Packing It the Right Way
For entrepreneur Albert Fuller, success comes in cardboard boxes.
As the CEO of Integrated Packaging Corp. in New Brunswick, N.J., he should know. His company is one of the largest and most profitable African American-owned manufacturing businesses in the New York metro area. At 49 years old, Fuller has guided his company through tumultuous economic times, partly by sticking to a simple rule: provide an outstanding product and quality customer service. “Great customer service and a solid product are at the center of any great business,” he says.
In addition, Fuller is always looking for ways to improve his business, services and products. About a year or two ago, he purchased a piece of equipment to maximize the output of Integrated Packaging’s main product: boxes. The equipment, a Corrugator, is almost as long as a football field. Unable to secure a bank loan, he financed the purchase himself. “The Corrugator can process one hundred and ten thousand tons of paper a year. We then convert [the processed paper] into a finished product for our customers,” Fuller says. “I wrote a lot of checks and did what I had to do to keep the business afloat while I searched for additional financing to expand and grow the business. It all eventually worked out.”
Fuller came into the New Brunswick facility in 1990 as a plant manager. Back then, the company was called Jefferson Smurfit. Fuller and a partner, Joe Wilson, purchased the company in 1995 shortly before it was to be shut down and changed its name to Integrated Packaging, often referred to by its acronym, IPC. Contracts continued to pour in from major and midsized companies alike. Eventually, IPC expanded its operations from the Garden State to New York, Michigan and Louisiana. However, New Jersey remains the home base and employs about 100 employees, with about 200 total companywide. Revenues for IPC as of December 2008 stood at about $142 million.
Despite a drop in revenues of about 10 percent in the first nine months of this year from the same period last year, IPC has fared better than many other manufacturing firms primarily because of the large consumer base served by its two largest clients, PepsiCo Inc. and Procter & Gamble Co., both Fortune 500 companies. “Despite the economy, people are always going to eat and use over-the-counter health products,” Fuller says, referring to the food and beverages made by PepsiCo and the range of household and health products manufactured by P&G. “But we have felt an overall impact from the current economic slump, as have most manufacturing companies.”
Even so, PepsiCo and P&G are committed to their relationships with minority and women-owned business enterprises, Fuller says. P&G, for example, awarded more than $1.5 billion in service and supply contracts to MWBEs between July 2001 and June 2005 alone, according to the company’s annual report. That figure led, at least in part, to the company’s May 2005 induction into the Billion Dollar Roundtable, an elite organization open only to companies that do at least $1 billion in business every year with minority suppliers. “[PepsiCo and P&G] have been clients with us since the very beginning,” Fuller says, adding that pharmaceutical giant Johnson & Johnson, also based in New Brunswick, has been a client for nearly 10 years.
MWBEs should not rely on the notion that being a diverse business will lead to long-term procurement opportunities with major corporations or with federal, state or local government agencies, Fuller insists. A longtime member of the National Minority Supplier Development Council Inc., which, provides a direct link between major corporations and minority-owned enterprises, Fuller is well aware of what works and what does not work when seeking procurement contracts. “The premise of promoting your company as a diverse business to potential customers worked great in the ’60s, ’70s, ’80s and early ’90s,” he says. “Now it’s not quite as effective and many MWBEs will find it difficult to win contracts and maintain their business if the only thing they have to promote is the color of their skin or gender.”
Instead, offering a quality product or service and a proven track record is more likely to get an MWBE a contract and lucrative business relationship, he argues. “A businessowner will spend a lot of time and resources just getting registered [as an MWBE] and listed in a corporation’s database,” he says. “Once registered, it’s the actual product or service that will keep the contracts coming.”
Because Fuller practices what he preaches, IPC is currently on its fourth five-year contract with PepsiCo, and P&G remains an ongoing client. “Generally, a buyer for a company won’t even speak to a supplier unless the supplier is registered in the company’s database. The main job of a chief diversity officer is to help MWBEs register with an organization. Once that process is completed, the rest is up to the vendor,” Fuller says.
But it isn’t always up to the vendor, others contend. Studies show that major organizations are falling short of their stated goal to increase the number of —and opportunities for — MWBEs in their vendor base. In a recently released an audit report, New York City Comptroller William C. Thompson Jr. criticizes New York City’s Department of Small Business Services on that score. Thompson, a candidate for mayor of New York, notes that purchases by various city agencies from MWBEs totaled about $15 million in 2008, a mere 14 percent of the agencies’ goal for such purchases of about $108 million. Not only were subcontracting goals equally abysmal, he adds, but also about half of all of the city’s 23 agencies that are mandated to submit MWBE utilization statistics failed to do so.
“The MWBE program was created to help ensure that the procurement process was equal and open to everyone who wanted to conduct business with the city, no matter their race or gender,” Thompson says. “The fundamental goal of the program is to increase MWBE participation in the city’s procurement process, not merely to give these companies an opportunity to compete. Auditors determined there was a clear lack of oversight on the part of the SBS in monitoring whether agencies were in compliance with their MWBE participation goals.”
The report seems to strengthen Fuller’s argument about not relying on an MWBE strategy to win major contracts. Implementing a niche-marketing strategy and following through on promises to clients and staff are key to his personal and professional success, he insists. Moreover, a successful entrepreneur must surround himself with people who share his or her vision, says the husband and father of three. “I’d like IPC to remain a family owned business for years and generations to come,” he says.