That afternoon also brought together 35 AICC Emerging Leaders (ELs) to learn how to generate creative leadership, shared vision, and alignment across a variety of skills and talents from Mark Houck, co-founder and president, The King’s Men. The ELs later enjoyed a night out in Wynwood, Miami’s trendiest neighborhood, where they experienced the graffiti art and toured Wynwood Brewing Company.

Keynote presentations offered inspiration and new ideas to attendees: • Scott Zimmer, generational expert and consultant, BridgeWorks, offered ideas about working together

across generations in “Bridging the Generational Gap.” • Jeff Skiles, co-pilot of U.S. Airways Flight 1549, shared his amazing experience and the role he played in the “Miracle on the Hudson.”

During the closing general session, AICC members also heard from a surprise visitor, Eric Trump, the second son of President Donald Trump, executive vice president of the Trump Organization, and founder of the Eric Trump Foundation. Trump shared his perspective on running a family business.

The meeting offered four workshop tracks to allow AICC members to gain insights into human resources, generations in the workplace, leadership transition, and supplier innovations.

Members Meeting

Human Resources Track SOLVE THE WORK SHORTAGE CRISIS – RECRUITING & RETAINING VETERANS

Justin Constantine, partner and chief business development officer, JobPath, debunked myths about veterans returning to the workforce, explained the military-civilian language barrier, and offered solutions designed to help companies attract veterans. JobPath, a new AICC member benefit, allows AICC members to post jobs on the JobPath portal, an innovative online community that helps companies connect with qualified veterans. Learn more at www.aiccbox.org/jobs.

Nearly 40 AICC Emerging Leaders enjoyed a night out in Wynwood—Miami’s trendiest neighborhood—where they experienced the graffiti art and toured Wynwood Brewing Company.

RECRUITING, RETAINING & RETIRING TOP-LEVEL EMPLOYEES

Joe Trybula, vice president, advisory services, Diversified Financial Advisors, helped AICC members translate their 401(k) plans into a recruitment and retention tool. He also discussed common practices and best practices of companies offering this benefit.

AICC recognized four member companies for reaching a significant anniversary this year.

Generations in the Workplace GENERATIONS & THE FUTURE OF THE WORKPL ACE

Zimmer offered seven tips on things that motivate millennials other than money, explained the importance of listening to the ideas of millennials and Generation Z, encouraged a flexible work environment, and stressed the importance of offering feedback with examples of how different generations tend to prefer receiving it.

HERE COMES GEN Z

Josh Miller, speaker and passionate advocate for Generation Z, XYZ University, explained that Gen Z will share many traits with baby boomers. Gen Z is

the first generation of the 21st century, and they came of age during the most disruptive decade of the last century.

Leadership Transition LEADERSHIP TRANSITION

Moderators Gene Marino, executive vice president, Rusken Packaging, and Terri-Lynn Levesque, office manager, Royal Containers, led the audience in a discussion with panelists David Callif, CEO of BCM Inks, Peter Moore, founder and CEO of Moore Packaging, and Neil Saunders, CEO of Container Graphics Corp., about their experience transitioning their successors into leadership roles in their companies.

DEVELOP A ROAD MAP FOR YOUR OWN LEADERSHIP

Marino and Levesque began again on the second day with the successors of day one’s leaders—Rob Callif, vice president of BCM Inks, Stephen Moore, director of corporate strategy at Moore Packaging, and Graham Saunders, vice president of business development at Container Graphics Corp.—to discuss their processes and lessons learned along the way.

Then, Jim Hensel, speaker, author, and transition coach, Mayhem Mindset, joined the conversation to help members create a “road map” for their own leadership transition plan.

BOXSCORE www.aiccbox.org

15

Members Meeting

Supplier Innovations AICC Associate members shared the latest machinery and nonmachinery innovations for the corrugated, folding carton, and rigid box industries.

MACHINERY INNOVATIONS

Presentations: • KOLBUS America: “KOLBUS AutoBox” • Samuel Strapping Packaging Systems: “All-New Unitizing System Engineered by Samuel” • Global Boxmachine LLC: “Super Alpha High-Speed High Graphics Flexo Folder Gluer” • SUN Automation Group: “Taking the Air Out: New Electric Ink Pump Ensures Lower Operating Costs” • EFI: “Unique White Ink in EFI Nozomi C18000 Single Pass Inkjet Printer for Corrugated” • Valco Melton: “Valco Melton/ ClearVision CartonChek Pro for Specialty Folder/Gluers and Folding Carton Folders” • CST Systems Inc.: “Duplex: Perfect Core Grip – Perfect Core Ejection – Every Time” • XDS Holdings Inc.: “AirBond A Double Backer Heat Transfer Upgrade” • Pamarco: “Increase Quality, Reduce Ink Consumption, Improve Efficiency” • A.G. Stacker Inc.: “Sample Quality Rejection”

Attendees were able to enjoy several networking events during the meeting, including a latenight mixer, an opening-night reception, networking lunch, and other eventing receptions.

• Advantzware: “Advantzware-Esko Full Integration” • EFI: “Streamlining Product Creation With the Corrugated Business System” • Amtech Software: “Smart Factory – Streamline Your Scheduling” • REISSCO Corp.: “Reinvent Your Business With Better Knowledge Management” Over the three days, more than 40 new members or first-time meeting attendees were treated to a special networking event and reception, as well as a breakfast, with AICC Ambassadors, seasoned AICC meeting attendees, to help them integrate into the AICC family and make the most of their meeting experience.

During the meeting, AICC also recognized members for safety and significant anniversaries:

NONMACHINERY INNOVATIONS

Presentations: • Tilia Labs: “ ‘AI’-CC or: How I Learned to Stop Worrying and Love Artificial Intelligence”

16

BOXSCORE May/June 2019

Independent Safe Shop Winners AICC recognized 14 member companies for outstanding performance in plant safety:

• Abbott-Action Inc., Attleboro, Mass.

• Akers Packaging Solutions Inc., Huntington, W.Va. • Akers Packaging Solutions Inc., Middletown, Ohio • Akers Packaging Solutions Inc., Oreana, Ill. • Alliance Sheets LLC, Bristol, Ind. • Arrow Box Company of St. Louis, Kirkwood, Mo. • Box-Board Products, Greensboro, N.C. • Buckeye Boxes Inc., Columbus, Ohio • Hoosier Container Inc., Richmond, Ind. • Jamestown Container Cleveland, Macedonia, Ohio • Jamestown Container, HP Neun Division, Lyons, N.Y. • Lawrence Paper Company, American Packaging Division, South Hutchinson, Kan. • McElroy Packaging Inc., Orrville, Ohio • Wunderlich Fibre Box Co., St. Louis, Mo.

Members Meeting

INDEPENDENTS’ CUP CHARITY GOLF TOURNAMENT The sixth Annual Independents’ Cup Charity Golf Tournament, with its largest turnout ever of more than 190 golfers, raised more than $100,000 in sponsorships from 54 member companies for the following charities: St. Jude Children’s Research Hospital; J. Richard Troll Memorial Scholarship Fund; and local charities Branches and Camillus House.

Golf Tournament Winners GOLDEN PALM COURSE

RED TIGER COURSE FIRST PLACE

CONTEST HOLE WINNERS

FIRST PLACE

CONTEST HOLE WINNERS

Ryan Clark, A.G. Stacker

Closest to the Pin, Hole 2: Tommy Bradford, Bradford Co.

Dave McBeth, Apex International

Closest to the Pin, Hole 7: Lee Tirey, Huston Patterson Printers

Warren Pearce, Proprint Services Tony Stewart, Chief Container Pat Szany, American Corrugated Machine SECOND PLACE

Tim Connell, A.G. Stacker Brant Dixon, A.G. Stacker Tom Lawrence, Sumter Packaging Gene Marino, Rusken Packaging THIRD PLACE

Jeff Abbott, Moore Packaging Serge Desgagnes, Kruger Packaging Michael Lafave, Kruger Packaging Stephen Moore, Moore Packaging

Closest to the Pin, Hole 6: Sam Kromberg, Royal Container Closest to the Pin, Hole 8: Jeff Fratus, BHS Corrugated

Eleazar Meza, Apex International Ken Ralton, Apex International Chris Rogers, Kao Collins SECOND PLACE

Closest to the Pin, Hole 9: Sarah Bertram, Complete Design & Packaging

Closest to the Pin, Hole 11: Warren Pearce, Proprint Services

Gregg Diethorn, Longreach International

Closest to the Pin, Hole 12: Andy Kramper, Arrow Box

Closest to the Pin, Hole 14: Koby Cox, Harris Packaging

Mike Gentry, Poteet Printing Systems

Closest to the Pin, Hole 16: Mike Lafave, Kruger Packaging

Troy Grubb, MaxPak

Closest to the Pin, Hole 15: Wolfram Verwuester, Durst Group

Longest Putt, Hole 18: Sam Kromberg, Royal Container

John Harris, Poteet Printing Systems THIRD PLACE

Closest to the Pin, Hole 17: Keith Reiter, Absolute Longest Putt, Hole 18: Chris Landing, APPI Energy

Phil Barrett, New England Sheets Jim Farmer, BW Papersystems Blake Pluemer, BW Papersystems Chris Richards, New England Sheets

BOXSCORE www.aiccbox.org

17

Members Meeting

AICC Member Milestone Recognition The Member Milestone program, started in 2017, was developed to honor the hard work and longevity of AICC member companies: • 80 years: Wertheimer Box Corp., McCook, Ill. • 60 years: Central Package & Display, Minneapolis, Minn.

• 60 years: Landaal Packaging Systems, Flint, Mich.

• 50 years: Cumberland Container, Monterey, Tenn.

The International Corrugated Packaging Foundation also honored Joseph R. Palmeri of Jamestown Container Cos. with the Circle of Distinguished Leaders Award.

Photos from the meeting can be found on AICC’s Facebook page, www.facebook.com/aiccbox. Meeting

attendees can request recordings of the general sessions by contacting Laura Mihalick at 703-836-2422 or lmihalick@ aiccbox.org.

The AICC 2019 Annual Meeting & Independent Packaging Design Competition will be held September 16–18, 2019, at the Westin Harbour Castle Hotel in Toronto. Registration for the annual meeting will open in June.

THANK YOU, SPONSORS! INDEPENDENTS’ CUP GOLF TOURNAMENT SPONSORS

A.G. Stacker Akers Alliance Machine Alliance Sheet American Corrugated Machine Apex International Atlantic Packaging Products Bay Cities BCM Inks Bobst Bradford Co. BW Papersystems C&M Conveyor

Carolina Container Cascades Cascades Sonoco Cauthorne Paper Co. Dicar Dusobox EAM Mosca EMBA Machinery Engineered Recycling Equipment Finance Corp.

Flint Group Fosber Göpfert Machinery

Haire Group Hood Hood Container Hycorr ISOWA Jamestown Container Cos. JB Machinery Johnson, Kendall & Johnson Kao Collins Kemi Art Lewisburg Printing Co. Litho Press McLean Packaging

Pamarco Philipp Lithographing Poteet Printing Systems Royal Container Rusken Packaging SAPPI Schwarz Standard Printing Co. StandFast Packaging Vanguard Packaging Wasatch

Anilox Roll Clean Baumer hhs Durst US EFI Emmeci Hycorr/Kolbus PPC Technologies & Solutions

Hospitality Sponsors Flint Group Oklahoma Interpak WestRock Technology Sponsors Baumer hhs MHI

Visibility Sponsors Bay Cities Huston Patterson Koenig & Bauer Stafford Corrugated Products

MEETING SPONSORS

Premier Sponsors HP Poteet Printing Systems SUN Automation Group Networking Sponsors Alliance Machine Systems

AICC also thanks the many other companies that supported the meeting through their generous contributions.

18

BOXSCORE May/June 2019

Emerging Leader

2019

Chairman’s Fieldtrip July 17-19 Cleveland, OH

Plant Tours

Training

Standard Printing Company

Learn to engage legislators at all levels.

Jamestown Container

Open to all AICC Emerging Leaders

Register Now AICCbox.org/calendar

Ask Ralph

Containerboard Manufacturing Moving From China to India

BY RALPH YOUNG

W

ith the enactment of the National Sword Program by the Chinese government, which places limitations on recyclable materials, and the countervailing tariffs with the United States, the movement of old corrugated containers (OCC) and mixed office waste is now about 6–7 million tons per year, compared to a high of nearly 30 million in 2015. China has grown tired of the nonfiber material in our bales, is trying to energize its own internal collection systems, and is known as the major ocean polluter of plastic. Seven of the 10 worst rivers for ocean waste flow through China.

So, as the largest global producer and largest economy, China’s internal containerboard manufacturers scramble to feed their almost 100 percent recovered fiber system, looking to move both pulp and container­ board production to other countries. Nine Dragons, an AICC Associate Member as ND Paper, the largest containerboard producer in China, has made four domestic acquisitions here in the U.S. One mill in Biron, Wis., is scheduled to manufacture low-basis-weight board starting in the fourth quarter of 2019. China is only one of five foreign countries that has ownership of American containerboard manufacturing.

We are not isolated from overseas interest in domestic papermaking and corrugated converting. This particular mill will probably sell its output into the open market, since they have no downstream box plants.

It is not in an ideal location from which to export back to China.

On a very recent note, Nine Dragons has signed a memorandum of understanding to invest $625 million in a board mill in the Indian state of Maharashtra. This

state includes the city of Mumbai and is located on the west central coast, serviced by the Arabian Sea. The site would be close to inland ports and a major north-south highway. Asia Pulp and Paper has also announced a 5 million-metric-ton complex.

Both could be fed with American recovered papers, which could shore up prices that have slipped severely over the last 18 months. The virgin pulp for this will come from Indonesia and not from local forests.

We have had Matt Elhardt, senior vice president, business development North America and corporate strategy, Fisher International Inc., speak at our national meetings, so it comes as no surprise that we are invited on occasion to their webinars. Urban Lundberg delivered the one

titled “Is India the Next China?” (You can view the presentation at http://bit.ly/ fisheri. Fisher desires the recognition for most of the content.) The simple answer is, not likely! However, the paper packaging grades to feed China’s domestic and export needs must come from somewhere.

