BERLIN: Chicago let me listen to a phenomenal story about how to run a company that does a better job of serving customers and employees.
That was my conclusion after speaking with Andrew Berlin, Chairman and CEO of Chicago-based Berlin Packaging — a distributor pf plastic, glass and metal containers and closures for the food and beverage, household, personal care and healthcare markets.
Berlin Packaging grew from $69 million when Mr. Berlin’s father bought the company in 1988 to $900 million in sales 26 years later. And in the last decade, Berlin Packaging has grown over 10 times faster than the industry for the last decade by getting joy from crushing its competition.
Berlin Packaging started life as a division of Alco Packaging. In 1988, Mr. Berlin’s father, Melvin, put down $500,000 and borrowed $11 million to acquire the money-losing $69 million in revenue business.
By the end of 2014, that business had grown to $900 million in revenue and in the decade ending that year, it had grown at 22.6 percent annually — well ahead of the 1.5 percent to 2 percent growth rate of the packaging industry.
And in October 2014, Mr. Berlin sold a chunk of the company to a private equity firm for $1.43 billion — about 14 times its $100 million in earnings before interest, taxes, amortization and depreciation (EBITDA). He owns a minority stake in the Chicago White Sox and Cubs and remains the company’s Chairman and CEO.
Mr. Berlin started working for his father — who ran a tin plating business in Chicago — starting at five years old. He attended Syracuse University and from there went to Boston College where he studied history with the goal of becoming a history professor.
He soon tired of that and decided to become a lawyer because he liked the idea of being like Perry Mason — getting a guilty person to confess to a crime in 45 minutes. After graduating from Loyola University Chicago Law School, Mr. Berlin started practicing law and lost interest in that after about two years.
He got what he called “the commercial bug” and has remained infected with it ever since. He gets a kick out of boosting a company’s EBITDA. And he did that when he started running Mr. Berlin Packaging.
It had 35,000 different products and he developed a business plan that would make the company profitable by getting rid of slow-selling items on its inventory shelves, cut operating expenses, and sell more of what customers wanted to buy.
To keep Berlin Packaging growing at 10 times the rate of this $55 billion industry, he uses four principles to “crush the competition.”
