Companies to Watch

By Jack Kenny, John Penhallow and Steve Katz | October 7, 2009

Companies to Watch is a special feature of Label & Narrow Web
that pays tribute to a select group of converters who are making noteworthy
contributions to the health of the industry.

This is not a ranking of any kind, nor is it meant to be all inclusive. In making our selections, we did not consider company size or annual sales. If these companies share anything in common, it is that they are highly successful, that their work is of the highest quality, and that they are setting new industry standards every day.

For 2009 we present these Companies to Watch:

The Label Shoppe
Baker Self-Adhesive Label
Haendler & Natermann
Kopco Graphics
ID Images

The Label Shoppe
15430 Proctor Ave.
City of Industry, CA USA

Management:Rudolph Gaytan, president
Ryan Gaytan, vice president

The Label Shoppe

Gaytan Foods, located in City of Industry, CA, USA, was founded in 1935 by Florencio Gaytan. The snack food business, in a suburb of Los Angeles, eventually was taken over by the founder's son, Rudolph Gaytan, who still presides over the company. Food manufacturers, of course, buy a lot of labels, and Gaytan Foods was no exception. Rudolph Gaytan, however, was not happy with the cost and slow delivery of his labels, so he decided to do something about it.

Ryan Gaytan of The Label Shoppe at the Nilpeter FB press with a mounted digital waterwashed plate.
In 1991 he made the move to print his own labels. "Dad decided to buy a press and see if we could get the work done in-house," says Ryan Gaytan, Rudolph's son. "Immediately we began seeing that making our own labels lowered our cost. Then it naturally evolved into a business that sold to other companies. We didn't intend for that to happen, but today we are selling 30 percent of our labels in-house, and 70 percent to the outside world." That's how The Label Shoppe got its start.

The company started its printing venture with a Mark Andy 830 press. After a few years it added a rebuilt Webtron 750, then acquired a Webtron 700 central impression press. "We kept getting busier," says Ryan, "and in 2006 we bought a Nilpeter FB press."

Ryan, the company's vice president and manager of The Label Shoppe since 2001, says that because the company was closely involved with food and beverage, "we have a natural strength in those markets."

Today, food is the top market for the label company, followed by beverage. Other strong markets are specialty electronics and automotive parts. "Our automotive label business is up 50 percent since the recession started," Ryan notes. Our focus is on the private label or generic products. People still have to fix their cars, and they're buying our customers' products."

The company is doing well this year, Gaytan reports. "We are up this year, probably in the 14 percent range. A lot of that is driven by our customers and the consumers who support them. Honestly, it's hard to compete with the big converters, so we go with the mom-and-pops and the generic manufacturers."
The company is now running two shifts. "If we continue our current pattern of growth, we'll have to expand."

New plate system

"We were struggling with analog solvent plates for a long time," says Gaytan. "In California, we are audited by the air quality management district, and by the waste water district because of our food company. So we are under the strictest scrutiny of any label company in the area."

He was considering a digital platemaking system with a dry thermal process, but at Labelexpo 2008 he saw a new digital waterwash system offered by Anderson & Vreeland.

"We wanted to go solventless, and with a system that did not have a high environmental impact. A&V's system gives higher quality than the dry thermal or digital solvent plates. We were up and running in two to three days. Sure enough, it's clean, uses no harsh chemicals, basically the equivalent of dish soap."

The system involves EskoArtwork Backstage software, a Kodak Thermoflex Narrow digital imager, and the A&V Orbital 10 processor. The processor has a self-contained waterwash system that removes the polymers and reuses the cleaned water.

"I can produce great 200 line screen plates with this new system," Gaytan says.

– Jack Kenny

Baker Self-Adhesive Label Co. Ltd.
37 Sutherland Road
Walthamstow, London, England

Annual Sales:$9 million
Management:Steve Baker, managing director

Baker Self-Adhesive Label Company

Start-ups in a garage are old hat," says Steve Baker. "My parents set up this company in 1973 in a small factory, using our old caravan as offices. When business was slack – which it often was in those early days – my mother and I used to play table tennis next to it."

Today Steve is managing director of the business his parents founded, and Baker Self-Adhesive Label Co. has 46 employees and annual sales of $9 million. Based in one of London's inner suburbs, the company supplies labels to a wide range of UK customers, from large international companies right down to small new businesses. Labels today account for around two-thirds of the total sales, the rest being slit reel distribution.