India has the world’s second-largest economy now, between China and the U.S., and its population is forecast to surpass China’s by 2024. India’s per capita consumption of paper at 13 kilograms per year is a far cry from China’s 74 and the United States’ 229. While its GDP per capita is growing, its paper capacity is not.

Time for foreign investment? India still maintains a 65 percent rural population, while the U.S. is at 18 percent.

BOXSCORE www.aiccbox.org

21

Ask Ralph

India has not imposed stricter environmental requirements on the many old, small, inefficient producers that continue to operate. Their ownership of paper mills is absolutely opposite of the U.S. situation: 80 percent of the mills are independently owned and are relatively small—most under 150,000 metric tons a year. More than half are more than 30 years old, while half of China’s were built in the last 10 years. They do not have pine plantations as we do. Domestic fiber produces only about half their needs.

Other nonsoftwood fibers are used, such as sugar cane, straw, and bamboo, including eucalyptus as hardwood.

India certainly has benefited from lower-​cost OCC and mixed papers, as China has pushed supply up and demand down. This imported raw material stays close to the coast, where freshwater supplies and infrastructure are better than in the interior. The only U.S. companies that have investments there—and small ones—are WestRock and International Paper. The current state of the industry is highly fragmented, with small mills and outdated technology.

So, India will need to become the new China, but without the central government top-down push for industrial production. It has to have a national plan

to attract foreign investment and draw recovered papers from the U.S. so that we do not have to continue landfilling or using waste-to-energy options. Stay tuned! Have questions? Ask at www. aiccexperts.org.

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.

t h e p er fe c t b ox

DELIVER THE PERFECT BOX TM

DISCOVER HOW http://bit.ly/2iU3fJ4

BoxChek7 MAKES QUALITY, VISIBLE TM

BoxChek7TM offers a host of quality inspection tools:

CC GlueChek

RC

CodeChek ScoreChek RegChek

BC gC GapChek

Adhesive Dispensing & Quality Inspection Systems World HQ: +1.513.874.6550 | ask@valcomelton.com

22

BOXSCORE May/June 2019

Ask Tom

Taking the Packaging Industry to New Heights (or Is It Highs?)

BY TOM WEBER

B

y correctly choosing the best cannabis packaging types to match your client’s specific product, you can present your unique offerings in protective, dynamic, and eye-catching corrugated or folding carton packaging with various inserts, while adhering to all necessary and ever-changing regulations.

If You’ve Already Planned Your Cannabis Packaging Strategy It should be easy for you to decide on what type of cannabis packaging will best protect and carry the brand forward for your newest clients.

It’s important to review packaging options with your clients to detail any pros and cons of your chosen blend of primary and secondary packaging. Your choice would ideally be the maximum among: product protection, cost-effectiveness, ease of use, shelf presence, handling and shipping environment, and corporate philosophy, if your client is particular about the sustainability aspects of your particular cannabis packaging.

Matching Packaging to Your New Clients’ Cannabis Product(s) Our greatest efforts should include choosing and creating cannabis packaging that is perfectly suited for your clients’ needs. This means that your chosen cannabis packaging types should be more than ready and competent in addressing their product market needs and preventing any shelf-life, quality, and structural damage issues. These are, in many cases, new clients with new businesses and very limited experience with our beloved industry.

24

BOXSCORE May/June 2019

Types of Cannabis Packaging Styles

cracked containers will be highly prone to contamination.

RIGID CANNABIS PACK AGING

This type of packaging is defined as any container with unyielding structure, hard packaging made of material such as glass and metal. When it comes to product value perception, any container that is solid and heavier than other containers is viewed as premium, not disposable.

Pros of Rigid Cannabis Packaging

• Hard material provides the marijuana product with excellent mechanical protection. This is of utmost importance, especially with cannabis flowers, to prevent the heads from getting crushed and subsequently increasing the oxidation rate.

• It holds its form well, which makes for a consistent packaging presentation.

• It’s inert and, therefore, a safe choice.

• Most rigid container materials are made of completely nonporous material, are easy to clean, and are hygienic, which allows for a longer shelf life of its contents.

Cons of Rigid Cannabis Packaging

• Depending on where you are, some rigid containers (naturally clear) may need to be packaged in an additional exit bag due to regulations disallowing transparent packaging.

• Especially with oils and concentrates, accessibility can be a problem depending on the container’s shape, and it can be difficult for customers to get every last bit of product.

• Some rigid materials, such as glass, can break or shatter easily, and

SEMI-RIGID CANNABIS PACK AGING

This type of packaging is defined as any container that has some structural give and holds its form unless a moderate amount of pressure is exerted on it. These packages are neither rigid nor flexible.

They are made of material such as folding cartons, corrugated boxes, paper tubes, thermoformed plastic tubes, clamshell containers, and plastic cups with lidding.

Pros of Semi-Rigid Cannabis Packaging

• They are highly cost-effective and easy and quick to produce.

• They are a lot lighter than rigid containers, making transport and storage cheaper. Many styles ship in a knocked-down fashion.

• Some semi-rigid materials are easy to mold, allowing customization options for your brand and type of product.

• Containers of this material are tough yet flexible, have good transparency for cannabis product viewing, and usually come in high gloss for a great commercial marketing esthetic.

• These don’t really break, shatter, or tear, so they’re hardy against handling and wear and tear.

Cons of Semi-Rigid Cannabis Packaging

• Most semi-rigid containers can scratch easily if not properly handled, leading to an unprofessional presentation.

• Unlike rigid containers, most of these are plastic and can degrade quality— watch out for old inventory.

Ask Tom

• Plastics can yellow over time and create visual distortion.

• Some semi-rigid containers aren’t easy to recycle, and some consumers regard these containers as pollutants.

• Specific materials are flammable, especially if stored near solvents and oils.

• There are many customization options available to further increase a flexible container’s ease of use for customer handling, as well as for branding purposes (e.g., tear notches, hang holes, degassing valve, adding clear windows on an opaque body, etc.)

Cons of Flexible Cannabis Packaging

FLEXIBLE CANNABIS PACK AGING

This type of packaging is made of material that is yieldable. When filled and sealed, flexible containers may change in shape.

Examples of these containers include bags, pouches, envelopes, sachets, or wraps, made of paper, plastic film, aluminum, or a combination of these (usually ranging from 13 to 75 micrometers in thickness).

Pros of Flexible Cannabis Packaging

• These are widely and readily available.

• Parchment paper is the most ideal for concentrates because it has a silicone surface that oils won’t stick to.

• They are flexible, and breakage and consequent contamination aren’t serious concerns.

• They’re ergonomic and easy to handle and manipulate. These are perfect for shelf display, as they can fit closely around the product/contents and take little extra, unnecessary space in storage and transport and on the shelf.

• Flexible packages are relatively lightweight, stack easily in storage, and are cheaper to ship than other rigid or semi-rigid containers, for less complicated shipping protocols.

• They’re recyclable and reusable.

• These have excellent printing capabilities—flexible materials can have prints on them, instead of purchasing separate product labels.

• If purchasing lower-quality flexible containers, these will be thinner and will be prone to tampering and puncture during transport and handling.

• Depending on the cannabis product, some flexible containers can be used only for packaging cannabis concentrates and won’t be adequate for most cannabis product formats.

General Reminders Before Executing Your Strategy • A few of the oils produced by cannabis, such as limonene, can dissolve certain plastics. The resulting residue is deposited on the cannabis product itself. Make certain any inserts you may be considering will withstand the many oils generated by these plants.

• Hard plastic, especially when utilized as an insert, is quite inert and a safer storage choice, particularly when used within corrugated or folding cartons.

• You don’t want your client to package cannabis flowers in flexible containers (except for stand-up pouches) because of the risk of flowers and trichomes being crushed. This can be mitigated by utilizing a bag-in-a-box approach.

• You may have a client who wants to package dried cannabis flowers in airtight containers. When dried marijuana drops to minus 7 percent water content, volatile terpene oils

follow, and the once-quality product loses some of its potency. This may not be a place for corrugated or folding cartons currently, unless the airtight container is inserted for shelf presence and marketing purposes.

• Rigid containers provide excellent protection to dried and delicate cannabis flowers. These may require an added label, insert, or outer wrap paperboard sleeve for decoration.

• Vacuum packaging marijuana flowers in mylar bags is another common way for your clients to package product, as long as both the container and product have safe anaerobic bacteria levels. These bags can then be packaged into a folding carton with an additional point-of-purchase display for maximum marketing effect.

• To lengthen the shelf life of cannabis edibles, you may consider adding small desiccant packs tipped into your packaging style to continuously wick any moisture away from the product.

We hope this summary has been helpful to you as you finalize packaging for your unique cannabis clients. When in doubt, remember that discussing your best options with us, AICC, is still one way to go before manufacturing your packaging to serve one of the newest—and possibly largest—breakout markets to come into the packaging sector in the past two or three decades. Visit www.aiccexperts.org to ask your questions.

Tom Weber is folding carton advisor for AICC. Do you have any questions?

Ask Tom at 440-221-3103 or tweber@aiccbox.org.

BOXSCORE www.aiccbox.org

25

Selling Today

Five Reasons Why Most Lead Generation Efforts Fail

BY TODD M. ZIELINSKI AND LISA BENSON

Y

ou’re in business to make money. To make money, you need customers.

To get customers, you need to convert qualified opportunities, and to get qualified opportunities, you need to start with leads. Generating the right type of lead that converts to a required sales volume is a complex process that creates struggle for many.

If you are struggling with lead generation, you are not alone. In a survey of B2B marketers (Technology Marketing), 80 percent of respondents reported that their lead generation efforts are only slightly or somewhat effective.

Why are so many lead generation efforts failing? We see many of the same issues come up over and over with companies, so we are sharing the top five reasons to which we attribute failed lead generation efforts.

Lead Generation Is Viewed as an Activity, Not a Long-Term Strategy Many companies look at lead generation as an activity or project, when in fact, it should be viewed, planned for, and executed as a long-term business strategy.

It takes planning, investment, and most importantly, patience. To be successful, a lead generation strategy needs the same commitment level that would be given to other business activities, such as implementing an ERP system, changing your operation to lean manufacturing, or rolling out Six Sigma.

A successful lead generation program starts with goals, but more than that, it is an integrated plan with supporting processes and technology to measure, monitor, and track your return. It is

26

BOXSCORE May/June 2019

consistent, and it is continually running, being monitored, and course-corrected when required.

Lead Generation Activities Are Assigned to a Salesperson, Intern, or Telemarketing Firm There is a misconception that lead generation should be done by the sales team. They are already on the payroll, so the thought process is “why not?”

However, if you look at the sales funnel, the salesperson’s job is at the end of the funnel—building relationships with fully qualified prospects and closing the sale.

All the activities higher up the funnel, the lead generation and nurturing activities, should be performed by a team with the right skill set for each activity.

Many salespeople are not “hunters.”

They may be great account managers and may be customer-driven, but many have a fear of picking up the phone and lack the skill set needed to be a successful hunter.

Using your salespeople for lead generation is especially troublesome if you lack structure and process around your lead gen activities. Their efficiency levels will tank if they are spending valuable time chasing down “leads” that aren’t good.

Selling Today

Companies Have Muddled or Vague Ideas on How to Reach Sales Goals We have had companies tell us that they need X number of leads a month. Our questions are “why?” followed by “how did you get to that number?” Part of the planning stage for lead generation is mapping out your goals, starting with desired revenue growth. How many sales do you need to reach that goal? What is the conversion rate at each stage—initial contact, meeting, RFQ, etc. How long is your sales cycle? Do you currently track this data, and are your conversion rates accurate? This is assuming that you are targeting the right types of opportunities.

And they do see increased website traffic and engagement. But how many are viable? Outbound marketing can be very effective if it’s done right. The problem is, most of the time it lacks the strategy and processes to make it useful.

In the previously mentioned survey, 68 percent reported that their highest lead generation priority was to increase lead quality. This is a big challenge for many; 59 percent of the respondents indicated that generating high-quality leads is their biggest challenge. Many don’t know how to go about increasing the lead quality because, not surprisingly, 37 percent of the respondents think their biggest challenge is generating a high lead volume.

Many marketing efforts fail at bringing in high-quality leads, so the thinking is that you need to throw a wider net to capture them. This is the opposite of what should be done.

One of the reasons why companies want a high influx of leads is because they don’t have a clear picture of whom they should be targeting. Effective target market profiling—dialing in on the right targets—will increase the efficiency of your lead generation process, resulting in a lower number of leads required to reach your goals. It is better to have five prospects a month who meet your requirements for spend, company size, location, etc., than to have 100 prospects that you know nothing about. How much time will you spend on those 100?

There Is an Inaccurate Idea That More Leads Mean More Sales Another misconception is that more leads will bring more sales. Many companies turn to outbound marketing and SEO tactics to draw leads to their websites.

Nobody Is Following Up or Nurturing Leads Through the Pipeline Not enough can be said about follow-up.

Failing to follow up with leads can be costing your company revenue. When you have a meeting or a call with a lead,

Using an intern or another entry-level employee to do lead generation may seem like a great idea, but there are high burnout and turnover rates among this group. Plus, they lack the experience and the skill set to do it properly.

Some companies consider hiring a telemarketing company to make calls on their behalf. First, a successful lead generation strategy goes beyond making calls. Second, telemarketing firms tend to take on all different types of businesses.

How well will they know your industry?

Do they understand your products and services? Do you feel comfortable having them represent you? What is the quality of the leads they are providing to you?

How much time will you waste on leads that don’t fit or go anywhere?

28

BOXSCORE May/June 2019

leave knowing the next steps, and follow up. For example, if you didn’t get the RFQ when it was expected, call the contact and find out why. Sometimes people get busy and need a reminder. If someone says to call them back in three months, call them back in three months.

Follow-up should be made a priority in your lead generation strategy.

If a prospect says that they aren’t ready to buy, whether they are in a contract with another vendor or they just don’t have a need today, keep in touch with them. Nurturing prospects through the sale process is critical. You want your company to be first to mind when they do have a need.

Are Your Lead Generation Efforts Failing?

If your lead generation efforts are failing, a white paper we’ve developed may be helpful, titled “Implementing a Marketing Infrastructure: Internal Versus Outsourcing.” It provides the components for a successful front-end marketing and sales infrastructure, as well as items to consider. Contact Todd Zielinski at tzielinksi@athenaswc.com to request it.

