Winning Formula

Joel Carmany purchased Consolidated Label in 1984 with the intention to grow the fledgling regional label company into a nationwide business. Twenty-eight years later, the company's growth and reputation reflect his singular success made manifest in every way.

In Consolidated's case, "growth" refers not only to the 10 to 15 percent revenue increase the company aims to achieve each year—regardless of economic conditions—but also to the progressive expansion of its product lines, a habit of capital investment, and the enlargement of its workforce and physical plant. Specializing in digital and flexographic pressure-sensitive label printing and diecutting for food, household, pharmaceutical, and personal care products, Consolidated has moved decisively into flexible packaging and shrink sleeves over the past two-and-a-half years. Taking a long view of its need for space, Consolidated's original 1,200-square-foot location has given way to a 75,000-square-foot facility in Longwood, Fla., filled with no fewer than 10 flexographic and two HP digital label presses, and the company currently is eyeing a nearby property that would provide it with 200,000 square feet and room to spare.

It's clearly a winning formula for Consolidated Label; the company has moved rapidly from annual sales of $200,000 in its first year to more than $60 million today, and has been the recipient of the Tag and Label Manufacturers Institute's (TLMI) Eugene Singer Award for Best Managed Company for 10 years running. Beyond this however, what distinguishes Consolidated Label from its competition—and from many manufacturing firms in general, according to Carmany—is its relentless focus on the customer. While dedication to customer service can be a superficial cliché in the corporate mouths of companies merely content to pursue business as usual, Consolidated's commitment to the customer is the bedrock and driving principle of its corporate universe and operating philosophy.

Putting the customer first

"When I started this business, I quickly determined that most companies tended to be manufacturer-driven," Carmany said. "At Consolidated, we turn that concept on its head by putting the customer at the center of our business in three ways: first, by having the expertise to recommend the right label products; second, by delivering on the customer's schedule, rather than on ours; and third, by understanding our customer's need, which implies listening to them in the first place. Instead of the art department scheduling a job, for example, someone in our customer service department will identify the relevant priorities and adjust the production schedule to the demands of the customer. Instead of the customer asking, 'When can I have my labels?', we ask, 'When do you need them?'"

Carmany realized early-on that the key to Consolidated's success would lie in applying this philosophy across the company at every level, and in building sufficient flexibility into the operation, such that Consolidated would always have the ability to say "yes" to its customers.

"You constantly want to fill your capacity," Carmany said. "No project is too big or too small for us to handle. We have invested millions of dollars in state-of-the art technology, equipment, and resources to ensure our customers receive the highest quality products and services available."

Consistent with its double-digit revenue growth from year to year, Consolidated's business plan calls for the annual investment of between $1.5 and $2 million to enable the company to seize new opportunities for growth. "We try to reserve around 20 percent capacity," Carmany said. "We buy the next big press before we need it."

New opportunities

Product extensions are a natural part of Consolidated's persistent focus on growth. In the long-run flexo category, the company views the production of shrink sleeve labels (for various markets) and flexible, sample-sized, foil packets for the HABA segment as "significant markets that are growing nicely at above-average levels," Carmany said. For the packets, he added, "We have the packet material shipped in rolls, print it, then send it out to a co-packer selected by the customer."

For the wide range the full-body, tamper-evident, and combination shrink sleeves it produces, the company shrewdly bought a steam tunnel, effectively providing it with in-house prototyping capability.

"Now we can print the sleeve material, seam it, and use the steam tunnel to make a prototype of a prospective product before it goes into full-scale production," Carmany said. "This eliminates the element of surprise, and is very valuable for our customers who want to know what they're getting."

Among the company's most popular products are the repositionable adhesive "NewsNotes" labels placed on the front pages of newspapers to help advertisers drive store traffic and increase their ad response rates. This type of label represents a lucrative revenue stream for cash-strapped newspapers, and ranks among the "most read" items in many publications—or, as Carmany wryly noted, "a growth area in a shrinking market."

Digital in the mix

Carmany views digital label printing as a major element of Consolidated's success, as well as an ongoing growth opportunity. Alongside its 10 Nilpeter flexographic presses in widths from 10˝ to 16˝ and up to 10 colors, Consolidated also operates an HP Indigo WS4500 and an HP Indigo WS6600 with inline primer, installed in January 2012, that enables the company to run and coat raw roll stock without first sending it to an offline or outside coater.

"For a stable, mature business like Consolidated, digital printing represents a refreshing change," Carmany said. "We see digital printing as a growth opportunity, due to the increasing demand of small business and Internet orders. As label ordering continues to increase on the Internet, we see the advantages of using digital presses to handle these requests."

In 2000 Consolidated Labels launched its very successful OnlineLabels business, through which it supplies 8.5˝ x11˝ sheets of on-demand, custom-printed labels (address, CD, shipping, bar code, and bottle, etc.) for the smaller user. The success of this business is driven by pay-per-click advertising on the Internet. Consolidated's digital presses currently produce 15 percent of its prime label business.

From the top down

Carmany's customer-centric philosophy permeates the Consolidated organization, from the mindset of its sales force and customer-service team, to the training of its 35 operators, whom Carmany said are "capable of printing any type of label that exists. While we occasionally take advantage of vendor training, we typically train and educate our personnel internally to understand and execute on our growth objectives."

Customer education is a priority that falls primarily on the shoulders of Consolidated's pre-flight team, which handles all incoming artwork, reviews them for acceptability and accuracy, and readies them for print. The company also has a staff of 10 graphic artists, who are available to assist any company owner with art design, should they need it. According to Carmany, Consolidated prefers to receive files directly from customers, rather than from third-party prepress service providers. This policy enables Consolidated to retain a measure of control over the project, as well as the flexibility to change a file without incurring unnecessary delays.

"We try to make this process as easy as possible for the customers, but we regard pre-flighting as a necessary process," Carmany said. "We also have specification sheets we'll review with them. Because we deal with a lot of small and medium-sized accounts, we tend to have to do a lot of customer education."

Focus on sustainability

While Carmany believes that sustainability initiatives will offer significant opportunity for the label printing industry down the road, "Right now, customers will not pay a premium for recyclable materials," he said. "When green stocks are competitive with standard materials or the mandates become stronger, then sustainability will really take off."

Nevertheless, the consistently farsighted company has made significant strides internally to reduce waste and recycle its waste stream. The company recently received ISO 9001 certification for quality management, and currently is finishing up its further certification for the TLMI L.I.F.E. program.

"We feel that our customers will want to deal with converters who have this viewpoint," Carmany said. "We want to be ahead of the curve, rather than behind it. The second reason we believe in sustainability is that recycling results in hard savings for our company."

Ambition to lead

According to Carmany, the greatest challenge faced by Consolidated Label is maintaining a healthy margin for all of its products, even accounting for price increases from vendors and competitive situations where prices come down. "The label business is an extremely competitive 'penny business' with historically average margins," he noted.

While the company is hardly alone in articulating this concern, Consolidated Label rises above the fray by dint of its single-minded focus on growth, and its ambition to lead, rather than follow. "Now that we have the revenue to drive this effort," Carmany said, "we'll continue to expand our technology and expertise to meet the changing demands of our customers." pP