Introduction for major, well-known soda and beer
husband previously worked for a company called Graphic Packaging International,
Inc. (GPI) for many years running a printing press. The carton material printed
on was made by GPI at its Macon, Georgia paper mill. It was then loaded on a
truck, sent a short distance down I-75 to GPI’s Perry location, where it was
used to print drink cartons for major, well-known soda and beer companies.
admired this business strategy for two reasons. First, this process worked like
a well-oiled machine. It was able to keep the Perry location’s paperboard
inventory lower. The few times there were ever a shortage of paperboard, the
Macon plant could send out a truck and be there within the hour, so production
could resume. Secondly, it provided middle Georgia with many jobs with good pay
and benefits. Globalization is important, but so is having jobs nearby that pay
and provide to support a family. That is why I chose to do a company based out
of my home state of Georgia.
Packaging International, Inc. is actually a subsidiary of Graphic Packaging
Holding Company. Its headquarters is located in Atlanta, Georgia. Between the
plants and its headquarters based in Atlanta, the company employs over 1,300
residents. However, this is just a small glimpse into a much larger company.
Packaging Holding Company employs over 13,000 people in, not only 46 of 50 states
in the USA, but worldwide, as far away as New Zealand.
What is Graphic Packaging Holding Company?
Most people have probably never heard of Graphic
Packaging. However, there is a large chance that they have come in contact,
albeit unknowingly, with the company’s products. “The company is a leading
provider of paper-based packaging solutions for a wide variety of products to
food, beverage and other consumer product companies.” Meaning, they provide
packaging to products of world famous brands. Soda boxes, beer boxes, cereal
boxes, frozen dinner containers, are just some items that you may see in a
super market that were produced by Graphic Packaging for the companies. They
have even been known to print and assemble the fry containers from fast food
Creating an International Powerhouse
Package International may be a global leader today, but it actually started out
as two separate companies that weren’t even involved in paperboard packaging. Each
company evolved before, ultimately, merging.
While, the other, the “Graphic Packaging” portion
only came into fruition in the seventies, and was not even a paperboard company
at its creation.
was until 2003, when the company merged with
another packaging company leader, Rosewood. At the time Rosewood was private
and getting ready to introduce its IPO, but chose to buy out the already public
company, Graphic Packaging and retain the Graphic Packaging name. The merger opened
a larger portfolio and bank account, as it turned into a multibillion dollar
mother company in the merger was known as Riverwood. Riverwood, is as about as old
as the packing industry itself. The company started out as Brown Paper, changing
names numerous times until becoming Riverwood International.
It started the move into the international market
by buying timberland and a plant in Brazil and eventually buying out a
packaging company there to acquire a mill and plant. The move into Europe came
in 1990, when the company bought one of the largest folding carton providers in
Britain. It also bought its way into the Australia market around the same time.
In 1991, Riverwood International, “controlled 25 percent of the overseas packaging
market and 45 percent of the American market.” The company continued its trend of
buying out foreign companies and created a presence in North America, Latin America,
Europe, and Asia, and Australia. It’s holding company was forced to sale Riverwood
in hopes to cover its settlement from lawsuits that were not connected to its packaging
subsidiary. Rather than selling to a competitor, it was sold to a private investment
group. To continue to fund its growth, the company had planned to go public. However,
the option to buy Graphic Packaging came up, and Riverwood would choose this path
has plants in 12 countries, operating in the Americas, Europe, and the Asia
are factors that can have negative impacts on international businesses. Tariffs
or exchange rates can be examples. However, one thing that negatively impacts
this company across all of its locations, is something that may come as a
surprise—healthy eating. When consumers decide to eat healthy, they begin by
drinking less soda and beer and eating less packaged foods. When consumers stop
purchasing these products, the food and beverage companies stop needing more
packaging printed up, thus hurting the bottom line of Graphic Packaging Holding
Packaging Holding Company has over forty subsidiaries among its three business segments.
The first segment is paperboard mills. The company makes paper to use for
printing packaging, an example being the Macon, Georgia plant previously
mentioned. While they make paperboard, it is mostly for internal uses in its
other two segments of its business rather than sale. Graphic Package uses
around 85% of the paperboard it produces and sells the remainder to other
popular business practice of Graphic Packaging is to buy other companies out.
Sometimes, it may be that they buy the majority of a company rather than the
entire business. For instance, Graphic Packaging just bought most of