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

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

KLS 924io

The Ultimate Partnership KL, Shinko & Global Now you can have High Quality Inside/Outside Printing at High Speeds with the New KLS 924 Flexo Folder Gluer.

3180 MacArthur Blvd. Northbrook, Illinois 60062 847-949-5900 www.boxmachine.com

Tackling Trends

The Shape of Things to Come

BY JOHN CLARK

S

imple geometric shapes are some of the very first things we learn as a child. The enclosed space of a square or rectangle represents safety and protection, while a circle represents harmony and completion. A simple triangle pointing up represents direction and power, but the same triangle pointed down represents instability and caution.

When driving, you do not need to read the word “stop” when approaching an intersection with a red octagonal sign, nor do you have to think hard about a warning message conveyed by an inverted triangle. Shape conveys a message. Companies spend untold dollars on advertising to burn certain shapes into our minds. Two golden arches do not make anyone think of pizza.

The Function of Color Even the choice of color sends a subliminal message to the consumer. Deep in our psyche is an innate response to different parts of the color spectrum. White conveys purity but not deep emotions, while a red dress conveys something quite different. Yellow hints of caution, and blue

30

BOXSCORE May/June 2019

portrays trust and serenity. It comes as no surprise that no company sells laundry detergent packaged in a black container.

Color can also create an identity.

Shamrocks proliferate as St. Patrick’s Day approaches, and red stockings proliferate before Christmas. The color and the shape control the message. The same shamrock printed purple in July would be nothing but confusing, whatever the intended message may be.

Digital Origami In Japanese culture, the ability to fold and shape sheets of paper into a work of art is called origami. The earliest record of the skill was not until the early 1800s, though it’s thought the art form had been practiced for some time previous.

Origami introduced esthetics and beauty to a seemingly neutral product. The beauty was in the shape, not augmented by drawn images or use of colors.

Today’s packaging industry exists in a world where the complexity of origami is being married to the full spectrum of colors. In-house ink kitchens allow for small batches of flexographic inks to be

produced to meet the needs of conventional converting, while new generations of digital printers allow boutique quantities to be produced quickly and economically, with the added benefit of nearly infinite customization.

Advanced folding and joining machines can create shapes thought impossible not so many years ago. The presence of high-speed die cutters and plotters allows the design and manufacture of styles and in quantities that would have been previously cost-prohibitive.

The world of packaging solutions is entering a new and exciting era in which these three key elements of packaging design can be produced in quantities ranging from those suited to boutique storefronts to nationwide rollouts. New shapes, new colors, and new solutions are out there waiting to be discovered.

John Clark is director of analytics at Amtech Software. He can be reached at jclark@ amtechsoftware.com.

Some lending partners are more business minded than others.

Grow your business with equipment financing solutions designed specifically for the corrugated industry*. With deep industry experience and responsive service, the People’s Capital and Leasing Corporation team provides individualized equipment finance and specialized lending solutions that support the goals of growing businesses nationwide.

Our commitment doesn’t end on the day your loan is signed—we are your lender and partner for the duration, so your team receives ongoing service from those they know and trust.

Equipment Financing Solutions

*Application and credit approval required. ©2018 People’s United Bank, N.A. | Member FDIC

Tom Davies, Senior Vice President (203) 338-6412 Thomas.davies@peoples.com

Andragogy

Balancing Logic and Emotion

T

he business of corrugated fiberboard is inherently logical. Much of the work is mathematical—at the corrugator, in the design department, in diemaking—it’s math, measurements, and precision. Even the converting process is timed. Boxes are folded and glued in a mechanical order that needs to be engineered from the start. Customers require a specific order quantity, specific geometry, specific ECT, pricing, even commission. But for more than a century, brown boxes did not have to serve as a shopper-facing commodity— until recently.

The brown box is no longer an afterthought. Now, a significant number of consumers see traditional retail goods for the first time, at their doorstep, in a brown box! Instead of standing out on the shelf, packages need to perform at home. Customers are holding corrugated packaging to the same high expectations as they do a paperboard carton in retail.

E-commerce packaging needs to arrive undamaged, be frustration-free, manage waste (curbside recyclable or returnable), facilitate brand equity, and ideally offer a unique experience (custom decoration and/or structure). Each of these factors impacts consumer perception and repurpose intent. Corrugated board still retains its logical and mathematical roots, but it now lives in the consumer’s world, full of emotion.

How does the customer feel during that first unboxing experience—the moment you have engineered down to the specific fiber? The resulting emotion sets a strong precedent for the relationship the buyer will have with the brand. I speculate this is one of the fundamental reasons for

32

BOXSCORE May/June 2019

Apple’s impressive packaging. The tight tolerances engineered to facilitate the slow release when you open an Apple product build anticipation and generate excitement.

That attention to the packaging quality automatically creates a positive preconception of the product quality and forms a deeper connection between the brand and the user. With Apple setting a now iconic precedent on emotion-based packaging—right up there with Tiffany & Co.’s Little Blue Box—let’s think for a moment on how this applies to the logical (versus emotional) world of corrugated fiberboard. Quite simply, e-commerce is providing corrugated packaging a spotlight like never before.

So, where do you go from here? How do you create a positive emotional experience for your customer? Just as there is an ECT calculator, there are tools to measure a consumer’s emotional response to an experience, such as opening your box. My research team recruits a targeted audience, presents them with relevant packaging, and measures facial expressions at 30 times per second. Seven emotions are captured: joy, surprise, fear, disgust, contempt, anger, and sadness.

My team and I have been doing research like this for several years; as technology advances, so do our process and efficiency. I’ve been able to observe, participate in, and play the active role of everyday consumer as our corrugated

Photo courtesy of Package InSight.

BY R. ANDREW HURLEY, PH.D.

packaging industry has changed in terms of use, consumption, and expectations.

What I’ve taken note of is a few brands and packaging providers that have made some serious investments in time and thought around the customer’s perception of corrugated boxes and specific ways end users interact with their packaged products. If this is something you are considering, review this white paper on a Seaman Paper Co. study executed last year (www.packageinsight.com/ using-decorative-tissue-in-ecommerce). The premise, process, and findings are directly applicable to AICC’s membership as we navigate changing expectations.

There has never been a better time to be in the corrugated industry. Take advantage of it. On your next project, consider balancing your traditional logical preparation with some emotional insights.

R. Andrew Hurley, Ph.D., is an associate professor of packaging science at Clemson University. He can be reached at me@ drandrewhurley.com.

Leadership

The Importance of Mentoring

BY SCOTT ELLIS, ED.D.

A

few years ago, I was walking the floor of AICC/TAPPI SuperCorrExpo—a huge packaging industry trade fair—with my friend and sometime co-worker David Levy. As we strolled along the aisles in deep conversation, we were approached at different times by four or five 50-something-yearold men from diverse backgrounds. There was a common thread to the interaction.

They all advanced with unsophisticated enthusiasm to say, “Dave Levy! Sorry, I have to interrupt. How long has it been?

You know I use things I learned from you every day. [Turning to me:] Let me tell you about what this guy did for me. …”

For some, he was their manager at Union Camp; for others, he was a coach or just the guy they called when they didn’t know what to do. He shared his wisdom and experience, but what they all had in common was gratitude for his time and attention. And in this way, I would count myself among them.

Today there is a prominent need for mentors, as the workforce has become bimodal. There are boomers at all levels of our companies who have knowledge and experience to share with the millennials who make up the other large group.

Please treat this article as a call to all generations to share their knowledge and experience through the various forms of mentorship. Some boomers are reticent to share knowledge based on the job security they believe they hold by hoarding it.

Others are unaware that anyone would be interested if they were willing to mentor.

The good news, from my experience, is that a trait common to millennials is their willingness to ask questions and their attention to the answers. This is refreshing to me, a late boomer, who

34

BOXSCORE May/June 2019

believed that if I did not know something, I should quietly go and do my pre-Google research on my own.

No matter your age, there is someone who can benefit from the time and knowledge that you possess. Mentoring is an important role, among the many you play.

The first question to ask yourself as you prepare is whether you have the bandwidth to give this relationship the priority and time allowance that it will require. While most mentoring relationships do not take more than a couple of hours per month, it is vital that it be a priority in your schedule.

If you think back to your own experience as a mentee, you will likely be grateful for many things, and the expense of the mentor’s time will be high on the list.

Those who make themselves available to mentor often choose to focus on a short-term basis regarding a particular topic. Others are open to a longer-term mentorship focused on career development. The key here is to be on the same page with the mentee. For this reason, I have assembled a structure of sorts to guide either party through the formation of a mentoring relationship. The structure is there to help set expectations, including having less structure, and prompts the parties to consider and discuss subjects that may otherwise be difficult to broach.

Finding the Right Match A short exploratory meeting, whether in person or online, has proven to help many mentorships get off to the right start. This is a two-way interview. Discuss the area in which they desire mentoring, as well as the possible duration. Be open about either of you having the freedom to decide not to move forward following the conclusion of the meeting. If there is a better match for the person and their goals, then make the introduction and explore that option.

Setting Expectations Consider these first meeting essentials to create an agreement that will guide your progress. My preference is to ask an open-ended question, “What’s your story?”

This allows people to talk about what is most important to them. I also answer the question myself. Next, set preliminary goals. Based on these, you will be able to determine a reasonable duration of the mentorship. This is a good time to discuss your preferred method of communication between meetings, being honest about how much time you have budgeted for mentoring. Decide how often you will meet. Finally, set a date on which you will evaluate progress and decide whether to continue.

E N I L N O E FRE

EDUCATION

S R E B CC MEM

I A L L A FOR

• Maintenance Mapping • 18 Ways to Sell Value • Metal Packaging • Achieving Higher Levels of Productivity • Navigating Time: Time Management for the Job • Better Printing Shop • Build a Visual Workplace with 7S • OEE for the Packaging Industry • Communication for Coaches • Optimizing the Flexographic Printing Process • Conceptos Basicos de Corrugado • Package Printing • Corrugated Basics- English and Spanish • Packaging Design Workflow • Corrugated Containers Fundamentals • Packaging Foundations • Delegation DIY • Packaging Production Math • Distribution • Packaging Regulations • Essential Principles of Water-Based Flexo Inks • Faster, Better, Smarter with Value Stream Maps • Paperboard Cartons • Preventative Maintenance Optimization • Fingerprinting the Flexographic Press • Project Planning: MAPP the project for Success • Flexographic Print Fundamentals • Safety Basics • Flexographic Print Plates • Setup Reduction • Fundamentos de Seguridad • Standardized Work • Glass Packaging • Go Team! How to Make Your Team More Productive• Sustainable Packaging • The Corrugator • How to Spec a Corrugated Box • Understanding Accounts Receivable and Cash • Internal Staff Development Guide • Understanding Anilox Rolls • Introduction to Polymers • Keeping Score: How to Read Financial Statements • Understanding Combined Board Combinations • Warp, and How to Control It • Machinery

AICCBOX.ORG/PACKAGINGSCHOOL

Leadership

Use Available Resources A mentor is intended to be an advisor, a coach, or a sounding board. There should not be an expectation that the mentor is a one-stop shop for resources. Brainstorm with your mentee about courses and experiences that would equip them to reach their goals. They may need to increase their technical skill, their supervisory prowess, or their emotional intelligence. They may benefit from attending a class or visiting other companies like yours. There are many such resources to be found in AICC’s Packaging School or in your community. A

custom education track form is available at www.aiccbox.org to assist you. Your time, knowledge, honest feedback, and encouragement will leave a lasting impression on an individual. Get good at it, like Dave, and you may leave a legacy.

Ellis recently completed the AICC Packaging School course Mentoring Best Practices. To learn more about this course and other free online education opportunities, visit www. aiccbox.org/packagingschool.

Scott Ellis, Ed.D., provides the brutal facts with a kind and actionable delivery when a leader, a team, or a company needs an objective, data-based assessment of the current state of operations and culture. Training, coaching, and resources develop the ability to eliminate obstacles and sustain more effective and profitable results. Working Well exists to get you unstuck and accelerate effective work. He can be reached at 425-985-8508 or scott@workingwell.bz.

What’s Missing in your Quality Solution Glue Application | Detection | Quality Assurance Solutions for Specialty Folder Gluers www.whleary.com/corrugated-specialty-folder-gluer

36

BOXSCORE May/June 2019

Lead the Way AICC Advisory Groups

CEO Advisory Group Communicating with fellow CEOs to achieve higher levels of leadership, cultural, and operational excellence.

Leadership Advisory Group Connect with peers and learn how others implement solutions to the problems you face everyday.

Production Leader Advisory Group Share of best practices for the advancement of your company’s success, productivity, and for your career development.

AICCbox.org

From FLEXO

Uniform Print: Keeping Folding Carton Operations on the Right Track

BY GREG WISHON

T

hanks to their lightweight nature, folding cartons are witnessing an increased customer demand globally.

This means quality assurance is not only important for the physical carton, but also for the final package print.

To address this growth and meet demand, printers are looking at multisite

38

BOXSCORE May/June 2019

printing operations. In such a multisite operation, a critical challenge comes into play: print consistency.

Ready to set about tackling the issue and gaining control? Let’s examine the criteria to ensure a uniform print, as well as the variables in the print package allowing a printer to gain this consistency.

Outlined here are key areas to watch for to ensure you are on the right track for folding cartons.

Design Considerations Consistency is the key word here, meaning work closely with your designers and suppliers to develop good,

repeatable artwork that can be printed to your specifications.

Some things to consider with artwork for folding cartons include: • Keeping ink coverage to a minimum to keep screens open and print clean.

• Watching for moiré in screening more than CMYK. Some designs tend to have many colors that overlap screens and won’t be visible until print reproduction.

• Reviewing all components within the artwork to ensure they meet the specifications set by the printer (minimum dots, blends, images, text, bar codes, etc.).

• Combo plates (images with large solids with minimum dots all on the same plate) that can be difficult to reproduce, and special screening may need to be applied to the flexo plate.

• The Flexographic Technical Association’s (FTA) Flexographic Image Reproduction Specifications & Tolerances (FIRST) 6.0 has a very comprehensive and detailed design guide you can download for free and follow for artwork elements. Download it at www.flexography.org/first.

