How a Manufacturer Leverages a Distributor-First Ecommerce ModelHow a Manufacturer Leverages a Distributor-First Ecommerce Model

How a Manufacturer Leverages a Distributor-First Ecommerce Model Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White. 

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White and joining me today is Carman Pirie. Carman, how you doing, sir? 

Carman Pirie: I’m well. Delighted to be here actually, Jeff. It’s good to be chatting again. 

Jeff White: It is. It is. For sure. Looking forward to today’s guest. 

Carman Pirie: Yeah. I find today’s conversation to be really quite refreshing. There is so much of the chatter that you hear between manufacturers and distributors as it relates to ecommerce is often played out through basically manufacturers using ecommerce as a way to potentially, or it’s a concern that they may use it to circumvent their distribution channel. And today’s guest just kind of turns that on its ear. So, I love that. 

Jeff White: Yeah. I think anytime we have an opportunity to talk about a different perspective on that manufacturer-distributor online relationship and the potential for conflict resolution through just thinking about it a bit differently, it’s always really refreshing. 

Carman Pirie: Yeah, so let’s get to it. 

Jeff White: Let’s get into it. Yeah. Joining us today is Jeff Bercume. Jeff is the Director of CX Marketing at Berry Global. Welcome to The Kula Ring, Jeff. 

Jeff Bercume: Thanks. Pleasure to be here. 

Carman Pirie: Jeff, it’s going to be an odd one. I mean, I guess the good news is that as long as I call everyone Jeff, I’m gonna be right in this show, but who knows how this is gonna bounce back and forth here? But I suppose you should probably assume that I ask a question to Jeff, it’s probably to you. 

Jeff White: Probably so. I’m currently working on a project where there are actually four Jeffs. It’s embarrassing. 

Carman Pirie: Well, you’re making it worse now, because I said it would normally be for Jeff Bercume, and they actually chime in and answered the question and now nobody knows anything. 

Jeff White: There wasn’t a question. This isn’t Jeopardy. 

Jeff Bercume: Well, let’s agree that it’s a great name, which is why we have these kinds of problems. 

Jeff White: 100%. 

Jeff Bercume: And yeah, it’s funny, the team I’m on right now, it’s a small team. There’s just a handful of us, five of us, and the finance teammate that I have, his name is also Jeff. And he’s been with Berry Global for a couple of decades, so we refer to him as Jeff 1 and I am Jeff 2, so I am happy to continue that pattern and be referred to as Jeff 2. I think it’s fitting in this context. 

Carman Pirie: I love this. It’s a small team, only five of us and two Jeffs. Fantastic. 

Jeff White: In university, I worked with a Jeff Brown and a Jeff Rye, so we were brown bread, rye bread, and white bread. It was really easy. Anyway. 

Carman Pirie: All right, without further ado, Jeff 2 then, why don’t we start by introducing us to yourself and Berry/Laddawn, kind of those two hats that you wore from a brand perspective, as well. 

Jeff Bercume: Sure. I’m the Director of Marketing, Director of CX Marketing for the customer experience project that we’ve embarked on at Berry. Laddawn, I’m native to the Laddawn brand within Berry. Laddawn was acquired by Berry about two years ago. I was the Director of Marketing for Laddawn and now we’re a product line within the engineered materials division of Berry. Our project, the CX project, customer experience project that I’m working on is largely focused on in the short term, exporting some of Laddawn’s best practices to a similar product line within Berry. And simultaneously from there, we’re looking at other opportunities to improve the customer experience within our division, as well. 

Carman Pirie: And for those who don’t know, Berry is… fill in the blanks? 

Jeff Bercume: Yeah. Berry is a $13 billion publicly traded manufacturer of all things plastics. We’ve got a division that sells hygiene, so PPE, in particular, made a whole bunch of masks in the past six months. Another division sells consumer products, so think about your yogurt cups, your shampoo bottles, things like that. And the division that I’m in, we manufacture all types of industrial products and tape, films, sheeting for agricultural, construction, the buzz phrase is any given person touches a Berry product 33 times a day. That’s how much we’ve manufactured for everybody. 

Carman Pirie: That’s very cool. 

Jeff White: That’s a massive influence. 

