Bronze cemetery markers, electric car batteries and inkjet printers don’t seem to have much in common, but all of these innovations (and more) stem from the same expertise at Matthews International Corp.
For more than 170 years, Matthews has been putting its mark on things, although the methods and products have shifted through the years. Since starting as a branding iron business stamping wooden crates in 1850, the company has grown into a multi-billion-dollar industry leader with expertise spanning three business segments and several brands.
“Everything we do today is an extension, an evolution, or a pivot of what we did back then,” says Matthews President and CEO Joseph C. Bartolacci. “There were plenty of opportunities, in and around the businesses that we operated, to evolve and explore more ways to use what we produced.”
Since going public in 1994 with consolidated sales of $158.7 million, Matthews’ growth has erupted. The company reported fiscal 2022 sales of $1.76 billion and expects to reach nearly $2 billion in fiscal 2023 sales.
Matthews’ core business segments — industrial technologies, memorialization and brand solutions — all stem from the same basic concept of making a mark. By looking for opportunities to apply this know-how in other markets, the company continues to expand around the globe.
Extending core expertise
In the early 1900s, Matthews progressed from hand-stamped branding irons to rubber plates used for printing logistical marks on corrugated containers. This flagship product identification business evolved drastically through the decades and became part of Matthews’ Industrial Technologies division, which also manufactures high-tech energy storage and warehouse automation solutions.
The original stamping business likewise evolved into bronze when Matthews produced the first-ever flush bronze memorial in 1927. This division, now known as Matthews Memorialization, has continued expanding to serve cemeteries, funeral homes and sign shops across the country. Through several strategic acquisitions, this business grew beyond bronze markers to offer caskets, cremation equipment and other types of cemetery markers, including granite. Matthews Memorialization generated $840 million in sales last year, making up 48 percent of Matthews’ overall business while holding the No. 1 or 2 market positions throughout the industry.
Meanwhile, as mechanical printing presses continued to evolve, Matthews applied its printing acumen to launch a packaging graphics division. Instead of just making simple logistical marks on corrugated boxes as the original business did, this segment offered more sophisticated printing solutions for a range of product packaging materials. With Matthews’ acquisition of SGK Inc. in 2014 — the largest acquisition in its history — this division became known as SGK Brand Solutions. Today, this segment accounts for one-third of Matthews’ annual sales.
Advancing industrial technologies
Although memorialization is currently the largest division, Matthews’ Industrial Technologies segment is growing rapidly, fueled by innovations in the high-growth markets it serves.
By looking beyond the corrugated boxes that the product identification business was marking, Matthews found a new opportunity to streamline clients’ inventory management systems. In addition to just marking boxes with lot numbers and other logistical details, the company started offering solutions for moving boxes through the supply chain more efficiently using warehouse automation software. Key acquisitions in 2011 and 2017 enhanced the order fulfillment capabilities within the Matthews Automated Solutions business unit.
Besides product identification and warehouse automation, the third component of the Industrial Technologies division is “the most exciting one today,” Bartolacci says. This energy solutions business showcases Matthews’ innovative transformation from old-fashioned printing to cutting-edge production of hydrogen fuel cells and lithium-ion batteries.
Matthews pivoted into energy solutions by leveraging its expertise in rotary processing, which traditionally used a rotating metal cylinder to imprint images on fine paper or foil, such as chewing gum wrappers. With assistance from a research institute and the German government, Matthews’ German engineers launched a project about 10 years ago using similar techniques “to process dry powdered lithium-rich material into a solid sheet without the use of any resins,” Bartolacci says.
This innovative process creates a dry battery electrode, presenting an alternative to the wet battery electrode used in most electric vehicles (EVs) on the road today. Whereas wet battery electrode processing uses chemical solvents and lots of energy to turn lithium-rich material into battery cells, Matthews’ process unlocks cost savings and other benefits for customers.
“As a result of our technology and our know-how, for which we have multiple patents, we’re able to reduce the cost of the battery significantly,” Bartolacci says. “There’s far less energy used, far less manpower needed and no environmental concerns, which is a very important factor today.”
This technology is poised to revolutionize the EV market, Bartolacci says, all thanks to “a great idea and a lot of know-how in an old-fashioned printing industry.”
Acquiring capabilities
These innovations paved the way for additional growth opportunities as Matthews expanded into new markets through strategic acquisitions.
For example, in May 2021, Matthews acquired Terrella Energy Systems Ltd., an engineering firm focused on hydrogen fuel cell production. In February 2022, Matthews entered a Joint Development Agreement with another engineering firm specializing in hydrogen fuel cell production, with the goal of producing critical fuel cell components more cost effectively.
