Stories

Thinking Big and
Acting Boldly

"If we are to meet the changing needs of customers, we must anticipate their needs and help them succeed by providing creative new products and services." — Dean Scarborough, 2009

From a company that began mainly selling simple price tags, Avery Dennison has evolved into a multifaceted company creating solutions for its customers' high-performance needs. By thinking big and acting boldly, Avery Dennison meets the complex needs of today's customers.

A Revolution in Performance

It might be hard to believe that only seventy-five years ago, the concept of a simple self-adhesive label was revolutionary. In the years since the ground-breaking launch of the Kum-Kleen™ self-adhesive labels, Avery Dennison has "pushed the envelope" of adhesive products.

Examples of this boundary-pushing can be found in Avery Graphics™ products. Avery Graphics self-adhesive films are routinely (and successfully) used in an array of challenging applications. From yacht races to jet fuselages, Avery Graphics has the high-performance materials to withstand virtually any challenge.

Avery Graphics products were selected to decorate two yachts owned by ABN AMRO, one of the world's largest banks, in the 2006 Volvo Ocean Race™, a seven-month race around the world. The graphics withstood violent ocean waves and 60-knot winds. More importantly, ABN AMRO estimated it received two to three times its investment in the graphics back in the form of media coverage.

Successful on the high seas, Avery Graphics were tested in the air as well. Puma, the athletic wear manufacturer, used Avery Graphics on twenty-nine jet fuselages to advertise its brand and the 2006 World Cup™ in Germany. Once on the planes, the graphics withstood extreme temperature changes and the wear and tear of numerous takeoffs and landings.

A third challenge faced by Avery Graphics involved films applied to a race car in The Renault World Series™, a global racing event. The products met the high-performance challenges of three applications and proved to customers that Avery Graphics could find the solutions for use in even the most demanding environments.

©2010 Avery Dennison Corporation. All rights reserved. Avery Dennison, Avery and all other Avery brands, product names and codes are trademarks of Avery Dennison Corporation. All other brands and product names are trademarks of their respective owners. Personal and company names and other information on samples depicted are fictitious. Any resemblance to actual names and addresses is purely coincidental. Volvo and Volvo Ocean Race are trademarks of Volvo Trademark Holding AB. Renault and Renault World Series are trademarks of Renault.

Focusing on Customers
and the Market

"We live by our integrity, which is the number one word we use in describing the company—integrity."
— Russ Smith, 2009

The bulk of Avery Dennison's products go to retail and consumer goods manufacturers, which is why Avery Dennison is dedicated to supporting these companies and helping their products succeed. By focusing not just on the customer, but also on the markets they serve, Avery Dennison can recognize and anticipate the best ways to meet their needs.

A Sticky Situation

In 1968, Avery Label sold the United Fruit Company a big order for $110,000 worth of labels for its bananas. One day VP General Manager Dick Pearson received a call telling him the labels were curling off the bananas. Pearson assured United Fruit that if Avery Label caused the problem, the company would fix it and replace the labels. Replacing $110,000 of product was a big financial loss for the young company, but Pearson knew that solving the issue was paramount.

Eventually, Avery Label determined the issue stemmed from the bath that United Fruit dipped its bananas into in order to get rid of tarantulas. The bananas were dipped first and then workers applied the labels. The still-damp bananas caused the labels to curl and peel off. Although there was some fault in United Fruit's label application, Pearson acknowledged that Avery Label shared responsibility for the problem and replaced the labels. As Dick Pearson explained:

"In many organizations, if a problem such as that arose, everybody would first rush to protect himself and fight over who was to blame. Instead, Stan and Russ gave their managers the freedom to make decisions in the long-term, best interest of the company, and to place integrity ahead of short-term profitability. I knew I would be backed up."

The value that Avery Dennison's integrity adds to building strong relationships with its customers is enormous. Just like the United Fruit Company, today's manufacturers can have confidence that Avery Dennison will stand behind its products and support them in their needs.

Providing Vision
and Direction

"When you're spending the kind of money we are on RFID, we want to make sure we do the basics very, very well. Ten years from now, I'm sure this technology will be touching many, many areas all across the company." — Dean Scarborough, 2005

Investing in radio-frequency identification (RFID) technology is a risk for Avery Dennison that requires a long-term commitment. Yet, the potential applications for this product make the venture well worth it. With a vision toward the future, Avery Dennison is paving the way for broader technology applications that affect the world.

Unlimited Applications

The RFID story begins back in 2003 when a major retailer asked its vendors to tag their high-volume products to help track goods through the supply-chain. It was based on existing technology used for things like highway toll systems and key card access. Avery Dennison's breakthrough was its ability to implant a silicon chip attached to a tiny antenna into a pressure-sensitive label that can quickly be read by a RFID reader.

Conceptual illustration of RFID label technology used to track goods through the supply chain.

The creation of Avery Dennison's first radio-frequency identification label in 2004 represented a $35 million dollar research and production investment in the technology. While this potentially game-changing technology is still being refined, Avery Dennison has successfully implemented RFID programs for companies in countries around the world.

