Founded In Wisconsin - Menasha Corporation, Neenah/Menasha, Wisconsin

How a company survived 175 years by twice destroying its own core business before the market could

In 1927, a company located in Menasha, Wisconsin, transitioned its focus from being the leading woodenware manufacturer in the Midwest to producing corrugated boxes. Instead of hiring external experts, the company chose to train its existing workforce, successfully shifting from wooden pails to boxes within eight years. This strategic decision was driven by the foresight that wooden shipping containers would become obsolete, prompting the company to innovate rather than yield to competitive pressures. Three decades later, the company once again demonstrated its adaptability by transitioning to plastic containers. This flexibility has been essential to Menasha's enduring success. Throughout its 175-year history, the company has prospered by phasing out outdated products while maintaining its workforce and family ownership, changing its materials three times yet preserving its core identity.

The Firm: 175 Years in Three Materials

Founded in 1849 as "the Pail Factory," the company that would become Menasha initially produced wooden buckets and barrels. It faced early challenges until Elisha D. Smith acquired it in 1852, renaming it the Menasha Wooden Ware Company. Under Smith's leadership, the business expanded into a woodenware empire, employing 250 workers by 1871 and offering a diverse range of products. Despite obstacles such as post-Civil War inflation and catastrophic fires, the company consistently rebuilt, securing its future by acquiring timberlands. In 1926, Menasha transitioned from wooden containers to corrugated boxes, leveraging a regulatory shift that favored paper over wood. By 1935, corrugated products had entirely supplanted wood, prompting the company to concentrate on paper products. A third transformation occurred in 1957 when Menasha entered the plastic packaging market by acquiring G.B. Lewis, eventually evolving into ORBIS by 1996. Each strategic pivot enabled Menasha to adapt and prosper, embracing new materials that once posed a threat to its core business.

In the modern era, Menasha Corporation has strategically shifted from owning timber and mills to becoming a significant open-market buyer of containerboard. This transformation included the sale of its West Coast mill and the closure of its last paper mill in Otsego, Michigan. Menasha now prioritizes purchasing scale and flexibility over raw material ownership. Currently, the Neenah-based, family-owned holding company operates through two subsidiaries: Menasha Packaging, which specializes in corrugated packaging and retail displays, and ORBIS, which produces reusable plastic totes and manages supply chain logistics. Employing approximately 8,000 individuals across 105 facilities in North America and Europe, Menasha generates about $2.3 billion in annual revenue and was honored as Wisconsin's 2024 Mega Manufacturer of the Year. The company remains majority-owned by descendants of Elisha D. Smith, with Chris Drees serving as the second non-family president and CEO since 2023.

Key Leadership - From Founding to Today

The leadership history of Menasha is distinctly divided into three significant eras: over a century of family stewardship by the Smith and Shepard families (1852 to the early 1960s), a professional management period where non-family executives managed operations while the family retained ownership and board oversight (early 1960s to present), and the contemporary phase under professional CEOs reporting to a family chairman. The following sections detail the chief executives and board chairs throughout these periods.

• Elisha D. Smith, acknowledged as the founder of the Menasha Wooden Ware Company, transformed a struggling pail factory into the Midwest's leading woodenware manufacturer. His character and ability to inspire trust were instrumental, guiding the company through economic challenges and making significant contributions to civic life in Menasha.

• Charles R. Smith, Elisha's son, expanded the company by merging his own factory and securing raw materials through strategic acquisitions across North America. His foresight ensured a sustainable supply and continued the family's tradition of philanthropy and educational support.

• Mowry Smith Sr., Charles's son, shifted the company's focus from wood to paper, emphasizing employee retention and nurturing a "people first" culture. He was renowned for his personal connection with employees and his dedication to the family business as a passion rather than an obligation.

• Donald C. "Tad" Shepard, Jr., a grandson of Charles, guided the company through its most aggressive growth phase, expanding into new markets while emphasizing core values of honesty and integrity. His leadership underscored the importance of family involvement, as challenges under non-family CEOs later reaffirmed the family's role in the company's success.

