With over one million tamper evident shrink bands, shrink wrap sleeves, multi-packs, shrink bags, printed shrink labels and PS labels produced every day, and a selection of trademarked SuperSealer shrink wrap machines offering diverse capabilities, Traco Packaging is leading the way.
More and more iconic brands, start-ups, and private label manufacturers are turning to Traco Packaging because they are confident the company’s customized, digitalized solutions will create attractive and economical packaging that exceeds industry standards in terms of product security and consumer protection.
We wanted to know how the company, based in Orem, Utah, began, and company President John Palica offered a long and short version of the history. We opted for something in-between, which turned out to be not only interesting but instructive for anyone who might consider a career with the firm.
Palica had not planned to own and operate a packaging manufacturing company. He was playing professional baseball with the Minnesota Twins when he suffered a career-ending injury, which prompted him to look at other lines of work. At the time, the only other work he had done was “dabbling in packaging” during the off-season, but as it turned out, that experience was most fortuitous.
During his off-season employment, he discovered how frustrated retailers were by customers ripping open a shrink-wrapped product to see what was in the box and then replacing it on the shelf, rendering it unsellable. He asked retailers what they did with the opened product.
“They told me it was a nightmare. They could keep one as a demo unit, but the rest had to go in the discount bin because other customers would think they had been tampered with and wouldn’t buy them. Or they would have to send them back to the manufacturer, through the distribution channel, to have them re-wrapped, which subsequently drives up the cost, because of the freight rates and manpower required. Essentially, they become unprofitable items,” he explains.
“So we asked, what if we could put a small, table-top shrink wrap machine on your counter or in your warehouse and you could take those boxes that have been torn open, re-wrap them in plastic shrink wrap and put them back on the shelf?”
That was in 1985. Palica worked for a year with two engineers to research and develop the prototype, placed ads in trade magazines, and by 1986, was selling a functional machine. He says he approached sales based on what he calls ‘the razor blade’ theory, in which the customer buys a razor at a relatively low price but continues to purchase blades for years to come.
“We told retailers that if they spent a few hundred dollars on the machine and less than a hundred on film, it would cost pennies to re-wrap a package otherwise undamaged. They’d consider the volume of sales they were currently losing, do the math in their head, and say to us: ‘We could pay for this machine in one or two days and save thousands of dollars. We can’t afford not to buy it.’”
And that was the beginning of Traco Packaging: one idea; one patient wife named Tracy who gave her name and moral support to the start-up business; one supportive father (John Palica Sr.) who invested in his son’s business when the banks refused and worked for him until he was in his mid-eighties, and one determined man who peddled the first in the line of SuperSealer machines from the back of his truck.
“I’d go into distributors, retailers, print shops, video stores, and computer stores, walk in and show them the demo, and they’d want me to leave the machine right on the spot because they liked it so much,” Palica says. “So, I always had one to show and one ready to go. I’d say, I can’t sell you this one, but I have a brand new one in my truck.”
Today, Traco Packaging no longer operates from the back of a truck. Now it is based in Orem, just forty-five minutes south of Salt Lake City. Here it manufactures and prints its products in a 60,000-square-foot facility, distributes and ships them across the U.S. and Canada, and employs a staff of approximately one hundred people.
Speaking of his staff, Palica says: “We look for people with integrity, honesty, and who are hard workers and team players. We set goals, and we’re transparent with our people, and we celebrate at the end of the month (when we hit our goals) with catered lunches for the whole company.”
Traco Packaging is actually a division of Traco Manufacturing, Inc., which also owns Utah Packaging, an in-state distribution company Palica started in 1997. Utah Packaging sells several thousand types of packaging items, including boxes, envelopes, packaging peanuts, shipping supplies, Janitorial/sanitation supplies, safety products and food service supplies. But it’s the Traco Packaging division, with its out-of-the-box solutions and capabilities, that is gaining traction across North America.
Once the first SuperSealer machine model was distributed nationally, the word was out that Traco Packaging was a company open to new ideas. Distributors and other customers took notice. “Companies would come to us with miscellaneous concerns or projects they were working on, looking for solutions, some of which we could help them with. But I didn’t want to say no to any opportunity that I thought we could tackle,” Palica says, “so we would take on certain things and find a way to do it, and this led to us designing and manufacturing new equipment and packaging products.”
Traco, for example, was the first to come out with custom manufactured shrink bags that package and protect items in gift and fruit baskets. The retailer has a choice of pulling the bag up from the bottom, tying it off and not shrinking it, or they can take it from the top down and shrink it under the basket so that it creates a dome shape, allowing the contents of the basket to remain fully visible while preventing items from falling out or becoming samples.