While the major retailer was the original impetus, Avery Dennison quickly recognized the broad range of applications this product could potentially impact. One interesting application is in airline baggage tags. Standard barcode scanning systems achieve read rates of only 85 to 90 percent, so airlines must scan ten to fifteen percent of bags manually. RFID has a read rate around 98 percent, which greatly reduces the need for manual handling.

Other potential applications include pharmaceutical tracking, hospital patient care, document tracking and retail uses. As Bob Cornick, vice president and general manager of the RFID division said in 2007, "For supply chain, aviation and retail RFID, we're still in the 'gee whiz' phase. We'll look back 10 years from now and wonder how we ever operated before RFID!"

Driving Action
and Execution

"The shortages and immediate critical needs made people innovative and opened up entirely new uses for our products." —Stan Avery, 1984

In September of 1936, the company changed its name from Kum Kleen™ Products to Avery Adhesives. When WWII began, Stan Avery and his team at Avery Adhesives had to quickly act to find ways for the company to survive the war time stresses on supplies and manufacturing. The company mobilized with innovative ideas and smart plans for executing them.

Finding a Way to "Stick" with It: Innovation During Wartime

At the start of World War II, no one knew if the survival of fledgling Avery Adhesives was certain. The basic components of adhesive manufacturing—rubber and petroleum-based solvents—were only available for war efforts as part of government mandates. Rather than shut down operations, Stan Avery opted to keep the company running and switched to wartime manufacturing. This decision did not come easily. Avery Adhesives had to consciously shift resources and energies towards seeking innovative ideas and nontraditional solutions.

Stan Avery recognized immediately that the company needed to readjust and shift to wartime production because of product shortages and restrictions. Meeting demand required innovation in three key areas: finding solutions to new needs, finding solutions to improve existing needs, and finding ways to meet increased production.

Stan Avery and his employees stand in front of the Fourth Street location to which the company moved in 1940.

Wartime resulted in the creation of a slew of new products that required specialized labels. Avery Adhesives fashioned ground-breaking solutions such as waterproof labels that adhered to rescue radios used to send SOS signals from sailors stranded in the ocean and labels containing Morse code. Existing manufactured goods, such as airplanes, also benefited by innovative applications of the company's labels, which helped manufacturers' generally new and inexperienced workforces learn the ropes of production. Finally, in response to the huge demands for products, Avery Adhesives improved its own manufacturing process by inventing the first rotary die for pressure-sensitive materials.

World War II forced Avery Adhesives to rapidly adapt and innovate. In the course of just four years, the company successfully transitioned its focus from 85 percent of its pressure-sensitive labels being used for marking prices and 15 percent used by industrial manufacturing to the exact opposite. By the end of the war, the large majority of the company's products were used for industrial and commercial uses, something that remains true today.

Rallying and
Empowering People

"Companies decentralize out of choice and centralize out of necessity. If you want decentralization, you have to make it work."
— Russ Smith, 1964

While decentralization is a hallmark of the Avery Dennison culture, there are times when interdivisional cooperation strengthens Avery Dennison's position and leads to bigger growth opportunities. By empowering employees to share information across divisions, Avery Dennison creates powerful benefits for its customers.

The Benefits of Teamwork

From the start, Avery Dennison thrived with its decentralized business model. Russ Smith and Stan Avery made the conscious choice to allow individual managers to run their own operations within a clearly defined set of business objectives and conduct standards. This decision provided individual operations with the opportunity to customize their businesses based on local conditions.

While decentralization still works for the organization overall, thought is now being given to the benefits of collaboration. Breaking down the "silos" of the company's divisions positively impacts the growth of Avery Dennison as a whole. One great example of this "silo breaking" is in an experience with the Whirlpool Corporation that began early 2000.

When the Specialty Tape Division wanted to grow their business in the assembly and construction of large appliances, they set Whirlpool in their sights. As part of a collaborative project, the Specialty Tape Division held meetings with the Industrial Products Division, a preferred supplier of labels to Whirlpool. When the two divisions met, they quickly realized benefits for both divisions if they worked together.

Previous efforts to find growth opportunities within Whirlpool had fizzled, largely because Whirlpool saw the division as simply label producers. By teaming with the Specialty Tape Division, the Industrial Products Division offered an added value to their relationship with Whirlpool. The team worked together with Whirlpool to create a high-value, aluminum foil–based tape used to reduce noise in Whirlpool's high-end dryers. The new tape was a contender with a competitor's product and proved a more cost-effective solution.

Partnering together, the company achieved new sales growth and enhanced their relationship with Whirlpool, and Whirlpool saved money. A win-win for all, it was not possible without cross-team cooperation.

©2010 Avery Dennison Corporation. All rights reserved. Avery Dennison, Avery and all other Avery brands, product names and codes are trademarks of Avery Dennison Corporation. All other brands and product names are trademarks of their respective owners. Personal and company names and other information on samples depicted are fictitious. Any resemblance to actual names and addresses is purely coincidental.

