Remember the days when you dried your hands with 30 feet of paper towel cranked out of the washroom dispenser? (A friend once accused me of killing whole forests because of my cavalier use.)
Now you wave your hand in front of stingy high-tech dispenser as it bestows a lousy six-inch scrap of paper. I learned a new term for this: “source reduction.”
Good for trees. Saves the washroom operator money. Bad for a business built on paper-towel sales.
Acme Paper & Supply, a 68-year-old Maryland company with a snooze-inducing name, is a great business, partly because it has found ways to innovate around such problems as source reduction. “You sit still and you die,” said Scott Attman, 36, Acme’s director of business development and a third-generation employee of the family-owned company.
Acme sells a wide range of products, including hot dog wraps, straws, latex gloves, popcorn boxes, takeout containers, kitchen equipment and industrial cleaning supplies.
If you live in the Washington-Baltimore area, you have almost certainly snagged an Acme napkin, sucked on an Acme straw or hauled a half-eaten pizza home in an Acme box. The company’s customers include the U.S. House of Representatives, MedStar Washington Hospital Center, the Washington Nationals, the Smithsonian Institution, and restaurants from Sweetgreen to Matchbox.
Acme is a middleman. It buys from manufacturers and sells to retail customers, taking a little markup on the way. The company won’t say how much.
Even a great business, one built on people having to eat and use the bathroom, has to be on its game. Especially in a world where grocery bags are taxed, foam cups are evil and compostable is the altar at which many now worship.
Acme is a sprawling operation, with more than $100 million in revenue, 250 employees, 30 delivery trucks and two warehouses, one in Jessup, Md., and one in Richmond. Last year, the company sold 63 million coffee cups and enough toilet paper to circle the Earth 70 times.
The company is owned by a branch of the Attman family, best known for its 99-year-old delicatessen on Lombard Street in Baltimore and a newer one in Potomac. There is a book about the Attmans. There are so many Attmans that they hold reunions at a country club. Some run the deli. One branch is in real estate. Eight Attmans, including Scott, run Acme.
After a half-century of selling paper, plastic and cleaning supplies, Acme has been dealing with rapid change in the past decade as the sustainability movement takes hold and businesses save every penny they can, including in the cafeteria and restrooms.
At first blush, the paper-saving, one-at-a-time towel or napkin dispenser that has taken hold in the past decade looks like a revenue killer for Acme. “To a distributor like us, I don’t want to show that to a customer, because they will use less,” Attman said.
But Acme offset the decline by making use of electronic dispensers to round up new customers. They approached businesses that were not customers and offered free electronic dispensers if they bought the paper from Acme.
“These days, the only growth you can have is through acquisition and new clients,” Attman said.
Annual revenue has doubled from $50 million about a decade ago to more than $100 million. Attman said the competition is such that the margins are razor-thin. But with $100 million in volume, even small margins are likely to deliver more than $10 million in gross profits. From that, you have to subtract payroll, insurance, the cost of servicing the truck fleet and many other expenses. The family’s profit is in the single-digit millions.
But those millions keep rolling in thanks to innovation:
●When the U.S. House of Representatives wanted to go green for a week-long celebration of Earth Day in 2004, Acme replaced foam cups, plastic utensils and even plastic trash bags with compostable items. That launched the company into the thick of the green revolution.●“We had to find manufacturers and eco-friendly packaging that we didn’t know existed at the time,” Attman said.
● Acme added digital images to the outside of popcorn boxes for the Hershey Bears, the farm team for the Washington Capitals. The popcorn boxes became a souvenir item, selling out in eight weeks and boosting sales for the popcorn vendor and for Acme.
● When Washington’s Matchbox Food Group wanted to expand its carryout business, Acme designed a Matchbox-branded “sleeve” to slide over containers, adding some marketing pizazz for the chain. The sleeve had a built-in pop-up handle, eliminating the need for a bag and the 5-cent tax that goes with it.
● When souvenir soda cups got too big for concession trays in the mid-1990s, Acme’s in-house marketers invented a tray with more room for food and beverages, preserving profits for the concessionaire and preserving the stadium business for Acme.
Edward Attman, Scott’s 94-year-old grandfather, began Acme in 1946 after his mother urged him to look beyond the delicatessen business. Ed considered cosmetics and movie theaters, but he decided on the paper business because it didn’t have the spoilage risk that the family deli had. Ed bought a red, two-door 1945 Ford for $1,548 from Marshall Motors in Baltimore. His wife, Mildred, made the logo from some paper doll cutouts. He named it Acme to be first in the phone book.
On April 1, 1946, he packed the trunk with 100 rolls of toilet paper that he had bought for $3.75, and sold them for $4. Some of his best customers were drugstores, which bundled the toilet paper into 10-roll packages that sold for 50 cents each.
Because of the deli, the Attmans knew plenty of other merchants, and they became the firm’s first customers. A cousin in the candy and tobacco business connected him to other retailers. “You had butchers, liquor stores, breadmakers, bakeries, delis. There was nothing but paper bags,” Scott Attman said.
As the company grew, it diversified. Restaurants that bought paper goods also needed cleaning supplies. So Acme sold them chemicals, vacuums and anything else they needed. After the company started selling cleaning supplies to restaurants, it decided to expand to hospitals and other institutions. Because it bought huge volumes of tape, boxes and shrink-wrap to deliver the goods, it went into that business, too.
I love finding out about these drowsy, unsexy businesses that stick to their knitting and make returns that business schools term “NLO,” for “nice living for the owner.” But it’s more than an NLO to Scott Attman.
“I’m never going to be pitcher in the major leagues, but I get to work with the baseball teams. I am never going to be real estate mogul, but we work with the big developers. And that makes my day much more interesting than selling toilet paper.”