Screening Screening of the plate image has drastically changed over the years, and there are now many different options. Currently: • The most widely used screening in folding carton is circular, in which the dots maintain a round/circular shape in the entire halftone.

• Most folding carton printers are running between 120 lpi and 150 lpi for solid bleached sulphate (SBS) board.

Measuring is key! Have a system in place to manage and monitor print density, dot gain, ink pH, and ink viscosity.

• Hybrid screening is also a common way to keep the highlight dots from having a harsh tone break when transitioning off to zero (white).

• In the last few years, companies have been testing and using flat-top dot technology, along with screening modifications to the surface of the plate, to create improved surface ink transfer to the paper. This has been widely used in flexible packaging with film substrates, but not as widely used in printing on paper substrates.

• Surface screening utilizes higher-​ resolution images (high-definition imaging at greater than 4,000 ppi) to create the patterns on the surface of the plate. You will need to test and validate surface modification techniques based on your anilox and ink system.

Plate Materials Selecting the best possible plate for paper substrates is a never-ending discussion among printers. It’s important to understand that paper materials have varied ink absorption, coatings, and textures.

It is critical to monitor substrates throughout the press run. Pay close attention to the amount of ink carried to the plate and the amount of latitude you have when impressing the plate to the substrate.

For folding carton paper substrates: • There is a decent amount of absorption needed for the paper stock to impress a good, solid image.

• A medium durometer (58-65 Shore A) plate works very well.

• Plate thickness will generally be determined by initial plate undercut of the cylinder/sleeve. The most common plate thicknesses in the folding carton segment are between 0.045 inches and 0.067 inches.

• Photopolymer plate relief specifications will vary based on substrate, plate thickness, and type of material.

• FTA recommends a relief thickness between 0.018 inches and 0.022 inches for folding carton printing on SBS. • It is important to work closely with your plate manufacturers for the tolerances recommended and to use what works best in your environment for the specific type of plate.

• Newer plate materials with flat-top dot technology are now in use to get a more even surface area, to increase ink density, and to improve ink transfer. This is being driven primarily by increased press speeds and demand for higher line screen graphics.

Plate Processing and Storage Plate imaging is a critical process. For optimal registration and consistency,

BOXSCORE www.aiccbox.org

39

From FLEXO

Work closely with your designers and suppliers to develop good, repeatable artwork that can be printed to your specifications. it’s best to image all plates in the same direction on a digital imager. Optimize your plate room to enhance your exposure, processing, handling, cleaning, and storage variables. Prolonged exposure to UV light or the environment can lead to poor plate longevity, higher dot gain, and decreased density.

When it comes to storage, plates should be cleaned with a compatible plate cleaner, dried properly, and light-protected after each press run. Storing plates in an area with high UV nonfiltered lighting will reduce shelf life and reusability.

Sleeves The majority of the folding carton business requires a larger repeat sleeve and sleeve width. It is critical that print sleeves be consistent in TIR (total indicated runout) and have even surfaces. Your sleeve supplier can provide you with a certificate of analysis. Also, if you see a print void in the sleeve, it could have a low spot, which may indicate the sleeve has been damaged. Most damage is visible, but some can hide inside the sleeve.

Print sleeves for folding cartons come in various materials, including fiberglass

40

BOXSCORE May/June 2019

composite, urethane, and nickel (thin).

There are also cushion sleeves available for special applications.

Sleeve manufacturers have been working to reduce the overall weight of larger sleeves by improving raw materials in order to make them more durable and lighter. In addition, there are sleeve-​ handling systems to assist operators and virtually eliminate handling. Consult with your sleeve manufacturers to determine what type of sleeve will work best for your facility.

Mounting Tape When selecting an optimal cushion/plate combination, you will want to use the firmest tape possible that offers the least amount of impression, without influencing dot gain and print slur.

This will enhance plate longevity and prevent failure on long press runs. In addition, it is important to optimize the cylinder and plate-size adhesion to prevent plates from lifting on edges or allowing air bubbles to form during the run. These factors are all very common in folding carton printing.

Inks Water-based inks are more common in folding carton printing; viscosity and pH are key to consistency on paper, along with print sequence.

Print sequence is generally dark to light, improving the wet trapping of the yellow ink. Automatic ink pH/viscosity control systems work to improve management during runs. Inks also need to be filtered due to paper dust residue getting into the ink system.

Coarse papers can damage the plate dot surface throughout the print run, so check periodically. Some printers struggle

with static discharge from paperboard.

There are systems to vacuum and reduce static prior to print impression, and they can keep ink cleaner during a run.

Quality Control Most importantly, measure! Measuring is key! Have a system in place to manage and monitor print density, dot gain, ink pH, and ink viscosity. It’s always a good idea to keep these records in a system that can be referenced for quality control for each item you’ve run, as well as the history if there are multiple runs.

Quality control can also be moved upstream into the platemaking areas to include laser ablation checks on your digital imager, as well as final plate inspection using a plate analyzer.

In closing, I hope these key areas identified will help you keep on the right track for folding cartons. I understand not all the information here may be fully applicable in your environment, but it might help you see opportunities that could be applied to your processes.

Editor’s note: This article originally ran in the October 2018 issue of FLEXO magazine, the FTA’s flagship member publication, and has been edited to fit BoxScore’s style.

It represents the first in a series designed to expand technical coverage via partnership between FTA and AICC and their respective magazines. Collaboration between the membership of both organizations is encouraged.

Greg Wishon is a technical service consultant at DuPont Advanced Printing.

s g n i Th

? ff O e l t t i L a

Ask AICC Technical Advisors Recent topics include: • Adhesives • Smudging • Breaking PDQ Perforation • Theorectical Box Compression

Tom Weber Folding Carton Technical Advisor

Ralph Young Corrugated Technical Advisor

Doug Friel Safety & Risk Management Advisor

Ask Your Questions AICCexperts.org

GOOD FOR BUSINESS BOXSCORE TIPS, TRICKS, AND SOLUTIONS TO BETTER BUSINESS

Retirement and Retention

Recruit, Retain, Reward, Retire: Become a Top Employer

D

o you want to gain a competitive advantage in recruiting, retaining, and rewarding employees?

You can, with a smart 401(k) plan design and an organized course of action.

By offering employees an optimized 401(k) plan in plain language, you can gain a competitive advantage.

According to a recent Betterment for Business survey, approximately 70 percent of respondents described a good 401(k) plan as an important or very important consideration in a job offer, and 78 percent of respondents indicated that they deferred the amount to capture the full employer match.

This is an opportunity to set your company apart from the rest. By changing expectations and how you position your 401(k) plan to current and prospective employees, your company is provided an

advantage in any labor market, and your company’s viability is strengthened.

How do you change the expectation?

Simple—you change the conversation.

As an example, you have a prospective employee named Sam, who is 25 years old and whom you are looking to pay $36,000 a year. When it comes time to make the benefit program offer, most companies communicate the benefit of the 401(k) program in some sort of match formula that most employees do not understand. It is typically communicated

as, “We match 25 percent of the first 6 percent you contribute to the 401(k) plan.” That is, of course, if the company offers a match or chooses to highlight the program.

Whether a company match is offered or not, reframe the message to how the program benefits the prospective employee, thus changing the conversation and putting the focus on the prospective employee. Position the 401(k) program as the benefit it is by saying, “We offer a retirement savings account for our

BOXSCORE www.aiccbox.org

43

Good for Business

employees, and by participating in the program and taking full advantage of our employer contributions, you could accumulate assets of $15,723 after five years, $36,939 after 10 years, and $480,240 by the time you reach age 65.1 Our company match is free money that allows us to significantly increase the total amount you can put away toward your retirement. It is important to us, as an organization, to help provide our employees with the opportunity to have a successful retirement.” This is a format an employee can understand, and it provides the employee with a vision of his or her future and longevity with your organization.

Final Advice: Remember, all employees have an interest in accumulating assets, just as you do; very few have

been shown how or have had it clearly explained to them to this point.

It’s no secret. A happy work environment equates to employee satisfaction and retention.

Joe Trybula, CFP®, CFPA®, is vice president of Diversified Financial Advisors LLC and a registered investment advisor with more than 20 years of experience. He can be reached at 800-307-0376 or joe@ diversifiedfa.com.

Disclaimer: Investment advice offered through

for use with participants or the general public.

This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Endnote 1 The hypothetical future value calculation of your 401(k) balance is calculated by accumulating the total contributions over the periods shown and assuming a 6 percent interest rate compounded annually. It illustrates what can happen when you start to save now, invest wisely, and take control of your retirement future. Your results will vary. Investments include risk, including possible loss of principal. No rate of return can be guaranteed.

Diversified Financial Advisors LLC, a registered investment advisor. For plan sponsor use only, not

Leading supplier to the corrugated box industry

Conveyor Parts and Service We’re your one-stop shop for conveyor parts and service.

We carry manufactured replacement parts for C&M, ACS, Pentek, Mainline and Systec. Parts available for immediate shipment include pneumatic, drive train, devices and installation material.

Our customer service programs include preventive maintenance, contracted service, warranty assistance, remote assistance and parts warranties. Call today for more information.

cmconveyor.com

44

BOXSCORE May/June 2019

Mitch Brown, Parts 800-551-3195 ext. 2406

Brad Brown, Customer Service 800-551-3195 ext. 2404

Member Profile

CompanyBox

BY VIRGINIA HUMPHREY

Company: CompanyBox Established: 2000 Joined AICC: 2018 Phone: 877-926-3223

Photo courtesy of CompanyBox.

Website: www.companybox.com Locations: Charlotte, N.C.; Geneva, Ohio President: Louie DeJesus Nara Skipper (left), Louie DeJesus (center), and Kyle DeJesus have built CompanyBox into a leading-edge, community-centric, customer-focused business.

W

hen the team at CompanyBox says they want to operate with good moral values, they mean it. They apply those morals to what they print, how they give back to their community, and how they treat their employees.

CompanyBox started as a family-​ owned incubator company in 2000, making cardboard boxes and slowly investing in better and better equipment.

Then, four years ago, they shifted their focus to providing designs, brands, and boxes to e-commerce companies.

President Louie DeJesus works alongside his son and daughter: Kyle DeJesus, vice president of marketing and sales, and Nara Skipper, social media strategist.

“We’re a family-run company with good moral values,” Louie DeJesus says.

“We are very technology-driven; we have

46

BOXSCORE May/June 2019

cutting-edge equipment; we have a very sophisticated, clean facility; and we’re going to be food-certified.”

The food certification is something they’re able to do because of the installation of their newest digital single-pass printer (see sidebar), which uses food-safe ink, allowing them to provide packaging to the bigger brands that require it and offer it to the smaller brands that want to ship food without the smell of the UV ink soaking into the food.

“Food-safe packaging makes us stand out from other manufacturers, since this is such new technology,” says Skipper. “It is something we can offer that not many people can.”

It’s just part of how CompanyBox tries to keep up on the latest technology in order to serve the e-commerce industry.

“It’s not your typical box plant,” says Louie DeJesus. “We had a customer come through for a tour the other day, and they said if this was a technology company, it is what they would think Google would look like. ‘Google box plant’ is essentially what they compare us to.”

They serve customers all around the country, most of whom place their orders directly on CompanyBox’s website.

Kyle DeJesus says that while they are web-to-print, nothing is printed without human intervention. If they can catch a customer error, such as a low-resolution image that comes out pixelated, a word spelled wrong, or a graphic misplaced, they’ll contact the customer and make sure everything is what they want.

“Just because someone hits the order button [doesn’t mean we’ll print],” says Kyle DeJesus. “We will make sure we

Leipa’s new paper machine can produce

of

500,000 tons

100% recycled

LIGHT-WEIGHT white-top linerboard for

sustainable,

graphic-intensive

packaging

Leipa Liner is a multi-functional, blue-white sheet with a smooth, calendered surface ideal for vibrant, colorful, graphic-intensive packaging. Backside sizing offers clean performance in flexographic and offset printing applications. Leipa liner is competitively priced with inventory available for immediate shipment.

Leipa linerboard is the ideal, sustainable solution for flexographic printing digital printing point-of-purchase packaging

direct printing offset printing shelf-ready packaging

Leipa Classic White (72 Bright uncoated white top linerboard) Available MSF: 26#, 29#, 33#

Leipa LUX (84 Bright double-coated white top linerboard) Available MSF: 29#, 33# 37#, 41#

For more information, contact

SHARP International Group Randy Banks rbanks@sharp-international.com (757) 410-3601 www.sharpinternationalgroup.com

www.leipaliner.com

Member Profile

reach out to that customer so that they’re happy with their end product.”

They also reserve the right to refuse to print those things that violate their morals.

“Our standards are such that we will not print anything that is offensive by any means, whether to a religious group or race or any particular group,” Kyle DeJesus says. “So we work very hard to examine all of that. We feel it is our right to not print what we feel is offensive.

For that reason, it is true web-to-print, but we have human interaction [with each job].”

Within the next three months, CompanyBox expects to receive its certification as a minority-owned company, a designation recognizing that the ownership group is 100 percent Hispanic.

It is one more thing they want to offer to brands that are dedicated to working with minority-certified companies.

The owners are also dedicated to making sure their employees have the sort of benefits and working conditions that they themselves would want. This includes jumping in to help with any job when help is needed and

making sure the working conditions are ethical.

“None of our employees are [paid] minimum wage,” says Louie DeJesus.

“Everyone gets health care. Everyone gets a 401(k). We treat all our people who work with us with total respect.”

They even recently installed a stereo system for all their employees so they could each have their own music playing.

CompanyBox’s morals also extend to making sure they are caring for the planet.

“Everything we touch is sustainable,” Kyle DeJesus says. “Everything we touch

DELIVERING FROM THE FAMILY CORE When Louie DeJesus, president of CompanyBox, started looking for a digital printer, there were three boxes that the machine’s capabilities had to check off before he’d consider purchasing it: 1) It couldn’t have any UV lights in it; 2) it had to be a true replacement to litho; and 3) it had to be backed by one of their partners that they were familiar with.

This search resulted in their purchase of the HP C500, a machine that came with the Nestlé certification and Swiss Ordinance.

It is a printer that uses odorless and solvent-free ink. There are no HAPs (hazardous air pollutants) added, and it is low in VOC (volatile organic compound) emissions. Why is this important?

