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Photos Jonathan Castner

Monarch Manufacturing

by Eric Peterson on May 6, 2019, 09:40 am MDT

www.monarchmfg.com

Salida, Colorado

Founded: 1969

Privately owned

Employees: 8

Industry: Supply Chain

Products: Protective sleeves and plant bands for growers

President Zack Zeiset is guiding the leading manufacturer of protective sleeves for vineyards and orchards into new markets.

Zeiset is the second generation to helm Monarch Manufacturing, the 800-pound gorilla in its niche.

His father, Jim Zeiset, started the company in 1969 with a machine he built himself. He moved it from Oklahoma to Colorado in 1976.

"It was en route between where he got his paper, which was Alabama, and where his customers were, which was California," says Zeiset.

Most customers were grape growers at the time, who favored Monarch's bands to ready a graft for the vineyard, a year-long process that involves time in a box of sawdust and a greenhouse.

Monarch's paper bands "just suited their process very well," says Zeiset. Plant band sales edged up through the 1980s, but declined in the face of plastic-based competition the subsequent decade.

"At the same time, we saw a new market for protecting newly planted vines in the field," says Zeiset.

That led to Monarch's line of Zipset Protective Sleeves/Grow Tubes. Growers of both wine and table grapes adopted the product, as did almond growers and other orchard operators.

Monarch grew along with the wine market. A half-century after its launch, the company now makes 50 million sleeves a year.

"It was pretty much just luck," says Zeiset. "We had a customer using rejected milk cartons. We said, 'We can provide those and put your logo on it.'"

California -- which grows about 80 percent of the world's almonds and about 90 percent of the grapes in the U.S. -- remains far and away the top market. Two Golden State competitors, however, have a combined market share of less than 10 percent, with Monarch controlling about 90 percent. "There's a bunch of inherent costs in California that we don't have here in Colorado, and that's a competitive advantage," says Zeiset.

Another advantage: "We can print on our product, and those people can't. It's part of our process."

That is a result of the integrated manufacturing with Monarch's proprietary equipment. The company still uses the original proprietary machine from 50 years ago, along with a second to handle the volume. "Where [competitors] need four machines to make their products, we only need one," says Zeiset. "The original machine, my dad built in 1969. . . . I built a second machine when we got into the tree and wrap business. Since then, we upgraded both machines to touchpad displays and better componentry."

In 2016, another upgrade came in the form of automation. "We have robots on the front pulling the product off," says Zeiset. "It was rather mundane and it led to repetitive stress injuries."

The used robots’ price tag was about three-quarters of the annual labor costs for the task, meaning the investment "paid for itself within a year easily," he adds, while increasing efficiency by 10 to 20 percent. "There's zero downtime due to operator error."

While the supply chain has changed -- "We're getting [paper] from Finland," says Zeiset -- the company remains based at the same 23-acre property southwest of Salida that it moved to in 1976. The 3,000-square-foot metal building has been expanded several times, and is now 14,000 square feet.

Zeiset took over running day-to-day operations when his father retired in 2010 and has overseen a recent sales boom. "In the last five years, we've seen 15 to 25 percent growth every year," he says. He forecasts a plateau in 2019 as growth in key crops slows in the U.S., but he says there is room to grow in overseas markets.

Challenges: "The big challenge is really getting the international market to pick up on the product," says Zeiset. "There are cultural and language barriers, not to mention the challenge of shipping the product."

Workforce is another challenge, he adds. "There is a small amount of skilled workers in this area, and the high cost of living makes it difficult to pay people enough to live here." Monarch counters whis with good benefits.

Opportunities: Exports are one potential driver, but Zeiset says he'd also like to see an old product stage a comeback. "I'm hoping to see a resurgence for our plant bands . . . as people shy away from plastics," he says. "It's every bit as big of a marker as the protectors, if not bigger."

Monarch still sells some plant bands, but the line has dropped from the flagship to less than 5 percent of sales. Zeiset says the sustainable angle -- Monarch's bands are 96 percent biodegradable by weight -- is an increasingly attractive selling point.

Needs: "Not really much of anything," says Zeiset. "We have a good position in the industry -- we have a 90 percent market share. I just keep an eye on the bottom line and make sure we're positioned to grow."

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