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Family Businesses Prosper Amid Consolidation

The industry is consolidating and big, publicly traded companies are moving in. Can family businesses survive, much less prosper, in such circumstances? If the paperboard packaging industry is any example, the answer is that independent, family-owned firms can use their flexibility to succeed by exploiting niches and building powerful customer relationships.

Vertically integrated giants like Georgia-Pacific, International Paper, Weyerhaeuser and Smurfit-Stone Container among other companies are paperboard powerhouses. The big guys are eager to buy out the little guys. Some smaller companies sell, but others remain independently competitive based on the family-owners goals and motivations. Independent corrugated box plants hold 24% of the U. S. market and independent folding carton plants take 35% according to Paperboard Packaging, an industry publication.

Many independents have traditional family business motivations. "My dad and mother would never want to sell this place," says Mike Flinn, president of Scope Packaging, Inc. in Orange, CA. "This company supports a lot of families that have worked here for a long time."

"We're 93 years old and I'm proud of what we do here. I love this business," says Steve Warneke, president of Denver's Warneke Paper Box Co. "We're the best there is. No one can get a better box anywhere than they can at this place."

Wertheimer Box & Paper Corp=s president Jay Wertheimer offers a similar perspective: "My company has been a family business for 61 years. We've had people express their interest and desire to buy us, but we're not interested. We haven't achieved everything we're capable of." Wanting to sustain the family business, however, doesn't promise success. "Independents are alive and well and will remain alive and well," says Jerry Van de Water, President of the Paperboard Packaging Council. "Independents these days can play with the big guys. A very small independent, for a reasonable sum, can acquire information technology capabilities close to those of the major integrated."

Others point to family business competitive advantages: Employee commitment, deep caring by owner-managers, and willingness to provide superior service even on smaller orders, "The role of the independent has, and continues to be, to serve the market segment where we can be more creative, more flexible and more quickly answer specific customer needs," says Lou Wetmore, President of Triad Packaging, Inc. in Conover, NC. Under those circumstances, family firms can remain successful even in a marketplace of giants.

 

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