Ink has the potential to migrate through the porous corrugated material and contaminate food product.

“The more you learn about how ink can migrate to food, it is very startling and troubling,” says Nara Skipper, CompanyBox’s social media strategist. “It’s that learning that has changed people’s minds.”

DeJesus says there are some brands in the food industry that will no longer purchase any boxes that are made with UV lights. They’re also developing a company policy that even if the customer does not request it, they will not run any food-related boxes on the printers they have that use UV ink. They will run it only on the HP C500.

48

an hour, allowing them to deliver orders faster. It also produces high-quality tiny details with realistic skin tone, vibrant colors, and an extra-silky finish.

The addition of the machine in October 2018 has already changed how CompanyBox operates. They’ve added approximately 25 people in production and in the office area to facilitate production needs. HP is present in their plant to help train the operators.

They are now running two 10-hour shifts on the C500, making their plant operate 20 hours a day, six days a week.

They make sure they are available to answer customer questions and help make sure the products they are getting off the C500 are what they want.

From 8 a.m. to 7 p.m., there are specialists answering phones and responding to web chat help who are skilled in graphics and have been trained to understand the equipment. If those specialists cannot answer the question, they are surrounded by structural people and graphics people with further skills.

“We’re very collaborative,” says DeJesus. “We work together. No one is sitting behind a closed door. It’s how we built our office.

I’ll even try to assist if I hear someone is having a problem. It’s expensive to manpower something like that, but we’ve chosen to do that.”

“Before, there were no other options. There are options now,” says DeJesus.

Skipper says they try to treat all their employees and all their customers like part of the family. Customers are free to text them, call them, or use their chat line.

Even for those who don’t ship food, the printer offers some new options. CompanyBox can print text as small as four-point without any blurring. They can also print more than 100,000 feet

“We really do try to take care of them,” Skipper says. “It stems from it being a family-run business. It drives our core values and how we operate.”

BOXSCORE May/June 2019

is recyclable. Even our Event Trash Boxes™ are compostable. We want to be successful with ourselves and with our success, share that back with the country in any way possible. We help with events that are true to our beliefs. We help sponsor those—sometimes at no cost.

We’re a company that wants to give back, so we participate in food banks and those kinds of things.”

As part of their Give Back Program, they team up with food banks in Charlotte, N.C., and create professionally printed, structurally strong donation boxes for them. Their website says they’ve provided thousands of boxes on multiple occasions to food banks such as Loaves and Fishes and Second Harvest Food Bank. Their desire is to provide them with

clear branding that communicates well to donors about their mission and encourages them to get involved.

The focus of their business and their primary market are e-commerce companies. They provide branded boxes, mailers, shippers, and displays. They’ve also recently started creating Event Trash Boxes™ for conventions, events, and festivals. In everything they do, they want to help their customers promote their brand with consistent designs and packaging.

It’s something to which they devote time in researching trends, colors, and designs.

Skipper makes sure they have a presence on social media where their customers are. She writes a regular blog and is present on Instagram, Twitter, and Facebook.

CompanyBox is committed to making sure they have leading-edge technology, whether it is digital printers or digital cutting equipment. They are even considering expanding their building to make room for more equipment and to expand their offering to provide custom-branded pouches and labels for the food industry.

“We’re going to try to work very hard to stay ahead of the curve and meet our customer demand,” says Louie DeJesus.

Virginia Humphrey is director of membership and marketing at AICC. She can be reached at 703-535-1383 or vhumphrey@aiccbox.org.

BOXSCORE www.aiccbox.org

49

Talent and expertise combine for award-winning packaging

50

BOXSCORE May/June 2019

DESIGNED to SELL

By Robert Bittner

D

eveloping a new package—whether a product package, point-of-purchase (POP) display, or online shipping box—means blending form and function to create a container that also, ideally, captivates clients and customers while showcasing a product or brand.

Designing a package that accomplishes all of these things effectively is never easy. But outstanding packages go even further, offering standout examples of a company’s creativity, technical expertise, and in-house talent. Great design doesn’t happen by accident.

Clients and Creativity “When we jump into a project, we first have to understand the scope,” notes Colten Freeze, creative services manager at Bennett Packaging. That happens during what the company calls “new item meetings,” at which graphic and structural designers, a project manager, and a salesperson discuss the customer’s expectations, timeline, and budget.

“Stemming from these meetings, especially in the case of POP displays, we like to have brainstorming sessions with multiple designers or creative people within the organization,” Freeze says. “We can throw out ideas and come up with efficient ways to run components through our plant or come up with cool and innovative design features. We use these meetings to prepare ourselves to think ahead of the customer,” which, for Freeze’s team, means anticipating potential challenges the packaging may face when it comes to assembling, shipping, and in some cases, serving retail. “Ultimately, we want things that are pleasing to the eye and effective in their purpose.”

BOXSCORE www.aiccbox.org

51

No matter how much talent and experience are in the room, though, there are often stumbling blocks along the way to a great design.

“It’s not uncommon to think you have a grand idea and get steps into the process, only to realize you have to scratch it and start over,” notes Matthew Meehan, structural designer, The Royal Group Mid-Atlantic. “You have an idea in your head of how you want it to function, how the paper’s going to fold. But sometimes it just isn’t going to work.”

“Not everything a designer touches comes to life and makes it to the store shelves,” Freeze acknowledges.

“Sometimes you’ll design something, and you hit the nail on the head. But at any point you might hit a bump in the road.

It might look great, but maybe it’s too expensive. Or you’ve just gone down the wrong path. When that happens, you need to find a solution.

“That doesn’t mean your original design was a complete failure. You still have the files on hand. You still have those ideas, so you can recycle and reuse them later on.”

Steps to Success For some, it’s a pencil on paper that first brings an idea to life. For others, it’s computer software that allows nearly infinite exploration of a package concept. But without structural and graphic designers, it would never make it from someone’s head to someone’s hands.

“Once we break from our initial meetings, we begin in graphics with hand sketches, then renderings, and then into structure design for CAD [computer-​ aided design] layouts and a prototype,” Freeze explains. “For packaging, we don’t do a lot of renderings; we’ll do hand sketches or go directly into structural

52

BOXSCORE May/June 2019

“It’s not uncommon to think you have a grand idea and get steps into the process, only to realize you have to scratch it and start over.”

— Matthew Meehan, structural designer, The Royal Group Mid-Atlantic design. We’ll then submit those to the customer for feedback. For POP displays, we typically start with hand sketches or a rendering, where we can seek feedback from our customer. We may see multiple rounds of revisions, so by sketching or rendering we save time and resources with our structure design team.

“I’m a firm believer that the more real you can make that rendering, the better impression it makes on the customer,” he says. “The render is a selling tool. We’ll print those renderings on big image boards for client meetings. However, we don’t always have that luxury—based on timelines, customer proximity—but we work hard to make it a sales event or presentation. Our second choice would be emailing the client a PDF version of the rendering.”

When it comes to the software applications they rely on for packaging design, boxmakers agree: Adobe Creative Suite—which includes Illustrator, Photoshop, and Acrobat Reader—and ArtiosCAD are essential. Other software in use includes 3ds Max and Strata 3D for rendering and modeling applications, and Esko’s Cape Pack for palletization.

Of course, anyone can buy or lease great software. That doesn’t mean they will produce great packaging. “Anybody can grab software and create boxes,” Freeze says. “But a good, experienced

structural designer goes beyond that.

They’re thinking 10 steps ahead—from machine limitations up to the hand labor required, to how it will ship, and the retailer’s requirements. There is a tremendous amount of planning that goes into the design work of a package or display.”

Yet that work still may miss the mark if it doesn’t effectively address several key points.

Essentials of Great Packaging For Meehan, “a great package first needs to have visibility from the consumer side, as well as the strength that allows it to ship well, be palletized.”

Freeze agrees, adding, “When judging a great design, I think you have to consider the consumer experience. Did it increase sales? Did it help the product explode on social media?

“There’s also something to be said for unique and interesting ways of execution and improving shopability,” he says, “ways you can present the product that haven’t been done before.”

And while it is not common for the words economy and efficiency to be associated with greatness in the world at large, in boxmaking they can help to elevate a good packaging design into a great one.

“We’re very cognizant of paper costs,” Meehan says, “as well as what we charge

to get these things out in the store.

Limiting labor costs and co-packing requirements are cost-saving steps we typically use at The Royal Group.”

In addition, an award-winning product typically considers economies of freight, warehousing, and delivering added value wherever possible.

Nailing each of these elements is not easy. Not every good package is also a perfect package on all counts. But when your team delivers something that truly stands out, it becomes more than just another project. It becomes something worth showing off.

Peer Appreciation Every two years, AICC hosts a packaging design competition in association with its Annual Meeting. This year, members have the opportunity to submit their best packaging from the last two years for awards and peer recognition across a broad range of categories. (The competition deadline is Aug. 16.)

Jim Nelson, vice president of business development at Green Bay Packaging and chair of AICC’s Packaging Design Competition Subcommittee, explains how the event works.

“All of the entry samples are shipped and warehoused at a location near the Annual Meeting, and the [participating] companies submit detailed information on the entries to the AICC competition website.” At the meeting, “all the entries are set up and displayed by category.

Currently we have 41 categories for corrugated, folding carton, and rigid box. The judges, who are chosen based on availability and their specific expertise with the categories, take almost a full day to judge their assigned category. The judges are put into teams and meet as a

54

BOXSCORE May/June 2019

“Anybody can grab software and create boxes. But a good, experienced structural designer goes beyond that.”

— Colten Freeze, creative services manager, Bennett Packaging

group to collectively review and judge their selected categories.”

As someone who has served on the competition committee for the last 10 years, Nelson has seen his share of award-winning designs.

“What sets a first-place winner apart from a third-place winner really depends on the specific category. If you look at items in categories strictly for structure”—for example, Category 1: Innovative Structural Design, Consumer and Industrial Focus—“the judges will look at the write-up of that structure that was submitted with the entry. Is there something unique about it? Was it all corrugated, or did it include other materials?

They’ll consider the fragility of it, the type of testing that was done on its strength.

“What stands out? Maybe someone took a package with a lot of nonpaper items or nonrecyclable items and made it into a fully recyclable product that also saved money. That could be a first-place winner.

“For Judges’ Choice Awards, they look at the first-place-designated winners in each category. They look for something that hits the highlights of unique design.

Maybe it’s so new in design and concept that it’s head-and-shoulders above everything else. They’re looking for something unique and so new to the industry that they want to spotlight it.

“We aim to get over a hundred entries,” Nelson says. However, that has become increasingly challenging. “Consolidation

in the industry has reduced the number of entries we get. In 2017, we only had 86 entries. In 2015, we had about 150. In 2013, there were even more.”

The committee also aims to feature submissions from smaller independents, boxmakers who may assume they cannot compete with larger operations.

“We really want to dig down to the smaller independents and encourage them to compete. Sometimes the small guy who just has a two-color flexo press doesn’t want to enter because he doesn’t think he has a chance against the bigger guys. But there are so many subcategories for entries now, even the smallest guy has an opportunity to win.

“I’d encourage all independents to submit their best entry,” Nelson says. “By being part of the competition, you can get exposure you may not otherwise get if you’re a regional independent. Plus, it challenges your design teams to feel like they’re competing with other independents and really show their creativity as an independent. You don’t have to be one of the big guys. We try to make the competition equal among all.”

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

ENGAGE IN YOUR FUTURE

WESTIN HARBOUR CASTLE HOTEL SEPTEMBER 16-18, 2019 TORONTO, CANADA Make sure your passport is current!

Registration Opens June 2019 AICCbox.org/Meeting

AICC 2019 ANNUAL MEETING & PACKAGE DESIGN COMPETITION

56

BOXSCORE May/June 2019

PACKAGING UP E-COMMERCE Elevated demand continues to present marketing and growth opportunities

By Leslie Lang

I

t’s easy to forget that e-commerce started only in the mid-1990s, because it got so big so fast. In 2017, an estimated 1.66 billion people worldwide bought products online and spent about $2.3 trillion. That amount may more than double in just four years when, Statista projects, e-commerce revenues will be about $4.8 trillion.

And, of course, all those goods have to be packaged up for delivery. A report from Future Market Insights says the global retail e-commerce packaging market is projected to grow from $13 billion to about $21.4 billion by the end of 2026. From just 2014 to 2016, shipment volumes were up more than 30 percent, and consequently, the demand for boxes and other packaging has grown precipitously as well.

The meteoric rise of e-commerce is having an enormous effect on the global packaging industry. What does that mean for AICC members trying to keep up with rising demand, and how can they position their companies to take better advantage of it?

Tami Cullen, business manager at Dallas Container Corp., points out that some e-commerce impacts have been indirect and unmeasured. “When Amazon opened up a distribution center here in the Dallas-Fort Worth area, some of the big guys took on a lot of that Amazon business,” she says.

“And that, in turn, left some of their smaller clients scrambling because they didn’t have enough capacity to run their orders on a timely basis. It was kind of a bonanza for us. We’ve been able to pick up a lot of that business. We don’t really sell to Amazon directly, but we sell to some of the smaller retailers and several of the subscription services. It’s good for independents because it’s steady business monthly.”

Evolution of an Industry Chuck Delaney, vice president of retail sales and marketing at Dusobox, says the rapidly growing industry means there’s a lot of room and space for a company to set itself apart from the competition. “Because this isn’t a 20-,

BOXSCORE www.aiccbox.org

57

30-, or 40-year-old mature industry but is relatively new, people are looking for innovative ideas,” he says. “There’s an evolution going on. I think there’s a huge upside depending on how you approach it.”

Miriam Brafman, CEO of Packlane, agrees. Because she founded the company just four years ago, her core customers have always been e-commerce and subscription box merchants, although she says the customer base has diversified over time. Even in that short time, she says, she has seen tremendous growth in her business, which she credits to the surging tide of e-commerce.

Brafman says boxes become an iconic type of branding, a billboard for digitally native and e-commerce brands whose customers don’t get to walk in and have an in-store experience. She has worked to optimize Packlane’s offerings to take advantage of, and suit, those e-commerce needs.

