It all started about two years ago when Jack Knott, Virag Patel and Carl Joachim were working with California Polytechnic State University on ways to improve graphics for CPGs. The trio, who make up Arion Partners, analyzed various business models, eventually coming across digital packaging technology. From there, Arion Partners struck a partnership with Emerald Packaging to further utilize digital technology.
“The more we looked at it, the more we thought it would be difficult for a traditional converter to properly position digital printing technology in flexible packaging,” Knott says. “So we conceived a greenfield (company) and we studied all the different cost benefits of how that would be put together.”
The company, ePac, LLC, was established via a joint partnership between Emerald Packaging and Arion Partners. Headquartered in Madison, Wisconsin, ePac was officially announced last February and opened for business a few months later in May. It’s said to be the first greenfield flexible packaging company in North America based exclusively on a digital technology platform.
“All the downstream equipment – the laminators, pouch lines, slitters – have all been configured to fit the HP 20000 and align with it,” Knott continues. “All the upstream processes, like the web-to-print software and the prepress, has been aligned around the digital press.”
So why all digital? Knott cites a variety of reasons, notably SKU proliferation, specialty food categories and the ability to better serve short-run needs.
“The conundrum is that the converters that get pushed on price-cost, price-value relationships every year by the CPGs have continued to invest in a larger and larger asset base for the manufacturing platforms,” he explains. “These larger manufacturing assets are good to drive down cost and price, but they’re not good for the SKU proliferation. We’re looking at a model that would be able to properly service the short-run business with short lead times and be cost competitive. Digital fits that bill.
“There’s also the ability to create a manufacturing platform that doesn’t have the infrastructure. The infrastructure costs, the building requirements – all of it pretty much disappears with the digital technology.”
ePac initially began operations with just a single digital press, but has recently acquired three more – one of which will be installed in its Madison plant, and the other two will support the company’s planned expansion throughout North America.
Speaking of expansion, Knott says the plan is to prove out the success of ePac’s business model at its Madison location in 2016 and then replicate it elsewhere.
“Our concept is that once we get this plant up and running and it’s successful, that we replicate this plant in different geographies in North America,” he says. “The reason being, again, we’re talking about digital. You can use a distributed model here. You can download the artwork or upload the artwork on our web trend capability, you can print it in Georgia or in Troy, Michigan – it doesn’t matter, it’s going to look the same. That’s a major difference between analog printing capability, where you have to finger print every press and every press is different.”