Aardvark’s new owner has ambitious plans

By Linda Lipp | Greater Fort Wayne Business Weekly

Rarely — as in, almost never — can a business venture be considered a sure thing.

But Fort Wayne-based Aardvark Straws, which was acquired from Precision Products Group Aug. 6 by the Hoffmaster Group of Osh Kosh, Wis., may come pretty close Aardvark is the only commerial paper straw manufacturer in the United States. And with popular sentiment turning away from plastic straws because of their impact on the environment, the potential for replacing plastic with paper is almost limitless.

“There are 500 million plastic straws used a day, and paper straws today only represent a small part of that,” said Rory Leyden, CEO of Hoffmaster.

Aardvark has ramped up its production in the last few months, and currently runs three shifts a day at its plant at 1430 Progress Road, but it still hasn’t been able to keep up with demand, Leyden said. Hoffmaster plans to bring in new equipment, continue to add to the workforce, and try to double production in the next six months. Longer term, it will also take a look at whether the current plant is large enough to handle the expected growth; if not, its footprint might need to be expanded.

Hoffmaster has been around for about 75 years, Leyden said, and has two divisions. The first is retail, producing coordinated paper plates and napkins sold in retail stores across the country. The second is the food service division, which provides napkins, doilies, baking cups and guest towels that it sells to food service distributors, who in turn provide them to restaurants, hotels and hospitals.

“That’s really where Aardvark paper straws come in,” Leyden said. “The paper straws they’re manufacturing are primarily ending up in bars, restaurants and hospitals.”

Hoffmaster, in fact, has been a customer of Aardvark for about six years. Its straws are made with a proprietary process that makes them sturdier than other paper straws, which tended to disintegrate in liquids and thus were replaced over time by plastic.

A man named Marvin Stone invented the original paper straw in 1888 and patented the idea. That patent became the foundation for the company Stone later created, the same company that manufactures Aardvark straws today. Aardvark paper straws were re-introduced in 2007 in response to a burgeoning anti-plastic movement, and that movement has skyrocketed in the last year.

Within that time frame, Seattle, San Francisco, Vancouver, Fort Myers, Florida, Malibu, California and others have banned plastic straws, while New York and more communities are considering bans. Notable brands such as Starbucks, Disney, and American Airlines have also announced they’ll eliminate plastic straws from their establishments.

Plastic pollution is one of the biggest environmental challenges of the time, with statistics showing that there will be more plastic in the ocean than there are fish, by volume, by 2050, the company said. Restaurants, venues, and establishments worldwide are working to combat plastic pollution by switching from plastic to paper.

“Certainly that potential exists,” Leyden said. “That market has been growing exponentially and we think it will continue for a period of time as more and more businesses migrate from plastic straws to paper. How long that’s going to take, and how long the growth rate will continue, I’m not exactly sure.”

“We’re optimistic about everything that Hoffmaster will accomplish with the acquisition of Aardvark,” said Dave Hooe, CEO and president of Precision Products Group. “Their knowledge of the food-service market paired with their resources will aid the company in providing billions of quality paper straws to restaurants and businesses looking to implement necessary changes to protect our environment. We’re proud of how far Aardvark has come and look forward to continued success with Hoffmaster.”

Leyden said Aug. 7 he and Hooe began discussing a possible acquisition of the company by Hoffmaster about 100 days ago, and that led to the agreement that was consummated Aug. 6. Terms of the deal were not announced.

The plant currently employs 40 full-time and 20 temporary workers; many of its additions to the workforce have come as temp workers but became permanent employees. Sales are done offsite, but there is a customer service team at the local facility that will continue to work there. Hoffmaster is committed to keeping the straw manufacturing business in Fort Wayne.

Leyden said he also is open to looking at ways to expand and improve the company’s product line, “but having only owned the business 24 hours, I can’t tell you definitely how we’re going to do that.”

Precision continues to own Euclid Medical Products, based in Ohio, and Paramount Tube, which has operations in Fort Wayne.

Hoffmaster currently is owned by Wellspring Capital Management, a private equity firm headquartered in New York.