|The new team, from left: Trevor Maunder, general manager
of Adams Labels; Dawne Tapp, marketing manager; Jay Tapp, President and CEO; Harvey Watts, CFO; Doug Sage, business development and planning manager; and Mike Huntsinger, general manager of Tapp Technologies Inc.
Two months ago a significant union was formed between two of the major wine label players, a marriage between two businesses that have reaped a pile of awards for their work, both continental and international. These two companies have co-existed as neighbors, geographically, for years, and as competitors as well. In May the announcement was made that Tapp Technologies Inc. had acquired Adams Label & Tag Ltd. (better known as Adams Labels). Both are in southwestern British Columbia — Tapp in Langley and Adams in Surrey, within the Vancouver, Canada, sphere of influence.
The new relationship strengthens the capabilities and potential of these label entities both technologically and commercially, and not just in Canada. Both are represented in the United States: Adams has Apex Labels in Portland, OR, and Tapp has a plant in Napa, CA.
Flexo, offset and digital
The portfolios of these two companies, and the walls of their offices, are filled with awards from industry associations. Tapp Technologies routinely wins several awards each year from the Tag & Label Manufacturers Institute, and Adams captured the coveted Best of Show in the 2000 TLMI awards competition.
The distinctions between the two businesses are significant, and contribute mightily to the internal optimism about this industrial marriage. Adams Labels is a flexo house. Tapp Technologies is an offset house. Tapp focuses entirely on wine, but Adams is deeply involved in the food and nutraceutical markets as well.
There's one other aspect of this acquisition worth noting. Last year Tapp Technologies went digital, acquiring not one but two HP Indigo digital narrow web roll-fed presses. These are the ws4000 models, the new ones. Now the combined operations can offer flexo, offset and digital printing from Puget Sound to San Francisco Bay, and well beyond.
|At work on a Mark Andy flexo press|
Adams Labels opened for business in 1983. Its founder, Les Adams, had joined forces with a local food company, which became a partner. The parent of the food enterprise, publicly traded Premium Brands of Richmond, BC, acquired full interest in the late 1990s, and brought in Trevor Maunder in 1997 as a consultant to help re-tool the operation. He became general manager, and has run the operation ever since.
About 35 percent of Adams Labels' work has been for Premium Brands. Roughly 55 percent of sales is in the food industry, 30 percent in wine, and the rest in over-the-counter pharmaceutical and nutraceutical products, and specialties of several kinds. About 85 percent of the company's labels are four-color process, all flexo.
As the manager of a successful business unit of Premium Brands, Maunder knew that Adams Labels had to make some serious investments in new technology to stay ahead in business. His ideas, he says, involved seven-digit numbers, but the parent, in coping with shifting economies, would offer six figures. Not long ago he suggested that he try to shop the company, and was given the green light.
He didn't have far to go. Langley is the next town. There was Jay Tapp, thinking about flexo.
Discussions were fairly swift and smooth, and the transaction was concluded in May. Premium Brands has a 20 percent interest in the combined new company.
"This is all about growth," says Jay Tapp, president and CEO. "This whole transaction was predicated on the feeling that we can grow. We will concentrate on our existing wine label market initially, and grow the food business, offsetting the seasonality of the wine business."
Adams Label & Tag will keep its name and identity. The combined company has annual revenues of about $33 million (Canadian), of which Adams (with Apex in Oregon) accounts for $8 million. The work force is now 185.
Tapp Technologies opened its doors in April 1993. "When we first wrote our business plan we never expected to have more than 50 percent wine labels," says Jay Tapp. "Now we do 98 percent wine labels." The company prints on Sanjo waterless offset presses, nine of them.
"We have been very fortunate to be recognized by our peers on a regular basis," he adds, in reference to the awards the company has won over the years. "That kind of recognition is extremely important, and it means a great deal to the customers, as they rate themselves on their packaging."
Tapp says that his company gives duplicate award plaques to the designers of the winning labels. "Designers are very important to us. They are strong influences at the wineries, and they like the awards, they like to deal with a premium company; it gives them confidence that they can translate their ideas into reality."
About 80 percent of Tapp Technologies' products are exported to California. It is for that reason that the company opened an office in Napa, the heart of California's wine business. That shop is used primarily for press proofs — right now about eight per week. When jobs are approved the labels are printed in Canada. The digital press in Napa also will be used for proofs, and for short run and variable image products.
"We have competitors of two sorts," says Jay Tapp, "offset label companies or high-end flexo label companies, like Adams. We have recognized the need to be able to provide the value proposition afforded by the flexo platform.
"The wine market is under pressure, because of the weaker economy, changes in the wake of September 11, and competition by strong exports from Australia. West Coast wineries are under strong pressure to 'de-cost' their packaging," he notes. "We are able now — with Adams — to provide a different value proposition without sacrificing quality and overall design."
Adams prints labels for most of British Columbia's 48 wineries, and has an extensive portfolio just south of the border: 25 to 30 winery customers in Washington, seven or eight in Oregon.
"Back in 1997 wine was a logical step for us to pursue," says Maunder. "At the time a number of wineries were going to flexo because it was becoming more acceptable, the quality was rising."
Still, it's a hard sell. "There's no question that the wineries are among the most demanding in terms of the level of quality," he observes.
Right now the price points in the wine market are tighter than ever, which affects what they buy from vendors, Maunder adds. Consolidation is on the rise, and foreign wineries are storming the shores. There was a time when the wine label market was wide open for the pressure sensitive converters, but Maunder sees that pursuit having calmed a bit. "The transition from cold glue to pressure sensitive has gone through the pipeline," he says. "In our geographical market the majority of the wineries have gone to pressures sensitive, but the large companies have not, so the volume of pressure sensitive labels is lower."
|Rewind operations at Adams|
Offset equipment is more expensive to run, and flexo printing is much faster. "That's fundamentally it: you have a shorter run time. Offset prints with a finer dot and on papers that don't appeal to flexo. At the same time," Tapp adds, "there are a lot of designs that are more appealing to flexo, as well as certain films and metalized papers.
Tapp Technologies acquired the two HP Indigo ws4000 presses in November of last year. "We're still in the late commissioning phase," Tapp says. "This is a very new technology, and we are a lighthouse beta site for that technology. We probably have produced a couple of million labels off the presses so far. They're not near to viable commercial standards yet, but are getting there." The digital presses allow for extremely short runs with no makeready, no films and plates, "and we can print one, a hundred or a thousand at the drop of a hat. Designers really enjoy that."
There is also the advantage of the proof. On a digital press, the proof and the product are one and the same.
Adams Labels prints on Mark Andy presses: two 2200s and two 2100s. Capabilities are up to 10 colors, and they use them all. A new Mark Andy 2200 13" press will be delivered to the plant soon.
The enthusiasm for the new, larger venture is palpable. The Tapp team is excited by the opportunity to offer high quality flexographic labels from an operation they have known well for years. And Adams gets its wish at last: new technology, really new technology, a ramped-up program, and a wide open field.
|Trevor Maunder, general manager at Adams Labels|
|6270 205th St., Suite 104|
|Langley BC Canada V2Y 1N7|
|12110 86th Ave.|
|Surrey BC Canada V3W 3H7|