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Thinking out of the box: competitors join forces to save an industry.

Dennis Jonsson of Tetra Pak Inc., and Warren Tyler of Combibloc, Inc., the chief executives of the two U.S. manufacturers of aseptic packaging, popularly known as the "drink box," wage a daily battle over market share in the crowded world of food and beverage packaging suppliers. Yet, they also have an unusual environmental partnership solidified during a tumultuous five-year journey from the backwoods of Maine to the White House. By checking their guns at the door and joining forces in a time of crisis, they transformed the aseptic package from an "environmental pariah" to an earth-friendly, Presidential award-winning celebrity.

TYLER: The ban on aseptic packaging in Maine was a CEO's worst nightmare. One day in 1989, I received a call from one of the technical directors at Ocean Spray, a customer who worked at their headquarters in Massachusetts, demanding, "What are you going to do about it?" I responded, "Do about what?" The ban came totally out of the blue. We were desperately unprepared.

Packaging is a crowded, competitive industry. Major beverage producers use all types of packaging even within individual product lines. Aseptics, glass, aluminum, paper, and plastic packaging manufacturers fight tooth and nail for even slight market share gains. The industry watched from a distance - most didn't want to join our fight. With excruciatingly tight margins, some of our competitors, particularly those losing market share to aseptic packaging, wouldn't have minded seeing the aseptic package killed. At best, most were going to stay neutral. There was a serious question as to whether aseptic packaging was going to make it in the U.S.

JONSSON: Ed Klein, our environmental expert, had been on board for only two weeks after being hired away from the Environmental Protection Agency in our first real attempt to address environmental issues, when he from a trip to find a cryptic note: "You're banned in Maine."

Our reaction was, "This is really unfair," because ours is a great environmental package, and was more efficient in delivering beverages than any other packaging form available on the market at the time. With a minimal use of paper and aluminum, aseptic packaging offers great energy efficiencies and can deliver products that don't require refrigeration without the use of preservatives or additives. Between the packaging process and the materials, there are no toxins in the products. The light weight of the packaging and its ability to be transported and stored without refrigeration translates into energy savings during transportation and storage. We were insulted. We believed in the package from a societal standpoint. As a company, we had never been involved in the political process. We had no real understanding of how to deal with it.

What's more, we were debating strategy among ourselves - whether to focus on recycling or promote the benefits of aseptic packaging relative to glass, aluminum cans, and other packaging. As a source-reduced package (made with minimal materials), aseptic packaging is by nature better for the environment. But others had already defined the issue. The aseptic package had been branded a national symbol of the throwaway society. Recycling had become the mantra for the environmental impact of a package.

TYLER: We had never sat down with Tetra Pak before. They were larger and had no inclination or need to sit down with us. There was little we felt we could get out of a relationship with them.

However, since Tetra Pak was also an aseptic packaging producer, I suggested we sit down and discuss the Maine ban. At first, we tried to pull together a group of our customers, including Ocean Spray, Coca-Cola Foods, Procter & Gamble, and General Foods. But most were not committed to a protracted battle. We soon realized that this was our battle to fight.

I invited Ed Klein to our headquarters in Columbus, OH, and at that meeting, the Aseptic Packaging Council (APC) was formed. Created primarily to address the ban, it has evolved into a long-term organization that addresses environmental issues on behalf of the industry.

Getting together with Tetra Pak was okay if I could erase the deep suspicion on my part toward them. I trusted Ed Klein, but he was new to Tetra Pak, and I could not be sure how much his voice would be heard. I felt there was little to gain - -but perhaps much at stake - from a joint effort. We were warily circling one another until Uno Kjellberg, Dennis Jonsson's predecessor and CEO of Tetra Pak at that time, stepped in. Uno threw away the hostilities of competition. He told everyone that they'd work on this objectively, that no one would use the issue to further the company's interests over the partnership's - or they would be fired. Dennis Jonsson and his staff have since continued that vision.

JONSSON: Our relationship with Combibloc wasn't smooth sailing all along. It evolved over time into trust. From the outset, the tone was set from the top down, with the commercial warriors of each firm relegated to the sidelines. It was this shared commitment that carried the APC successfully through the early crisis phase and eventually transformed it into a long-term environmental vehicle.

Aseptic "ban fever" spread like brushfire across the country, with flames fanned by lobbyists of grassroots environmental organizations. Seven states promptly introduced similar legislation, and then three more followed. Environmental activists watched their counterparts in other states, often introducing bills with identical language. We needed someone to guide us in the battle and finesse the delicate political scene. We hired Marshall Cohen - a longtime Maine lobbyist and consultant known for his effective legislative approach at the state level - as APC's president.

