The COVID-19 pandemic placed packaging at the center of an urgent economic dislocation, ranging from supply chain to essential workers We sat down with Acme Corrugated Box’s Bob Cohen, president since 1969, to talk about the pandemic’s impact on Acme Corrugated and the industry as a whole – and what’s on the horizon for 2022.
Bob, it goes without saying: The past 20+ months have been unprecedented. Can you share some thoughts on what’s transpired at Acme Corrugated Box since the start of the pandemic?
BOB COHEN: In March of 2020, we had no idea what the COVID-19 pandemic would hold for the economy or our business. Our initial demand decreased by 20% in March and about 15% in April, but then continued to grow at an unprecedented rate. By Q4 2020 we were barely able to keep up; demand shot up 18% in that quarter alone. It was obvious that a sea change had occurred in the way people bought goods and services, with isolation resulting in internet purchasing. Consumer products are normally shipped to households in corrugated containers – thus the uptick in demand that continues to the present. While I expect that the public will return to some form of brick and mortar retail shopping in the future, it will never reach the levels of decades past.
It sounds like the first question you faced was, Can Acme Corrugated Box keep pace with pandemic-induced demand?
Over the last nine months we have been far more successful in meeting customer requirements. We recognize that consumer preferences have changed. E-commerce has led to a significant growth in box demand. During the first stages of the Pandemic, it was determined that our industry was critical to infrastructure. A great number of our customers are pharmaceutical companies. They were vital to the health and welfare of the public. To bring their products to market our packaging was essential, and so we became an important cog in the supply chain.
That’s a perfect transition to the topic of Acme Corrugated Box’s forthcoming expansion. What is the status, and what can you share about your decision to expand now?
We had been seriously considering a facility expansion but shelved those plans when COVID hit, due to the initial uncertainty. Once vaccines were in the pipeline we decided to move forward. Truthfully, given the surge in demand for corrugated boxes since 2020, expansion was the only course of action that would allow us to continue to properly serve our customer base.
At present we are 24 months into planning and construction on the 78,000 square foot expansion. It will bring our Hatboro, Pennsylvania facility to 312,000 square feet and will increase our manufacturing capacity by 30 to 50%.
Earlier this month we began assembling our new corrugator, which is capable of producing 2 billion square feet of corrugated material annually – the production equivalent to 12,000 to 15,000 truckloads of corrugated boxes and sheets each year. When our expanded space debuts in late summer, we will be a far better supplier to our customers, able to react quicker to their market requirements. We will be among the most technically advanced producers/converters in the nation, allowing us to accommodate the most specific and nuanced customer needs. And we’ll be far better at anticipating demand and responding accordingly. The expanded space’s automation capabilities in particular will make us a more formidable competitor and allow us to reallocate labor and deliver far better results.
Acme Corrugated Box, like so many businesses, faced raw materials shortages in 2020. Where do matters of supply stand today?
In October of 2020 we were faced with the first serious disruption to our supply of containerboard as demand was through the roof. We certainly had challenges in securing our raw materials supply. Necessary adhesives were in short supply due to weather events in the southeast; pallets were in short supply because of wood shortages. The list went on.
Our saving grace was our strong, longstanding relationships with vendors. They helped us manage a very serious shortfall in containerboard production during the late stages of 2020 through 2021. By the end of 2021 we were in much better shape and 2022 should see an even greater relaxation of supply chain difficulties.
What are your hopes for Acme Corrugated Box for 2022?
We hope that by Q4 2022 the expansion is complete and our operation is once again set for growth. There have been a great many obstacles that we have had to contend with: Freight delays, raw material concerns, inflation, COVID-19 infections, weather, labor shortages (affecting us and our subcontractors), and project costs. Still, we are very confident that we will be a far better supplier, a better employer, able to host a more productive work environment, and a better customer to our suppliers this year.
What does the increased demand for corrugated packaging mean for individuals considering a career in this field?
We expect that over the next three to five years our industry will become more complex, and there is no question that we will need to draw talent from packaging programs offered by a number of universities in North America. I would say to anyone considering our industry that it has proven a very worthwhile pursuit for many of the people we employ and those we interact with at other packaging companies. Packaging in supply chain management, packaging in logistics management – these are high growth areas. We are a healthy industrial sector and I would encourage those with an interest in packaging to seriously consider the opportunities available.
We’d be remiss if we didn’t touch on the fact that Acme Corrugated Box has been in business for an astounding 103 years. To what do you attribute this longevity?
Our focus has always been the customer, and those just aren’t words. In today’s environment, where a lot of companies pay lip service to customer needs, Acme Corrugated Box still believes at its core that the customer comes first. It’s a belief that has guided my 50+ years with this business. Since 1980 I have seen 75% of my regional competitors leave the field – through acquisition, shutdowns, or mergers. We are still standing because of basic business values. It’s not about ego. It is about the desire to be the best we can be. We hire people whose individual talents contribute to the company as a whole. We try to give people a vision of success and allow them to be part of that success – encouraging this thinking both inside and outside of work. I believe it is for all these reasons that we have been in business for more than a century.
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