SMITHVILLE, Ontario — Does a pallet company need to hire a creative agency to develop a distinctive brand that will enhance its sales and marketing efforts?
The answer is yes if you’re Fred Vrugteveen, general manager of Niagara Pallet.
As you might imagine, Niagara Pallet is located in southern Ontario on the Niagara Peninsula, the little strip of land in Ontario between Lake Ontario and Lake Erie. It is less than 30 miles west of Niagara Falls, about half-way between Buffalo and Toronto.
This marks the company’s 25th year in business. It was launched by Fred’s father, Dirk, company president, in his back yard.
Why would a company that repairs and sells used pallets need to hire a creative agency to help it identify a distinguishing brand?
“Because it’s the right thing to do,” said Fred, general manager of Niagara Pallet.
The company’s logo, branding and website were out of date. He explained, “On the Internet the relevance and customer usability of a website diminishes over time. It used to be a website would last 5-10 years. If you are not in there every 2-3 years, your voice is getting stale.”
Beyond just the website, the company hired a local marketing consulting firm, Compass Creative, to direct an entire rebranding effort for the business. Fred stated, “The creative firm guided us through a process of self-reflection, which helped us craft the foundations of our brand, the core values and vision of our company.”
Diego Lopez of Compass Creative explained, “It is rare that we would build a website without a strong brand and marketing plan in place. In fact, we would suggest that’s putting the cart before the horse.”
Lopez added, “We led Niagara Pallet through a journey of self-discovery, helping the business come up with a solid brand strategy, clarifying its message, and only then were we able to develop a new identity that truly reflects its core values.”
Brand Building Takes Intentional Change
The creative process resulted in a new website for Niagara Pallet (www.niagarapallet.ca.), new branding messages, new logo, letterhead, promotional material and business cards. Compass Creative helped the company develop its marketing messages and put it in a form designed to help initiate positive responses from customers and business prospects.
Websites are very important in marketing, even for an industrial business like a pallet supplier, observed Fred. “The web is the Yellow Pages of the world now.” A company’s ability to capture an audience on the Internet “requires a very professional presence,” he said. A competing company with a professional-looking website may be able to capture business even though it lacks sufficient resources to make good on its commitments, suggested Fred.
Before the redesign the website attracted at least one new customer to the company each day, and the hope is that all the new branding will enhance that activity. In Niagara Pallet’s case, its previous website was more than 10 years old. The information on the website was outdated and did not accurately portray the company’s products and services.
The services Compass Creative provided went much further than developing a new logo, website, and other materials, explained Fred. The agency’s leadership held a series of meetings with Fred and the Niagara Pallet management team “to understand all the things we were doing.” The agency’s services also helped Fred plan the strategic direction of his business for the future. “It’s a complete re-focus of what we’re doing and how we’re doing it,” he said.
Fred is sticking with and putting renewed focus on the company’s core business services. “Sometimes you get in a rut,” he noted. At the end of the year, a company’s leadership may be asking, “Why did we do that?”
Creative Compass helped Fred and his team to evaluate their strategic planning. “They initiated those discussions to help us focus on our core activities,” said Fred. Having an outside voice helped bring in fresh perspectives and dialogue about the core competencies of the company.
“In pallet recycling, you’re presented with a lot of different opportunities,” said Fred, that may vary among potential customers from business to business. Those opportunities are not always core business activities. Fred added, “We learned that we know everything about ourselves. We just don’t stop and take the time to reflect on who we are and accurately explain that to our customers.”
In the past five years his company “dabbled” in a lot of business activities that it no longer is pursuing, said Fred. Now, recycling pallets will continue to be the strongest focus of the company, and Fred predicts it will continue to grow. “We want to double in size in the next five years,” he suggested.
Niagara Pallet kept its slogan, “Moving your business one pallet at a time.” The reason is that its focus remains packaging solutions done right, on time, every time. Every vehicle is a potential moving billboard for the company. Fred explained, “People drive down the highway, and they see us. Our trucks travel on major corridors.” Niagara Pallet is retrofitting its trailers with the new logo and is slowly upgrading its trailer fleet with the new branding as well.
Niagara Pallet’s Business Basics
The heart of Niagara Pallet’s core activities is repairing used pallets. The company also refurbishes other wood packaging materials and manufactures new pallets, and it processes its scrap wood material into mulch.
The company owns a 40,000-square-foot building that formerly was a John Deere dealership. Its operations employ about 50 people and produce about 12,000 pallets per week. About 80% of production is recycled pallets, and 20% new. About two-thirds of recycled pallet production is GMA pallets.
Niagara Pallet is fortunate to have customers in numerous industries, according to Fred. “We’re very diverse,” he said, with customers in the Niagara area and Toronto region. There is a wide variety of manufacturing companies and similar businesses within those two areas, he indicated. Those industries include greenhouses, wineries, grocery manufacturing, food service distribution, pharmaceuticals and others.