Baker Self-Adhesive has traditionally used mainly Nilpeter letterpress and flexo presses, but was also a pioneer in digital, starting with an HP ws4050, moving up to a seven-color ws4500. Since August 2009, the company is the proud owner of the UK's first HP Indigo WS6000.

Steve Baker and the HP Indigo WS6000 digital press
Investing in expensive hardware might be considered foolhardy given the present business climate, but Steve Baker is unperturbed. "Yes, the recession has been a bit noticeable," he says with true British understatement. "Our sales in the year to August 2009 were just 3 percent down from our previous financial year. Customers are squeezing us for a better deal on prices, and some of our competitors are offering them silly deals, but that's nothing new, just a bit worse than before. If you're a small businessman today you can either sit on your assets and bleat, or move forward and invest." As well as the new digital press, Baker has also this year upgraded its Nilpeter FA2500 flexo press with a VCP UV curing system and e-Brick electronic power supply from GEW, and has also installed a Quick Check 890 bar code verifier.

We put it to Steve that Mike Fairley, the label guru and soothsayer, has predicted that only very big and very small label converters will survive in the long term. "With all respect to Mr. Fairley," he says, "our company is a good manageable size, I know all the team here personally, and we can react and decide fast without going through committees. The very small label printer is more vulnerable, he probably has only a few customers, and if he loses one he can go down."

Digital revolution: a long time coming round

Steve Baker is a strong believer in digital label printing, but recognizes that the industry has a long way to go before exploiting fully the potential of the new technology.

"Our customers recognize that they can now order smaller quantities," says Steve, "but nobody out there realizes all the things you can now do with digital labels that were undreamt of before. I'm hoping that the London Olympics and the other major sporting events coming up in the UK will help to heighten people's awareness of what label and package printers can now do. It's a constant effort to educate the customer. For the moment our new digital press is giving us lots of publicity but not enough new business, although I accept that it's early days yet.

"The other problem we have particularly with digital is the myth – partly encouraged by the press manufacturers themselves – that narrow web digital printing is as simple as pressing a few buttons. It isn't. You've got to get the pre-press absolutely right, and even then you still need the printer's eye to get the color right. And you will always need the right finishing equipment – we use a Digicon from AB Graphic – and you must have operators who know how to use it."

Few people outside England have heard of the Hopshackle Brewery (although it can be found in Stratford-upon-Avon, which is rather better known internationally). This small-scale brewery wanted cost effective labels with gold lettering to denote the individual character and quality of all its different beers, and Baker Self-Adhesive suggested they use digitally printed labels. Neil Marchant, digital and repro manager at Baker, takes up the story: "The metallic effect was achieved through the use of digital printing on a silver substrate using magenta and yellow inks to create the gold. A spot white was used on the non-metallic part of the job which was finished with UV varnish and consecutive numbering for each label."

Material supply and coating are also an integral part of Baker's operation, and its affiliated company, Baker Self Adhesive Materials, is an HP Indigo Treatment Center and also a slitting/distribution center for Fasson, Madico, Arjobex, Ritrama and Tyvek.

How does Steve Baker see the future of the label business in England? "Beware of false dawns," he says. "What with swine flu and government debt, I reckon the UK economy's not out of the woods yet. Some of our competitors will go to the wall, that's for sure, but innovative and financially sound businesses like ours will get back into growth and profitability – eventually."

– John Penhallow

Haendler & Natermann
Kasseler Strasse 2
D-34346 Hann. Münden

Annual Sales:$410 million
Locations:Europe, Canada, USA, China
Exports:50+ percent of production

Haendler & Natermann

Based in Germany, Haendler & Natermann (H&N) is one of the world's leading suppliers of wet glue labels, and is also a significant producer of wraparounds and IMLs. Using mainly gravure and offset, H&N is particularly dominant in the beverage label sector, supplying nearly one in five of Europe's beer labels, and with a strong presence in soft drinks labeling. Now owned by the Austrian packaging group Constantia, H&N benefits from being part of a strong, vertically integrated group that manufactures, among many other products, a wide range of filmic substrates for labels.