Carman Pirie: Absolutely. Absolutely. 

Jeff Bercume: Yeah. A broad portfolio. 

Carman Pirie: Yeah, so look, let’s narrow in a bit, because I know that the Laddawn acquisition is somewhat recent for Berry, and it’s really the Laddawn approach to kind of a distributor-first model that we wanted to chat through a bit, especially how that comes to life online. And I think, Jeff, that all really started with the founding of Laddawn, didn’t it? 

Jeff Bercume: Yeah, so the origin story as I’ve come to understand it, Paul, who is the founder of Laddawn, just wanted to start a company and decided that it was gonna be in polyethylene films. Started out as a single location manufacturer of plastic bags, plastic tubing and sheeting, and at first, like any manufacturing company, there’s a lot of pressure to fill your capacity, make sure that your lines are running, the people that you’re employing to run those lines are actually manufacturing the goods that you sell as opposed to sweeping the floor while the lines are idle. 

So, at first, Paul was willing to sell to anybody, and then I think it became evident that selling through distribution was really the most efficient use of the strategy of Laddawn. Paul was able to focus on manufacturing and servicing distributors while distributors were able to be the selling arm of Laddawn and its manufacturing capabilities, as well as engineer the solutions for the end-user. They have the subject matter expertise on applications. Our challenge became to educate distributors on what our manufacturing capabilities are so that when they’re in the field selling, they can leverage our capabilities without Laddawn salespeople having to ever engage with the end-user on whether or not that product will work. We lean on the distributor for that. 

Carman Pirie: And this kind of distributor-first model has really extended itself online in recent years. When you look at Laddawn, the Laddawn.com, it seems an incredibly robust platform for distributors. How long has this been this type of current iteration, if you will? How long have you been at this?

Jeff Bercume: The website was started in the ‘90s, and there was already 15 years of distributor-focused work before any of that knowledge made its way or manifested itself onto an ecommerce website. So, it’s been a long time. This is the third iteration of the website. We actually call it Laddawn 3.0 internally. And yeah, you’re right, everything about it is geared toward the workflow of a distributor, starting with the fact that it’s password-protected, so we vet anyone who wants to do business with Laddawn to ensure that they truly intend to resell the products that we sell them. 

And that has built a lot of trust over the years between our partners, our distributor partners and Laddawn. And then all the tools that are inside that website once a distributor logs in come from an understanding of the nature of their work, the pain points of their work, and largely the tools have been built to either augment or complement the tools that they have internally in their own native ERP systems. And in many instances, we know that the website is doing things on the distributor’s behalf that actually represents a hole in the capability of their own ERP system.

I always think about it in three ways. Laddawn has roots in manufacturing and therefore is able to program a website to reflect our manufacturing capabilities, provide an instant price on what is being quoted, as well as an accurate lead time, so that’s the first part. Understanding manufacturing. The second part is a deep understanding of the work of our customers, which are distributors, and then the third part was the ambition to become an ecommerce company and to hire developers and programmers who can take our manufacturing understanding and our distributor understanding and bring it to life on a website so they can transact their ecommerce work. 

Carman Pirie: You know, I love everything that you just said, and I somehow find my mind, and I don’t know, Jeff White, if you’re with me on this or not, but I can’t get past the kind of the route to functional optimization of the ecomm platform being identifying holes in their ERP functionality. 

Jeff White: Yeah. It’s certainly part of what has me just wondering how that came to life and how you went about it. 

Carman Pirie: Yeah, it’s fantastic. I mean, it’s just a great way of looking at it and saying, “This is their world, and we understand it so well, the job that they have to do, that we actually can find the points of friction in their relationship with their ERP.” Knowing that these distributors don’t all run the same ERP, of course. And then build out toolsets online to help fill those gaps. 

Jeff Bercume: For what it’s worth, I wasn’t there for this, so I’m sharing age-old mythology, and I don’t think that anyone set out to really audit the typical ERP system of a distributor and find those holes. I think it was more what are the pain points of the work of a distributor, where is there friction, and how do we build a system that will enable them to be more successful? And we know if we can do that, our business with them becomes stickier, we’re a more appealing partner to them, and I think maybe by accident is overstating it, but along the way what ends up happening is you’re augmenting, supplementing, or filling in holes in their ERP system. 

