When Berry Global Group Inc. CEO Tom Salmon was preparing to take charge at the company more than six years ago, he talked about embracing change.
Change is upon the Evansville, Ind.-based plastics processor once again as Salmon prepares to step aside. His successor, Kevin Kwilinski, has just been named as new CEO effective Oct. 2.
The Berry that Kwilinski takes over is a different company than what Salmon inherited from former CEO Jon Rich in 2017.
There have been some high-flying days during the past decade or so with a series of acquisitions that transformed Berry from a significant player in the North American market to a significant player on the world stage.
Berry even changed its name just weeks after Salmon took control. The switch from Berry Plastics Group to Berry Global Group was a signal to the market about the company's outlook and ambition.
Salmon will work with Kwilinski as part of the leadership transition in the months ahead, just has Rich worked with Salmon, who served as chief operating officer in 2016 and early 2017 as he prepared to become CEO.
It was during this transition period that Salmon spoke with Plastics News about the need to embrace change. "Companies, when they are going through change, want someone that is a calm voice, that's a calm voice that ultimately says: 'We've got this. We've got this,'" Salmon said at the time.
Berry, after announcing the executive transition this time around, said the company is not providing interviews.
But Kwilinski comes to a company that has altered its approach over time as a result of a tussle with activist investors not happy with the company. Berry ultimately decided to institute a quarterly dividend for the first time and increase the amount of money used to buy back shares of its own stock.
The company, which once had an appetite that made significant acquisitions seem almost routine, now instead stresses a desire to return proceeds to shareholders.
Berry ultimately came to an understanding with the investors, who then signaled support for management. The company also added three independent board members and created new oversight at the board level for capital allocation.
Kwilinski is leaving his job as CEO of Multi-Color Corp., a label printer, to take over from Salmon, who announced in February his plans to retire at the end of the year.
The new CEO is scheduled to begin work at Evansville, Ind.-based Berry Oct. 2, with Salmon retiring as both CEO and chairman but remaining with the company "in an advisory capacity to ensure a smooth transition," Berry said Aug. 15.
"Kevin is a proven leader who knows our industry well. He has spent the last 15 years serving as the CEO of companies within the packaging space and, as an Indiana native, he understands the importance of Berry Global to the State," said Stephen Sterrett, lead independent director and board member at Berry, in a statement. Sterrett also is slated to become chairman effective Oct. 2.
"Kevin will be a great leader because he shares Berry's values of teamwork, customer-focus and excellence, and his performance-driven leadership style directly aligns with Berry's culture. He has distinguished himself over the course of his career as a disciplined operator with a focus on revenue growth and cost management," Sterrett said.
Kwilinski previously was CEO at Fort Dearborn Co., a label maker purchased by Multi-Color in July 2021. And he was CEO of PaperWorks Industries Inc., a maker of recycled paperboard and folding cartons.
Unlike when Salmon was hired as CEO, Berry decided to hire from outside the company for its next leader. Salmon came to Berry in 2007 through a merger with Covalence Specialty Materials Holding Corp., the former Tyco International Ltd.'s plastics and adhesives division. Prior to becoming CEO in 2017, Salmon also was president of the company's Consumer Packaging division.
"It has been a privilege to lead Berry's talented employees as CEO for the past six years, and I am extremely proud of the many accomplishments achieved by the Berry team during my tenure. The board and I have full confidence in Kevin and in his ability to join with the rest of the leadership team to take the company forward into its next chapter," Salmon said in a statement.
Multi-Color Corp., meanwhile, named David Scheible as interim CEO as that company looks for a permanent successor to Kwilinski. Scheible is the former CEO and chairman of Graphic Packaging Corp., a maker of paper folding cartons.
Kwilinski also will take over at a smaller Berry, but still a huge operation. The company, on a recent conference call to discuss quarterly earnings, indicated 20 of the company's sites are closing.
Part of Berry's facility closure strategy involves moving production from higher-cost to lower-cost facilities, the company has said. The firm is looking at further investments in automation.
Berry, earlier this year, talked about closing 15 locations while indicating there could be more. Salmon put the figure at 20 during the most recent conference call. Berry did not provide a list of the site closures or number of employees impact when asked.
"We're going to be in a position in '24 as we see growth and general market environments improve. Also, we're going to benefit from having actually executed against 20 facilities that have been shut down and not having to need ultimately to add incremental [capital expenditures] to serve that business. So it's very exciting for us going forward that optimized footprint, lower cost structure ultimately is going to benefit us on the bottom line as well," Salmon said on the recent call.
The company also filed a Form 10-Q quarterly report with the U.S. Securities and Exchange Commission that briefly addressed the closures.
"During fiscal 2023, the company announced several plant rationalizations in all four segments in order to deliver cost savings and optimize equipment utilization. In total, over the next three years, these plant rationalizations are projected to cost approximately $200 million with the operations savings intended to counter general economic softness. The plant rationalizations are expected to be fully implemented by the end of fiscal 2025," the company said in the filing.
Berry divides its business into four segments: Consumer Packaging International; Consumer Packaging North America; Engineered Materials; and Health, Hygiene and Specialties.
Berry once had nearly 300 locations around the globe thanks to a series of acquisitions in recent years that widened the company's footprint significantly. The company now reports having "46,000 global employees across more than 250 locations."