Sealing the deal: Small manufacturer packages steady growth

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Jim Leute
Monday, May 20, 2013

— The expiration of a patent last year has boosted business at a Milton company that designs and builds a wide range of cup and tray filling and sealing machines for the packaging industry.

Pac Tec has grown 30 percent every year since its founding in 2006, said Carl Peterson, president of the company on John Paul Road between Janesville and Milton.

This year, Peterson expects growth of 100 percent, and it's due in large part to the company's filling and sealing machines for K-Cups, individual portion packs that are used with Keurig or other single-cup brewing systems for coffee, tea or other hot drinks.

Patents on the original K-Cup design expired last fall, and other coffee companies are now producing their own versions compatible with Keurig machines. What was once the sole domain of Green Mountain Coffee is now loaded with competitors such as Starbucks, Dunkin' Donuts and a variety of other roasters.

"This is certainly a big part of our growth this year," Peterson said as he looked over the filling and sealing machines that will pump out up to 240 K-Cups a minute for a well-known specialty coffee company that Peterson is prohibited from identifying.

It's so big, he added, that the sale of the machines will count for about 25 percent of the company's revenues this year.

"The K-Cup is a big growth area," he said. "There are about 12 million to 14 million Keurig machines on the market, and that's estimated to go to 30 million in the next three years."

Pac Tec and its 14 employees reach far beyond K-Cups to serve small- to mid-sized companies primarily in the food packaging industry. The company makes filling and sealing machines for products ranging from yogurt and other food products to small saline containers. All meet strict federal guidelines for food handling.

From a base of about six designs, the company hand-manufacturers each machine, primarily using stainless steel, aluminum and plastic precision cut on a large water jet cutting machine.

The machines are assembled with the latest electronics and touch-screen interfaces. They are sold around the world, primarily through a network of sales representatives.

Peterson said there are about five major players in the food packaging industry, as well as five or six other regional companies.

He said his small company—sandwiched between two consignment shops just north of Janesville—has built a solid reputation for quality, cost and customer service.

"There's an awful lot of craftsmanship and art in what we do," said Peterson, who graduated in 1976 from what was then Blackhawk Technical Institute with a degree in mechanical design.

"We've developed a very good system, and, as we've done that, word has spread. You're only as good as what you've done, and we're pretty proud of what we've done."

Last updated: 10:34 am Tuesday, July 2, 2013

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