Ranpak’s bright blue machines have been a common sight since 1972, when the company launched with the aim of creating the first environmentally responsible packaging material. Now, 50 years on, the business remains committed to that mission, and has become an expert in its field.
“Many people do recognise us from our blue machines and that is our heritage. It’s how we started,” Managing Director Europe Eric Laurensse says of the company’s “razor-blade” model, which involves the sale of paper that can only be used in Ranpak protective packaging systems.
“The growth in that specific pillar, how Ranpak started, is one of the elements in our route to the future. But we recognise that we will not get to where we want to go if we only focus on that. So that is just one part of the plan,” Eric adds.
Another pillar is the development of new applications such as its cold chain packaging solutions. “If you’re going to buy your groceries online the box or the bag that’s shipped to your home needs to be protected for a relatively short time – 24 hours, maybe 48 hours maximum,” he explains. “We have a paper solution for that specific application.”
It represents a new market segment for Ranpak, which has traditionally operated in the industrial ecommerce markets. “But developing new applications and new segments, such as cold chain, is a key growth pillar for us,” Eric says.
Developing new applications and new segments, such as cold chain, is a key growth pillar for us.
Retail has emerged as another area of growth for the company, with a paper alternative to bubble wrap proving popular for at-home use. “It’s a completely different area, consumer retail, which we at Ranpak were traditionally never in,” he says. It is also supplying packaging to retail stores such as Zara Home, another new avenue.
The company is also working hard on a third pillar: to become a leader in end-of-line automation. With freight costs spiralling as a result of limited availability of ocean containers, Eric is confident that companies will turn their attention from outsourcing back to insourcing.
“But now in Europe, companies don’t have enough capacity to satisfy that additional demand if everybody starts to insource into Europe,” he says. “So the whole automation angle is becoming very, very important.”
In recognition of this, in 2017 Ranpak acquired French packaging automation company e3neo and established Ranpak Automation, to help it automatically customise the height of its boxes, thereby reducing void fill and the shipping space required to transport the package. Last year the company also made a “strategic investment” in Pickle Robot Company, which specialises in robotics, robotics software and the loading and unloading of trucks.
Ranpak also created a new company called R Squared Robotics in 2021, looking into artificial intelligence and machine learning. “Together with R Squared Robotics, with Pickle, with Ranpak Automation, we want to be a serious player in end-of-line packaging solutions,” Eric continues. This focus on mergers and acquisitions forms the company’s fourth pillar. “It’s total solution selling, which we think is critical and important.”
It’s total solution selling, which we think is critical and important.
Packed to the rafters
All of this comes at a time when double-digit growth in ecommerce, boosted by the COVID-19 pandemic, is rapidly accelerating ecommerce packaging market growth. In Ranpak’s case, it has meant 30 per cent growth in volume in 2021 in Europe alone – a rise Eric describes as “historically high”.
The pandemic’s impact on ecommerce hasn’t been the only factor behind this increase, however. Consumer demand for more sustainable options was already driving a shift from plastic to paper – Ranpak’s speciality. And on top of that, there was a drive for people seeking to automate their environment.
Everybody benefits from the success of the company. And if the stock price moves up, it’s really for everybody.
Headaches were unavoidable, of course. And for Ranpak, the steep rise in demand meant a longer lead time in many cases. “We were not set up to get a demand increase of 30 per cent so we needed to add additional capacity,” Eric reflects. “We had people working overtime, went from three shifts to five shifts, started outsourcing more.”
Everyone rallied round thanks to the strong company culture, further enhanced by the fact that each employee has “restricted stock units”. “Everybody benefits from the success of the company. And if the stock price moves up, it’s really for everybody,” Eric explains. “And I think that is helping the organisation big time.”
Eric has proven throughout his professional career that he shines during tough times thanks to his entrepreneurial spirit, which has underpinned his work since joining the company in 2009. “Throw me in deep and I’ll make something out of it without concrete boundaries,” he smiles. It’s an energy that promises that, even as Ranpak celebrates half a century in business, great things are yet to come.