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Mohawk Reinvention Plans Unveiled At Launch Events; Commentary by Cary Sherburne

Wednesday, April 11, 2012

Press release from the issuing company

At launch events held in New York over the last three weeks for customers and employees, Mohawk Fine Papers revealed its blueprint to transform its premium paper business to thrive in today's digital world. In his presentations, Thomas D. O'Connor, Jr., Chairman & CEO, Mohawk, the largest premium paper company in North America, outlined his vision for the future. 

"Everywhere you read that print is declining, but the opportunities with the new digital technologies, or with what I would call 'the new generation of print', are great,” O’Connor said. "Technology disrupts, recessions clarify, and successful companies reinvent. That's what we're doing right now."

THE NEW MOHAWK: A VISION FOR THE FUTURE

O’Connor outlined Mohawk’s framework:

Mohawk will focus its manufacturing exclusively on high-margin papers and products that will bring distinct value to the new generation of print customers, a unique positioning in an industry historically driven by volume and capacity.

Mohawk will develop strategic acquisitions and partnerships that successfully leverage Mohawk's expertise and operational excellence.

Mohawk will continue to move closer to the end-customer across all business segments. 

O’Connor discussed Mohawk’s progress over the last 24 months:

  • He cited Mohawk's acquisition of Bravo in 2011. The digital specialty substrates business, he reported, offers significant worldwide potential.
  • Last year, Mohawk created and launched a B2B and B2C envelope business. In the past, O'Connor said, Mohawk relied exclusively on converters to produce envelopes made with its papers. "Now, we’re making envelopes at the rate of 30 million per month,” he said. O'Connor explained Mohawk is now better able service its customers, fill an unmet need in the marketplace, and achieve substantially higher operating margins. "We're taking the future into our own hands," he said.
  • In the consumer marketplace, O’Connor pointed to Pinhole Press, Mohawk's site for simple, beautiful photo products launched in 2010 [http://www.pinholepress.com]. Pinhole products have been featured in consumer outlets like Real Simple and Martha Stewart Living. This business, he noted, took seven thousand orders the last six weeks of 2012. Pinhole Pro, a related offering to the professional photography community, was launched last month.
  •  O'Connor said Mohawk will continue to seek strategic partnerships with companies like business card company Moo.com, that differentiate their products with unique substrates like proprietary Moo Luxe [http://us.moo.com/products/luxe/business-cards.html]. He shared the example of Blurb.com [http://www.blurb.com], which now offers a high end product line requested by its customers, and advertises the use of Mohawk's legendary Superfine and ProPhoto papers to help sell its products.
  • Mohawk fully expects to leverage its industry expertise and operational excellence as an incremental revenue stream. "Last year, we earned over $1 million consulting with other paper companies," he said. O’Connor predicted MakeReady, [http://www.mohawkpaper.com/makeready/] the service platform for digital printers launched by Mohawk last year, will become a consulting business.

"At our core, we are a paper company," said O'Connor. "But we are rapidly becoming much, much more." O'Connor indicated that customers would soon see substantive changes in the marketplace. 

ON APRIL 16, MOHAWK WILL RADICALLY TRANSFORM ITS FACE TO THE WORLD

§ Mohawk will launch Project Streamline. This is a strategic consolidation of Mohawk's core paper lines, taking 22 paper grades (brands) down to six. For customers, Streamline is a simpler, clearer presentation of Mohawk brands and products, resulting in the elimination of more than 50% of its sku's, from 4,500 to roughly 2,200.

A new technology/operations initiative, Unified Service Delivery Platform, will create a seamless selling experience for all customers from merchants to printers or small businesses. Customers will be able to choose how and when they want to do business with Mohawk. See next.

A new website, MohawkConnects (http://mohawkconnects.com) integrates e-commerce into all dimensions of Mohawk's online activities. The site provides a frictionless path for purchasing paper in small orders or large quantities. 

The new name of the company will simply be Mohawk. Mohawk will also unveil a new brand identity. He said the "energetic" new logo based suggests paper rolls, circuit boards, and connectivity. O'Connor described the color palette with words like "fresh," "optimistic," and "youthful.” He remarked the new brand speaks directly to Mohawk’s transformation, it is "an expression of who we are and what we are becoming."

 A new campaign, "What will you make today?" will also launch April 16. "This simple question goes to the passions of customers who use our papers to make things, or to make a difference in their business," said O'Connor. 

"You know," he said, "This is also a question I ask myself every day, 'How can I make a more sustainable business?'" O'Connor said he wanted to build a business "that can sustain any changes in technology or in the business environment out there."

"The last five or six years have been nothing like I've ever seen ... and we are transforming our organization so it can sustain itself—and thrive—in today's new environment."

About Mohawk
Mohawk is North America's largest privately owned manufacturer of fine papers and envelopes for commercial and digital printing. Signature brands include Mohawk SuperfineÒ, StrathmoreÒ, InxwellÒ, and proprietary i-ToneÒfor digital presses. Mohawk papers are chosen for commercial printing, photo specialties and high-end direct mail. Products and samples are available through leading paper distributors and at mohawkpaperstore.com.

The company is leveraging connections in the digital, design and photo space to develop new web-based offerings: Pinhole Pro, a solution for professional photographers to create beautiful press products; Pinhole Press, a lifestyle brand for beautifully simple photo gifts; and Felt & Wire Shop, an online marketplace for social stationery, posters and prints. 

This fourth-generation, family-owned business is constantly renewing its commitment to environmental stewardship. As the first U.S. manufacturer of commercial printing papers to match 100% of its electricity with windpower renewable energy credits and the first U.S. premium paper mill to shift toward carbon neutral production, its portfolio of recycled papers certified by Green Seal and the Forest Stewardship Council’s (FSC) standards, continues to grow along with the rest of the company. 

Commentary on Mohawk Reinvention by Cary Sherburne

I have been following Mohawk for a number years, dating back to its early engagement with Indigo in the 1990s and its work on developing digitally-optimized papers that worked with that press and others. It has been interesting to watch this fourth-generation family business evolve over those years. And now, under the leadership of Thomas D. O’Connor, Jr., Chairman and CEO, the company seems to be accelerating its rate of change.

First, I found it interesting that the company took the word “paper” out of its name, just as many printing businesses are removing the word “print” from their company monikers. I liked O’Connor’s statement: “Technology disrupts, recessions clarify, and successful companies reinvent. That's what we're doing right now." It certainly describes what is going on in our industry today.

Over the last few years, Mohawk has been quietly acquiring companies and adding new solutions and services, some of which are pretty bold for a paper company. The release indicates that the company will continue down this path. It is also interesting that Mohawk is “moving closer to the end customer.” I interpret this to mean that the company is seeking some alternatives to the traditional merchant channel, which could cause some channel conflict. However, I spoke with Mr. O’Connor recently, and he indicates that while Mohawk is exploring alternatives to the merchant channel, the company is certainly not abandoning that channel. It appears that the new Unified Service Delivery Platform the company is building will help mitigate any channel conflict, yet put more control into the hands of end users—which is clearly the way of the world today.

We plan to speak with Mr. O’Connor shortly in a WhatTheyThink exclusive interview to get additional insight into these dramatic changes at Mohawk.

 

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