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Profits on Display
September 1, 2006 By: Tom Andel Paperboard PackagingWith the right technology and some market knowledge, converters can add to their product line and their bottom line.
These days, making a profit selling corrugated depends on a number of factors. First, are you selling to a purchaser or a marketer? Second, are you selling material or a message? And third, how agile are you?
 Jamestown Container produced 200,000 of these "Beers of America" display packages in two weeks, resulting in store sell-outs. |
How you answer these questions can determine if you have the right stuff to succeed in the display business. Janet Hage wants to partner with converters who have the right stuff.
Hage is cfo of Production Services International in St. Paul, Minn. The company specializes in designing promotions for the beer and beverage industry in the U.S. and internationally. Last year she was faced with a particularly daunting challenge, and she was looking for a display company with whom she could share it.
"The packages we do are sold during the holidays," she explains. "The cooler we can make them, the more likely they will command a premium price."
The cool concept Hage wanted to put out into retail stores was a "Beers of America" promotion. The display was to communicate an era of American craftsmanship, and what would get that message across better than an old-fashioned wooden toolbox filled with the best-formulated beers this country has to offer?
The goal behind this concept is similar to the motivation any corrugated box maker would have in producing wooden toolboxes: to command a premium price. A corrugated box is just that: a box at a market price. A wooden toolbox filled with beer is a gift, with priceless value-added elements that can fatten the profit margin.
"A customer is buying not just 12 beers but this container they can use again to put their newspapers in or a plant," Hage says. "They might be willing to pay $20 even though a 12 pack of beer would cost them less than $10. Because this is a gift item, we're not really competing against other beers, but against other gifts in the market."
Because this was a holiday promotion, time was of the essence. Hage heard good things about Jamestown Container's Buffalo Division from High Falls Brewing Co. in Rochester, N.Y. She decided to put Jamestown to the test.
"That is a cool concept," Jamestown's general manager, Rob Warnock, told Hage. "How many do you need and when?"
200,000 in four weeks.
"Okay," he said.
The answer came so quickly Hage wasn't sure she believed Warnock could pull this off. However, she decided to go with his enthusiasm.
Warnock would have competition. Production Services International also uses agencies that house sheltered workshops with government assisted employees who work at the right price point, but not necessarily the right speed.
Warnock hired help of his own — 60 temps to buffer, assemble and pack these carpenter toolboxes. They produced 9,000 of these displays a day for four weeks.
 Great Northern's goal for this Tsingtao beer display was to reflect the Chinese heritage of the brand while producing an upscale display merchandiser that mimicked the look of steel and fabric. Made of corrugated and vinyl, the display features a removable banner that can also hang from the ceiling as an independent sign. |
"We set up a cobbler shop in one of our storage rooms, supplied the temps with safety glasses, hearing protection and staplers, brought in all the wood and figured this out as we went along," Warnock says. "We consumed enough wood to build 15 2,000-sq-ft homes, well over 20 miles of 1-inch dowel, and enough beer to fill 24 tanker trucks."
What does this have to do with corrugated? Well, the job did involve lithographic miniflute header cards that wrapped around the top of the toolboxes, as well as diecut corrugated at the bottom of the display. What matters is the result.
The beer sold out quickly. But what really matters to Warnock is he dazzled his customer. He even outperformed them.
"We were waiting on some material they could not orchestrate into our building as fast as we were able to pack it out," he explains. "They were so thrilled that within a week of ending that project they committed to doing the same thing this fall. We're about ready to get going with a little different design, using a metal pail."
From Basic to Wow
The value added services that can accompany displays is drawing more converters into this business, and therefore more customers to corrugated.
"We can take people from the most basic need, which is a stock display, all the way to customized displays," says Joel Tilsner, president of Tilsner Carton Co., St. Paul. "We'll also do fulfillment, setting up the display with the customer's merchandise, pack it and ship it to the retail location. Our niche is taking the customer from basic to something custom and handling everything in house."
