Keeping Squeaky Green -- Company Offers Alternative To Polystyrene Packaging

Eco-Pack Industries Inc.

-- Employees: 11

-- Headquarters: 7859 S. 180th St., Kent.

-- Business: Recyclable packaging products.

-- Chief Executive Officer: Johnny Parker.

-- 1990 sales: about $500,000.

-- Major competitors: Dow Chemical Co. of Midland, Mich.; American Excelsior Corp. of Chicago.

-- Major customers: mail-order catalog operations with products for the health- and environmentally-conscious. ------------------------------------------------------------ Dress Cliffie the Postman in a three-piece suit. Take his South Boston brogue uptown. Prepare for thousands of Cheers fans to throw their dinners at the TV set before they switch it off.

Messing with a successful identity can be lethal, for a television show or a business. Consider Eco-Pack Industries Inc., the packaging company founded by local inventor Johnny Parker and John Ratzenberger, who plays the loquacious postman. Much as the fledgling enterprise wants to grow, it's got to stay uncompromisingly green to get anywhere.

`Green' - as in environmentally conscious. Founded in late 1989, Eco-Pack uses a cellulose-fiber packing material called Quadra-Pak to fight the large producers of what some consider an affront to the ecosystem: the polystyrene peanut.

Polystyrene packaging uses petroleum, contains air pollutants such as ethylene and benzene, and, environmentalists charge, is so light that it floats easily and indestructibly through the atmosphere, filling landfills and killing birds and other animals that mistake it for food.

Ads for Eco-Pack products, consequently, feature the peanut as the villain in a marketing morality play. What their packaging isn't - damaging to the environment - is as important as what it is, Parker and Ratzenberger say.

"Our main focus is to be the guys making the alternative to polystyrene. We don't think we're going to take over the market," Parker said.

"I found out everybody hates the stuff. If the product's hated, pick on it."

Eco-Pack's not the only company picking on polystyrene, but it may end up the most successful. Other alternative packing materials have been plagued with problems. Natural popcorn, for example, has been rejected by the Food and Drug Administration because it can attract rodents and insects. Eco-Foam, a degradable peanut alternative manufactured by American Excelsior Corp., is made mostly of cornstarch and dissolves on contact with liquid. Newspaper is inexpensive but can rub off on items shipped in it.

To make Quadra-Pak, Eco-Pack purchases ton-sized rolls of cellulose - wood fiber normally discarded as industrial waste - from one of Washington's largest mills. Sheets of the fiber are stretched in three layers across belts that feed them into two processing machines, which springload the layers and cut them into 4 1/2-inch-long pieces. The crimped pieces interlock when compressed, to prevent breakage.

Sizzle-Pak, a more recent version, is dyed with food coloring and cut to a longer length for retail packaging, such as gifts and display baskets. Nordstrom was one of the first retailers to order Sizzle-Pak, and remains a steady customer.

The company racked up nearly $500,000 in sales in its first year of production, though it will take several years to turn a profit, Parker predicts. Now the key is to expand production as broadly as the environmental awareness that gave birth to the products.

Already nearly 95 percent of orders for Quadra-Pak and Sizzle-Pak come from outside the Northwest. But manufacturing the products here - in a region with some of the highest freight and raw-material costs in the country - makes serving those customers costly. (Parker estimates shipping and raw materials each represent 20 percent of his total costs; the production process represents 8 percent to 10 percent.)

Ratzenberger and Parker already have one letter of intent for two "environmentally sensitive" friends to manufacture the product near Arlington, Va.

Here's where one strategy conflicts with another, however. National expansion will proceed only as fast as Eco-Pack's partners can find licensees who share their environment-first, profits-later philosophy. Partners who wouldn't try to put Cliffie in a three-piece suit.

Several potential manufacturers have been turned down already. One suitor from Boston, for example, wanted to mix Quadra-Pak with polystyrene fill.

"You can't hide your personality very long," Parker said. "If you come in here and you're BS'ing, you don't get through."

"People who have that insignia on the window have to do something for the community," Ratzenberger said, pointing to the Eco-Pack sign on the door. "Corporate America has been sucking the life out of communities. It's time to put something back."

Sounds like a populist line. But Parker and Ratzenberger insist they mean it; they plan to make sure licensees are serious about community involvement before signing any agreements. They've also decided to dedicate 1 percent of their profits - when they start earning profits - either to a child-abuse prevention fund or environmental causes.

