54 / 88
47
Making paper straws is relatively simple. Large sheets
are slit to narrow widths, then wound in spirals around long,
skinny tubes to create the shape. There are options for
specialty straws, from custom designs to extra-wide ones
for shakes. Aardvark’s challenge is making more, faster,
and of the same high quality. The Hofmaster investment
is mostly focused on equipment to boost output, as well
as expanding facilities and hiring more workers. Aardvark
had started ramping up production even before the deal
because of the time it takes to have equipment running
at full capacity. “It takes a few months to build a piece of
equipment”—Aardvark makes its own—“and to train the
operators, who function more as artisans,” Rhodes says.
Most of the process is secret, and the company oper-
ates a closed plant. It’s also a sustainable business,
Rhodes says. The paper is sourced from trees Aardvark
grows to avoid deforestation and to provide the green-
est substitute for plastic. “If you’re trying to eliminate
single-use plastics that get into waterways and get into
the ocean, the plastic straw to paper straw movement is
the gateway,” he says. “It’s a sustainable option that’s rel-
atively easy and, at only a penny more than plastic per
straw, economically viable.” Plastic straws cost about half
a cent each, Rhodes adds.
The company isn’t too worried about competition,
despite the threat of China. That country’s paper straws
are the ones that have given the drinking implement such
a bad rap, he says. “Making a good paper straw isn’t easy,”
Rhodes says. Also, building an operation to rival Aardvark’s
can’t happen overnight. “It takes awhile to develop a sus-
tainable and green business like this,” he says. “You have
to get compostability and biodegradability testing and then
certification” from the Food and Drug Administration.
The company’s biggest customers are theme parks
and major restaurant chains, including McDonald’s Corp.
and Disney. “Everybody who has made claims about tran-
sitions—restaurants, cofee shops—we are in conversa-
tions about servicing them,” says Romjue. “But as each
new municipality puts laws in place, we shift to help folks
in need. If you can’t have plastic straws in Seattle, we’ll pri-
oritize that over Nebraska.”
However much Aardvark increases its output, Rhodes
cautions that the switch to paper takes more time than
many businesses realize. “We try to work with new cus-
tomers and prospective buyers and tell them to be
mindful that they can’t just turn this on,” he says. “In
the 1960s, when the plastics industry came in to the
business, it took them almost a decade to build out the
structure to move Americans away from paper straws.”
—
Kate Krader
THE BOTTOM LINE The sustainability movement has everyone clamoring
for paper straws. The problem? Procuring good ones takes awhile, especially
because there’s only one company that makes them in the U.S.
Last fall, Porchlight, a Southern-themed cocktail lounge in
New York City operated by the Union Square Hospitality
Group, decided to ditch plastic straws. So Mark Maynard,
the bar’s director of operations, decided his staf would test
some eco-friendly alternatives. They placed 20 diferent
paper straws in glasses of water. The one from Aardvark,
the only company that makes paper straws commercially
in the U.S., was the standout, he says. It held together bet-
ter than the rest for well over an hour.
Ofering Aardvark’s straws at Porchlight took a little
longer than expected. When the bar’s procurement oice
contacted the Fort Wayne, Ind., company to place an order,
it was told the wait time could be as long as three months.
“They said, ‘We’re sorry. A lot of people have jumped on
board recently,’ ” Maynard says.
Aardvark got back into the business of making straws
in 2007—its roots are in a company dating to 1888 that
invented the paper straw—largely because of a grow-
ing anti-plastic movement and increasing demand for
eco-friendly products. Several companies, including
Walt Disney Co. and the Ted’s Montana Grill restaurants
founded by Ted Turner, reached out to Aardvark that
year, asking if it might again make the paper straws it
was once known for, according to David Rhodes, the
company’s global business director. More than 30 years
after the onslaught of plastic put an end to that part of its
business, Aardvark reengineered its process, refined the
paper and the glues used in manufacturing, and issued
a basic white straw.
The business started doubling every year, according
to Rhodes. Aardvark was making millions of the product
annually—and introducing innovations along the way, such
as diferent sizes and designs and safe colors. What the
company hadn’t foreseen was how fast demand would
rise. “In 2017 to 2018, it went from double to 50 times the
business,” Rhodes says, “Most businesses would have a
hard time reacting to that.”
In the spring of this year, Aardvark decided to seek
an investor to help it increase capacity. “We didn’t have
the resources to grow to the level that we needed to be,”
Rhodes says. After approaching several companies, it was
acquired on Aug. 6 by Hofmaster Group Inc., a 71-year-old
Oshkosh, Wis.-based manufacturer of disposable kitchen
goods. Hofmaster had been an Aardvark customer and
knew about its straws. “Over the past nine years, Aardvark
developed the best blend of paper that would be com-
postable but hold up against liquid,” says Andy Romjue,
president of Hofmaster’s food service division. Hofmaster
also makes paper products, potentially a source of engi-
neering know-how for Aardvark.
“Our short-term objective is, by January or February
2019, to have seven times the production capacity we had
when we took over,” says Romjue. Rhodes says the com-
pany produces millions of straws per day.
SOLUTIONS
Bloomberg Businessweek
October 8, 2018