Back in the 1950s, Harry Eisen foresaw that corrugated cardboard would soon upend his business of manufacturing wood and wirebound boxes. His timely and swift response was to acquire the Advanced Corrugated Box Company. Fifty years later, Harry’s grandsons, Scott and Yale Eisen, had similar visions of unwelcome gatecrashers, as many of their paper suppliers aggressively built up their own competitive corrugated offerings.
“These are integrated companies that own forests, cut down trees, pulp them, and then turn them into corrugated materials, and we saw that we were just not going to be able to compete in what had increasingly become a commodity business,” explains Scott Eisen, who believes that the recent acquisition of a number of corrugated rivals by International Paper and Rock-Tenn Company only further validates the transformation path the two brothers began charting nearly a decade ago..
It’s a path that has had little to do with boxes and everything to do with talent. In the middle of the last decade, the Chicago company then known as Ideal Box laid out plans to enter the retail-merchandising arena with a roster of cardboard display advertising and design offerings.
“We were wrapping a design boutique around the business, and the big challenge was how to attract, recruit, and retain this new talent throughout the entire facility — from project management and design through manufacturing,” explains Scott, who, along with his brother, would assume management responsibilities for the firm from their father as the company began down the transformation path.
“We’re not an atypical family company in light of the fact that at some point there was going to be a succession, and our father had gotten to the point where he saw that the next growth opportunity had to be determined. He let us know that if we wanted to join the business, now was the time,” continues Scott, who was working at the same dotcom venture as Yale, after an entrepreneurial itch appears to have sidetracked a fledgling law career for each of the brothers.
Scott would join the family business first, to be followed by Yale roughly 2 years later.
Going forward, the firm, which once prided itself on how much corrugated cardboard footage it produced annually, would forfeit its old metrics as it zeroed in on a market where profit margins are more apt to be aligned with design sophistication rather than output footage. In fact, according to Scott, corrugated displays devour less than one percent of the country’s annual corrugated production.
“It began with an investment in the people who could do illustration using software tools, making certain that our structural designers understood how to work with graphics, and making sure that everyone understood how we work with corrugated,” explains Yale.
Today, with an estimated $100 million in annual revenues, the company now known as Ideal is reportedly growing at a rate of between 15 and 18 percent annually. And while the company continues to compete inside the corrugated box arena, its retail display offerings are clearly what are now driving growth.
Looking back, both brothers believe that the economic downturn impacted the company’s transformation challenge, but not in the way most people would have guessed.
“It was really during the downturn years when we were able to plan and really gain the skills and relationships that were required to advance here.”
His brother Scott likewise believes that the middle-market firm was able to use the downturn to its advantage.
“We had no debt, and without the burden of outsiders questioning what we were up to, we used the downturn to let the vision marinate, and in this way benefited from our size,” he adds.