That could involve the use of motion, sound, lights, anything to bring consumers to the display.
"We found there were companies that wouldn't go with displays, but now they're coming for very small quantities," Tilsner says. "Or their needs have changed so that the graphics on the displays must be regionally specific, so someone may order 500 displays, to be printed five different ways in hundreds, depending on what part of the country it's going in. We ship displays overseas also."
The Aid of Technology
The increased capabilities of state of the art converting equipment is making displays an attractive sideline for converters to whom this business was once out of the question.
 Meridian Display and Merchandising, a division of Tilsner Carton, produced this "Over The Hedge"-themed promotion for Costco Stores. It is a full-labeled video game pallet display. |
Buckeye Container, Wooster, Ohio, recently installed a Bobst Vision platen diecutter consisting of four sections: a feeder, a diecutter, the gBREAK separator, which breaks the cut pieces into whatever configurations necessary for the customer, and the palletizer.
"This has increased our ability to do some complicated multiple-out diecuts," says Guy Papp, graphics manager at Buckeye. "One customer purchased a NASCAR display from us. The Bobst uses an electronic eye to register its print to diecut. Since this diecut looks like a car, it's not your typical square shape. These cameras that register the diecut to the printing capture the sheet in register so when this car was diecut it came out in good register. This piece was so big that the parts had to match up, from the front of the car to the back."
Papp's next investment will be a specialty gluer.
"We modified the gluing device we already had, but some of the complicated packaging we're seeing will require more glue heads," he explains. "On the display side there are some large bases, and when they're folded up sometimes our gluing device isn't able to handle the width, so we have to send it out to be hand glued. A gluing device that could accept a larger blank would benefit us and that would tie in nicely to the displays."
Medium and Message Mastery
This is the TIVO age, and that's why it's also a good time for converters to sell displays, according to Patrick Graf, vice president of sales development for Great Northern Corp., Racine, Wisc.
"Consumer product companies are realizing that the results they can achieve using a display vs. other types of advertising are much greater than they used to be able to achieve in other areas such as print, TV and radio," he says. "There's been a shift in dollars from TV to internet based advertising, but also to more point-of-purchase advertising. It's recognized as the best way to get to customers who are making decisions at the store level."
That opens an opportunity for the paperboard converter, but also a responsibility. The converter needs to develop the expertise to explain to clients the best way to present their product in the marketplace that will increase market share and sales.
For example, Great Northern offers both permanent and semi-permanent displays. A permanent display is generally in the field for nine months to a few years. But as Graf explains, the market is leaning toward shorter timeframes for displays.
"Beverage is one of those, where they may want to have something up for a season but then they want to have it come down and put something else up for the following season," he explains. "That could mean three to six months. Mixing materials is the perfect way to meet the goals of the budget but also meet those requirements from an aesthetic and structural standpoint."
Graf says corrugated displays generally have a four to eight week lifespan. Beyond six weeks he looks for ways to expand that lifespan. That could mean pregluing panels together or adding a UV coating to avoid deterioration and wicking up of water from the floor. Another way is to elevate the display off the floor slightly.
"Then there was the case of the Miller beer display we did where we put it on a wood base so we could attach casters to it and use metal tubes," he adds. "It all depends on how long you want the promotion to last."
Graf says technology will open doors for converters to the display market. He's particularly enthusiastic about digital printing opportunities.
"It will allow for much more regional customization of promotions," he says.
New materials will also help converters impress clients.
"Our StrataGraph operation involves a laminated solid fiber product that is unique to North America," he says. "We produce a variably laminated product for signage and display components. It's an alternative to miniflute. It has the compression strength of an E-flute or F-flute, all the way down into some of the smaller miniflutes. It allows high-end printing using six-color UV inks and coatings. We can print on a wide variety of substrates and then laminate to a variable weighted base sheet and top sheet. Whatever it takes to create a fit and minimize costs."
And make a profit.