Sales Director Jörg Waldorf insists that to understand Haendler & Natermann you need to look both backwards and forwards. "H&N has been looking to the future since we were founded in 1825. With skill and specialist knowledge, we have developed into one of the world's leading manufacturers of high quality aluminum, plastic and paper labels and packaging materials. Together with our subsidiary companies in Germany and on every continent except Australia, we offer a truly global and versatile product range."

With an export market share in excess of 50 percent, and customers in more than 120 countries, H&N employs roughly 1,500 people and has annual sales of approximately €280 million ($410 million). Since 1993 it has been part of Constantia Packaging AG, a publicly listed Austrian holding company with 2008 sales in excess of €2 billion. "Our integration into the Constantia empire protects our investment strength and guarantees our customers, large or small, the very best expertise and security in global delivery," says Waldorf. "Since 1994, we have conformed to DIN EN ISO 9001, which certifies that Haendler & Natermann employs the highest standard of quality management."

When it was originally founded more than 180 years ago, H&N's first product was lead foil for making tea crates. Moving progressively into metalized foils and then into paper, foil and filmic labels, the company became a European (and later world) leader in wet glue labels for the beverage market.
"One of our recent innovations is cut-and-stack printed filmic labels using white or metalized OPP foils," says Waldorf. "These are now being supplied by H&N and also by our sister companies within the Constantia Group, Sim'Edit and Etipack in France and Novis in Romania."

While mainly a European producer, H&N has plants in Canada (Sim'Label, Quebec) and the US (Printer Labels, California), and also in China. In the spring of this year the company also started a cooperation with Malaysian converter CM Labels near Kuala Lumpur. Says H&N's regional manager Lars Schützenmeister: "We were looking to expand our business with the major brewing groups like Heineken and Carlsberg, as well as with Asian beverage companies. CM Labels is a family-owned company which shares with H&N a devotion to quality and service, and which uses modern ManRoland and Komoro offset presses."

Beyond wet glue

While N&H is mainly known worldwide for its wet glue labels, it has in recent years moved out into other label types with a view to becoming "the world's leading one-stop-shop for all kinds of labels." With this objective in view the company acquired label converter Verstraete in Belgium, a specialty producer of in-mold labels. Several N&H plants also make roll-to-roll polypropylene wraparound labels. The print technology most widely used by N&H is rotogravure in up to 10 colors, although IMLs and wraparounds are often flexo or offset printed. For labeling irregularly shaped containers the company also produces the increasingly popular shrink sleeve labels made of PVC, PET or OPS. For all these label types N&H offers thermo sensitive or luminescent inks, holograms and other security features.

This, of course, leaves one major label category unaccounted for. Jörg Waldorf acknowledges, "Yes, we have for some years been looking for the right opportunity to get into the self-adhesive label business, and an opportunity has come up right here in Germany. We will be making an announcement very soon."

Wet glue labels are sometimes dismissed as traditional, unexciting and declining. Jörg Waldorf reacts sharply to this premature obituary. "Worldwide, wet glue labeling is generally growing or at the worst, remaining stable. It is the unrivaled labeling method for a vast range of consumer goods, in particular beverages. Of course N&H's growth has been cut by the recession, but our sales have not declined." According to Waldorf, some major brand owners, far from shifting to cheaper labels, are actually upgrading both packaging and labels as they compete for shelf space in the world's supermarkets.

Working for a cleaner future

Like most German companies, N&H takes its environmental responsibility seriously. This involves reprocessing waste solvents and VOCs and turning them into energy, using well water as a coolant, and reducing waste in all stages of the production process. "Our sustainability programs are based around measured targets," says Waldorf, "We have one of the world's largest regenerative thermal oxidation plants for processing organic solvents, and over the past three years we have cut our ink waste from 30 percent to just 15 percent."

– John Penhallow

Kopco Graphics
250 Osborne Drive2066 58th Ave., Circle E
Fairfield, OH USABradenton, FL USA

Annual Sales:$9+ million
Management:Doug Kopp, chairman
Walter Zeek, president

Kopco Graphics

Doug Kopp, founder of Kopco Graphics, goes back pretty far in the label business. Along with his father and uncle, he started a label company in 1970 called Universal Tape & Label, in Cincinnati, OH, USA. "We were one of the early converters," he recalls. "After we started, the guys at Superior Label formed their business and the industry started to grow. We operated until 1982, and then we became Superior's first acquisition."