We also sought to work with the trade associations of industries such as food, paper, and packaging. However, existing associations took a wait-and-see attitude. For them, it was one of many issues, not their lifeblood. For us, it was life and death. From our customers' standpoint, they only sell juice. They wanted us to succeed, but if we didn't, they would still sell juice.

TYLER: Our experience with trade associations exemplifies the problems of large industry organizations: They threw together people from all sides of the argument who couldn't reach consensus. Some paper companies did help us set up recycling - mainly because they were our suppliers.


TYLER: We quickly set up a road show, giving presentations in approximately five cities around the U.S. to our customers who wanted to discuss the APC program and what could be done. Customers were beginning to make noise about exploring other packaging options. We had to convince them that we would survive.

JONSSON: Not only was the issue defined by our critics, but it was popularly defined. Ten percent of the country was participating in recycling programs when the ban was introduced, and recycling was swiftly gaining popular acclaim. The process for reaching legislators was easier, because we knew who they were and where to find them. But how do you reach millions of people and change their thinking? Our task was to convince consumers that this was a good environmental package - in a sense, giving them permission to use the package without feeling guilty.

Included in the documentation rationalizing the ban, was the language, "because the material and the drink box cannot be recycled, it must be banned," so we chose recycling as the underpinning of the entire battle. The APC erected a national infrastructure to fight the issue, with lobbyists in 15 to 20 states providing intelligence on the legislation being proposed and Cohen devising strategies to respond in each state.

We were fighting our opponents' battle on their terms. However, we still underestimated the gravity of the problem. We recognized the need to bring in experts too late. Our opponents had defined the issue, and we were in the worst place to be - playing catch up. Our critics had sound bites: "recyclable," "throw-away society." We had technical jargon.


JONSSON: The APC's program plan was three-tiered. First, we set up viable recycling programs, hiring local experts who could make them happen. To establish credibility, the programs had to be real and substantial, not publicity ploys. Second, we communicated to key audiences with sound, comprehensible technical and arguments about the environmental profile of the aseptic package and its recyclability. Third, our legislative program, which started as a defensive strategy, soon became an offensive strategy.

During the heat of the crisis, we also developed an award-winning, national ad campaign to educate consumers about the package's recyclability. We also recognized that all politics is local. Instead of "suits" from D.C., we needed local represention. We hired state-level public affairs experts, building a national intelligence network and defensive line.

TYLER: In the early years, the APC had hired national public relations agencies. One group of hired guns from Washington, D.C., landed in Maine like a bull in a china shop. We soon felt the firms were charging outrageous fees for poor work. Changing this was one of Cohen's first recommendations. He brought in communications professionals, building a small hand-picked team to achieve fast results.

One critical strategy was going directly to environmental groups to establish credibility. We operated on a philosophy of honesty, even admitting when we weren't successful. Our driving force throughout was our steadfast belief in the package.

A significant turnaround in the fight occurred in 1991, one year after the Maine ban. We approached the chief scientist of a leading national environmental organization. Marshall Cohen and I sat down with him for hours and answered technical questions. I explained the science of aseptic packaging - the reason for each material used and what that combination produced, such as great energy efficiencies with minimal packaging, and the ability to deliver a product without preservatives, additives, or toxins. I also discussed its technical recyclability and the commitment we were making as an industry to getting the package recycled. As a result, the scientist gained an understanding of the aseptic package, which helped us from that day forward. Shortly thereafter, the final packaging regulation legislation introduced in Massachusetts had aseptic packaging listed as an example of "innovative packaging" that would be exempt from the law if enacted. This position was then replicated in other regulation proposals around the country.

JONSSON: We gained the respect of environmental groups and legislators as being an industry you could trust - as actively doing something about it. We had to be all things to all people, even though our packaging represented less than one-tenth of 1 percent of all packaging waste in the U.S.

The third-party credibility gained enabled the APC to meet the objectives of the Maine legislature so that the politicians could comfortably lift the ban. Passed in 1989 and put into effect in 1990, the ban was lifted in 1994.

TYLER: The cost in financial and professional terms was staggering. Demands on our time diverted us from our everyday responsibilities for a painfully long period. Because of Combibloc's small size, I was always our point person. A physicist by training, I also played the role of chief scientist for the APC. In the heat of the crisis, I devoted at least half of my travel and working time to these issues and had to turn over some customer responsibilities to people in my company. It hurt a great deal. There are times when customers need to meet with you personally. I know I missed out on some significant business opportunities as a result, but I had no choice.

