Berry hinting at CEO succession plan

Jon Rich, who has helped transform Berry Plastics Group Inc. during his tenure as CEO, is calling it quits. But not completely.

Rich signaled his intention on Sept. 30 to retire in February, but will continue on as executive chairman of the Evansville, Ind.-based company.

While Rich, 61, is making plans to clean out his CEO office, Berry also named Thomas Salmon as president and chief operating officer effective Oct. 3 and talked about succession planning.

“The creation of the president and chief operating officer role is the next step in our ongoing succession process. Tom's background, experience and track record of success leading multiple Berry divisions throughout his career with the company make him eminently qualified to take on this important leadership role,” Rich said in a statement.

The company, however, stopped short of naming Salmon as successor to Rich as CEO.

“Today's announcement of the new COO is the next step in Berry's on-going succession process. Between now and February, the board will make a decision on a new CEO and we will announce it at that time,” Berry Plastics spokeswoman Eva Schmitz said in an email interview.

Salmon, 53, came to Berry in 2007 and is president of Berry's Consumer Packaging division. He also has been leader of the company's Adhesives Division and president of its Engineered Materials division. Salmon tenure includes time as president of the company's Rigid Closed Top division.

The company indicated it looked at both internal and external candidates before deciding to offer the COO position to Salmon.

Salmon will keep his president's role in consumer packaging until a new leader is found for that division, Berry Plastics said.

Rich has been on the job for six years, during which time the company conducted an initial public offering in 2012. Annual sales have increased from $4.77 billion in fiscal year 2012 to pro form sales of $6.7 billion last fiscal year.

It was just about a year ago that Berry Plastics completed its $2.45 billion acquisition of Avintiv Inc., which brought Berry a portfolio of flexible nonwoven products. Those nonwovens are used by others to make a wide variety of consumer and industrial products, including diapers, wipes, wraps and agricultural products.

As a result of the Avintiv deal, Berry reorganized into three operating segments: consumer packaging; health, hygiene and specialties; and engineered materials. The deal was described as transformative by Berry at the time.

And it was just in August that the company announced plans to purchase AEP Industries Inc., a flexible packaging films maker, for $765 million. AEP, of Montvale, N.J., has 14 manufacturing locations in the United States and Canada.

Wells Fargo stock analyst Christopher Manuel called the announcement slightly surprising given Rich's age, but a positive step in succession planning.

“In our view, this announcement ends the reign of a successful CEO, as Mr. Rich transitioned Berry from its IPO in 2012 into a mature packaging company with the ability to balance acquisitions and organic volume growth,” Manuel wrote in a research note.

Rich was profiled in Plastics News as part of a special report on plastics industry CEOs last year.

“I've thoroughly enjoyed every job that I've had. But the most interesting job that I've had is the one I have now. I'm absolutely sure the best day I'm going to have in my career is tomorrow. I tend to look forward, not back,” he said at that time.