And so, that’s some of the feedback we get. Also understand that so many of our customers who are distributors started out as just a handful of people that felt like they could provide some subject matter expertise to end-users, and also felt that they could build relationships with suppliers, and so an ERP system, that doesn’t even exist yet when you’re a small company like that. And many of our customers are that small type of outfit. 

Jeff White: So, they just don’t have the capability internally or haven’t grown to the point where they feel the need to implement something so massive as an ERP. I love that, but I also don’t want to lose sight of something else, and I’m sure Carman’s kind of rolling his eyes that I would be bringing this up, but I really love that you brought in developers and people within your company to… seeing the ecommerce platform as being so important as to not be left to an outside vendor in order to provide. Because you know, it really is a core capability to be able to lead, and direct, and be agile with the development of that. 

How was that in terms of bringing those kinds of team members in? Was it difficult to recruit for? How did people fare? 

Jeff Bercume: Yeah. I think we have a pretty well… It’s a pretty robust team of web developers and an IT team that’s pretty large, given our size, and the fact that we’re a manufacturing company that makes polyethylene film. I think anyone that works in IT and deals with third-party applications all have the experience of, “Oh, wow. This is an appealing path.” Right? This tool is already built and they all come with some promise of customization, and whether they live into that probably depends on the brand and the product itself. I know for our purposes it was really difficult always to find third-party tools that were able to meet really the goals of a given project. 

One example of that, we have a tool on Laddawn.com called print designer. Essentially it’s a what you see is what you get tool that allows the distributor to put artwork onto film. You’ve probably seen suffocation warnings, for example. That’s the type of printing that we’re talking about. But it gets more complex than that, and it gets customized, and this was a terrible process. This is an example of our customers would tell us, “Wow, it is so difficult to get a quote and place an order for a printed bag, and when I do, half the time I don’t like the way it looks, and it doesn’t look the way I expected it to look.” We set out to build this tool called print designer that really functions the same way any sort of graphic editor would and makes sure that the customer can visualize what it is that they’re quoting, what it’s going to look like as a finished product, and when we went looking for third-party tools that could do that, it didn’t work out. 

I think we started with a third party company and got pretty far along before we had to pretty much start over. And that’s been the experience, I think, with many of the goals for the website, and so we just have a really capable group of developers who do it all themselves and create the exact tools that we want. 

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Jeff White: You know, effectively what you’ve done is you’ve created Canva for manufacturers who want to design their own packaging.

Jeff Bercume: Yeah. Exactly. It works a lot like Vista Print would for making your own business card. The challenge that we have, and this is why it was so difficult to find a third party that could help us, is the number of permutations for our products. The width, the length, the depth, the colors, just the general construction of our product, it changes every single time. It’s not like a business card, which is pretty much the same size always. It was just that much more complex, that canvas that we’re trying to provide, so yes. In summary, yes. 

Jeff White: As somebody who was trained as a graphic designer, I’ve done packaging designs and all of that. Are you able to take the output of that platform and print directly with that? Or does your team of producers still have to rebuild this? I realize I’m going down a rabbit hole here, but I find it very interesting. 

Jeff Bercume: Yeah. No, that’s okay. It creates a technical drawing right on the spot. The result of the customer designing that project on our website gives us the technical drawing that we would need to then go make it. And honestly, I think this leads to another really interesting thing, and maybe I can sort of bring the conversation this direction. If you prefer not to go there, that’s great. 

Laddawn does not have the ability to actually manufacture that printed bag that I just described. And this is just another part of the evolution of the website. What we came to realize is that we built a tool that is uniquely powerful, the website itself, and most manufacturers, other partners that we have, don’t have this front end tool. And the plant manager might also be the top salesperson. What we set out to do is say, “Okay, we’ve built this great online ecommerce website and our customers tell us over and over again that it’s so easy to use, but you only sell a limited assortment of products compared to the wide array of products that a distributor actually needs to purchase.” 

