You might never have heard of Innovative Labeling Solutions (ILS), but you’re probably familiar with their work. That Coke campaign with names on its bottles and cans? That was ILS. They do most of Rhinegeist’s and MadTree’s labeling too, along with 250 other craft breweries and 350 wineries around the world. Prominent in industries as diverse as promotional marketing, industrial products, beauty care and, of course, beverages, ILS is an industry leader in digital printing technology for labels and flexible packaging.
But it hasn’t always been. ILS faced the financial hurdles all startups and small businesses face when it was founded in 1996 by a family partnership. Co-founders Jay Dollries, president, and Steve Wolf, vice president, discovered banks they approached offered inflexible solutions, but ILS had little choice. Surprisingly few banks can support commercial lending arms that service small-market clients, and the banks that do rarely prioritize those clients’ interests. Until a business can manage eight-digit loans, options are limited. The relationship that subsequently formed between ILS and its bank of choice was ultimately functional, but far from the partnership Dollries and Wolf desired.
Still, ILS achieved steady growth. That growth accelerated exponentially after 2005 when ILS was among the first in the industry to move from conventional flexographic printing into digital printing. “We saw the market changing and saw some opportunities with our existing equipment,” says Dollries. “We were one of four or five hundred companies that had the exact same things to offer. We provided better service but there wasn’t anything unique about our product. Digital print gave us something different. It allowed us to go from a primarily industrial base to a consumer product base. Now we are really the leader in North America with digital printing.”
“A lot of companies before digital printing couldn’t afford to put high-end labels on their products because the printing plates would have cost them a fortune, whereas with digital printing they don’t have to make that investment,” says Wolf, offering the example of an individual candlemaker or a craft brewery. “Now smaller brands have opportunities they didn’t have before to be more creative and approach the market differently.”
ILS had graduated from a small startup to a middle-market business. The mindset of Dollries and Wolf changed accordingly: they were no longer merely surviving in a saturated market, but were thriving – impressively so – within a market they had pioneered. Planning for future growth was exciting, but it was also time consuming, and the bank with which they started had not evolved with them: it didn’t make their lives any easier, and in fact it often made them more complicated.
“While we were still in the small business side of the bank and dealing with the people at the branches, we were fine. But they can only manage accounts up to a small level and we outgrew that,” says Dollries. “We got lost, we were a nothing. Everything became cumbersome.”
Dollries and Wolf couldn’t afford to spend days making six-month projections and calculating their own fiscal ratios and working capital, just like they couldn’t afford the months of waiting before a loan was approved. So in 2014, they made it a priority to search for a better solution. They found it in the person of Dave Cardell, Cincinnati market director for MainSource Financial Group.
MainSource entered the Cincinnati market in December 2013, specializing in middle-market clients who, like ILS, aren’t large enough to unlock the full commercial lending services of large banks and are too large for their branch-managed small business arms. When Cardell made MainsSource’s presentation to Wolf and Dollries, he already knew the type of value-added approach the ILS co-founders were searching for.
“David immediately understood where we were. He knew we wanted a long-term relationship,” says Wolf, who emphasizes the long-term aspect because ILS’s manufacturing is dependent upon technology acquisitions that require forethought and upfront equipment financing that pays off over time. A bank that prioritizes the numbers on a spreadsheet over a deep understanding of its client’s business and a friendly relationship with its executives might be reticent to commit that financing – or, just as bad, it might commit financing to a project that is not really a smart move for ILS. Either way, that bank isn’t a partner and it isn’t adding value.
MainSource promises to be a different kind of bank, the type that adds value by partnering with its clients. That’s what Cardell promised at the ILS offices during that first presentation in 2014, and it’s what he’s delivered since. “Dave has been out here (at ILS) more in the last six months than our other bank was in 12 years,” says Wolf.
Cardell provides suggestions, tips and warnings about the future. He regularly notifies Wolf and Dollries when he notices something they might want to watch out for. He offers insightful strategies, useful forecasts and interactive quarterly meetings during which he breaks down all the numbers Wolf and Dollries need to know, including a detailed analysis of ILS’s valuation. He does all this efficiently and without delay.
“ILS is the perfect client for us,” says Cardell. “From the beginning they were willing to listen. They wanted the interactive banking solution. They’re willing to proactively sit down and go over metrics and changes to their business. They’re able to leverage our experience and expertise to have an easy and efficient banking solution that will grow more useful the longer we serve them.”
Innovative Label Solutions is located at 4000 Middletown-Hamilton Road, Hamilton, OH 45011. You can reach them at 888.860.2457 or visit their website at www.ilslabels.com.
MainSource Commercial Banking Group is located at 100 East Business Way, Suite 150, Cincinnati, OH 45241. You can reach them at 513.259.2623, by email at Dbcardell@mainsourcebank.com or visit their website at www.mainsourcebank.com.