Sealed Air is in the process of moving its headquarters from New Jersey to Charlotte, a move that will be completed in early 2017. Why Charlotte?
Up until recently, our three main divisions were located in South Carolina, Amsterdam (Netherlands) and New Jersey. Then our global headquarters was in yet another place, also in New Jersey, and our R&D was scattered around the world. This was preventing collaboration and cross-fertilization among our staff: we needed to regroup. We chose Charlotte because of a combination of factors. One is the city, its location and its airport, which is very important for us since we are a global company. The other factors are the affordable cost of living, the schools, the availability of skills, access to universities, and financial incentives. Putting all these factors together, Charlotte came before all the other competing states.
Sealed Air is particularly known for having invented Bubble Wrap®, but you recently announced the launch of a new product, Bubble Wrap® IB, which doesn’t pop. Fans are going to be heartbroken!
Bubble Wrap started the company but it is not, by far, our biggest product. Today, we have a whole range of packaging solutions adapted to very specific markets and needs. We are a $7 billion, global company with a commercial network in about 170 countries and physical presence in about 60, as well as plants all over the world.
Sealed Air has always innovated in different aspects of the packaging business, such as food preservation. What are the areas in which you most innovate now?
There is plenty of innovation in all our lines of product. Our Food Care division represents about half of our business, notably through our brand Cryovac®, by far the world leader in protein packaging. This type of product addresses the 5-10% of the meat that is not sold at the original price because it reaches its sell-by date. Packaging can prolong the shelf life and thus bring a lot of value for the retailers. Then we have our Diversey® division, which has the mission to improve the level of hygiene in restaurants, hotels, hospitals, offices, etc. We are the second largest in the world in this area. Here again, we believe our differentiation is innovation by reducing the level of manpower, which is the costliest area in hygiene packaging. Regarding our Protective Packaging division, we reduce freight costs by optimizing the dimension and weight of our packaging, again through innovation. So we really are all about innovation and our tagline, Re-imagine™, reflects that, because our mission is to re-imagine the industries we serve. We spend about $150-160 million on R&D including digital work, which represents about 2% of our sales, a higher percentage than all our competitors.
There has been a lot of movement recently in the structure of the company. Will this drive the share prices further up?
In the last three and a half years, the stock increased from about $13 to $55 and it now stands at about $44. This reflects the big changes going on in the company. We have a program called Get Fit, which is about transforming Sealed Air into a truly modern company, and the move to Charlotte is part of that. We want to be a company where everybody collaborates and where R&D is not centralized but rather organized around centers of excellence. The other program is called Change the Game, which is about being disruptive, innovative, moving faster than our competitors and changing our own industry. We are already market leaders but what we now want is to become market makers.