Ratzenberger, 43, is a soft-spoken, unassuming man dressed in a flannel shirt and jeans, who thinks nothing of jumping up to help a prospective customer at the Kent plant. He downplays his famous alter-ego; he'd much rather talk about the future of environmentalism than the doings on Cheers.

But, like it or not, crimped pieces of cellulose, while politically correct, aren't exactly sexy. Celebrity is.

Often it's Ratzenberger's famous face and voice that convey the message about Eco-Pack on shows such as Arsenio Hall and Entertainment Tonight. Months later, customers will call to ask about the postman's new packaging.

"This business spreads by word-of-mouth. Kind of like Cheers," Ratzenberger said. "Somebody watched it and told Aunt Betty, who told Cousin Mary, and so on."

There are other parallels between Cheers and Ratzenberger's business. Quadra-Pak, for example, was conceived . . . in a bar. Parker got the idea by watching a friend win beers betting he could throw a match in the air and never fail to land it on its edge. Then the friend would fold the match into a spring.

Shortly after, Parker figured out he could do the same thing with cellulose, he met Ratzenberger, who has a summer home in the Seattle area. Ratzenberger, an environmentalist since the 1960s, almost immediately agreed to invest in the venture.

The Body Shop, a nationwide line of skin- and health-care products, was one of the first major customers. More recently, mail-order businesses such as Robert Redford's environmentally bent, Colorado-based Sundance Catalog Group have signed on with large orders.

Seattle-based Recreational Equipment Inc. has been using newspapers to cushion most of the 550,000 packages it ships yearly but found that the newsprint rubs off on some products. After testing Quadra-Pak, distribution/production center supervisor Julie Milner was excited enough to recommend it to vendors who ship to REI.

"It's really great stuff," she said. "The more you jostle it, the more it interlocks."

But REI won't be using Quadra-Pak exclusively - it's more expensive than newspaper and harder to phase into the packaging process, Milner said.

Industry watchers agree that to be successful, Eco-Pack should keep preaching to the converted. They don't expect the cost of consumer outrage against polystyrene to justify the higher price of environmental alternatives anytime soon, at least for companies where the bottom line is the top concern.

"It still has less to do with the environment than with economics - how much can I fill this box for?," said Ben Miyares, a packaging-industry analyst based outside Cleveland. "These folks should make as much money as they can selling to the environmentally committed."

Dow Chemical, the world's largest producer of polystyrene loose fill, isn't exhibiting concern about its green competitors, at least not outwardly.

Bill Phenicie, product manager for Dow's loose-fill business, said the alternatives won't catch on with large-volume shippers because the vacuum system that shoots peanuts into boxes is such an integral part of large assembly lines.

Quadra-Pak not only costs more per cubic foot than peanuts, it weighs more and doesn't float easily, so it backs up in valves made to distribute peanuts.

For several years, Dow has issued a peanut called SUN-PAC, which breaks down when exposed to sunlight.

Next month, Dow plans to announce an agreement with a national company that will reuse polystyrene peanuts brought in by consumers. In some cities, consumers will be directed to centers able to recycle the peanuts into plastic pellets for use in such products as cups, dishes and benches, Phenicie said.

Ratzenberger counters that those recycled items from plastic tend to have long lives themselves, while Quadra-Pak breaks down in soil. He says recycling efforts by large manufacturers of polystyrene are steps in the right direction, but don't go nearly far enough. "We need to stop manufacturing this stuff," he said.

And start, he hopes, buying Quadra-Pak instead. ------------------------------------------------------------ PACKING? HERE'S CHOICES

Here are some pros and cons with different packing choices:

-- Polystyrene peanuts. Costs from 60 cents to 75 cents per cubic foot; weighs four ounces per cubic foot. Used by many large mail-order companies; fits into standard assembly lines. Can be recycled, but only into other plastic products.

-- Eco-Foam. Biodegradable version of "peanuts" made mostly of cornstarch. Costs about $1.50 per cubic foot; weighs from .7 lb. to 1 lb. per cubic foot. Fits into machinery for distributing polystyrene peanuts, but dissolves in contact with water.

-- Natural popcorn. Cost varies, depending on how obtained; several fledgling popcorn-packaging companies have stopped distribution amid concern from the Food and Drug Administration that popcorn attracts rodents and insects.

-- Quadra-Pak. Costs from 95 cents to $1.10; weighs about 5 times as much as polystyrene. Completely degradable and recyclable. Doesn't work in machinery that packs peanuts.

-- Newspaper. Available from local recycling companies for about $65 a ton. Doesn't work in machinery that packs peanuts and ink can rub off on products.