Chicago-based Berlin Packaging, a leading supplier of plastic, glass, and metal containers and closures, recently announced a major expansion of its operations, which includes the addition of 100 new employees in 25 cities in 2015.
I recently had the chance to discuss the expansion with Chairman and CEO Andrew Berlin. We discussed the reasons for the company’s success and how the business may change in the wake of the upcoming growth.
Bridget Bergin (BB): How did you determine which cities were the most beneficial for expansion, and what did you consider when making that decision?
Andrew Berlin (AB): First, we considered the addressable market. We looked the density of companies in the industries we serve, like food, chemical, pharmaceutical, and cosmetics.
We also looked at which of our customers were already in the area and could benefit from our expansion, and whether there were additional opportunities with those existing customers.
Third, we determined whether the city or region was growing, stagnant, or going through a recession.
We also looked at the workforce. Typically we’ll try to hire people from those regions because they know the culture, know their way around, and have their own networks.
BB: Which areas of the company will see growth?
AB: About half of the people we’ll be hiring will be sales people, and the rest will be involved in customer service and operations.
We plan to start with 100 and then expand further. There are about $55 billion of rigid packaging sold in the United States, and we think there is about $30 to $35 billion we can aggressively try to attract. Berlin Packaging is approaching about $900 million, so we still have a long way to go. We have a great business model and a great business, so the only thing holding us back is finding more great people.
BB: Does your growth include an expanded or altered product line?
AB: We don’t need to expand our product line to get the business we are hoping for, but every company worth its salt is always looking to expand their product line and innovate along the way.
We are breaking out new products that will be announced in 2015, and this will further establish our competitive advantage. It is one thing to be graded on operations, logistics, producing, and delivering packaging for customers, but we also have to be expanding our product line and innovating both aesthetics and functionality of our products.
BB: Will your supply chain and distribution channels change as you expand to new U.S. cities?
AB: No. We already sell in almost all of the fifty states, but as we expand into new cities we will open distribution centers in those cities. We will continue to use the same suppliers and systems we are using now.
BB: Are you currently using or considering adopting plant management software?
AB: We purchased People Soft in 2001. It was acquired by Oracle, and we have upgraded our software three times. The ERP system we have today should take us into the many billions. It is scalable as the company grows, which was the initial intention of buying the software.
BB: Do you have any other insight to share about Berlin Packaging’s expansion?
AB: The most important thing for us is to maintain our culture as we expand and bring on new people. It is a very inclusive and nurturing, yet hard charging, culture that works well for us. The culture is the mortar that holds the bricks together, and it is essential to our success.
Anytime we are doing a lot of recruiting like this, we always make sure that we are recruiting people who are just a click better than the rest of us so we continue raising our standards. We don’t want to end up regressing just to fill spots.
We never hire to a date, because we pass on people who don’t have the traits we value and wait for the right person. We aren’t hiring for skill sets, although they are important, because if we hire the right people we can always teach them packaging.
Every company is full of hundreds of great ideas on how to grow. The difference between a good company and a bad company is whether it is capable of hiring the right people and training them to execute those great ideas. Without the right people, great ideas just sit on paper. It takes people to lift the strategy into action.
Private industry needs to have the courage to invest in hiring people to move the economy forward.