They offer three types of boxes—mailers for gift or subscription boxes and e-commerce packaging; folding cartons for products on the retail shelf, such as beauty packaging, supplements, and chocolate; and corrugated shipping boxes

58

“It’s not a box. It’s a delivery and marketing vehicle, and if you sell it just as a box, good luck.”

— Chuck Delaney, vice president of retail sales and marketing, Dusobox for larger, heavier, or fragile items. All are targeted toward e-commerce customers and their preferences for shipping and presentation value. All can be customized with branding and graphics, which is not unusual, but what is different is how Packlane works with its e-commerce and other customers.

“We are pretty unique in that we only allow customers to order through our website,” she says. “So it’s a web-to-print company.” Customers upload their graphics to Packlane’s 3D tools and can then see a visualization of how their packaging will look before it prints. All ordering takes place online.

“A lot of people realize it’s valuable to pay a premium to have that kind of custom-branded packaging, so where Packlane comes in is, we make that really easy for brands to do. They upload their

graphics directly to one of our packaging styles, which are specifically geared toward e-commerce, and then order it directly from our website.”

The Perfect Fit Packlane also focuses its products for e-commerce brands by providing custom-sized boxes that do not require tooling. Customers can select a custom-​ sized parcel that fits their product just right, and matching the box size to the contents also reduces waste. Brafman says this is important to e-commerce brands.

And not only does it cut down on wasted and unnecessary void fill, but it can reduce shipping costs, as well.

Another important factor, according to Brafman, is speed. Packlane works to serve its e-commerce customers by reducing production time and getting orders out fast. “A lot of our orders are subscription boxes where they have a deadline every month when they have to get their shipments out to customers,” she says. “So, we try to be really mindful of that by keeping production times low.”

Delaney also stresses how important speed is in the world of e-commerce.

“Time is the measure, and speed is the currency,” he says. “My friend Tom Miller came up with that. He started as the marketing director for Temple-Inland in Indianapolis probably 40 years ago.”

Businesses in the industry, he says, must structure themselves with technology— not just with people. “Technology that is practical,” he explains, “in that it gives answers to the buyers faster than anybody else can. Whether that’s a fast price, whether that’s a fast proof, or a fast design, everything is going to be predicated upon speed, especially in this industry.

“At Dusobox, we take customers on the entire journey, going from the concept through the consumer engagement,” he says, “and we automate every one of those steps—everything from doing the pricing to the design that they can see.”

Printing To succeed in this new e-commerce world, Delaney says, you need an operation that is “multiprint-faceted, meaning it can handle a high-end flexo.” That is important, he stresses, because the product—the box—is taking the place of retail.

“It’s not a box. It’s a delivery and marketing vehicle, and if you sell it just as a box, good luck. You’re not going to come across as a pro.

“So you’ll have flexo, you’ll have litho, and you’ll have digital,” he says. “To me, if you can produce all three out of your plant, and perhaps have the converting execution capability, you’re in. You can help establish that you are a one-stop shop that can handle that array of different press needs.”

Cullen, too, talks about how much printing has changed with e-commerce.

“I’ve printed more on the inside of boxes in the past three years than I ever did in the former 25.”

Mastering ‘Marketing Speak’ Delaney posits that to truly be in the driver’s seat with a client, a company needs to have a dynamic person who knows retail

“I’ve printed more on the inside of boxes in the past three years than I ever did in the former 25.”

— Tami Cullen, business manager, Dallas Container Corp.

marketing on the front end—someone who understands marketing language and how to pitch products to the right people with the right words.

“We’re good at box speak,” he says, “and we’re good with sourcing, but when you take that next step up the line with marketing people, they want to talk marketing speak. They want to know, how are we going to integrate a QR code or text-to-video into the second moment of truth on the box. Most corrugated reps don’t feel comfortable talking about features like that; I’ll guarantee it.”

You can separate yourself from the competition, he says, with a dynamic internal agency that helps you drive specific messaging through that box and out to the consumer. “I think there’s a whole untapped front end of content development that will help you if you leverage variable content that accents and drives your equipment,” he says. “Our equipment helps us separate to a point.

But when someone opens a box and sees your QR code with a 20 percent discount coupon for a referral, or that 83 percent of people typically will use a coupon to make an additional purchase of your product if they feel it’s very unique to them—those are some of the things you have to be able to talk about, and articulate, in this e-commerce business.

Not ‘we can make a box.’

“This is a retail vehicle,” he stresses. “It’s not just a shipper.”

A New Way of Thinking Although the industry has changed, Delaney says, not everybody in the industry has. “Right now, digital is helping to make a big impact because we’re able to run short-run business. We’re able to help those million-dollar new e-commerce companies be able to afford a box, versus having to buy a die first and buy the printing plates and all of those elements.

It’s very dynamic.”

He says that the subscription boxes so popular today are all about the “me generation.” “What we’re doing is working, I think, very well,” he says. “And there are all sorts of sales channels that you can also land that you’ve never had the opportunity to land before.”

Something else important to keep in mind when strategizing how to best take advantage of rising demand? For years, he says, he has heard that you can do business only within a 250-mile radius of your plant.

“Balderdash. Wrong. But for all you who want to keep on thinking that,” he says with a laugh, “please do, because then I don’t have to worry about competing with those who think this way.”

Leslie Lang is a Hawaii-based freelance technology writer.

BOXSCORE www.aiccbox.org

59

60

BOXSCORE May/June 2019

A CUT ABOVE THE REST One man’s undying fortitude has taken AICC— and an entire industry—to new horizons

BY GEOFF WILLIAMS

E

ven if he had chosen a different career, friends and colleagues say, Steve Young would still be the complete package.

In June, the AICC president is retiring, and the independent packaging industry is losing a champion. If you’re new to your job, if you have never met Young, you may not recognize the impact that he’s had. But that is why articles like this are written, to give a proper send-off to a leader who has done much for many, and to offer a hint of what may be coming in the future.

The Early Years Alton Steven Young came into the world on Sept. 6, 1954, to Alton Theodore Young and Gladys Cecelia Ott. The Youngs were a middle-class Catholic family. According to census records, Young’s father, for a time in the 1940s, was a credit manager at an auto supply service store, and his mother was a homemaker.

But in 1948, the elder Young ran for elected office, becoming the local sheriff for Erie County in Sandusky, Ohio.

It sounds like young Steve had quite a childhood. He was the youngest of five kids, and they lived in the Erie County Jail, which sounds worse than it was—in the book Elected to Serve, Erie County, Ohio, 1838–2003 by Patty Pascoe, there’s a photo of the jail, which was a spacious, ornate building that looked a little like a mansion.

The family apparently never felt as if they were in any danger, and the people who cooked the prisoners’ meals—including, for a time, Mrs. Young—also prepared them for the Young family.

Pascoe also writes that when the stairs of the nearby Sandusky Library iced over during the winters, the Young kids would sled down the stairs. (Later, Steve Young would advance his interest in winter sports and learn to ski.) Alton, whom everybody called Al, remained sheriff from 1948 until 1964.

As Steve developed through his high school years, his faith deepened, he picked up the lifelong hobby of drumming, he became interested in astronomy, and he set his sights on college. He

attended the University of Toledo from 1972 to 1976, earning a Bachelor of Arts degree in international relations. At that point, as a college student, Young obviously had no knowledge of AICC, which was established in 1974. But looking back, almost everything Young packed into his life was preparing him for his future career. Over the next several years, Young would be in a virtual incubator of international relations, politics, and business, all of which would help him when he was put in the position of leading AICC.

Unknowingly Planning for a Career With AICC After college, Young became a researcher at the U.S. House of Representatives, and then spent the next two years, from 1977 to 1979, as a legislative representative for the Small Business Legislative Council. In October 1979, he moved to California and became an associate editor and membership services coordinator at the nonprofit Manufacturers Agents National Association.

BOXSCORE www.aiccbox.org

61

It was about that time that Young first became acquainted with AICC, according to longtime friend and colleague Craig Hoyt, who is the president of Buckeye Boxes in Columbus, Ohio.

“Back in the late ’70s, I attended my first AICC meeting. Either then or another early meeting was Steve’s first. And being the youngest guys there naturally brought us together,” Hoyt recalls, saying of Young: “He was a friendly, poised, smart guy trying to figure out what it was to be assistant to the driven personality of Dick Troll.”

Troll was AICC’s fourth president, serving from 1977 to 1978, and then, starting in 1980, he was the first full-time president. He would later also become the founder of the International Corrugated Packaging Foundation (ICPF), the corrugated packaging industry’s educational organization, which was established in 1985. Troll was a force in AICC, with a strong personality that clashed with many, but most people would be quick to say that the man was just the type of leader AICC needed back then. Young is also indispensable, and over the years he has often referred to Troll as a mentor.

“Steve had no baggage, was open to everyone who joined, and made everyone feel welcome. He has the perfect personality for the position.”

— Neil MacDonald, president and CEO, Independent II

62

BOXSCORE May/June 2019

Steve Young has been the face of AICC for decades, bringing independents together and being a champion for converters.

Greg Tucker, CEO and chairman of Bay Cities, with offices in Pico Rivera, Calif., and Bentonville, Ark., says that he first met Steve more than 30 years ago. “I met him with our founder, Bill Hanan, and his mentor, Dick Troll.

Both these guys were wilder than a June bug. Steve had almost a father-son relationship with Dick for years. Oddly enough, Steve was very opposite of Dick. One could consider Steve as cool, calm, and collected in comparison,” Tucker says.

Ralph Young, AICC’s corrugated technical advisor and another longtime friend and colleague, also remembers those early days. “We walked into the industry together in 1983. I met him at our first AICC meeting and soon invited him to our paper mill tour and to get a taste of real Southern hospitality,” says Ralph, who at the time was a salesman at Great Southern Paper.

But Ralph was soon impressed with Steve’s own Midwestern manners. “I still have the—handwritten with a fountain pen—thank-you note from that engagement,” Ralph says. “That was only the

first of many he has written since then.

We have been investing in each other’s lives ever since.”

Never Getting Boxed In Steve Young would remain involved in AICC, taking on various roles in the organization for the rest of the ’80s before briefly leaving the organization in the ’90s. He returned in 1995 to become AICC’s executive vice president. The following year, Troll passed away, and Young became president. While Troll has often received deserved praise and plaudits for growing AICC’s membership and helping its members navigate the turbulent, often-changing corrugated packaging industry, Steve Young also has his share of fans.

“I first met Steve in the early ’80s when he first joined Dick as an assistant at AICC,” says Neil MacDonald, president and CEO of Independent II, based in Louisville, Ky. “I believe he came up and introduced himself—which for me was a pleasant surprise. When I joined AICC, it was more of a club, and Dick was the manager. New people that

“I am not Steve Young, so I am sure as time goes by, you will see some things related to AICC become different—but because of Steve Young, AICC will never be unrecognizable.”

— Mike D’Angelo, vice president and incoming president, AICC

known as the Washington Fly-In, held at the same time as the National Association of Manufacturing’s Manufacturing Summit, to amplify the corrugated industry’s concerns with one voice to Capitol Hill.

There have been so many areas that Young has impacted; almost every significant development in the industry since the 1980s has his fingerprints on it.

What’s Next for AICC and Steve Young were not part of the club stood on the sidelines. Steve had no baggage, was open to everyone who joined, and made everyone feel welcome. He has the perfect personality for the position.”

“I think we would all agree on one of the toughest challenges of our box world is dealing with the egos of our fellow boxmakers,” says James M. Davis, founder of Packaging Express in Colorado Springs, Colo. “No matter what you are involved in, getting the cooperation of fellow workers seems to be at the top of the list of getting the job accomplished.”

As for managing egos, Davis says that Young is “a master lion tamer.”

“Surely, Steve must have read Dale Carnegie’s bible on getting along with people, because he has proved himself for over 30 years,” Davis says. No matter whom Young was working with, “he has demonstrated a heroic and patient approach to soothing the savage beasts.

His personality is calm and reassuring in troubled times—whether it is a heated board meeting or putting on another spring or fall conference. I believe that Old Testament Job and Steve must be first cousins.”

It may have helped his ability to manage personalities, of course, growing up as the youngest in a family with eight kids—and having a father who was a sheriff. But in any case, Young did have a lot to contend with. He helped create some now legendary partnerships in the

industry, like the one with TAPPI that paved the way for the creation of the first SuperCorrExpo in 2000. Almost 20 years later, the SuperCorrExpo has become a must-visit in the world of machinery shows. In 2011, much of it due to Young’s leadership, AICC added folding carton membership to its organization. Young also spearheaded what would become

“Today, I look back at AICC and see an international association,” MacDonald says.

“The corrugated industry went from being controlled by the majors to now having a united group of independents having some impact in our industry. Steve has developed so many programs for AICC. The programs are educational, governmental, financial, and social. He has brought the second and third generations into the loop.

Young (left) is leaving AICC in the right hands with Michael D'Angelo.

63

Where once divided—now TAPPI, FBA, and AICC work together and make life easier for members and associates.”

But one period of Young’s extraordinary leadership particularly stands out for Tucker. “One of the darkest times in America and with the Association was right after 9/11. We had a meeting in Canada, and no one showed up,” he says.

“Back then, the organization relied heavily on the national meetings, and that took its toll on the program.”

But Tucker says that Steve’s stewardship and determination kept things going.

“Then with all the consolidation in the industry, many thought the organization was doomed,” Tucker adds. “However, today it is in the best shape it ever has been in. That’s leadership.”

Michael D’Angelo agrees. D’Angelo, as most of you likely now know, is AICC’s vice president, who will soon take over Young’s role as president. He is effusive in his praise for Young. “Under Steve’s leadership, he has shaped AICC into the premier manufacturing association in the packaging space,” D’Angelo says. “From advocacy to industry education, to plant and worker safety, to facilitating an open environment for member companies to share information and best practices, Steve’s leadership has been at the center. He has been unafraid to embrace organizational change in an ever-changing marketplace and has led AICC to reinventing itself many times, while keeping the family-like regard and respect that our members have for one another.”

The baton, in fact, will be passed to D’Angelo, which is another example of Young’s solid leadership, that AICC is going to have a seamless transition of leadership, according to AICC Chairman Joseph M. Palmeri, who is based out of Macedonia, Ohio, and is the president of corrugated packaging at Jamestown Container Cos., headquartered in Falconer, N.Y. “I think we’re in good hands with Michael D’Angelo,” says Palmeri.

