Articles

By Joanna Miller, December 21, 2007 
Venture Magazine

Green Company Profiles
Green has become a buzzword for companies in nearly every industry, but Fabri-Kal Corp. is one that is really investing in new, green technology. The plastic ware company's Greenware drink cup line is in its third year and accounts for roughly 10 percent of its volume, says Vice President of Marketing John Kittredge.

Greenware products are currently made from NatureWorks PLA, a plastic-like resin derived from corn. Fabri-Kal spent two years in development with its partner Natureworks Biopolymers to perfect the material for a commodity thermoformed product. "They looked to us as a partner for thermoforming material and packaging," he says. "In turn, the market could use an innovative cup so we figured we could do a lot of cups. It was a two-year learning curve - it wasn't easy, but our professional crew made it well worth the resources spent to launch Greenware." 

PLA is not only made from sustainable resources, it is also completely compostable in an industrial composting facility, although Kittredge says it is possible to compost the product with consumer products under the right conditions.

"We're following the cradle to cradle methodology," he says. "Greenware is annually renewable and compostable, completing the cycle. In San Francisco and Oakland there is an initiative to create reduced-waste by retrieving compost through the waste pick-up program. They were able to take 50 percent of the current landfill waste and convert it into composted products, such as the compost you use on your lawn and garden. The project took a great deal of effort, money and people to support it; our Greenware products fit into this stream."

Greenware products will not decompose in landfills. "But you can have the ease of heart knowing that if there is leeching, the cup won't contribute to it," Kittredge notes. "Another aspect to this product is that is does not give off any harmful emissions when it is combusted, so it can be incinerated. It's pretty unique - you can throw it on a campfire and watch it return to its original state - corn syrup."

Expanding Applications
In addition to cups, the company has worked with a couple of clients on custom PLA applications such as blister packs and lids. It is also expanding its cup line to include soufflé cups. It is developing a private label line iECO for Costco Canada, which is a big undertaking.  "This launch alone will total 25 percent of our Greenware production," Kittredge says.

"Greenware is the most successful launch we've had in our history. It's growing rapidly and we expect it to continue growing. The plan is to continue branding not only PLA products but other bioresin Greenware products to the foodservice industry. To do that, we need to change some of our manufacturing capabilities and realign with customers in that vein."

PLA is a premium material compared to the other petroleum-based materials the company uses for other products, but Kittredge says that could change. "When we launched Greenware three years ago, PLA was not the highest costing resin," he explains. "With regards to sustainability the cost of PLA is more stable than petroleum-based resins over 12 months; most bioresins are annually renewable, unlike a volatile barrel of oil which is subject to environmental and political pressures, creating a solid platform for future innovation."

Despite its advantages over petroleum products, there is a limit to pricing. For instance, he says, the market can't handle a $5 disposable cup.  However, consumer's emotional attachment to green products is an important element, he notes. "It's important to realize that companies have a responsibility to the environment and there are many ways to take on that responsibility," Kittredge says. "The important part is seeing where it fits your current operation.  We're making Greenware fit in the best capacity for us."

To date, Greenware has grown 60 percent annually with only the cup and lid product line since its launch in 2005. The company plans to introduce five new products in 2008.

'Great Morale'
Founded in 1950, Fabri-Kal is now the sixth-largest U.S. thermoformer and one of the top-four players in volume in foodservice disposable products with $250 million in annual sales, Kittredge says. Its custom division accounts for 30 percent of the business, with customers such as General Mills, Kellogg's, Campbell's, Heinz and Fruit of the Loom. "We're beginning to position ourselves internally as a market-driven company," he notes. "Our history has been operationally driven, catering to custom packaging. We are now positioned to service large and small niches in the foodservice market."

Fabri-Kal employs 800 people - 100 in its Kalamazoo plant and headquarters, 400 at its Pennsylvania plant and 300 at its Greenville, S.C., plant. The company's design and technology center and express packaging operation is located in Kalamazoo. Kittredge describes this operation as "a smaller scale of what we do in the big plant."

Its Greenville plant handles primarily custom products, such as cereal bowls, food containers and juice cups, as well as the company's deli product line. The Pennsylvania plant - the company's oldest and largest - produces most of its cups and runs approximately nine materials and 16 lines. It also handles some deep draw custom packaging.

At each of its plants, the company fosters a family oriented culture, Kittredge says. "We've got great morale across the board," he says. "We're focused on our employees."

Through the Fabri-Kal Foundation, the company will pay college tuition for any salaried employee's children. He estimates 40 percent of the work force is currently taking advantage of the program with 65 kids enrolled. The 20-year-old program includes factory employees and families with multiple children. "To be eligible, they have to maintain a 2.0 GPA and show that you're running full credits," Kittredge says. "You have to be on target for graduation - it's for four years of school, wherever you can get in - Harvard or your local community college."

He adds Fabri-Kal is on target for continued, steady growth. "We see fantastic opportunity in our world to be a leader," Kittredge says. "We're very excited. It's a tough industry to be in, but we've always managed to get through the tough times and come out better on the backside. We are positioned well and have much strength with a great professional management team, the best workforce and great products to show for it."