They have a great experience on Laddawn.com and then they need to go source some other type of product that Laddawn doesn’t sell and they’re back to the fax machine. What we set out to do was let’s go find manufacturing partners who fit the bill of really good at manufacturing, perhaps a smaller outfit that don’t have a great website, and who might not have a fully rounded out sales team, and let’s program our website and commercialize their manufacturing capabilities so that we can sell their products and they can make them. We do what we do well, which is sell manufacturing products, products that are manufactured, and they go do what they do well, which is to manufacture those products. 

Perfect example, customers told us all the time getting a printed bag is a real hassle and it goes wrong, and I never know what it’s gonna look like. Half the time, I need to return it or it’s out of spec. Because at the quoting phase, we weren’t all on the same page. Laddawn builds print designer, we get a whole bunch of quotes for printed bags, and we partnered with manufacturers who have those printing capabilities, so we then source those jobs to them. When you have that website, it puts you in a position to become more of a marketplace as opposed to just-

Carman Pirie: Man, I think that’s just brilliant. I think that’s fantastic. How many manufacturing partners would you have in that kind of scenario? 

Jeff Bercume: Yeah. We have more than a few dozen. Certainly, some primary partners along the way, but just more broadly I think it’s an interesting conversation that there isn’t necessarily a demand problem in our industry. It’s more of a capacity problem. And I think that probably resonates with any manufacturer, especially smaller ones, because when you were growing and when you are thinking about investing in manufacturing assets, that’s a big deal. That comes back to the problem that Paul had when he started the company, which was I need to take any and all orders because I don’t want to pay people to sweep the floors while lines are idle. 

What ends up happening is it’s like, “Oh, are we gonna invest in that new asset?” These conversations happen around the dinner table, because it’s a family business, and it’s a huge risk to spend capital when you’re a small manufacturing company. One minute you’ve got so much work that you need to invest in capacity and it’s hard to plan around when there’s a drop-off, and so what our website, what this marketplace model is attempting to do is help smooth capacity across the industry. On any given day, one of our manufacturing partners who we vetted to become a supplier for the website, we come to them with an order in hand. The order has already been placed. But we don’t yet know who’s going to make it, so we end up going to these partners, and if it happens to be that moment where they’re extremely busy, then they don’t take the order. 

But if it’s a moment where they’re worried about having their manufacturing staff being idle, well, that’s a great time for them to take what amounts to lower margin work, because we’re splitting the profit, right? And they take that order because it makes sense to them in that moment. And the more suppliers we have, the more this model works. I find it to be just an absolutely fascinating way to leverage what once was a website for a manufacturing company that now has become a marketplace that tries to address a capacity problem that many manufacturers are very familiar with. 

Carman Pirie: I think that’s incredible and the notion of not having a demand problem but rather a capacity problem, and I would say the one thing that you’ve highlighted in your work here is that there was also a service problem, and by filling in that gap via Laddawn.com, the impact is massive. And it’s not something that I think people imagine as they start the ecommerce route, you know? They’re not eyes wide open to that potential happy little accident that comes up.

Jeff Bercume: Yeah, and I think it’s an example of the way that B2C brands have helped pave the way. I don’t know, how many people place orders on Amazon and get concerned about who manufactured it? Does Amazon manufacture it? Because if Amazon doesn’t manufacture it, I don’t want to place orders on Amazon for things Amazon doesn’t manufacture. Like we don’t have that thought and similarly here it’s like, “Oh, this is kind of a foreign concept. We know that Laddawn manufactures stuff and now they’re selling things that they don’t manufacture?” Well, Amazon has sort of chipped away at the belief that an ecommerce vendor needs to be the manufacturer of all that they’re selling. So, thanks Amazon. 

Carman Pirie: Yeah. No, it’s true. We can get in our own way a lot. Like you say, you can have that assumption like, “Oh, well, people aren’t gonna like it if we don’t manufacture it all.” Not only that, but when you’re talking about actually guaranteeing in a soft-proofing kind of scenario, where people are uploading artwork and designing on your platform, and then they’re expecting it to output accurately, most people, the dot that they would be connecting in the middle of that would be, “Well, yeah, I can make sure that it’s right, because I’m making it.” And in this case, your next thing out of your mouth was, “Yeah, we’re not making it either.” 

