Regulars / M&A | 31Navigating today’s labels and packaging climateThe aftermath of the pandemic is creating a unique set of challenges. Bob Cronin of The Open Approach ofers advice for navigating the top fveabels and packaging have seen “Investor interest in labels and packaging a dramatic shift in sales and sentiment over the last few months. Lcontinues, because private equity and others Entrepreneurs and executives don’t have the same optimism, and employees are believe this is a great place to be long term”getting restless. Despite the changing dynamics, we’ll downtime to devise a product that answers important than ever. Now’s the time to weather the storm. In good times and bad, a marketplace need. Have clients out to readdress how you manage your human we’re relied upon for marketing, brand- your plant. Identify their pain points and resources and internal communications, building, security, tracking and more — rebuild yourself as a partner in their growth, career progression pathways and employee bringing value to just about every industry. rather than just another supplier. loyalty programs. These are issues that Still, we have some new obstacles. 2. Operational price increases Our aren’t going to subside, so the sooner you One of today’s biggest challenges is the profts are also eroding due to infation retool, the better. aftermath of Covid-19. Over the last in offce supplies, professional services, 5. Mergers & acquisitions slowdown few years, we’ve tried to avoid material insurance premiums, healthcare/benefts, Current trends also have had an impact on shortages and price hikes by stocking up, ESG costs and even things we stock in M&A, because of the higher fnancing costs adding equipment to handle work we employee breakrooms. and the unknowns of sellers’ true run rates previously sourced, and hiring new staff. If you haven’t calculated the ROI of (2021/22 vs. today). We took aggressive action on short-term all your spending lately, it’s time to do These issues make it diffcult to value any issues. While this benefted our immediate so. Examine your biggest costs frst, and entity and develop a strategy from which needs, it didn’t position us for tomorrow. don’t be afraid to question long-time to build. Thus, we’ve seen a bit of a drop So, now we’re left with some new vendors. Should you be looking for new and more companies seeking suitors that impacts. We’re also facing pressures benefts providers — or options? Are there can pay cash. from our marketplace and economy at incentives that can save you money on That said, investor interest in labels and large. Let’s take a look at our fve major health premiums? Are there tasks now packaging continues, because private equity challenges and see what we can do to done manually that you can save with and others believe this is a great place navigate them. automation? Are there subscriptions or to be long term. Our companies are still 1. Overstock Just about every business ongoing services that aren’t essential? sought after as cornerstones, value drivers, has excess inventory that it needs to clear. A little belt-tightening can help you get and proft-enhancers, though potential This means all of us are trying to push through these times easier while creating a candidates should expect greater due through the same material to customers, more agile organization. diligence. Keep in mind, history is the best with some competitors drastically 3. Recessionary concerns The demand judge of your worth so if your fuctuations undercutting to offoad their shops. At for labels and packaging hasn’t changed; are drastic, you may want to wait till you the same time, converters are lowering the timing has. The purchasing acceleration have a steadier outlook. prices to protect their end market. This has of 2021 and 2022 has been replaced by If there’s one takeaway from all of it, it’s caused increased concern and frustration a slowdown as customers use the items that you need to make decisions for the as sales margins have dropped — on the they stocked up. This, coupled with some long term. Our market will always have few projects that are actually getting in the pullback due to expected recessionary change and obstacles to deal with. You’ll doors. pressures, makes it seem worse than it is. thrive if you stay focused on the future. I’m We need to turn this ‘commodity’ These aren’t new issues. Ups and downs always happy to consult if you want to get thinking around and focus on what has are what you’ve faced since day one. The a sense of your best options.made us successful for all these years: extremes have just seemed like feast and Providing solutions. Show your customers famine. Labels are still the best growth Bob Cronin is managing why you’re a valuable resource. Take the market in the printing industry. And there partner of The Open are always new applications, uses, and Approach, an M&A products to drive this. As we balance out, consultancy focused we’ll return to the steady pace we’ve been exclusively on the world of accustomed to.print. In addition to 4. Labor issues Remote work, the rising spearheading several large label and packaging minimum wage, and the changing attitudes industry transactions, the frm handles of the younger workforce have value-enhancement, due diligence, industry become signifcant concerns trend analyses, and exit planning. It is one of across every industry. the most tenured agencies in this space. The This makes company Open Approach, visit www.theopenapproach.culture, training and net, email Bob Cronin at bobrcronin@aol.com, mentorship more or call or text 630-542-1758.Jul - Sep 2023