I love the Dos Equis ad campaign in which the Most Interesting Man in the World (He took the title from me.) proclaims, “I don’t always drink beer but when I do, I prefer Dos Equis.” He ends each spot with, “Stay thirsty, my friends.” I think I am going to end each blog this year with, “Stay patient, my friends.”
The verbal sparring regarding the Greece situation has started in full force. In case you missed it, the socialist leaning party won the election in Greece. They want the European Union to provide leniency on Greece’s repayment of bailout money. The EU has indicated it will not bow to Greece’s demands and is demanding Greece repay its debts. US durable goods orders dropped in December, prompting concerns of an economic slowdown. Several large companies have reported earnings that missed expectations and they are warning about earnings shortfalls for the coming year. Everywhere you look there’s bad news yet again. Or is there?
Perhaps the most significant news impacting the packaging industry this week is Rock-Tenn and Mead Westvaco announced they are merging. Combined, they will have nearly $16 billion in revenue worldwide in the containerboard/corrugated segments. Once again, a mature industry is demonstrating that consolidation will improve the profit pool. That will continue to put pressure on other public companies in packaging to seek strategic alternatives. For those of us that are smaller players in the packaging industry, this pressure will create great opportunities. As with any large merger, there will be job losses from synergies between the two companies. I’m sure that won’t be a lot of fun for a lot of people. However, there will be talented people available that can contribute to your business almost immediately. There will also be opportunities for competitors to take share due to the distractions associated with the merger. There will also likely be large suitors looking for “tuck in” acquisitions of smaller players.
In my little world of labels, Honeywell, which purchased Intermec a few years ago, announced it was acquiring Datamax in mid December. The same results demonstrated above apply to this acquisition. Disruption creates opportunities. While the macro economy gets all the news, the real action happens on the micro economy level. Pay attention to what’s impacting your world and stay patient with the what is happening in the world, my friends.