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A man's got to know his limitations - so does a company

My main job at Packaging Digest is writing packaging line stories, most of which I get first hand by visiting plants. A short time ago, a person told me what a great job King Juice, Milwaukee, WI, was doing as a contract packer for one of its specialty juice products. Adding to the allure was the fact that King Juice had just installed a new bottling line, so this week I paid them a visit. (You can read about the bottling line in a forthcoming issue.)

King Juice produces a line of flavored lemonade under its own Calypso brand, as well as being a contract packer. The company got into the contract packaging business almost by accident. “Someone had heard that we were running a juice product, and called to ask us if we would be interested in contract packing their product,” says president Tim Kezman. As the contract business flourished, King Juice had to make some interesting decisions about its direction. “You have to decide what your strength is; you can’t be all things to all people,” says Kezman.

Following are some of those decisions, according to Kezman:

* We use contract packaging to stabilize our output, without taking over our production capability. Our goal is a 60/40 ratio between our company brand and and copacked products.

* We don’t want too much capacity dedicated to one big customer, because then they have too much control of your business. They can dictate their prices, so at the end of 10 years, you’re equipment is worn out, and you have very little to show for it.

* We have the capabilities of longer runs with the flexibility of short runs and small batches. Our niche is the entrepreneur, the startup customer, the specialty packer, the difficult package. We don’t publicize the fact, but in many cases, we are like a business consultant to our customers.

* We contract pack all sizes of glass and plastic with both hot fill and cold fill capabilities.  Our standard is 250 20-oz bottles/ min. We could run faster, but we prefer to run nice and steady and be comfortable.

This all sounds pretty basic, but the results have been impressive, or you could even  say spectacular. King Juice has had 20 percent/year average growth over the past 10 years. And in the face of the worst recession in many years, production of Calypso over the past three years has gone from 400,000 cases in 2007 to 780,000 cases in 2008 to 1.1 million cases in 2009 and is projected at 1.5 million cases in 2010.

As Dirty Harry (Clint Eastwood) said in Magnum Force, “A man’s got to know his limitations.” That seems like good advice for a company as well.

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