Label company keeping right on track

Total Label USA adds capacity but feeling economic downturn

By RICHARD HANNERS / Whitefish Pilot

In an industry that is typically ahead of economic curves, Don Farris is prepared for recession.

"This is my seventh economic downturn," the CEO of Total Label USA said. "It's scarier every time, but one thing I constantly remind myself — plan to be in business forever."

The label business is joined at the hip with the world's giant consumer market, so it's very sensitive to hiccups in the global economy. Farris said his company started feeling an economic downturn about 1 1/2 years ago.

"The label industry is a fabulous barometer for the economy," Farris said. "It's consumer-driven."

As a serious student of history, Farris believes capitalism is cyclical. It was easier to predict changes in the 1980s, when technology was much simpler, he said, but businessmen still need to look at past failures and understand the need to evolve.

"Somewhere 100 years ago, there was a company that was the last buggy whip manufacturer," he said. "They may have made the highest-quality buggy whips in the world, but they should have evolved into making something like carburetors."

Farris said he gets the Wall Street Journal everyday and often reads stories about "maturing industries."

"All industries are maturing — that should not be an excuse for falling behind," he said.

Total Label USA produces high-end labels for about 500 companies around the world, primarily for food, pharmaceuticals, health and beauty, and chemicals. It operates under a just-in-time business model, taking orders in the morning and shipping the same day.

Quality control is essential. Warning and instruction labels must be carefully proofed, which can be difficult if they're in Chinese, and graphic designs and colors have to be exact.

Farris brought his 38-year-old family business to the Flathead in 2003 with construction of a 16,000-square-foot plant about eight miles north of Whitefish.

This year, they moved into a new 60,000-square-foot building at the same 800-acre family-owned site on Label Lane. Employment increased to 43 workers, from graphics and sales to print technicians, and they added three more label-converting machines for a total of five.

Each machine is capable of printing about 15 miles of stock in a day, more than 50 miles total a day, but the company is more interested in "value over volume," said Chris Farris, Don's son and the plant's operations manager.

"The ink, plates, dye and stock need to be changed out about seven times a day," Chris said. "It's like a Chinese fire drill, or a NASCAR pit stop."

The rest of the family end of the business includes Chris' sister Janet Henderson, the company's administrative manager, and her husband Scott Henderson, the sales manager.

This is the fifth plant Don has built, starting in 1970 with a small shop called Screen Graphics.

Two plants he built operate in Memphis and Franklin, Tenn., under the name Resource Label Group, with 17 label-converting machines between them. Total Label USA has since split from the Tennessee plants.

Don moved to the Flathead in 2001 because of the quality of life. The family bought land with the idea of building homes, and Don thought he was retiring.

"Then I went to a social event and met several people — Liz Marchi, Turner Askew and Gary Hall," he said. "They went to work on me like a bulldog about setting up a business here."

At the time, Marchi headed up the Flathead County Econ-omic Development Authority and Hall was the county commissioner for the north valley.

Askew, now a Whitefish city councilor, hails from Memphis, but Don says he barely knew him from there. All three actively promoted bringing light-manufacturing businesses to the Flathead.

Don ran some tests to see how reliable shipping was in Northwest Montana.

"I found it to be very doable," Don said. "Shipping by truck is very reliable in winter. That's a perceived problem that is not real."

Don said local shippers were "enthused" to have a big customer in the area, and "enthusiasm solves a lot of problems."

Total Label USA is a "niche business" producing a high-quality product, Don said, and it could take 7-10 years for the company to get up to full speed with about 150 employees.

"We won't be a multi-billion dollar business, but we're right on track," he said.