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Tampa's century-old Peninsular Paper asks: paper or plastic?

The Clarke family knows paper … and plastic.

Three generations of the family have steered Peninsular Paper Co. through 100 years of change. They started with a mule and a wagon peddling supplies to stores and restaurants from Plant City to Trilby.

These days paper is dwarfed by the plastic containers and janitorial cleaning products Peninsular sells from warehouses in Tampa and Winter Park.

Indeed, Peninsular got a third of its $20 million in revenue in 2010 from outfitting public school cafeterias in Hillsborough, Pasco, Pinellas and Polk counties. Meanwhile, Peninsular fights for small-business favor with newer, bigger rivals: Sam's Club, Costco, Smart & Final, Office Depot, Staples and franchised chains that restrict their stores' vendor choices.

The company's bloodlines date to Tampa pioneers. Edward Clarke was a pre-Civil War downtown merchant and onetime mayor who opened his Blue Store in 1852 and persuaded his nephew to move to the wild frontier town 20 years later. In 1911 the nephew's son, James Clarke, launched Peninsular Paper.

Today, James Clarke's grandson, Dick Clarke, 83, is chairman of the family business, which is run by his son Richard Jr., the 58-year-old chief executive. A fourth generation, Ricky Clarke, 31, is vice president of sales.

A familiar civic figure, Dick Clarke has served as chairman of the Children's Home, headed Ye Mystic Krewe of Gasparilla and spent 20 years on the city zoning board and 12 years on the Civil Service Board.

The elder Clarke talked to the St. Petersburg Times recently about how the company survived for so long and how it intends to remain a fixture despite the rise of much bigger competitors.

Is the secret to enduring 100 years unceasing adaptability?

You'd better believe it, and I've got the gray hairs to prove it. We got in the business back when everything — even sliced bacon — came wrapped in paper. Today we sell more plastic products and cleaning supplies than paper.

Not that long ago we were selling washtubs, clotheslines, ax handles, shopping totes, thread, batteries and baskets. The real keys are being honest, taking care of the details, making sure your employees have a good standard of living and watching out for your customers. Our edge is customer service, like next-day delivery.

Plastics dramatically changed your business. How?

I remember as a kid getting our first dozen rolls of cellophane film. A chain store guy I'd never seen showed up to buy every bit of it at any price. I realized this was going to be big.

We were the first to sell foam cups in the bay area back in the early 1970s. Plastic containers were a godsend to our business. But now it's going the other way even though plastic containers cost a third of paper. Restaurants say they want paper because of customer demand for something biodegradable.

What about recycled paper products?

We're selling a lot, but most paper is not 100 percent recycled yet. It's hard to explain that there is recycled paper made from virgin leftovers and trim in the manufacturing process and post-consumer that's made from recycled paper like old newsprint that does not yet look or feel as appealing. You have to get all the ink out of it. We developed a recycled paper tray for the Hillsborough County schools that replaced their plastic foam serving trays. It's white inside with a gingham print that makes food look more appetizing.

What's happening with pricing?

I've never seen pricing from manufacturers as brutal as the last 90 days. Plastics are up 10 to 20 percent. Kimberly Clark (the dominant paper towel and toilet paper maker) is cutting the number of sheets on a toilet paper roll 18 to 20 percent. They say they are not raising prices, but that forces us to persuade customers they need to buy more.

How are your products changing?

There will be revolutionary changes. We're seeing a sandwich wrapping paper that holds heat as well as aluminum foil. We've got machines cheap enough for mom-and-pop stores to seal plastic containers of fresh-made food just like the supermarkets.

Twenty years ago restaurants needed a hose to wash garbage cans in the back yard, now they buy plastic liners. I had a guy in the other day who developed a biodegradable liner made from film that had been used to cover strawberries in the field. And biodegradable plastics made from corn starch are getting better and better.

Soon they will be crystal clear, so prepared foods in a deli case look perfect. They've been cloudy and heat sensitive. We had a Sarasota hotel insist on biodegradable plastic cocktail glasses a few years ago. They melted in the sun by the pool.

How have you fared through the recession?

Sales have been flat and profits marginal as some of our customers went out of business and restaurants cut supply costs.

How does it match up to other eras?

I've seen worse. My father lost our house, and I remember not going to summer camp in the pre-World War II years. During the war, we had trouble getting paper products to sell.

But the 1970s were worse for us than this recession was. We had double-digit inflation and double-digit interest rates at the same time. (That stresses a business that borrows to buy inventory that loses value to inflation before it can be sold.) I also brought some of it on myself when I borrowed to buy a company to expand to Winter Park.

You stock about 6,000 items vs. 1,000 a few decades ago, which undermines profitability. What will the next 10 years be like?

Middlemen like us are being squeezed. It's like what Home Depot did to the hardware store. It's going to be tough, but we'll have to get more specialized.

You were captain (chairman) of the krewe, the old-money social club that stages Gasparilla every winter. What are the krewe's biggest accomplishment since then?

They have really cleaned it up. The membership has been expanded from about 700 to more than 1,000 because this is a much bigger community.

You really have to prove yourself as a community leader now, too.

There is a better understanding that Gasparilla is a showcase for the entire Tampa Bay area. It's still a lot of fun, but there's not nearly as much imbibing. I'm looking forward to being in my 62nd parade next year.

Did you really help drive a caravan of floats and cars full of Gasparilla pirates through a toll booth with pistols drawn en route to the Orange Bowl parade in 1977?

Oh, yeah. We were in costume and nobody had a dime on them.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Tampa's century-old Peninsular Paper asks: paper or plastic? 06/17/11 [Last modified: Friday, June 17, 2011 11:42pm]
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