“It gives the customer security and comfort knowing this is a protected package that has not been tampered with, so it’s safe,” Palica says, “and safety is one of the big things that drives our company.”
What originally drove the growth toward protective packaging on pharmaceuticals was the death of seven people who had purchased Tylenol capsules which had been laced with potassium cyanide after being re-placed on store shelves in the Chicago area in 1982. Threats by terrorists to contaminate the food supply following the 9/11 attacks on the World Trade Centre, really drove the protective packaging industry forward in 2001.
“It was at that point the Department of Homeland Security was formed and came out with a mandate that all retailers must have some form of protective packaging over any consumable product on the shelf,” Palica says. “The least expensive and most economically efficient way to do this was to place shrink bands over the caps or the whole product, encapsulating it in a shrink package. That gave the customer confidence that the product had not been tampered with because it can’t be opened unless the plastic wrap is torn off first.”
From there, it led to color when people asked for it to be tinted. Then Traco’s customers asked to have a full-body sleeve printed, so it would provide tamper-proof packaging, plus 360 degrees of space for advertising and regulatory information while eliminating the two-step process of having to apply labels and tamper-proof bands separately.
“Because of all the requests we were getting for printed shrink sleeves, we were the first company in North America to bring in a digital press from Hewlett-Packard and figured out how to print on shrink film,” Marketing Director Tony Kemp explained. “Usually a press requires heat but that won’t work with shrink film, but one specific press, the HP Indigo, was able to do it.”
Traco started with Hewlett-Packard’s 4500 series press, then upgraded to the 6000 series press and this past November, they upgraded one 6000 series press to make it a 6900 series press while adding another new HP Indigo 6900 series press. “They are huge presses, as big as your garage,” says Kemp, “with automated engineering so the clear film goes in one side and comes out printed. Customers can choose between the standard CMYK (cyan, magenta, yellow, black) color scheme, or an extended gamut CMYKOGV which adds orange, green, and violet plus opaque white, metallic silver, and gold for eye-popping displays,” he explains.
“We can do matte or gloss finish, fluorescent prisms, and mosaics, as well as specialty UV invisible security links and QR codes that, when used with a phone, can provide an augmented reality experience,” he adds.
“Neither Tony nor I are engineers, but we take advantage of what HP’s engineering department has come up with,” says Palica. “In the digital printing market, HP is leading the way. There are a few other wannabe’s out there, but HP has ninety-five percent of the market and with good reason.”
A major advantage of digital printing, as opposed to rotogravure and flexographic processes, which Traco uses for some applications, is that digital has a much shorter set-up once the original artwork has been approved. Since no print plates are required, the process allows for shorter runs with no downtime, with work printed and shipped in as little as four days. “We can actually turn ‘rush orders’ in 24 hours when pressed by our customers.”
Shorter runs also mean that companies can use local or personalized labels. “When Coca Cola came out with the marketing concept of putting popular names, like ‘John’ or ‘Tracy’ on their bottles, instead of the generic red labels, we could do a run (if requested) of five thousand Johns and then switch over to five thousand Tracys, and then the next five thousand would have a different name, and the press doesn’t stop until the film runs out. Operators can program the different names and then just sit back and watch them come out with no downtime or change overs,” Kemp explained.
“That’s the beauty of digital. You could even use digital for small samplings for a regional market or promotional products where a manufacturer doesn’t need a huge quantity, so they don’t have to invest a lot of money because there are no plate charges. We could even program the machine to do one label for one customer while we are doing a large print run for someone else.”
Another application involves the tightly controlled regulatory information that must appear on cannabis products like CBD oils as this can vary from state to state for the same product. By using digital print technology, smaller print runs can be used, with each run complying with the individual state’s regulations.
At the same time, Traco continues to use flexographic printing presses, because even though the initial print plates have to be made and changed out after each print run, they are suitable for very long runs and maintain high-quality printing.
Palica says the company has recently been “focusing on green packaging because we have to be a responsible partner in the business world. We are looking at ways to reduce our footprint and our waste. We have to increase our recyclability and reusability and help our customers condense the size of their packages because I see a lot of wasteful packaging, and we try to find products that are environmentally friendly. A lot of what we have now is eco-friendly, with few exceptions. But as soon as new raw materials come out that are biodegradable, photodegradable, or dissolvable, we’re jumping all over them.”