Collaborating Across
Boundaries

Our new emphasis on understanding end customers' problems -- and solving them with innovation -- is Stan Avery, pure and simple. His ability to see a solution where others just saw the problem helped us bring Avery Dennison seven and a half decades of success, and will be the foundation of the company's next 75 years.— Dean Scarborough, 2010

To push the boundaries of innovation, Avery Dennison must collaborate across organizational and geographic barriers to meet the needs of end users in the development of new products. By encouraging "big picture" thinking that appreciates the benefit of looking beyond the sale of products to a converter and considers the needs of the end-use customer, Avery Dennison achieves success.

Partnering for Success

From shampoo bottles to industrial machinery, Avery Dennison® products are everywhere. Yet the Avery Office Products and Consumer Group is the only division that sells consumer-ready products. The bulk of Avery Dennison's other products are sold to converters, retailers and manufacturers who then use the materials in their manufacturing processes.

To bridge a gap between materials and end products, Fasson Roll North America developed a two-year partnership with a major converter. The partnership focused on working together and analyzing end-user needs. The goal was to reduce costs and complexity and drive technical development.

The partnership was a successful one and resulted in Fasson Global Co-Ex™, a low-gauge film labeling product designed for the prime label market, which was launched in 2005. The versatile product was an amalgamation of the best elements of existing Fasson® brand products. It created an optimal blend of converting, dispensing and on-container performance. For the first time, a film-labeling product contained superior clarity, printability and conformability. The collaboration not only drove the technical development of a new product, but also ensured that the end users' needs were met and expectations were exceeded.

Building Organizational
Capability

"Throughout our history we have followed the lead of our founder, Stan Avery, who saw the self-adhesive die-cut label not only as a solution to the everyday business problem of marking prices, but also as a way to help people. Our new vision—to make every brand more inspiring and the world more intelligent—is firmly anchored in Stan Avery's sense of purpose as well as his inventive spirit." — Dean Scarborough, 2009 Letter to Shareholders

Although Avery Dennison has a rich history upon which to draw, the company must continue to challenge itself. The ideas generated by the Horizons initiatives help fuel the company's organizational capacity to successfully expand into new markets around the globe.

Growth on the Horizon

In 2003, Avery Dennison launched the Horizons program to create a global employee focus on growth. The slogan "Growth…it's Everybody's Business" epitomizes the concept. Through the Horizon program, Avery Dennison developed new and stronger capabilities to rapidly evaluate product concepts and take them to commercialization. Horizons 1, 2 and 3 engaged cross-functional teams and businesses in a "break the rules" mentality that stretched employee thinking and energized operations.

Horizon 1 focused on solving customers unmet needs and generating profitable and sustainable revenue within 100 days. Avery Dennison learned, with dedicated cross-functional teams, to make the seemingly impossible possible by creating a sense of urgency in finding new solutions to customer problems.

Horizon 2 focused on both profitability and sustainability, adapting existing products to new markets and creating new products for current markets. A recent example of this adaptation is the improvement to the Avery Note Tabs™ product. The product is a marriage of the tab portion of a divider page (often used in 3 ring binders) to a removable self-adhesive note. This allows the user to insert a divider tab on any page and make notes on it. The sturdy design allows the Note Tab to be moved and used over and over again making it excellent for cookbooks, textbooks, manuals, etc.

Horizon 3 focused on identifying new technologies and new markets to create the future of Avery Dennison. A recently launched Medical Division is one product of the Horizon 3 program. This new market allowed Avery Dennison to apply existing capabilities and new technologies and created an innovative platform for growth.

With the Horizon's program, Avery Dennison has built organizational capabilities to grow the business into new areas that can sustain the company for decades to come.

Modeling Integrity and
Social Responsibility

"We have tried to be an environmentally friendly and supportive company anywhere in the world. We have tried to—even when the rules of the country were not yet at the standard of the U.S.— we tried to make things to the standard of the U.S…and in a lot of countries we lead the way." — Chuck Miller, 2009

Avery Dennison recognizes that being a good corporate citizen and being a profitable company are not mutually exclusive. Working to protect the environment is just one way that the company models integrity and social responsibility in the work that they do.

Building Healthy Communities

In the 1970s, California passed Rule 66 which limited organic material emissions, forcing the coatings and solvents industry to face its first big environmental challenge. At a meeting in Pauma Valley, California, Avery Dennison CEO Chuck Miller convened a team of senior officers to address the problem and evaluate possible solutions. One group advocated a move from solvents to water-gum adhesives. Another wanted to switch to hot-melt adhesives. Both techniques were under development in Avery Dennison's research laboratories and both showed promise. Ultimately, the decision was made to use all three methods because each had strong merits for applications that increased product diversity and adaptability and therefore allowed them to capture a greater share of the market.

The switch away from total reliance on solvents was a major step in changing the entire industry. In fact, the largest percentage of Avery Dennison's products manufactured today use environmentally friendly non-solvent adhesives. Not only did Avery Dennison comply with Rule 66, the company won an award as the most improved company in California.

Today, Avery Dennison maintains its strong commitment to sustainability. These forward-thinking practices allow Avery Dennison to combine its corporate stewardship with decision-making that protects the financial and business well-being of the company.