Beyond the box

Holy emoji: GNC takes packaging into the future

Posted on Mar 1, 2017 :: Cover Story
Posted by , Insight on Business Staff Writer

Few people would look at a brown paper box and envision the technology behind its recent evolution.

But today’s Great Northern Corp. has proven that it’s hip to be square in a digital age. The company has taken the cardboard box to a new level, adapting to changing customer demand for eye-catching packaging and award-winning displays.

Case in point: When the soft drink giant Pepsi wanted to offer bottles and cans decorated with emojis — those cute little smiley faces that people use to punctuate their text messages — GNC set out to create store displays to match the new product.

“The challenge was to create structures that could bring that product to the market for a launch week,” says John Davis, GNC’s CEO. “The creativity around our design allowed Pepsi to put their product at retail in a variety of environments and execute all across the country on that same launch week.”

GNC rose to that challenge. It created and produced 140,000 displays that were sent out in 3,148 shipments within just two weeks.

It was the kind of challenge that the company, with a new vision and mission, was ready for.

Growth & direction

Founded in 1962 in Appleton by Jim Davis (John’s father) and Bob Brown, along with the late John V. Maring, GNC started out converting corrugated sheets into boxes.

The company grew steadily with acquisitions into the 1970s, adding the Laminations division in 1995. It created its Oshkosh-based digital printing division, StrataGraph, in 2005 in a partnership with Castle Pierce. In 2004 and 2008, it acquired properties in Chippewa Falls and Minneapolis.

Then the recession hit. Fortunately, its investments and acquisitions had given the company the momentum needed to weather the downturn, Davis says. Since 2008 to 2009, the company has experienced double-digit growth. In 2016, GNC saw $450 million in sales.

Looking to the future

So why tinker with a good thing? The digital age was changing the way things needed to be done. It was changing what consumers were demanding in the marketplace and what the next generation of workers was demanding from their employers. That changing landscape, and the loss of GNC’s original founders, had company leaders looking at the future in a new way.

“My dad died in 2013, Bob Brown died in 2015,” Davis says. “So that was a bit of a moment in time when folks started to ask, ‘Well, what’s next for Great Northern? What does the future look like?’”

That discussion led to the company’s Vision 2020, a plan that enhanced the company’s mission and vision statements and set a course for building the digital infrastructure, as well as the people, it would need to carry it into the future.

“It seemed like an appropriate time to check our mission and vision and be sure that it still resonated,” Davis says. “I think our belief was if you’re true to your values and you live out your vision, that really creates a positive culture. That was the foundation that we set for ourselves.”

GNC manages five product groups: Packaging, Instore, Rollguard, Laminations and StrataGraph, its digital printing division.

Until the Vision 2020 plan, “we acted more like a holding company at the corporate level,” says Bill Raaths, chairman and former GNC CEO. “We had these good businesses, but we didn’t really have a sense of the common denominator, and what we can use to leverage our strengths.”

The common denominator came through a more unified and streamlined vision and mission. Company leadership recognized a commitment to staying privately held. They also recognized the company’s financials were strong, but “if we were going to compete effectively and give our employees the tools they needed to succeed, we needed to ramp up our reinvestment,” Davis says. “In the last four years, we really have been on a record pace in terms of reinvestment in our plants and facilities.”

The company also wanted to prepare its leaders for the next generation of skilled workers it would need for a tech- and design-oriented company.

Five divisions, one brand

The leadership team members — about 120 GNC staffers, or 10 percent of them — are undergoing leadership training geared toward becoming a sort of talent coach to their employees. They all read “Everybody Matters: The Extraordinary Power of Caring for Your People Like Family,” by Bob Chapman, CEO of Barry-Wehmiller. Chapman is an advocate of building morale, creativity and performance rather than managing workers as mere functionaries.

But it was a big change for some longtime GNC employees who had done just fine making sure the boxes were made and orders filled on time.

“There are two kinds of challenges — one would be this is very uncomfortable for some leaders who aren’t used to leading this way,” Davis says. “It’s also challenging to have unique business units with different target markets and different geographic locations.”

GNC was faced with driving a unified strategy, engaging 1,200 employees across five divisions, 12 locations, and getting all the leaders on board ­— without forcing conformity. The real innovation happens at the unit level, Davis says.

“We allowed the business units quite a bit of autonomy to create their own strategies for going to market,” Davis says.

“John’s done a great job of this,” Raaths says. “It’s not like we’ve got cookie-cutter locations that have to follow rigid and rigorous sets of criteria and performance issues. We’re always trying to strike that balance between enabling and empowering the locations and business units to do what they need to do.”

Hiring for the future

The leadership effort is part of the way the company is changing its culture to make itself attractive to the skilled workers it needs.

“It’s a different kind of employee these days, that’s coming out,” says Mark Van Pay, vice president of marketing. “Their motivations are different than the employee that’s been here for 30 years.”