Kopp's career shows a consistently steady rise to success, and in one sense he and his company have reached the pinnacle of achievement. This year Kopco Graphics received TLMI's Eugene Singer Award for the Best Managed Company, the label industry's most coveted prize.

After the sale of Universal, Kopp worked with Superior as director of sales until 1989. In the early part of his career he did every job at the plant, from mixing inks to running presses, but eventually settled into the sales operation. When he went out on his own he spent two years as a broker, and was happy with the business the way it was.

"It was actually my customers who got me back into production," he says. "Several of them said, 'We'd like to do more work with you, but you're a broker and don't have any control over what you're doing. If you were back in manufacturing we would give you more of our business'."

The Ohio headquarters of Kopco Graphics
He leased a building in Cincinnati, bought a press, hired a couple of people, and started into production. "We were fortunate," he recalls. "From 1991 to 1994 we built up enough business to buy three acres of land in an industrial park and contract with a design firm to erect a building. We moved there in 1994 and kept growing."

The company's first press was a Comco Cadet, acquired with financing through a friend who was paid back in a year and a half. After the move they sold the Comco and bought a Mark Andy, then two more Mark Andy presses soon after that. The company has been loyal to the St. Louis press maker over the years, and now has a new 10" wide 10-color press on order.

Kopp decided in 2000 to move to Florida full-time, after some extended visits. "I stayed very active. It was a good move, and I had the opportunity over a couple of years to see that the management team in place could handle the business without my oversight."

The next move was an acquisition. Eric and Mike Magel were the owners of Premier Label, and had put their plants on the block. Multi-Color acquired the Ohio plant, and Kopco picked up the Florida shop. That was in 2004. The new owner had to replace most of the personnel, but kept a press operator and a salesperson, "who is now with us, and is our corporate No. 1 salesperson," Kopp says.

A couple of years later the company planned to move the Florida operation to the town of Bradenton, where it had acquired a 10,000 square foot shell in an industrial park. "All we had to do was put in HVAC, electricity and the office," Kopp says. "We ordered the equipment, the presses, hoping to be in by August 2007. It took us until December 2008 to get into the building." The delay had several causes, including bankrupt contractors, regulatory agencies, and the economic climate in Florida. "I had presses in storage for that whole time," he recalls.

But business is good at Kopco. The company has three presses in Florida and four in Ohio, and will surpass $9 million in sales this year. It has direct sales coverage in Chicago, in the Detroit area, and in Florida and Ohio. The company's main markets are meat, poultry and other consumer goods. In Florida, more than half of the business is in nutraceuticals labeling. Kopco does more than just make pressure sensitive labels. Years ago, Kopp established relationships with suppliers of hang tags, tamper evident bands, styrene inserts, and so forth, products which today represent up to 17 percent of the company's work.

So what is it like being one of the best managed companies in the industry? "The real key is having the right people," Kopp says. We have a good, strong management team. We made a management change two years ago and brought in a couple of new people who put us over the top. Sales kicked in with some increases. We came up with tremendous efficiencies in operations. The key is people."
This year, Doug Kopp promoted one of those people, former vice president of operations Walter Zeek, to president of the company. "He has paid for himself a hundred times over."

– Jack Kenny

ID Images
2991 Interstate Parkway
Brunswick, OH USA

Annual Sales:$25 million
Management:Brian Gale, president;
Tim Mlnarik, business development
Lisa Stang, VP of sales

ID Images

ID Images has a lot going on. Between the new product launches, TLMI LIFE certification, and most recently a label company acquisition, the company is growing in more ways than one, and lots has changed since the company's founding in 1995.

In the beginning, ID Images was strictly a supplier of packaging equipment and packing supplies. But in 2000 a decision was made to focus on the manufacture of pressure sensitive labels – and it's proven to be a sound decision.

The company is based in Cleveland, OH, USA, and has a second plant in Cincinnati, OH. Company President Brian Gale completed a buyout of the business in 2007 and since then has maintained an intense focus on innovation, growth, and what he calls a "customer first" approach.