Jeff White: I think it does, one of the things that you talked about around the origin story, and really trying to understand your customers, and moving into ecommerce because it makes a lot more sense for the distributors that you work with, this isn’t necessarily a manufacturing-led thought process. It’s a people-led process where you’re thinking of what are the pain points people have in these processes and how are we equipped to help given our unique capabilities at Laddawn and Berry? I think it’s fascinating. 

Jeff Bercume: Yeah. It’s definitely… You say kind of a people first. We articulate it as customer first. How do we be as outwardly focused as we possibly can at all times so that we’re developing our value proposition around the needs that we’ve come to understand of our customers? That’s sort of in our DNA, to be externally focused like that. And the marketplace model that I just described, it predates being acquired by Berry, and the beauty of it is that that infrastructure is already in place to now leverage the manufacturing capabilities of one of the best manufacturers in the world. 

It’s just a beautiful sort of scenario as it’s played out. Not only is the website sort of an added element of service for Berry products, but Berry is so good at manufacturing, that’s the core competency, and we now have access to those product lines, and those brands, and those products, so it was sort of like that was certainly a happy accident, the way that all worked out. 

Jeff White: For sure. And I mean, to turn it the other way, they now have access to you, and your capabilities and understanding, which I have to… Obviously, they saw the value in it, otherwise they would not have acquired it, but I have to imagine you’re having some really interesting conversations with people who are just really excited to bring the Laddawn experience to their Berry brand. 

Jeff Bercume: Yeah. For sure. I can remember as far back as the actual management meetings where we were presenting the Laddawn business to potential investment partners, with Berry being one of them, and the first meeting that we had with Berry, they referred to us as a techquisition, which I don’t know if that’s a real word, but it’s the perfect word to describe, really. We’ve learned so much from Berry about how to manufacture better, how to run a better plant. When you learn about mergers and acquisitions in a textbook, you learn about how important it is to make sure that it’s a good partnership that makes sense and that fits, and I think in this case, yeah, Laddawn brings an ecommerce understanding that I think is ahead for our entire industry and we’re able to now use that information to improve Berry, and likewise, Berry is so good at manufacturing, and running plants and operations and supply chain, and these are all things that Laddawn has benefitted from immensely. 

Carman Pirie: Jeff, I think it’s just a fantastic story and I thank you for sharing it with us today. I just can’t help but think there’s a number of manufacturing marketers listening to this that are working in categories that haven’t yet experienced this kind of innovation. And I mean, it’s sitting out there to be claimed. We know that there are incredible online marketplace success stories covering everything from aerospace parts, to steel, and everything in between, up to and including plastic films, et cetera. People that are kind of sitting there in a manufacturing enterprise thinking that all the innovation happens on the B2C side, I think you’re a real testament to the fact that that’s not the case. 

Jeff Bercume: Yeah, I think that’s true. Or if I think about it differently, that innovation that’s happening on the B2C side becomes the way our customers at work are conditioned to think about the buying experiences. They shouldn’t have to park their expectations about what it means to buy stuff once they get to work. If B2C is making improvements in the buying experience, we should at least shamelessly steal and borrow, right? 

Carman Pirie: Yeah, absolutely. Or as you have done, just simply understanding that those expectations have changed and therefore you can leverage that understanding and those expectations into something new. And sure, it has B2C elements to it, and people can see parallels between Laddawn and maybe a B2C experience and Amazon, but there are also some fundamental business differences underlying them all too, and I just think it’s a fantastic story. 

Jeff Bercume: Yeah. If I could just make that final point, we talked about how a B2C website might present customer preferences where you’d note that this is a gift, and that might change the way it’s packaged or the way it’s delivered. On the B2B side, there’s a bunch of differences. We need to provide tools to our customers to make sure that the palette types fit inside their warehouses, or how do we handle price discrepancies when a purchase order is placed for a price that’s just off. Different customers have different preferences as to how to handle those things. What carriers would you like to use or what are your carrier preferences? There’s a million things that we have to address because it’s B2B that a B2C website might not be saddled with. 

Certainly, they have their own unique challenges, but yeah, there are some differences that create layers of complexity that amount to big projects to solve. 

Jeff White: I think it’s really cool that you’re taking the reigns and trying to solve these bigger problems for manufacturers and distributors. Jeff, it’s been phenomenal having you on the show. Thanks very much for joining us. 

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