Rock LaManna01.25.16
Tapp Label Company
580 Gateway Drive, Napa, CA, USA
www.tapplabel.com
Tapp Label Company, LLC, has grown at an astounding pace. But CEO and President David Bowyer’s growth strategy does not rely on a hot new product, service or sales team. In a little over a year, Tapp Label’s growth is a result of Bowyer systematically purchasing label companies across North America, an approach that may be worth emulating.
It’s an atypical approach. Most business acquisitions generally take more than a year, as buyers need to locate a prospective company, perform due diligence, negotiate a sale, and integrate the company.
Bowyer has not only found a way to compress the timeline, he has acquired four companies during an 18-month period.
The goal for the company’s acquisition plan was – and is – to serve the high-end label market: half of Tapp Label’s business is focused on labels and packaging for wine, spirits, beer, beverages and “ready-to-drink” products. The company’s estate wineries, wine conglomerates, and large food and agricultural customers are served by the West Coast operations, while spirits, cosmetics, pharmaceutical, and health and beauty sectors are served by a new location in the East.
As growth continues, jobs will be produced at whichever location is best suited from a production, operations and distribution standpoint.
It’s been a breakneck pace for the company. Let’s take a look back to how it began.
BEFORE THE WHIRLWIND
In the late 1990s, Bowyer owned a label company called Vintage 99 Label, which he sold in 2007. After that, he held executive management positions at large label supply companies. Those included Staples Print Solutions, CCL Label, and Cameo Crafts (a York Label company).
With a solid background in sales and manufacturing, Bowyer then delved into operational analysis, supply chain optimization, costing, team building, negotiations and logistics.
A few years ago, he started to think it would be nice to own a label company again. This time, he would approach it as a roll-up. He spent a year planning his strategy, developing a business plan and engaging investors.
THE ACQUISITION PERIOD
Bowyer’s first acquisition in July of 2014, under the moniker of Adams Label Company, was Label One in Beaverton, OR, USA. That was followed by Bonham Label Company in Livermore, CA, USA. Next was Tapp Label with locations in Napa, CA and Vancouver, BC, Canada. The most recent acquisition was Metro Label, also with locations in Napa and Vancouver as well as a high profile presence in Toronto, Ontario, Canada.
Label One was purchased from the Rabanal family, who was ready to sell. Bowyer had a good relationship with them before the sale. For the Bonham purchase, the owner was 82 years old. “It was an opportune time,” Bowyer recalls.
Being in the right place at the right time also applied to the Tapp acquisition. Unlike the first two companies, however, it was equity-owned, and the CEO and COO moved on shortly after the purchase.
BUILDING THE BRAND
At that point, Bowyer took on the well-respected Tapp brand name as the company name and moved headquarters to Napa, California. In July 2015, Tapp Label acquired Metro Label Group whose headquarters were in Toronto, Canada.
Metro was another large company, like Tapp, that focused on high-end labels. Also like Tapp, Metro had locations in Napa and Vancouver, which Bowyer is folding into existing locations. With Tapp’s strong brand name,all locations now will be known as Tapp Label.
INTEGRATION AND GROWTH
Although the consolidation of duplicate locations technically has been a contraction, it’s been offset by expansion of the Livermore operation into a new 20,000 square foot building, which will eventually house five flexo presses.
Before the end of 2015, Bowyer will put the finishing touches on a new 8,000 square foot site in Paso Robles. It will serve the Central Coast region of California with both flexo and state-of-the-art digital equipment, including one of a growing fleet of HP Indigo WS6800 digital presses.
Finally, the company is in the process of building a corporate office in Saint Helena, CA.
Bowyer estimates total square footage for the company at between 230,000 and 240,000 square feet.
PRODUCTS AND PROCESSES
In addition to a variety of label products – cut and stack, roll-fed, two-ply, and booklet type/ECL labels – Tapp also produces in-mold labels, shrink sleeves and flexible packaging.
The main focus is on high quality printed labels manufactured on flexo, waterless offset or digital offset presses. Bowyer is eager to test his approach in using digital offset in high-end label printing.