Alongside Gale, the company is run by Tim Mlnarik, business development manager, and Lisa Stang, VP of sales. There are a total of 62 employees working three shifts between the Cleveland and Cincinnati facilities. Cleveland's plant has 36,000 square feet of space, and there's 6,500 square feet in Cincinnati. The company is generating $25 million in annual sales and is poised to build on that number with the recent acquisition of Concorde Labeling Systems, also located in Cincinnati.

The acquisition enlarges the company's distribution footprint to meet what Gale says is a growing demand of product identification media products in the region. The addition of Concorde provides added custom and short-run capabilities to ID Images' distribution partners, a key part of the business model. ID Images focuses on higher value segments like the medical industry, chemical industry and consumer durables, and Concorde's capabilities are a great strategic fit.

ID Images sets itself apart from conventional label converters by selling exclusively through resellers. There is a primary focus on packaging distributors, value added resellers (VARS) and other converters. The company has a sharp direction in terms of markets. "All of our products are aimed at the variable information printing (VIP) market," says Tim Mlnarik, business development manager. "We feature paper, film and synthetic film labels, standard blank and flood coated to custom labels with unique face stocks, diecutting or printing requirements. We also provide a service bureau for those without printers," he adds.

Between the Cleveland and Cincinnati locations there are 12 flexo label presses at work, a mix of Webtron, Mark Andy, and Pace machinery, with press widths ranging from 10 to 18 inches. The company purchases its plates from a local source and prints with water-based inks. Capabilities include four spot colors, over lamination, back printing, in rolls, fanfold, or sheet.

Providing superior customer service is a top priority for ID Images. "We attract our customers by earning their business," Gale says, adding that referrals, participation in industry organizations and associations, trade shows, telemarketing, internet and direct mail are the primary methods of discovering new customers. There is an outside as well as inside sales force led by Lisa Stang.

With its customers being distributors, resellers, and fellow converters, ID Images takes an active role in education and training. "We place a large emphasis on providing training to our customers' sales teams," Mlnarik says, adding that the company hosts a label training and education seminar for its customers twice per year. "The seminar is an investment with an excellent ROI. The average distributor that goes through the seminar grows his or her label business by $80,000 per year. Sales people are reluctant to sell products they don't know much about. Given that the seminar is free and part of ID Images services, the payback is exceptional.

"Education is key for future growth. Each seminar is dedicated at educating its attendees on the market as well as other key topics including label constructions, label and printing technologies, ribbons, selling tips and applications.

"We've also started providing marketing services to our customer base this year. The services include producing private branded marketing literature to support their sales effort. And we can also help organize and execute emarketing campaigns," he says.

In addition to customer service, ID Images prides itself on community involvement, and environmental stewardship is an extension of that. The company was recently awarded certification for TLMI's project LIFE, the Label Initiative For the Environment, a scorecard to assist TLMI members in evaluating and improving their environmental performance.

"We understand that they we're a part of a global community that reaches far beyond the neighborhood in which we operate. ID Images is dedicated to environmental improvements that foster a sustainable future and lead to social and economical improvements in the community," Gale says.
Tammy Bivins, production manager, says the program has led to improvements. "Project LIFE is a great mechanism to share best practices and elevate our involvement to the next level. We have experienced significant improvements in production as a result of the program," she says.

In line with sustainability initiatives is one of the company's new product launches. "This year we launched a more eco-friendly thermal transfer product that utilizes our natural brown Kraft liner," says Mlnarik. "This falls in line with our community and environmental commitment and we expect to launch other products in this line in the near future," he says.

Also recently launched is the new Integrated Label line. "Integrated Labels, commonly referred to as Integrated Forms, combine a laser sheet with one or more labels. The integration of a laser sheet and label allows multiple functions in one step," Mlnarik explains.

While ID Images grows, it has not been immune to economic challenges facing industry at large. "We have had our challenges over the last 18 months, but believe we've weathered the storm well," Gale says, noting that while there's been a drop in demand, things seem to be leveling off and signs point toward improvement.

"The trend is towards shorter runs and quicker turnaround times. Customers continue to demand excellent service and delivery and we pride ourselves on rising to their challenges. We continue to look for growth opportunities, both in terms of capabilities and geography. We are excited about our future. I believe there will be further consolidation in the industry both on the supplier and converter level. And I think we are in an excellent position to benefit from that trend," says Gale.

– Steve Katz