Expert Interview – Packaging Matters

Packaging is critical to protecting goods as they move through the supply chain to the final consumer. The industrial packaging market is currently a $112 billion industry and expected to grow to $139 billion in the next 4 years. For this edition of The Expert Interview, I met up with Richard Clarke Jr, GM of Imperial Dade’s Tampa Division. Richard has over 40 years of experience in packaging distribution.

LC: How did you get started in the industry?

RC: In 1975, I went to work for my family’s 64 year-old distribution company, Peninsular Paper Company, one day after I graduated from Furman University in Greenville, South Carolina. During my tenure I have worked in the warehouse, driven a truck route, worked the inside sales desk, worked as an outside sales rep, worked as a specialist sales rep for large accounts, worked as a buyer, worked as a sales manager, and then became President of the company overseeing 100% of our operations along with my dad. Imperial Dade acquired our company in May of 2017 and I am now the General Manager of the Tampa Division.

LC: Sounds like you held every position in the company at some point in your career.

RC: Yes, and it helps as I understand how every role, in some way, touches our customers.

LC: What type of products are considered industrial packaging?

RC: Industrial packaging is usually a form of packaging designed to package products for resale. Some examples include foam trays, molded fiber trays, clear plastic packaging, overwrap and other sealing films, shrink films, etc. It can also be packaging items designed to protect and enhance the appearance of the loads during production and especially during shipping. Examples are tape, stretch wrap, pallet interleavers, kraft wrap, corner boards, specialty bags, and specialty labeling.

LC: What types of businesses use these items?

RC: Any business who produces anything and ships it anywhere needs Industrial packaging to protect their product during the handling and shipping process. They use tape to seal their boxes, stretch wrap and corner board to unitize the load, labels to denote production codes and routing information.

RC: Food processors such as commercial bakeries, produce and meat processors also use industrial packaging products to prepare a product for resale.

LC: Why is the packaging important to those businesses?

RC: They cannot sell their products if not packaged properly. They can often increase sales if the packaging enhances the appearance and better merchandises their products. This has always been true in the supermarket business. Food that is packaged attractively and displayed near check-out will sell faster.

LC: What changes have you seen take place in this product segment over the years?

RC: The competitive landscape has changed quite a bit over the last few decades. In the 1970s and 80s, paper and janitorial distributors were the go-to source. Then, in the 90s, specialty packaging distributors began to develop as packaging items became more varied and complicated. Then the recession hit and many of those specialty distributors closed their doors. Now customers are coming back to broadline paper distributors, such as Imperial Dade, for their needs. This has created opportunities for us, especially with middle-market customers that rely on our expertise to help them source the right products.

LC: What are the current trends and innovations?

RC: There are quite a few. Molded-fiber trays are becoming very popular with food processors. Their customers are looking for more environmentally friendly packaging options to meet consumer preferences. The enhanced merchandizing has helped to increase sales. Special tapes and films are available for the produce industry that help protect and control ripening during transit. This reduces waste which saves money and prevents unsellable product from being thrown away.

RC: Colored sealing tapes are being used more often in warehousing operations. The colors help the operator clearly see that cartons are sealed shut. With clear or kraft-colored tape, it is not as evident and that can lead to damaged goods. Non-skid interleavers are now available that help prevent loads from shifting during transit, another way to prevent damage to inventory.

LC: What do you think the future holds for this segment?

RC: Industrial packaging will increase exponentially in importance for American manufacturers as we compete in the global market. Packaging is primarily designed to protect the product as it is shipped. Many manufacturers do not realize that the same packaging can also be used to very effectively and very inexpensively merchandise their product and thus gain more sales. A simple example of this would be to print cornerboards, or to print the tape that seals the boxes for a fraction of a cent per piece and get real advertising value. Good industrial packaging, versus poor, also shows the end-customer that the manufacturer cares and emphasizes that the manufacturer makes a quality product.

LC: What advice do you have for businesses on improving their packaging program to save time and money?

RC: Businesses that use packaging need to realize that their distributor sales rep can be a real asset to their program as a partner. A good DSR studies what products are on the market and studies his or her customer’s needs, then matches the two. I recommend that they not only show the DSR what they use but tell the DSR how they use it and what they are trying to accomplish by using it. A good DSR, one who is a partner to their customer, will then recommend products that can help their customer achieve increased profits and efficiencies.

