Foxfire Printing and Packaging: Sure Signs of Success
The way John Ferretti sees it, printing is just about the least of his customers' problems. The CEO and founder of Newark, DE-based Foxfire Printing and Packaging knows that if he can get to the point where his customers are essentially getting their printing for free, then he knows his firm has done its job.
The largest printer in the state of Delaware—with $47 million in sales for fiscal year 2012—didn't get that way by doling out freebies (especially since the business nearly doubled from a previous year's $24.1 million in revenues). Instead, Foxfire reached the top of its market space by enabling its clients—retail chains including grocery, clothing, pharmaceutical, auto, department and discount stores—to efficiently and effectively execute their signage programs, from data manipulation through installation.
One of the most interesting facts offered by Ferretti: The cost to install a sign is generally eight to 10 times the cost of the sign itself. So how does Foxfire and its clients make money? By providing solutions that enable the retailer to greatly reduce its installation time. And, with floor personnel kept to a minimum by many cost-conscious retailers, the ability to efficiently and effectively execute an advertising campaign can provide real savings, thus negating the relatively small cost of the printed products as part of the whole enchilada.
"We've recruited and developed retail industry experts. We've become experts in supporting their needs," Ferretti states."Print is just our by-product. We've developed end-to-end solutions for retail that feature a holistic approach, looking at everything from data to installation."
Where Foxfire delivers is in impacting the two pivotal metrics in the world of retail: Same store sales and operating margins. He points out that retailers count 20 percent of their revenues from promotional sales alone, and many retailers often fall short of having 100 percent of their outlets implementing 100 percent of promotional signage. But, in using the plan-o-gram system (the organization of how products are laid out in the store, packaged to be easily implemented at the retail level) the value proposition far exceeds merely making life easier on the retail employee staff.
"We look at the way the kit is organized and examine the distribution channel—all the factors in reducing installation time," Ferretti stresses. "And, if we can reduce that by 10 percent, essentially the printing is free."
Foxfire offers the full gamut of products that support in-store signage for retail chains. Its top products include shelf edge tags and signs, shelf strips, peg panels, large-format signs, kitting and fulfillment. The 200-employee company also provides variable data digital printing for personalized items ranging from direct mail to brochures, point-of-sale (POS) displays and various other commercial printing products.
Ferretti broke into the industry back in 1991, and had the prescience to anticipate the printing movement from a production-based industry to one fueled by IT and digital business, which demanded multiple solutions for clients. Foxfire shot out of the blocks smartly, serving a software packaging space where even smaller publishers were generating $1 million per year for printing and designing boxes that would house 5.25˝ and then 3.5˝ discs. Foxfire provided all the back-office functions as a turnkey solution for the market.
The Writing on the Wall
When that industry began to consolidate, Ferretti kept his feet moving and embarked on the retail sector. In 2000, he acquired LSW Inc., a retail specialist, and perhaps the most critical aspect of the deal was the Rapidsign proprietary software, which helps with the production and placement of variable data interior signage. The software enables Foxfire to commingle all of a client's merchandising and advertising programs, to print unique sets of signs for each store and sort it into plan-o-gram order.
"We get millions of records of data that we can import into our software. And it has dynamic templating, so we can automatically apply that raw, character-based data into a template and create a graphically appealing image," Ferretti explains. "Then we can process and sort that data, so all of these signs will be in plan-o-gram order when they get to the store. They're organized by department, (organized) within the department. So, when they get to the store, they're easy to hang."
LSW was just the beginning of Foxfire's growth through M&A. In 2002, Ferretti bought Baltimore Sign, which provided a gateway into large-format retail signage. And, just last year, he added Pinnacle Business Products of Nashville, TN, a reseller that formerly outsourced its printing work. Aside from providing kitting and fulfillment to the parent company, Pinnacle also provides an entry point into the south, according to Ferretti.
Foxfire also embarked upon an $8.6 million capital investment initiative, with a five-color, 73˝ manroland Roland 900 sheetfed offset press with coater as its centerpiece. Other parts of the capex project include an Agfa :Jeti wide-format flatbed printer with an I-cut diecutter, a 90˝ Saber cutter, and a new platesetter, fork truck and skid turner in support of the manroland press (as of press time, they had not been selected). The company has been very aggressive with recent equipment purchases, which include two Xeikon 6000 digital presses and a Xerox iGen4 (its fourth) in the last three years.
The upshot of all this new gear is that Foxfire is boosting its staff to upward of 40 new jobs, some of which will be added in 2013. In terms of the :Jeti printer and the Roland 900 press, Ferretti was essentially giving his customers what they wanted.
"We saw a need in the market for the larger sheet size; 60˝ used to satisfy most customers, but now they want 73˝-size sheets," Ferretti states. "It's really kind of a twofold solution; you need both digital and offset capabilities to satisfy the shorter run and variable data solutions, as well as the longer run work. Silk screen is a market that's dying, and the new offset presses like the manroland have the ability to produce short run lengths. Consumables costs are also coming down, so digital run lengths are getting longer. We decided we would make investments in both of those categories."
It's not just equipment and business acquisitions that have fueled Foxfire's growth. When Ferretti began acquiring companies, he relied on funding from several venture funds. This necessitated the creation of a board of directors for the privately-held firm. For this he tapped a number of different industries: A retired Sara Lee executive, a human resources maven, and the head of new business development at E.I. DuPont. Two other board members are from the venture funds.
"By having some diversity of business experience on the board, we're able to vet problems and approach strategies from different angles," Ferretti remarks. "As an entrepreneur, if you're sitting there by yourself, you can become complacent if you don't have a higher authority to answer. This board has kept our business driven."
David Freschman, CEO of Delaware Innovation Fund, which is one of Foxfire's investors, sits on the printer's board of directors. He credits Ferretti with having a "laser beam focus and the ability to take a plan and execute it to a T." Moreover, the diverse content of the board—which contains current and former executives from smaller businesses up to multibillion dollar concerns—brings a variety of knowledge sets to the table.
"Most privately-held printers will put together a board consisting of printing industry types," Freschman notes. "We've put together a board with global business experience, and that adds value to the company. Our meetings are run like those of publicly-held companies. We put the mandates in, the governance, the reporting, the measurement. It's not unlike a company that would have to comply with Sarbanes-Oxley (Act)."
It is the willingness to take the long view on business strategy, investing in technology and in its employees that has sustained Foxfire for more than 20 years and will continue to do so in the future. Solving client needs, anticipating their challenges and impacting their growth have enabled Foxfire to gain favored nation status, and tied its fortunes to the companies it serves.
"We measure our success by the success of our clients," Ferretti says. "If we provide a phenomenal set of tools that will help them execute and grow their business, then we'll grow with them." PI