By the early 1960s, Menasha Corporation was characterized by professional management under family ownership. The company saw significant developments under various leaders:

• Robert D. Bero (1993–1999): As President and CEO, Robert D. Bero led diversification efforts, notably acquiring New Jersey Packaging Company and the U.S. operations of Solidur Deutschland. His tenure concluded due to disagreements regarding decentralization. Prior to becoming President and CEO in 1993, Bero served as Vice President of Menasha's plastics group. His tenure ended in 1999 when the board's decision to further decentralize the company's structure led to differences over its implementation, resulting in his departure.

• James M. Kotek (2009 to 2023) significantly expanded the company while maintaining a "people first" ethos. His tenure was marked by major acquisitions, including LINPAC Group's North American material-handling business and Norseman Plastics Holdings, which transformed ORBIS, Menasha's subsidiary, into a market leader. Kotek dedicated his entire career to Menasha, starting at ORBIS in 1991. Under his leadership, Menasha's workforce doubled to 7,500 employees across 112 facilities, earning him recognition as a key business leader in Wisconsin. He retired in March 2023, leaving a lasting impact on the company and the Fox Valley community, where he continues to be active in civic roles.

• Christopher D. Drees (March 2023 - Present), After a 24-year career at Brunswick Corporation, where he became President of Mercury Marine, Drees is recognized for strategic growth through acquisitions and facility investments. A Wisconsin native with degrees from UW–Eau Claire and Marquette University, he started at Mercury Marine in 1998, progressing through purchasing, sales, and operations to oversee global operations and major acquisitions. At Menasha, his strategic vision led to the company being named Wisconsin's Manufacturer of the Year during its 175th anniversary. Drees is active in Wisconsin's business community, serving as board chair for Wisconsin Manufacturers & Commerce and Keller Inc.

Over the past 175 years, what stands out is not any individual leader, but the enduring strength of a model: family ownership that adeptly balanced direct leadership with strategic delegation. The Smiths and early Shepards directly managed the company for over a century. Beginning in the 1960s, the family deliberately transitioned operational control to professional managers while retaining ownership and board responsibilities. When this model faced challenges in the 1990s, the fifth generation reasserted its influence at the chairman level rather than taking back the CEO role. This has resulted in a rare governance success: professional executives are empowered to manage a modern multibillion-dollar enterprise, under the guidance of a patient, values-driven family that has never sold or fully relinquished control.

Porter's Five Forces: A Commodity Business That Avoids Competing on Standard Commodity Terms

The packaging industry is challenging, characterized by intense competition, high buyer power, and significant threats from substitutes, leading to typically low and cyclical returns for most companies. Menasha has successfully navigated these challenges by transitioning from commoditized products to higher-value offerings, such as displays, design, and supply-chain services. Despite their customers—large and sophisticated organizations—having considerable power, Menasha integrates deeply into their operations, providing more than just packaging solutions. The company has restructured supplier power by divesting from mill ownership and utilizing its purchasing scale in the open market. Menasha has also effectively managed the threat of substitutes by transforming potential threats into opportunities, such as owning both corrugated and reusable plastics businesses. The risk of new entrants is minimal at Menasha's scale, due to its extensive facilities and capabilities. Overall, Menasha thrives in a structurally challenging industry by moving beyond its commoditized core into more valuable, sustainable endeavors.

Hambrick & Fredrickson's Strategy Diamond: Five Decisions Focused on Longevity

The Strategy Diamond underscores Menasha's alignment in strategic decisions, emphasizing innovation within a framework of continuity. The company operates in sectors such as corrugated packaging, retail displays, and reusable plastic packaging across North America and Europe, catering to industries including food, beverage, and automotive. Its primary growth strategy is through acquisitions, complemented by organic investment in facilities, a practice maintained for over sixty years. Menasha distinguishes itself through integrated design and a strong reputation for reliability, rather than price. Its strategic approach involves a careful transition across materials, ensuring continuity prior to the decline of previous core offerings. Economically, Menasha avoids commodity margins by concentrating on value-added packaging and services, balancing market fluctuations with a combination of corrugated and reusable plastics. These strategic choices collectively reinforce the company's continuity over the survival of individual products.

VRIO: Where the Moat Actually Sits

Barney's VRIO framework assesses resources that are Valuable, Rare, Inimitable, and Organized for enduring advantage.