The company has more than 500 customers, and no one customer represents more than 5% of Niagara Pallet’s overall revenues. The company mainly uses recycled pallet parts for repair stock, so it makes very few combo pallets. For new pallets, the company buys pre-cut stock, usually SPF, from Canadian mills.
Production Process at Niagara Pallet
Incoming pallets are staged and then sorted manually. Pallets that are not suitable to be repaired are sorted out to be dismantled to recycle usable parts; pallets that will be repaired are sorted according to three primary sizes. Depending on orders, the sorted pallets are moved to work in progress at repair stations or put into storage on the company’s yard.
The company sorts pallets by hand because “the cost benefit is not there yet” to invest in some type of automated system, said Fred. “I’d like to see a robot that can sort pallets by size,” he added.
The company can operate up to 12 repair stations at one time. The worker at each repair bench will refurbish pallets as needed and grade them.
The company is equipped with two Smart Products bandsaw dismantlers for taking apart used pallets. This year the company added a Smart Products turntable that is fed with used material, and a Smart Products chop saw and trim saw for trimming material to length.
Fred commented, “Smart Products makes the most robust bandsaw dismantlers out there. I have had mine for almost 10 years, and they run great.”
In equipping his recycling operations, Fred has paid particular attention to his equipment for producing and distributing compressed air, which, of course, is used for powering the company’s pneumatic nailing tools. “The ability to supply efficient, clean compressed air is critical,” he said. The company spent a “a lot of time and money and thought” on its compressed air system, he added, and uses Kaeser compressors.
Niagara Pallet has a good filtration coming out of the compressors to produce as clean and dry of air as possible. It has also worked with Rapid Air Products to put aluminum piping in the facility because it is more efficient for moving air.
Eliminating moisture is important to prevent freezing and problems with air systems in cold weather. A better air system reduces downtime and energy costs.
The company’s compressed air system has been noticed by Stanley-Bostitch representatives, who supply Niagara Pallet with nailing tools and collated fasteners. The Stanley-Bostitch representatives have told him that Niagara Pallet’s pneumatic nailing tools are the cleanest ones they service. “The air pressure and quality are important to reduce down time for nailing tools,” noted Fred.
The company has a couple of Nail Mate automated nailing machines for assembling new pallets. The machines consists of a jig on an incline with pneumatic nailing tools on a gantry; the gantry moves automatically to nail the face of the pallet once the parts have been placed into the jig. Niagara Pallet bought its Nail Mate from Universal Machinery Sales.
The company processes all its waste material with a Rotochopper MP-2 grinder to produce colored mulch. “The Rotochopper works very well for that operation,” said Fred. “It makes a consistent mulch product. They also stand behind their equipment.” Mulch is sold both wholesale to garden centers and other customers as well as retail directly to homeowners.
The company just installed a CNC router to cut panels. Niagara Pallet makes some specialty pallets that feature components to hold products in place for shipment; those components are made of panels cut with the new CNC router. “That’s something new for us,” said Fred, and the capability the CNC router provides is integral to making those type of skids. “It’s going to give us an edge up on competitors.” He also is looking at using the CNC machine to cut panels for other pallet suppliers.
Fred partners with other pallet suppliers as the occasion arises. “We do a lot of work with other pallet companies in the Great Lakes region,” he said.
Fred takes an approach to obtaining cores that may be different than many pallet recyclers. He does not buy cores from vendors or ‘pallet pickers’ or others who bring them to the company’s yard. He obtains all cores from customers, usually for free. Niagara Pallet regularly sends trucks around to customer sites to pick up quantities of 20-40 pallets. Relying on customers for cores “requires more effort,” observed Fred, “but it will produce results, and we’re proof of that.”
Niagara Pallet does not have any large distribution centers among its customers, noted Fred, which is another business strategy. Business with distribution centers is more volatile, he said.
Recruiting, hiring and retaining good employees is a challenge, observed Fred. “Obviously, we’re all challenged with employing people,” he said. Niagara Pallet has put a significant focus in recent years on recruiting and retaining good employees. The company uses an online psychological testing tool that assesses attributes such as aptitude and motivation. It has been very successful in helping the company identify good candidates for employment. In addition, Niagara Pallet pays wages that are above average, according to Fred.
“We like to treat our employees well,” he said. Production bonuses are paid to employees throughout the entire recycling shop.
The company has been holding an annual open house the past four years and this year will use it to showcase its 25 years in business. Scheduled for September 22nd, the open house is for customers, staff, potential new employees and the community. The company will provide lunch by a catering firm that also puts on a monthly breakfast at the plant.
“Customers and employees are the two most important groups of people,” said Fred. “They make it happen. Without them, we wouldn’t be doing what we do.”
Fred’s father, Dirk, 62, is still involved in the business. In addition to Fred, 39, a younger brother, Mike, 34, is active in the business, handling sales. Fred started in the business as a teenager helping his father repair pallets by hand.
Among the company’s core values is the simple phrase – “Treat people the way you want to be treated. Do what you say you’re going to do.” That commitment to service is what Fred hopes will drive growth into the future.