Richard and his team are available to consult with businesses about industrial packaging programs. He can be reached at rsc.jr@imperialdade.com.  

 

Expert Interview – Dealing with Disruption in the Grocery Segment

The US retail grocery market segment is currently a $608 billion industry and growing. However disrupters including online retailers and meal-kit delivery services are creating competition for traditional supermarkets and consumer lifestyles are changing the way people shop. I spoke with two of my colleagues about this industry for this month’s Expert Interview. Bob Waxman, Director of Supermarket and Chain Store Sales and Oliver Munoz, National Account Manager, shared their insights and advice.

LC: How long have you each been in the industry?

BW: Over 35 years. I started as a sales rep for another New York-based distributor and joined Imperial Dade in 1987. Been here ever since.

OM: I’ve been with the company for 5 years focusing on sales, sourcing, and market research.

LC: What are some of the big changes you’ve seen in the grocery and supermarket industry in recent years?

OM: Mergers and acquisitions have been prevalent.

BW: I agree, consolidation of single stores and smaller chains into buying groups or larger chains has been the biggest and most defining difference. The consolidation has both added to the competitive edge as those retailers now have an expanded presence. But it’s removed some competition by lessoning the number of independents that the consumer can choose from. There is also a large European influence that has captured part of the market with the introduction of new chains.

BW: There has also been consolidation among distributors, including Imperial Dade. Fortunately, our expanded reach has opened up opportunities to partner with more customers.

OM: Non-traditional competition is also changing the landscape. Although online sales have not been a very profitable venture for most grocery retailers it is an important channel to consider. In 2017, online grocery sales were over $14 billion and that figure is expected to more than double by 2021.

LC: What the challenges that grocery operators are facing today and how do you get involved in helping solve those challenges?

BW: Economics continue to be a major concern and challenge. It is a delicate balance of image and cost that make up the dance we do every day.

OM: Costs are the big issue. In 2017, the data shows high increases in raw material costs, both for store supplies and agricultural products. These costs would have to be passed along to the consumer unless we can help find solutions. In these cases we work with manufacturers to identify alternative products that provide cost savings.

BW: We work as an agent for our customers. We listen and understand their needs. Then we work with a wide variety of manufacturers to source the best products at the best prices. We look at new products daily and stay on top of innovative ideas.

OM: For example, store-cut fresh fruit programs have been a hit in recent years. One of our customers was using an outdated container that came open easily and did not present a consistent look across the sizes offered. We introduced a square, tamper-evident container that has better clarity, an upscale look, and fit in the display case better. Their sales of increased by almost 30% following that change. Improved merchandising can be the key to driving sales and increasing profits.

BW: We also offer a variety of technology tools that help our customers manage their inventory more precisely which saves money. We help them prepare for sales and seasonal trends, as well as set controls on supply items such as gloves and bags. For some stores we offer VMI (Vendor Managed Inventory) which saves on labor costs and allows store management to focus on center store profit.

LC: What are the trends you each see for the coming year?

BW: I’m seeing more interest in sustainable packaging as well as more upscale packaging. Though cost is still a concern, keeping up with or outdoing other forward thinking retailers is important to the end-customer’s experience. Prepared foods and in-store restaurants are also going to be the flavor of the year.

OM: Yes, prepared foods is likely to continue booming. I work with our customers to help them initiate or grow this key category. Also, understanding the demographics of different neighborhoods is important. Understanding the ethnic foods that consumers are looking for and merchandising them correctly leads to higher sales and customer satisfaction.

LC: Any other suggestions you can offer retail grocery operators?

OM: Consider getting into the online space by partnering with a third-party grocery delivery service. This can help fend off the competition from other online retailers and help you grow your market share by capturing new sales. This space will continue to grow, but you need volume to make if profitable. Create a consumer-friendly website that is updated regularly with special deals and informative content that is of interest to your target market. Couple that website with online-ordering capabilities, either through a third-party service or your own platform.

BW: My advice is to let us help grow your business. We have been doing this a very long time. Put our resources and economies of scale to work for you!

The dynamic duo of Bob and Oliver are available to consult with retail grocers and related businesses about supply chain programs and solutions. They can be reached at bwaxman@imperialdade.com and oliverm@imperialdade.com.