Then, in June 2022, Matthews acquired German-based engineering firms OLBRICH GmbH and R+S Automotive GmbH, adding specialized capabilities to produce rotary processing equipment used in the manufacturing of lithium-ion batteries and hydrogen fuel cells. Matthews acquired both companies, with combined annual revenue of about $100 million, for approximately $45 million.
“What we needed was capacity, and they bring over 160 engineers, hundreds of thousands of square feet of manufacturing space and a particular piece of equipment that’s critical to the production of dry battery electrodes,” Bartolacci says. “It’s our investment in the future of Matthews, which we think has to do a lot with the battery business.”
Since going public nearly 30 years ago, Matthews has completed nearly 100 acquisitions across its business segments, acquiring the technical capabilities and critical skillsets that have fueled its growth. When making acquisitions, Bartolacci says, “we retain the people we think are critical to the success of that business, and those employees remain critical parts of our business going forward. We don’t walk in and clean house; they’re good businesses for a reason, and oftentimes, the reason is the people that are there.”
Disrupting industries
Even the oldest business at Matthews, the product identification division, continues to push toward the leading edge of the industry as printing technologies advance. Within this segment of the market, the inkjet printing industry had historically been dominated by a couple of large players. High barriers to entry made it difficult for other providers like Matthews to compete.
“The devices that are out there today are prone to breaking down. They require repair and maintenance, so you had to have service teams ready and available,” Bartolacci says. “We found it difficult to sell into that marketplace because we couldn’t afford a service team yet, and we couldn’t afford the service team because we didn’t have the revenue to support it.”
Several years ago, Matthews overcame this barrier by forging an entirely new path into the inkjet industry, developing a disposable printhead that could simply be replaced instead of being repaired.
“We’re now working with silicon chips to create a disposable printhead to attack this market and disrupt it in such a way that the operator doesn’t require a repair maintenance team to be there,” Bartolacci says. “It’s an ingenious solution that has taken a lot of time and dollars to develop. We’re hoping to see the fruits of that labor soon as we begin to launch the product into the market.”
Matthews’ disposable printhead recently transitioned from research and development to production, and the product should reach customers by the end of 2024. Bartolacci has “great aspirations” for this latest product identification innovation, as with the other businesses in Matthews’ industrial technologies division. He foresees ongoing growth in warehouse automation and energy solutions, too, as the demand in those sectors continues to swell.
“These are our little growth engines that we’ve been nurturing for years, that each have the potential to be billion-dollar businesses,” he says. “We have the good fortune of having stable, solid memorialization and SGK Brand Solutions businesses to help fund that [growth].”
Growing forward
When Bartolacci joined Matthews in 1997, about 90 percent of the company’s operations were in North America, spread across a handful of locations. Today, Matthews operates in more than 30 countries on six continents, with more than 12,000 employees. These employees are the key ingredient behind the company’s growth, so Bartolacci and his team work hard to keep them connected to Matthews’ mission.
“We as a management team spent a lot of time traveling around visiting the sites to understand what’s going on, to encourage them to evolve and to continue to make that contact to our corporate culture,” Bartolacci says. “And there’s no better way to do that than in person.”
Even when they’re not visiting other sites, Bartolacci’s team continues to reinforce Matthews’ culture, values and mission through constant communication.
“We’re communicating with our employees globally about what we’re trying to do, and sharing wins and successes across the organization,” he says.
For example, Matthews’ corporate communications team spotlights different innovations throughout the company every quarter to keep the entire team apprised of their colleagues’ achievements around the country.
This reinforcement “creates a culture of success” by recognizing and fueling innovation, while “more importantly, giving our employees a sense of belonging to an overall organization,” Bartolacci says. “We all have the same mission and the same goals, and as a result, we have the same culture.”
This cohesive culture continues to fuel Matthews’ explosive growth as employees bring new skills and capabilities to unlock new innovations and market opportunities.
“We’ve always envisioned our responsibilities as leaving this 170-year-old company in a better place and leaving the next generation the same opportunity to do what we did, but more,” Bartolacci says. “There’s a lot of innovation going on throughout the organization, and our job as leaders is to identify the best opportunities that people bring to the table and support them all the way.” ●
TAKEAWAYS
- Stick to your knitting, but extend your expertise into new markets.
- Align with strategic partners to strengthen and expand your capabilities.
- Invest in innovation to stay ahead of evolving technologies.
- Communicate successes to keep your team connected to the mission.
