Taking the Pepsi Challenge: tiny New Jersey company wins $75 million contract.

After getting a $75 million contract from the Pepsi-Cola Co., a New Jersey box manufacturer is poised to become one of the nation's largest black-owned businesses.

Pepsi recently agreed to purchase 500 million boxes, over five years, from Integrated Packaging Corp. (IPC) of New Brunswick, N.J. Pepsi officials say the contract is the largest they've ever awarded to a minority-owned company.

The deal will help IPC complete their purchase of a $6 million container plant formerly owned by Jefferson Smurfit Corp., a St. Louis paper products concern.

Joe Wilson, a co-founder of IPC, began his business relationship with Pepsi in 1987 when he started selling packing materials and janitorial supplies to the cola giant. Three years later he teamed up with Albert Fuller, who managed Jefferson Smurfit's New Jersey box plant. In 1993 the formed IPC.

"That's the story here. We began a small relationship with Pepsi years ago, and it has grown into this," Wilson told BE. "We were able to make a quantum leap ... [Pepsi] aggressively pursues minority companies that fit into their company plans."

Pepsi officials say they're convinced IPC can handle the major contract, based on their past dealings with Wilson. "Many minority companies are small, and we want them to have the opportunity to compete on a level playing field with bigger companies for these contracts," says Fred Canady, Pepsi's director of minority business enterprise. "Joe Wilson and Al Fuller both had records of superior performance and were clearly qualified to do more business with us."

Wilson and Fuller started IPC by buying containers from other manufacturers and reselling them. Most of their $5.3 million in revenues last year was with Pepsi. Pepsi officials indicated their desire to do more business with IPC, but Fuller and Wilson knew the could not get a major contract without having their own manufacturing facility.

"We knew their company needed to purchase its own manufacturing plant to be able to compete for a major contract with Pepsi," Canady says.

When Jefferson Smurfit announced plans to close its central Jersey facility, the two men approached the paper company with their bid to purchase the manufacturing plant. The company agreed to sell the plant to Wilson for $6 million-$600,000 up front and $5.4 million to be financed over 10 years. Wilson and Fuller agreed to keep Jefferson Smurfit as the plant's paper supplier.

With the Pepsi deal in hand, Wilson and Fuller are now looking for more contracts from major corporations. They have also signed a contract with Procter & Gamble to purchase about 6 million containers annually.

The company has plans to add a third work shift in 1996, adding about 30 employees to the present workforce of approximately 100. Wilson says the company plans to eventually open plants in other areas of the U.S.

Since 1982, Pepsi has done more than $800 million worth of business with minority suppliers through its Minority Business Enterprise program. IPC will supply 16 Pepsi plants with boxes, say company officials.