JONSSON: No other state enacted a ban, which was a primary goal. As we gained credibility with legislators, recyclers, and some environmental groups, the food and paper industries came around and joined our team. With this added strength, we successfully overturned the ban in Maine in 1994. In Florida and Pennsylvania, the APC received public grants to help recycling programs. In 1996, Warren Tyler and I were invited to the White House by Vice President Gore to receive the Presidential Award for Sustainable Development, one of several environmental honors bestowed on our industry in recent years.

A number of once-skeptical environmentalists now voice support for aseptic packaging. National Wildlife Federation Executive Vice President William W. Howard, in a 1995 letter to Marshall Cohen, wrote, "We originally shared the skepticism of our colleagues when we learned about your plans to develop an industry to recycle poly-coated milk cartons and drink boxes. While we recognized the source reduced and energy-saving characteristics of the drink box, we expected that the costs of recycling would be too great ... We are pleased at the events that seem to be proving us wrong."

In 1994, Kate Roth, executive director of Mothers and Others For a Livable Planet, a national environmental group, said, "We have found that the drink box may not be the environmental bad guy we once thought it was. In fact, this seems to be a case study of an industry responding constructively to consumers' environmental concerns."

TYLER: Today, almost 8 million households participate in a national network of aseptic recycling programs. Aseptic packaging was declared a recyclable commodity in several states. And most importantly, while all this was going on, Dennis Jonsson and I were able to go back to our day jobs - building our businesses. The APC was working for us.

This process has taught us that anything and everything is possible. The result of our collaboration has been the education of a lot of people in both Combibloc and Tetra Pak that there are ways competitors can do positive work that don't get in the way of competition.


When Gloria Dittus began coalition building for companies 18 years ago, she had to borrow techniques from environmental activists - the only people actually doing grass-roots organizing at the time. Even a dozen years later, only two or three Washington, D.C., firms specialized in this approach. In the last few years, however, a confluence of factors heightened demand, and firms have sprouted faster than a yard of the green stuff. "Grass-roots public relations has become a necessary component in the political arena today," says Dittus, head of Washington, D.C.-based Dittus Group. "Companies are finding they need to identify key issue areas and get their message to select blocks of constituents early and often, because if they don't, those on the other side of the issues will."

What's brought so many companies and industries into this now-fertile field? Lots of new faces in state and federal legislatures, for one. Since 1990, more than 340 people were elected to Congress for the first time, yielding tremendous opportunities for companies to make inroads. "Direct lobbying simply is not sufficient anymore," suggests Mary Ann Pires, head of the Chappaqua, NY-based Pires Group, another of the early entries. "Knowing the right committee chairman is no longer enough for a company to get results."

Grass-roots campaigns may involve the masses in targeted communities, but to be effective they must begin with the company CEO, Dittus says. The best approaches build a reservoir of good will among constituent groups well before a crisis hits. Dittus Group client Southern Company, for example, actively involves its utility-holding-company CEOs in third-party outreach efforts. As a result, she says, they rarely lose on critical issues. "If the CEO is not committed, then senior management and the rank and file are not going to be there," she observes.

Of course, companies must actually deliver. In promising local environmental groups that the aseptic packaging industry would soon begin recycling programs, for example, Marshall Cohen, now president of Association & Issues Management, found that he was "stepping over the dead bodies of another materials industry" that had made similar, though empty, proposals a few years earlier. "In the long run, promising and not delivering is worse than not promising at all," Cohen says.

The proliferation of grass-roots campaigns has led to some high-profile disillusionment with certain techniques, especially "astroturfing," or using a firm to buy or build quickie coalitions and to generate huge amounts of mail or phone calls on an issue. Some Congressional representatives complained during the telecommunications bill debate, for instance, that many of the letters received reflected an ignorance of the issues on the part of the sender. "Legislators at both the federal and state level have become discerning in recognizing those groups that just lend their names versus those that really lend their support," says James Moeller, senior vp at Ogilvy Adams & Rinehart.

Some are optimistic that these fast-hit techniques have neared their end. "Massive phone calls and computer-generated letters are not effective; what is effective is having three critical people stand up for you at a town hall meeting," Dittus says. What's more, Pires adds, companies are realizing that true coalition building is not only more successful, but "can be done for pennies on the dollar compared to these hit-and-run campaigns."

- Meryl Davids

Dennis Jonsson is president and CEO of Tetra Pak Inc., based in Chicago. Warren Tyler is chairman and CEO of Combibloc, Inc., based in Columbus, OH. Both companies are privately held suppliers of aseptic packaging for food and beverage products.
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Title Annotation:includes related article on grass-roots public relations campaigns by companies; alliance between Tetra Pack Inc and Combibloc Inc
Author:Tyler, Warren
Publication:Chief Executive (U.S.)
Date:Jun 1, 1997
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