D’Angelo believes they are and hopes so—and says that much of that is due to Young.

“He has given me autonomy to change a lot of our internal systems, for the benefit of the Association, our members, and our great staff,” D’Angelo says. “His only

Software looked good on paper?

Has it kept pace with your evolving business? You have invested in new machines. Customers have more challenging requirements (more orders, less volume, shorter lead times and more last minute changes). Products are more complex and yet you want to manage working capital effectively. In this new world, you need to efficiently manage your assets to deliver the perfect order. The OMP solution supports your ever changing business aligning your strategy & operations with your customer’s demand.

SUPPLY CHAIN DESIGN •SALES & OPERATIONS PLANNING•ORDER PROMISING•MASTER PLANNING•CORRUGATOR OPTIMIZATION•PRODUCTION SCHEDULING•SHOP FLOOR INTEGRATION•TRANSPORTATION PLANNING Optimize your supply chain management.

For Excellence in Supply Chain Software: www.ompartners.com

64

BOXSCORE May/June 2019

demand on the staff is to do everything with quality and excellence in mind— and we respond. I am not Steve Young, so I am sure as time goes by, you will see some things related to AICC become different—but because of Steve Young, AICC will never be unrecognizable.

There will always be a thread that binds the AICC of tomorrow to the AICC of today and the AICC of yesterday.”

And Young isn’t likely to disappear from the industry. “Steve will have a role as an ambassador,” Palmeri says. And he should, Palmeri adds, saying: “He’s just done a great job of stewardship—caring for us, babysitting us, guiding us as members in the Association.”

He also won’t be just standing around doing nothing in his retirement, many of his friends predict. But he may stand a lot.

“Somewhere along the way he went to barber school and donates his time cutting hair for the poor,” Hoyt says.

“He never talks about it unless asked. I asked him if he planned to continue that after he retires, and he said yes.”

“Currently he is a legal unlicensed male barber working for a Catholic charity,” Ralph says. “On top of his bucket list is to go to school and obtain his license, so he can serve beyond the church.”

Which is no surprise. If there’s a common theme in Young’s life, it is his deep faith and willingness to help people, his friends say. So it’s time to put away

some of the box puns and start coming up with barber jokes to compliment Young. Because, really, it isn’t a surprise that Young would choose to spend his time being a barber to the poor and downtrodden. After all, he isn’t just the complete package. Everyone also says that he’s a cut above the rest.

Geoff Williams is a journalist and writer based in Loveland, Ohio.

People | Knowledge | Software | Services

Connecting you kiwiplan.com

#followthekiwi

BOXSCORE www.aiccbox.org

65

The Associate Advantage

Embrace the New, but Don’t Give Up on the Old

BY JOE MORELLI PAT SZANY AMERICAN CORRUGATED MACHINE CORP. VICE CHAIRMAN PSZANY@ACM-CORP.COM

DAVE BURGESS JB MACHINERY CHAIRMAN DBURGESS@JBMACHINERY.COM

JOE MORELLI HUSTON PATTERSON PRINTERS SECRETARY JMORELLI@HUSTONPATTERSON.COM

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

ED GARGIULO EQUIPMENT FINANCE CORP. IMMEDIATE PAST CHAIRMAN EGARGIULO@EFC-FINANCE.COM

66

BOXSCORE May/June 2019

D

oes anyone remember how revolutionary to sales the first cellphone was? Or what about when the internet first came on the scene?

Like everything else, sales and the sales process have evolved over the years. Social media and advancements in technology have changed the way we all approach our clients and potential clients, but it is a tried-and-true sales technique that still proves to be most valuable today.

Prospecting in pre-social media days was extremely difficult. Phone calls, cold calls, drop-in visits—a lot of wasted time!

Whether or not you like social media, the positive impact it has had on sales cannot be understated. All of a sudden, prospecting has become as easy as keying in a company’s name on LinkedIn and seeing exactly who works there and what their positions are. Finding out a contact’s personal likes, habits, or hobbies can be as easy finding a Facebook, LinkedIn, or Twitter page and scrolling through their history. The ease of finding information has advanced to the point where the art of the cold call has died. Social media has become a very important tool for all of us and cannot be ignored.

In order to survive in any industry, salespeople have always had to have a strategic approach to the way they do business. But as technology has advanced, so have the tools to facilitate sales. CRM programs, such as Salesforce or other like programs, have features that track leads, establish pipelines, manage a book of business, and help determine what will be your best approach. Completing

expense reports has become convenient with any of the cloud-based apps for your smartphone; no longer do you have to fumble through a pile of receipts at the end of each month. Embracing the new technology on the market can ultimately make the sales process less cumbersome.

Along with the advancement in technology, the workforce is now being flooded with new generations of workers.

It is not uncommon now to work day in and day out with millennials and/or Generation Z employees who are being tasked with making game-changing decisions for their companies. Adapting to the technology that they are used to has become a given in order to keep up.

But what I find interesting is what they find most important to them in the sales process. In a recent article in Forbes, one of the things they say that Generation Z craves most is a personalized and comfortable relationship with the people they do business with. Wait—what?! Sales has changed, and so have the people who are buying. But with all the change, one thing is still constant: the value placed on relationships.

With all the technological advances in sales, the development of the smartphone, and social media, an age-old sales technique continues to impress: Getting to know your customer and what matters to them is something that will never get old.

Joe Morelli is vice president of sales and marketing at Huston Patterson and secretary of AICC’s Associate Board.

Thank you Education Investors These companies are making a significant contribution to the online education available to all AICC members.

For more information, contact Mike D’Angelo, Vice President, 703.535.1386 or mdangelo@aiccbox.org.

What the Tech?

Fishing, Paint Booths, and Customer Care

BY CHUCK DELANEY

L

ate last spring, I went fishing. Not just your garden variety “go down to the local pond and throw in a line” fishing. No, this was serious, “get really smelly, no kids allowed, get there by plane, truck, boat, then by foot, no cellphones allowed” fishing. It was real fishing—way up in a foreign country. OK, it was Canada, but it was still way up there.

I’m no avid fisherman. I take the opportunity to go out maybe two to three times a year. It’s not something I feel as if I must do every couple of weeks. So, why did I go through all that effort to get there? Because a couple of very good customers put this trip together a few years ago and asked me to go. We went, had a great time, and now we make it an annual event. And, oh yes, I like these guys as people, as well.

These are not just Patti Procurement Manager or Mario Marketing Director we’re talking about here. These are folks who are either owners of their own businesses (companies doing at least $30 million annually) or high-level executives in large multinational companies—all are the proverbial “big hitters.” These are people who know their businesses and know how to make money—serious people I can learn from—good customers but also great individuals to be around.

So, did it help my business? You bet it did, and probably because I made a point of not talking about printing, presses, board, converting, finishing, or anything else related to my business. The vast majority of time we spent on business, we talked about their businesses, about what gives them headaches, about what problems they’re facing, and even about their successes. I learned a huge amount

68

BOXSCORE May/June 2019

about how I can help them. I did not try to impress them with my latest flexo press acquisition.

Now, you might not have the opportunity to go on a yearly weeklong fishing trip—or maybe you do—but there are some things to learn from this experience.

Chuck’s Rules for Nurturing Customers Rule #1: Pick customers you like. I don’t mean just picking the right people to go fishing with; I’m talking about picking the right customers for your business.

You read me right—you do, in every case, pick your customers. They don’t pick you first. Usually, you pick them—and, you keep picking them!

If you don’t like—and trust—your customers, it’s probably not a good idea to do business with them. Why? I assume that your goal is to find customers whom you can keep around for a long time and get them to give you money for a long time. (If that is not one of your goals, you’d better rethink what you are

doing. You are in a for-profit business, after all.)

Even more basic, if you don’t like them, they probably don’t like you, and it’ll be very difficult for you to add real value to your business relationships under those circumstances. If you are not adding significant value, real value, your relationships are short-lived, regardless of how you priced your latest project.

Here are some key criteria to consider when selecting—and continuing to select—customers: • Will they do what they say they are going to do?

• Do they have solid core beliefs?

• Do they have a good business plan or strategy?

• Do I like them as people?

Rule #2: Spend way more time talking with your customers about their business, their concerns, and the challenges they face than talking about your latest equipment acquisition. News

flash: Customers don’t care what kind of presses you have!

Think about it in other terms: When you bought your last car, did you ask the dealer either of these two questions: 1) Was that car painted using DuPont paints in a Global Finishing paint booth? or 2) Were those seats made by Lear Corp.? I won’t have any seats that weren’t made

by Lear!

Of course you didn’t! You might not even have known that Global Finishing makes automotive paint booths or that Lear makes seats. Even if you did know this, it wouldn’t make any difference to you.

You want a car that gets your 18-yearold to college, or a car that impresses your clients, or a car that can get you and your family to a vacation spot in comfort and safety. In short, you want a car that solves a problem for you. How or where it was made is probably way down the list of what is important to you, if it’s on the list at all.

So, what makes you think that your customers—or potential customers—give two hoots about the fact that their brochures were composed on the latest Mac, printed on a Barberán press, converted on a Bobst, all done in a beautiful facility by the most caring employees on earth by a company that has been around for 30 years?

Practical Application 1: Pull out your company brochure and compare it to the paragraph right above this block. See any similarities? If not, congratulations, you are in the minority. Almost every packaging company presents itself in almost the same way. If you see similarities, then maybe you should spend some time figuring out exactly

what makes you different. (Hint: It’s not your presses.)

To recap my two customer rules: 1) Pick customers whom you like and who like you, and 2) talk with customers about their businesses, not yours.

One More Customer Rule (That Makes Three) Rule #3: Make sure you and your sales team are put into positions in which these types of conversations can happen. Conversations of real importance seldom happen when reviewing the specifications of a job with a packaging buyer. They rarely happen when delivering a quote on a job. (Your salespeople will claim the opposite is true.

Don’t believe them.)

Meaningful conversations happen in one way and one way only: planning. I know, I know, you hate to plan, you can’t get your sales team to plan, and everybody else is putting out fires all day long and doesn’t have time to plan. But, the types of conversations that really expose customer desires, problems, and opportunities don’t happen naturally—so plan for them.

My recent fishing trip didn’t just happen. The first year, it required a tremendous amount of planning on everybody’s part. One guy in particular took the initiative to find the right travel coordinator, the right lake, the right transportation, and the right week to make it all happen. Since then, the trip planning process has been much easier, since we go to roughly the same area every year.

You’ll find that, much like these fishing trips, these kinds of customer discussions get easier every time you do them. The first one is hard, requires lots

of pre-planning, and may not even go off all that smoothly. But I promise you that it will pay dividends for years for every customer you try.

Practical Application 2: Consider a press salesperson who wants to have a conversation about how he can sell a press to your company. Is he likely to get good information on how he can go about it from your lead pressman or pressroom supervisor? Probably not. He can get pretty good technical specifications from those two guys, but to find out the real issues he needs to be talking to the company president or, at least, to a vice president of manufacturing or marketing.

The same is true with your company’s sales reps. They can’t find out the real problems and opportunities by talking with your customers’ sourcing team.

Make sure they—or you—are talking two to three levels above the guy who is handing out packaging programs. This is where the real decisions are made and the real information lies.

If you can apply the three rules above to your top 10 customers and prospects, you’ll see a dramatic turnaround in account profitability in the next 12–24 months.

In the next issue, I will give you 12 billion reasons why you need to consider upping your expectations about pursuing business in a different way. Or, I’ll give you 12 billion reasons why you don’t have to buy another press or hire the heavy hitter.

Chuck Delaney is managing director of GROW Retail Technologies.

He can be reached at 708-491-5090 or cdelaney@growrt.com.

BOXSCORE www.aiccbox.org

69

Strength in Numbers

Economic Value 101

BY MITCH KLINGHER

I

n the last issue of BoxScore, I suggested that the best way to measure success is through the lens of returns on and changes in economic value (EV). The key question that a prudent businessperson should always be asking is, “How can I increase the long-term value in my/our business?” In my opinion, every major decision that is made should be looked at in terms of the effect on value, whether there is any thought to selling the business and “liquifying” this value. Now, you might say that without putting the company up for sale, there is no way to really know what it is worth. The purpose of this exercise is to get you to focus on the things that should increase EV and to create action plans to implement improvements in these areas, not on calculating a precise value. The key is to be consistent and conservative in your methodology.

Don’t pick the highest possible multiples, and don’t be afraid to let serious identified deficiencies in your operation reduce values accordingly.

For instance, if your plant is too small and poorly laid out, if your equipment is old and obsolete, if your management team is thin, or if your workforce is getting older, you can factor these things into your EV model and get a better sense of the overall health of your business.

Believe me when I say that when you do decide to go to market with your business, the potential buyers will be making a similar evaluation. At the end of the day, a buyer is always concerned with the overall risk of the transaction and with areas where they will have to make additional investments and devote resources to the deficiencies they inherit. Increases in risk will generally lower the overall “multiple” that they are willing to apply, and future

70

BOXSCORE May/June 2019

investments will reduce the dollar amount that they will be willing to spend.

You also may have hidden increases and decreases in value on your balance sheet relating to the accounting conventions used in the creation of financial statements under U.S. generally accepted accounting principles (GAAP). In the United States, all capital assets are reported at historical cost less depreciation, which means that assets such as real property that was purchased many years ago will be shown on the balance sheet at values that are significantly lower than they are currently worth.

It also means that the value of recently purchased assets may be overstated. In addition, you may have intangible assets on your balance sheet that have little or

no real worth, so a balance sheet review is also a part of this process.

The following is a list of external factors that will affect the value of your business: • Overall business conditions: How do interested buyers feel about the economy short-term and long-term. Is this a good time to take on risk?

• Regional business conditions: Are you in a region that is growing or shrinking with respect to customers who purchase packaging?

• Your location relative to suppliers, customers, and competitors: What resources do potential acquirers already have in place in your region, and what changes are being planned?

What initiatives are being planned

Independent Packaging Design Competition September 16-18, 2019

Registration Open: AICCbox.org/PDC Held in conjunction with AICC 2019 Annual Meeting September 16-18, 2019 - Westin Harbour Castle Hotel - Toronto, Ontario, Canada

Strength in Numbers

by competitors and suppliers in your region?

