Runnin' Scared

Runnin' Scared

By Janet Leiser

Senior Editor

Dalton Jr. knows nothing stays the same. In his nearly 50 years at Photoengraving Inc., the Tampa company his father founded, more has changed than not.

"We made five different products here that paid the bills back then that we don't make now," Dalton, 63, says from his second-floor office in an industrial area, a mile or so west of downtown Tampa.

Valued customers back then, such as Winn Dixie Stores Inc., Eckerd Drug, JCPenney and The Tampa Tribune, haven't needed his company's services in decades.

To survive, Dalton has taken chances that others saw as risky - at least initially.

Not too long ago, Dalton decided his company needed a special can printer that would enable his business to show clients a can prototype prior to factory production. He wasn't interested in manufacturing the cans at as much as 3,000 a minute as the factories do. He simply wanted his clients, which include Ball Corp., PepsiCo., Anheuser-Busch Cos. and Coca-Cola Co., to have a chance to view the final product before an unsatisfactory run cost them hundreds of thousands of dollars or more.

He had heard about the U.S. brewery which spent $7 million replacing a shipment of Japanese beer that had a faulty UPC code that wouldn't scan at retail outlets. And he was tired of trips to the Arctic Circle or Colorado or Wisconsin in the dead of winter to determine why a can wasn't printing as expected. Plus, wouldn't his clients prefer Florida in the winter?

Two of his biggest clients told him he couldn't build a can printer on a small scale. "They said it wouldn't ever work," he says. But as in years past, Dalton kept his faith and moved forward.

All didn't go as planned.

Dalton expected the machinery to cost $50,000 and to be completed within a month, he says. It took a year and cost about $250,000.

But demand for the machine has been even better than he expected. The company, which generates more than $5 million revenue annually, routinely must put off its clients until time is available on the printer, which is why Dalton now plans to add a second machine.

Mats for ads

In 1953, when Photoengraving was founded, there were an estimated 100 hand-built computers in the world, and Tampa did not yet have its own television network station. People were still separated at restaurants, restrooms and on buses by the color of their skin.

Newspapers used what was called mats to print the paper. Edward Dalton Sr., a union president and foreman of the stereotyping department at the St. Petersburg Times, paid $5,500 to Byron Chambers for Tampa Stereo & Mat Service.

Dalton, a New York native whose family moved to Gulfport when he was a young child, saw an opportunity and seized it. Neither the St. Petersburg Times, nor the Tampa Tribune, wanted to make the mats for ads. They gladly allowed Dalton's business, which later became Photoengraving Inc., to do the job for advertisers.

Back then, the mats were sent via Trailways or Greyhound bus to newspapers around the country, Ed Dalton Jr. says. "There wasn't a FedEx," he adds, "at least not that we knew of."

Before long, the family realized the company's future was in jeopardy. Newspapers were no longer going to use mats. They were going with offset printing.

In 1965, Dalton stopped at the Reynolds Metals plant, north of Busch Gardens in Temple Terrace to find out more about how cans are made. He learned the plant used photo engravings, but they were curved.

"They said they had only one source in the world for this, and it was in Union, N.J.," says Dalton.

Dalton, with his father's approval, jumped on the idea. He had found a new niche.

"I realized how much business there was," he says. "I went to Miller Brewing Co.'s corporate office. I went to Anheuser-Busch's corporate office. I traveled everywhere. I visited all the major can plants."

In Milwaukee, a Miller executive met him in the lobby to tell him to quit calling on him, he says, adding: "You know big companies like this aren't easy to get into. But I didn't stop. It wasn't long before every one of their plants was buying my plates."

Eventually the executive called Dalton and invited him to Milwaukee. "I said, 'Are you going to see me this time?' "

By the early 1970s, the company was manufacturing all of Miller Brewing Co.'s photoengraving. "We've been doing it ever since," Dalton says.

Another major client is Anheuser-Busch. Dalton estimates his company has 80% of the brewer's business. A Denver competitor has the other 20%.

Taking risks

Over the past several decades, Dalton headed research and development. The company started an art department, prior to the advent of computers, and he refined the plate-making process, obtaining a patent for a metal plate he developed.

In the late 1970s, the business, which has been at North Willow Avenue since 1956, bought a $270,000 scanner to do color separations for publications. To buy it, Photoengraving mortgaged all of its existing equipment. Dalton's uncle, Don Potts, who also worked at the company, left over the purchase, he says.

"We had very little money in the bank ,and it was touch and go there," says Dalton's wife, Rachel, Photoengraving's secretary-treasurer.

"It was scary," Dalton says.

"But as soon as we proved ourselves, the business started to boom in color," Rachel Dalton says.

"It just got to be huge," her husband says. "It was almost uncontrollable it was so big. Employees worked around the clock."

Clients included USA Today and other national publications.

But once again the company's livelihood was threatened by progress. The Macintosh computer came on the scene in the late 1980s and publications no longer needed Photoengraving's services for color separations.

Dalton learned the one thing he could count on was change. "You can figure whatever you're making today, you probably won't be making 10 years from now," he says.

Thanks to that phase, though, the company developed an expertise in color, Rachel Dalton says, adding: "That led us to being experts in the can business."

Staying small has helped too, she says. "The fortunate part about being a smaller company is you can move faster to make these changes. ... You just tighten up and get over the hump, then the business starts to come along. But you can never sit back and say, 'Now I've got it made. The business is going great.' By the time you've said that, it's changing again."

New generation

Edward Dalton Sr. worked at the company until his death in 1995 at the age of 81. His son plans to work for years to come. But he's learning to count more on his son, Edward Dalton III, a University of Tampa graduate who's now 30.

The younger Dalton, who was recently promoted to vice president of sales, is going after more national clients.

"We'd like to go more into folding cartons and labels for the bottles and more corrugated too for these big companies," the elder Dalton says. He says one major beverage company spends about $7 million a year for those services, and it isn't happy with the results. That means there's an opportunity for his company.

He's considering another building that will enable the business to grow even bigger. It employs about 35 people. Many have been with the company for decades. He's also looking at ways to improve the quality of the can artwork.

"PepsiCola wants us to come up with technology to print magazine quality on the can," he says.

To stay in the game, Dalton says he's always "runnin' scared," looking for ways to improve what his company does.

Says Rachel Dalton: "At any time one of these customers can decide they're going to deal with somebody else and pull away. You're always on edge and always out there looking for ways to be innovative and the best at what you do."

UT Honors Longevity of family businesses

Family businesses are the backbone of Florida's economy and essential to America's free enterprise system and entrepreneurial spirit, Joe McCann, dean of the University of Tampa's John H. Sykes College of Business, told attendees at the fifth annual family business awards luncheon Nov. 18.

The Dalton family business, Photoengraving Inc., received the Heritage award for its longevity and success. The 53-year-old company, started by Edward Dalton Sr., has annual revenue of about $5 million and employs 35 people.

Also recognized were Peltz Famous Brand Shoes, St. Petersburg, Small Business of the Year (50 employees or less); Coral Gables-based Home Financing Center, Medium Business of the Year (50-250 employees); Seretta Construction Inc., Apopka, Large Business of the Year (more than 250 employees); and Brownlee Lighting of Orlando, community service award.

McCann pointed out how unusual it is for a business to survive three generations. Previous heritage winners are S&S Electric Co., Tampa; Staff Restaurant, Fort Walton Beach; Cox Chevrolet-Daewoo, Bradenton; and the Columbia Restaurant Group, Tampa.