Until now, Bowyer says customers – especially at the designer level – demanded offset due to its high quality and ability to achieve textural effects on uncoated labels, especially embellishments such as embossing, foiling and high-resolution screens.
“These days, we can accomplish all that and more with digital presses,” says Bowyer. “We’re doing award-winning work for customers on digital equipment.”
HP Indigo WS6800 presses provide high quality with cost and time savings through lack of waste, Bowyer says. In addition, the presses handle long runs, accommodate a variety of substrates, and are able to overprint on foil. The presses can also produce variable output for security, decoration or differentiation.
The use of digital printing epitomizes Bowyer’s lean operating approach.
OPERATIONS
As the company grows, Bowyer is implementing a plan to achieve cost savings through economies of scale.
When companies are acquired, they gain room for growth by benefiting from these operational efficiencies. In addition, gains are made when newly-acquired companies adopt workflow processes that have proven to work in the other locations.
By managing operations in this manner, Tapp can negotiate better terms with vendors, minimize waste by choosing the right equipment, and attract top talent.
EMPLOYEES
Bowyer emphasizes quality and care of employees in his overarching plan. At every step, he’s brought in or retained talented people to keep things moving and to support the big picture: Steve Miller, chief operating officer, worked with Bowyer at Staples Print Solutions and York Label. He manages the day-to-day operations. Rod Smith is executive vice president of sales and also worked at Staples Print Solutions. His background is in packaging. Gerald Hauprich is the new chief financial cfficer, while Vinod Sharma is vice president of sales, and Dawn Moreci is vice president of human resources. Jeff Licht, the new director of quality systems, will operate using Six Sigma principles and apply them across the company along with Brian Johnson, who is supply chain director. Both are comrades from York Label.
Tapp’s business development directors are seasoned label and packaging sales professionals. They focus on target sectors, including global brands and Fortune 500 companies, and are charged with developing new business across the continent.
For his part, Bowyer – who owns 100% of the company – works with key customers, crafts the business strategy, and spearheads the acquisitions.
He has a driving belief that Tapp can make a real difference for mid-sized label companies and small family-owned companies that want to retire or sell with dignity.
BENEFITS OF BEING ACQUIRED
For small companies that have reached the limits of their growth or that don’t have the operating capital to make improvements, Bowyers stresses that selling to a company like Tapp can allow owners to leave a legacy and continue to provide jobs for employees.
Other benefits for selling owners, according to Bowyer, are: Since Tapp Label is fully capitalized, not only are the acquired companies brought up-to-date with the newest technology and digital equipment, selling owners can see their companies transformed within a month or two. “Ownership by Tapp can mean a small or family-owned business can finally operate at its maximum potential. New ownership can bring vitality, excitement and growth to the communities where these companies are located.
“We consider ourselves fortunate to provide these benefits for owners when they’re ready,” says Bowyer.
THE FUTURE
As the US is one of the top three wine regions in the world, Bowyer predicts growth in the North American wine industry. He also foresees more years of a solid economy. He predicts that two labels per bottle will continue to be the norm for wine labels, although he sees shifts to shrink labels and newer packaging options for beverages.
Bowyer plans to continue focusing on acquisitions over the next three years, and envisions 12-15 total locations and coverage in every key wine location in North America.
Although Bowyer’s not planning any further acquisitions in the West, he’s considering Virginia, New York, Texas or Florida. Meanwhile, locations in Mexico, Central America or the Caribbean would be strategic for serving his spirits business. For acquisitions in the Food group or Personal group, Bowyer says he’s checking out large cities with existing label companies.
The goal is to make each location profitable, integrate smoothly, show ROI, and continue to build an environment that allows each employee to be his or her best.
“When I’m walking through the plant, employees will stop me to shake hands,” says Bowyer. “They’re excited, just glowing, to be part of what we’re creating.”
With a great team supporting Tapp Label Company, David Bowyer will continue his fast-paced plan to build a world class label printing business that dominates North America.