• Global containerboard markets: Integration value varies greatly depending on this.

• Overall cost of debt and equity capital: When the cost of capital is perceived to be at historically low levels, it is much easier to get deals done.

• Competitor and customer current and future planned activity in your area.

The following is a list of common internal factors that will affect the value of your business: • Customer concentrations: This is possibly the biggest risk to an acquirer. If the loss of a few customers represents a disproportionate amount of your sales, the risk of failure and, ultimately, the multiple paid will be lower.

• Heavy reliance on broker and trade business: An acquirer will likely reduce the multiple if you are selling a lot of trade and broker accounts because the risk of not being able to retain this type of business is far greater than it will be with sales to end users.

• Key customer management concentrations: It seems that no one has any extra managers to move into a target, so having a thin management team is a big negative.

• Ineffective management team: A poor management team usually means a poor culture, which is very hard to overcome. A lot of small businesses make this mistake—too many key management responsibilities and too much customer relationship management lie with the owners.

Most acquirers find that it’s hard to

72

BOXSCORE May/June 2019

•

•

•

• •

•

• •

keep former owners motivated after a transaction. A professionally run company with in-place management is worth much more than one dominated by former owners and their family members.

Aging workforce: Finding good longterm employees is possibly the biggest issue facing small business today.

Tons of paper consumed by the operations: Recent history has shown that paper cut up or MSF consumed (integration value) can be a significant factor in the value of a converter, and the larger the operation, the more this becomes a factor.

Old, inefficient equipment: If a buyer must spend millions of dollars upgrading your equipment, they will pay you less (probably dollar for dollar).

Poor plant and/or poor plant layout: Ditto.

Flawed and incorrect financial and other management reporting and bad business practices: If they don’t trust the information they receive from you, they will consider the transaction riskier and pay less.

Pending or threatened litigation: A buyer will want to be insulated from this, so any hit that is taken will likely be borne by the current owners.

Poor reputation: It’s very hard to overcome this one.

State and local sales and income tax issues: Buyers will evaluate your compliance with laws to make sure they are insulated from any tax claims. It is important that you make sure that you are filing income tax returns, sales and use tax returns, etc., in all jurisdictions in which you operate.

With all of this theory out of the way, let’s talk about how you can create a usable model for calculating the EV of your business to aid you in the evaluation of how your business is performing and what the effect of various initiatives is on the long-term value of your business.

Most buyers will look at earnings before interest taxes depreciation and amortization (EBITDA) generated for the past couple of years for two reasons: • It is a bottom-line calculation of the cash flow that you generated that a buyer can utilize to pay for the business without any tax structure or financing assumptions.

• The results of the recent past are often the best predictors of future performance.

The EBITDA will then be normalized for things like the loss or gain of major customers and nonrecurring items of income and expense in the income statement. So, some notion of normalized historical EBITDA should be the starting point of your calculation.

Next, an evaluation of all the aforementioned factors relating to risk will be evaluated and reflected in a multiple to be applied to the normalized EBITDA. So, to keep things simple and work with actual and implied multiples that can be extrapolated from recent M&A transactions, let’s say that the perfect company would be assigned a multiple of 10. You can then adjust the multiple that your company may receive by evaluating these key factors. You can then reduce this value by the perceived additional investments that a buyer would have to make and by the interest-bearing debt that you currently show on your balance sheet, and increase it by any hidden value

Strength in Numbers

that you may have, such as undervalued real estate on your balance sheet. Very few companies will sell for multiples of 10 unless there is significant integration value associated with the transaction, and therefore, you should be liberal in your reductions to the starting multiple based upon your company’s known weaknesses. Most companies without significant volume—and therefore integration value—will ultimately sell for multiples much lower than 10 in today’s marketplace.

Therefore, an average (or weighted average) of the normalized EBITDA that you have generated for the past few years, multiplied by a multiple that is adjusted by the relative risk factors associated with buying your business, less a possible provision for large future capital costs and less interest-bearing debt plus the value of any hidden assets would equal your enterprise value. Make these evaluations and calculations at least annually to enhance your overall reporting and business analytics.

The beauty of this exercise is that it can and should tie into—or possibly facilitate—your strategic planning, in that it will get you to focus on the things that will ultimately make your company more profitable and increase its EV. It will also give you a consistent lens through which to evaluate returns on investments, equity, and assets, and hopefully, it will give you a more realistic view on your progress—or lack thereof.

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

Improve Revenues with Food Safety Packaging Certification Do you know what standards are recognized by GFSI (Global Food Safety Initiative)?

Do you know which Food Safety Packaging Standard is best for you? Is it, FSSC 22000, SQF, BRC, IFS or AIB? Do you know how to Get Certified Faster & Easier in less than 5 months?

Contact QSE for ALL your Answers and Your Simplified Food Safety Packaging System Development Quality Systems Enhancement Inc. 1790 Woodstock Road. Roswell GA 30075 Ph# 770-518-9967, Fax: 770-518-9968 Email: info@enhancequality.com www.enhancequality.com

BOXSCORE www.aiccbox.org

73

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

PACKAGING

CORRUGATED

F O U N D AT I O N

Over 500 Students From 20 Campuses Participate in ICPF’s Teleconference on the Business of Corrugated Packaging & Displays and the Career Opportunities

T

his past February 21, a record 20 campuses with over 500 students and faculty participated in ICPF’s 2019 Teleconference on the Business of Corrugated Packaging & Displays and the Career Opportunities. The program included an industry panel presentation by Greg Hall of Smurfit Kappa North America and Jeff Turner of Pratt Industries. Michigan State University (MSU) packaging senior Taylor Jensen, who secured a 2018 student internship at Landaal Packaging through ICPF’s Career Portal, served as moderator.

Immediately following the panel presentation, the industry speakers and student moderator addressed live questions from each of the 20 campuses.

In addition to MSU’s packaging school that had the largest audience with over 120 students and standing room only, participating campuses included Appalachian State University, Ball State, Bowling Green State University, Cal Poly, Clemson University, Dunwoody College of Technology, Indiana State University, Illinois State University, Lewis-Clark State College, Millersville University, North Carolina A&T University, North Carolina State, Pittsburg State, Rutgers University, University of Florida, University of Texas at Arlington, University of Wisconsin-Stout, Virginia Tech, and Western Michigan University.

Throughout May, many of these students will be visiting ICPF’s Career Portal to directly apply to the openings that ICPF Corporate Partners have posted there. Many of the students and upcoming graduates also have posted their résumés in the portal’s Résumé Bank that can be viewed by HR representatives. So far for 2019, over 100 student interns and upcoming 2019 graduates have been hired for sales, production and operations management, design, and engineering through ICPF’s portal and other ICPF resources. ICPF Corporate Partners are encouraged to post their remaining job openings for 2019 graduates and summer student internships today!

BW Papersystems Becomes ICPF’s Most Recent Corporate Partner

I

corrugated packaging careers. We plan to CPF has announced that BW immediately begin using ICPF’s Career Papersystems has become its most recent Portal and other resources to acquire Corporate Partner by making a financial entry-level engineers and programmers. pledge to support the foundation’s educaAlready, we have seen several potential tional and student outreach initiatives. matches in the portal’s Résumé Bank.”

“BW Papersystems has been well aware ICPF’s chairman, Jeff Chalovich of of ICPF’s successful work with universities WestRock, welcomed BW Papersystems and students across the country for a long as an ICPF Corporate Partner and time,” said Neal McConnellogue, president of BW Papersystems. “Through ICPF, thanked Neal for the corporation’s pledge. hundreds of students annually learn about “For six or seven years, BW Papersystems

74

BOXSCORE May/June 2019

has supported ICPF through serving as a sponsor and participant in the annual Holiday Weekend in New York. During a dinner meeting recently with Neal and his team in Indianapolis, I was pleased to learn that BW Papersystems wished to take the next step of making a financial pledge commitment to become a formal ICPF Corporate Partner.”

ICPF Vice Chairman Andy Pierson added that “BW Papersystems has been

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

PACKAGING

CORRUGATED

F O U N D AT I O N

Joseph R. Palmeri Inducted Into ICPF’s Circle of Distinguished Leaders

O

Chuck Fienning, American Packaging, and BCM Inks.

Those who wish to join in recognizing Joe with a donation can make a check payable to ICPF, and mail it to:

Joe R. Palmeri was presented with a medal as part of his induction into ICPF’s Circle of Distinguished Leaders.

International Corrugated Packaging Foundation 113 S. West St., 3rd Floor Alexandria, VA 22314

donations in his name to support ICPF. To date, these include Akers Packaging Service, WestRock, Harris Packaging, Schwarz Partners, FBA, Greif, Buckeye Corrugated Inc., AICC, Klingher Nadler, Smurfit Kappa, Cascades, Hood Container, Liberty Diversified International, Tom Skinner, Landaal Packaging Systems, International Paper, Central Package & Display, John & Gloria Bolender, Sumter Packaging,

*Please write “Joe R. Palmeri” in the check’s note margin.

Donations are fully tax-deductible and support the Circle of Distinguished Leaders program and ICPF’s educational initiatives for the corrugated packaging industry. Joe will be provided a list of donors. For more information on ICPF’s Circle of Distinguished Leaders, contact rflaherty@icpfbox.org, call 703-549-8580, or visit www.careersincorrugated.org.

a longtime player in the corrugated packaging industry and will be a great addition to ICPF’s corporate partnership.

I initially approached Miles Fletcher and Neal knowing that an ICPF corporate partnership would be a great fit for them and for our education foundation.”

BW Papersystems brings together 11 brands—BW Bielomatik, BWP Zerand, Curioni, JAG SYNCHRO, K&H, Kugler-Womako, MarquipWardUnited,

SHM, VortX, WillPemcoBielomatik, and Wrapmatic—that synthesize manufacturing in the paper process industries.

BW Papersystems offers market-​leading technology for full corrugators in a variety of configurations, rugged rotary die cutters, and flexo folder gluers, as well as starch-mixing systems. The firm offers folio-size, cut-size, and digital-size sheeting and packaging of paper, board, and other materials.

For more information, visit www.bwpaper systems.com and www.careersincorrugated.org, or contact info@icpfbox.org.

Photo by Jackie Shultz.

n April 2, during ICPF’s annual update to the AICC general membership at the AICC Spring Meeting in Miami, Joe R. Palmeri, co-owner and chief operating officer of Jamestown Container Cos., was inducted as the 25th member of ICPF’s Circle of Distinguished Leaders. Through the assistance provided to ICPF by Jamestown Container, the corrugated packaging industry, and Joe’s family, the lifetime recognition was received as a total surprise to Joe. The Circle of Distinguished Leaders honors exceptional visionaries whose energy and talent have moved the industry forward in remarkable ways. These leaders are recognized for demonstrating a strong commitment to the continuing success of the global corrugated packaging industry.

Joe was nominated for induction by firms and individuals that made

Richard Flaherty is president of the International Corrugated Packaging Foundation.

BOXSCORE www.aiccbox.org

75

The Final Score

In Good Hands Going Forward

T

his is my last “official” column for BoxScore in my role as president of AICC. Next issue, my friend and colleague Mike D’Angelo will be writing his words in this space in his new position as president. I am gratified that AICC’s board of directors recognized Mike’s inherent industry knowledge, his longtime friendships among many members, and his well-known integrity in selecting him to succeed me in this position. AICC is in good hands going forward.

Before I officially sign off, I want to thank you, the members of AICC, who have over these many years become my friends and comrades in arms. When I was hired in 1983 by Dick Troll, who then was AICC’s executive director, I had no inkling of the career that lay ahead. I am grateful that AICC’s founders—men such as Jack Grollman, George Arvanigian, Hardy Sanders, Bill Akers, and many of you after them—took the time to teach me about the dynamics of the business.

I also want to throw in my two cents’ worth on the value of being independent—and remaining so—in our industry today. While the dynamics of our North American manufacturing base have changed dramatically, with rapid consolidation, increasing concentration of market share, and new generations of workers, the value and reward of independent entrepreneurial enterprise remains. Good, talented people thrive in an environment where they can be creative, take risks, and embrace the urgency that says “how high?” when the customer says “jump!”

What I have learned from you, our members, is that you who have invested in this industry have not just bought a building, some equipment, and a few trucks. No, you have invested in your communities, your customers, and your people. You have invested in our free-market economy, the proven value of which is something we all take for granted but for some reason is now being vocally challenged in the public square. I see this in your lobbies and conference rooms—the plaques, newspaper articles, trophies, and memorabilia that proudly say that this independent company in this customer-centric business is the best place to work, the best family to be a part of.

As I step down from my position as president, I am not stepping out completely. I will remain on as AICC’s “consulting ambassador,” meaning you will be seeing me at your doors from time to time to visit, talk about your challenges, and convey them back to Mike and the team at AICC. And speaking of the team, nothing AICC has done over these many years could have been accomplished without our wonderful staff members, past and present. Each one has carried the same passion and sense of purpose in their work on behalf of our independent members. I thank them all for their loyalty and for making this look so easy.

AICC is in good hands going forward because of who and what it represents. Thank you for the opportunity to be a part of it.

Steve Young President, AICC

76

BOXSCORE May/June 2019

Powerful art deserves an extraordinary canvas.

Backed by the industry’s leading technical sales support and supply chain expertise, we offer a complete line of high-impact graphics grades. Created to the highest industry standards, each paper solution delivers award-winning quality and consistency for all your printing needs. Our DiamondTop™ substrates have earned five 2018 Excellence in Flexography Awards. Whether you need brightness, strength, durability or flexibility across printers, we can help.

Contact your WestRock containerboard representative.

westrock.com ©2019 WestRock Company. All rights reserved.

Your Business...

ACCELERATED.

CORRUGATORS  SHEET PLANTS  SHEET FEEDERS  FULL BOX PLANTS

Your Factory…

AUTOMATED. Total Integration Complete Automation Costs Reduced

Fuel Factory Automation with Amtech’s Smart Factory Scheduling Solutions • Complete integration from inquiry through on time delivery • One seat scheduling for corrugating, converting and shipping • Real-time insight of the entire manufacturing process • Embedded algorithms that streamline processes • Analytics and information for effective business decisions

Copyright © 2019 Amtech Software. All Rights reserved.

Connect with us!

Learn more: dartillio@amtechsoftware.com