GNC employs 60 designers across its five product groups, which Davis says will be closer to 80 designers by the end of the year. GNC also wants machine operators and people with “soft skills,” the ability to work on a team and solve problems.

“We’re not immune to having challenges finding people and attracting folks to manufacturing,” says Davis, who is one of the founding members of the NEW Manufacturing Alliance. “If they can come from tech schools or school-to-work, high school programs and have a good attitude, we’re ready to hire. The rest of the skills we can train.”

The digital future

Gradually, GNC is pulling out old equipment and installing new, aiming for a 50 percent increase in output. For example, the new corrugator can produce three times as much product as 20 years ago, in the same space.

“That’s sort of our strategy, of the four walls staying the same, but getting machinery, getting tools for our employees to do more in the same space,” Davis says.

This spring, the company plans to install a new HP T400 Digital Press as an addition to its StrataGraph unit.

“Most of our investment has been in terms of capacity and capabilities to help our customers’ graphics and unique packaging design,” Davis says. “We’ve invested in our entire IT area.”

On a tour of the Appleton facility, Davis points out the original 30,000 square feet where his “dad would do expense reports; I would play hide-and-seek with my sisters,” he says.

Davis didn’t plan to follow in his father’s footsteps at GNC. “I left for college, and I remember driving out of the state thinking I’ll never be back,” he said. He earned a degree in economics at Dartmouth College with the intention of starting his own business.

After four years of education, Davis said he was “much smarter” and decided it wouldn’t be so bad to work at GNC. He followed the guidelines set by the Founding Fathers that he should do something else for five years. Davis sold packaging for another company and earned an MBA at UW-Madison, starting in sales management at GNC in 1986.

When Davis isn’t working, he enjoys recreational sports like water-skiing, mountain biking and tennis. “Anything that scares me or allows me to have another cheeseburger and beer,” Davis says.

He and his wife, Kathy, recently visited Park City, Utah, for skiing and the Sundance Film Festival with their two grown children.

Davis points out a new German Bobst “flexo folder gluer” installed in early 2016, which has a more space-aged look than its 15-year-old predecessors, as well as more of a space-aged output (capable of producing 22,000 boxes an hour, according to Bobst specs). The tour occurred during a shift change, so it was quiet. “Right now it’s running zero truckloads an hour,” Davis quipped.

But when it’s on, it’s on: It will fill a truck every 60 minutes, a process that used to take eight hours just 10 years ago.

Video displays allow workers to keep an eye on the process in different areas of the large machine. Stacks of rolled paper are bar coded and scanned; forklifts are equipped with laptops. Orders and invoices are all processed electronically, without paperwork exchanging hands.

Effective efficiency

The improvements also help reduce waste, a financial and environmental benefit. For example, GNC will work with customers to see how packaging might be altered to reduce waste, says Jeff Michels, senior vice president, business unit manager for packaging. It’s easier now, for example, to create multiple kinds of boxes for a client who might be shipping to different climates, using less fiber when possible.

“(Davis is) a very progressive guy and is always looking to keep pushing the organization to a new level,” Michels says. “He consistently challenges us to look for innovation, to look for ways to take cost out of it. He’s always been very supportive of kind of investing in some of the latest technology.”

David Dobratz, supply chain manager for Tidi Products in Neenah, says GNC helped his company review its 500-plus different sizes of corrugate and determine where it could consolidate. “We occasionally do audits where I have one of their packaging engineers come through and just look at our processes and look for ways that we can do it better — could we do it with a lower grade corrugate, or do we need to use less board?”

Dobratz says GNC is the kind of supplier his company doesn’t have to worry about.

“They’ve done a tremendous job with everything they’ve done over the years, helping us out with cost-saving initiatives as well as the service side,” he says. “We’ve got a short turnaround on our orders, and there’s never a question of whether or not we’ll have it on time.”

GNC’s new equipment allows the company to meet demand for fit-for-use packaging, running lighter-weight materials without compromising strength, saving fiber and optimizing both cost and materials, Michels says.

“We needed to keep up with needs of customers, what their product needs were,” Van Pay says. “That really helped us bring in new tech to help solve those challenges that they were having.”

For example, consumer product companies are creating more products to win over more consumers, and as a result want smaller quantities of packaging, Davis says.

“Digital is a perfect fit for that market,” he says. “We think we’re on the edge of a shift in consumer product development and in the ability to convert using digital inks.”

GNC is ready for the shift, having kept in place the values that made the company successful while adding and evolving where needed to meet the demands of the future.

“I think it’s just a nice balance, in terms of a leadership perspective, that John has brought to the company, recognizing that we’re not trying to trample on the past; we’re trying to build on it,” Raaths says. “Some of that is art. And he does a great job of that.”