• Scale and national footprint — valuable and rare but can be imitated by leading competitors, providing some advantage.

• Customer integration and switching costs — valuable, rare, and challenging to imitate, embedding Menasha deeply into operations unlike typical vendors.

• The reinvention capability — the most unique resource, a habit ingrained in 175 years of culture, enabling Menasha to move away from profitable cores and retrain its workforce, a challenge for competitors to replicate.

• Private, patient, family ownership — inherently valuable, rare, and inimitable, supporting long-term strategies and resilience against market changes.

The Organization sets Menasha apart. While many companies possess valuable resources, Menasha's structure—patient ownership, diverse portfolio, professional management—optimizes its reinvention capability.

The Collins Flywheel: How Reinvention Compounds

Jim Collins's Flywheel concept describes a self-reinforcing cycle that, once initiated, gains momentum. Menasha's cycle functions as follows: patient family ownership facilitates long-term investments, which finance the transition to new materials and services before the existing ones decline. This transition supports growth and profitability, enabling deeper customer integration and rewarding a loyal, retrained workforce. A reputation for reliability and profitability validates continued patient ownership, which in turn finances further reinvention. Each cycle builds upon the previous one, simplifying future adaptations, as evidenced by historical shifts such as the transition to corrugated materials in 1927 and the move to plastics in 1957.

Helmer's Seven Powers: Accurately Defining the Advantage

Hamilton Helmer's Seven Powers framework outlines the enduring advantages a company possesses, and for Menasha, three are particularly noteworthy. The most significant is Switching Costs, as customers would experience considerable operational disruption if they changed suppliers from Menasha. Scale Economies also play a crucial role, with Menasha's vast network and purchasing power providing cost and service advantages that regional competitors cannot match. Additionally, Menasha's Process Power, often underestimated, is a vital capability, stemming from its continuous ability to reinvent itself. Although Cornered Resource is a more subtle advantage, dependent on institutional knowledge and family ownership, Branding, Network Economies, and Counter-Positioning are largely absent due to Menasha's role as a B2B manufacturer. In essence, Menasha's competitive strength is founded on Switching Costs and Scale, bolstered by a distinctive Process Power, which essentially represents its capacity for reinvention.

Diverse Strategies for Longevity: The Unique Approaches of Menasha, Oaks Candy, and CR Meyer

Menasha, along with other longstanding companies such as Oaks Candy and CR Meyer, exemplifies a range of strategies that contribute to their exceptional longevity in a dynamic marketplace. Each of these organizations has forged a unique path to ensure their survival and continued relevance, illustrating that institutional longevity is not a one-size-fits-all approach but rather a collection of diverse strategies that can be effectively employed.

Oaks Candy has thrived for 135 years by steadfastly maintaining its cherished product line, building a loyal customer base across generations. By focusing on quality and taste, the company fosters a nostalgic connection with consumers, allowing it to navigate market shifts and economic challenges successfully. Meanwhile, CR Meyer exemplifies adaptability, altering its business practices and service offerings to meet industry demands while preserving strong customer relationships. This focus on trust and reliability enables CR Meyer to thrive in a competitive environment, highlighting the importance of relationships in sustaining long-term business success.

Menasha, however, embodies a particularly unique approach to longevity in the business world. This company has not only survived but thrived by continually reinventing its core business model. Over the years, Menasha has undergone significant transformations, transitioning from wood to paper and then to plastic, demonstrating a remarkable capacity for innovation. This evolution reflects a deep understanding of market trends and consumer preferences, allowing Menasha to remain relevant in a rapidly changing landscape. Importantly, throughout these transitions, Menasha has managed to preserve its workforce and maintain family ownership, which speaks volumes about its commitment to its employees and the values that underpin the organization.

In conclusion, the experiences of Menasha, Oaks Candy, and CR Meyer illustrate that institutional longevity is a multifaceted concept. Oaks Candy emphasizes the power of consistency in product offerings, CR Meyer highlights the importance of nurturing customer relationships through adaptability, and Menasha exemplifies the necessity of reinvention and innovation. Each of these firms has carved its own path to success, demonstrating that a thoughtful blend of strategies can lead to enduring success in the business world.

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