Recycled Paper Greetings, Inc. History

Address:

3636 North Broadway Avenue
Chicago, Illinois 60613
U.S.A.

Telephone: (773) 348-6410
Fax: (773) 281-1697

Private Company
Incorporated: 1971 as Recycled Paper Products, Inc.
Employees: 360
Sales: $140 million (1996)
SICs: 2771 Greeting Cards; 2678 Stationery Products; 3269 Pottery Products, Not Elsewhere Classified

Company Perspectives:

With both funny and affectionate card designs, Recycled is driven by sheer creativity. All of its designs are generated by more than 150 artists and writers working free-lance from their homes and studios all over America. Card buyers love the result.

Company History:

Recycled Paper Greetings, Inc. is the fourth-largest greeting card company in the United States, with revenues of approximately $140 million on sales of over 200 million cards. Known for its iconoclastic, hip, irreverent, satiric birthday and wide range of greeting cards, Recycled Paper Greetings built its reputation as an "alternative" to the long-established industry giants, including Hallmark, American Greetings, and Gibson Greetings. In fact, Recycled Paper Greetings has become so successful during its brief history that the above three mainstays of the industry have developed their own "alternative" birthday and greeting cards. One of the primary attractions, of course, to the company is that all of its cards are printed on 100 percent recycled paper. With environmental issues at the forefront of the American psyche, many customers are willing to pay a little bit more for a greeting card made from recycled paper.

Early History

The cofounders of Recycled Paper Greetings, Phil Friedmann and Michael Keiser, began their entrepreneurial journey while on a Colorado skiing trip in 1971. Former Amherst College roommates, the two young men wanted to do something that would have an ecological impact, so they decided to produce Christmas cards published on 100 percent recycled paper. It was the year of the first Earth Day and Friedmann and Keiser hoped that, after Hallmark, American Greetings, and Gibson Greetings saw what they had done and realized that printing cards on recycled paper was not only technologically feasible but economically cost-effective, the Big Three would follow suit. Most important to the two young idealists was that their effort in changing the way the Big Three produced greeting cards would have an enormous impact on the environment. Not surprisingly, the pair later admitted they were more interested in establishing an ecological project rather than in starting a business.

Marshall Field's, the famous and well-established retail store in Chicago, was the destination of the budding entrepreneurs' first sales call. When the company showed interest in their idea and asked to see a sample of their work, Keiser and Friedmann were so surprised that they had to scramble to prepare a product portfolio. They enlisted such Chicago artists as Phoebe Moore, James Higa, John Falkner, and Janet LaSalle to come up with some quick designs and were forced to use a small printer that required a separate press run for each color. Working through the night, Friedmann and Keiser folded, cut, and pasted until they had enough product to send to Marshall Field's and their representative in New York City. Field's ordered $10,000 worth of cards for their upcoming Christmas season, and ecologically-oriented not-for-profit organizations in the Chicago area ordered $50,000 worth of cards for fund-raising. Caught off guard by their success, the two men hurriedly named and incorporated the business, Recycled Paper Products.

From the time Recycled Paper Products greeting cards appeared on the market they were an immediate hit. ABC, NBC, and CBS television networks all did prime-time news stories on the company, and the Wall Street Journal had a cover story on Friedmann and Keiser's overnight success. Yet the greeting card industry seemed oblivious to what the two young idealists had created. Friedmann and Keiser expected that the major companies would imitate Recycled Paper and become more ecologically oriented in the manufacture of their own cards, and that they could then fold up their own company and attend graduate school. Since the Big Three weren't taking the bait, the two young entrepreneurs decided to stay in business, hoping that Hallmark, American Greetings, and Gibson Greetings would see there was a large market for cards produced from recycled paper.

With their business growing, the two young owners opened the firm's first office in a one-bedroom apartment on Chicago's northwest side. Working out of one of the larger closets in the apartment, Keiser convinced his sister-in-law to become the company's first secretary. From the closet, Recycled Paper Products moved within a year to a location on Irving Park, then to a commercial building on Aldine, and then to an even larger space on Sheridan Road on Chicago's Far Northside. Although the seedy neighborhood initially met with reluctance from some vendors, Recycled Paper Products continued to grow.

Growth and Expansion during the 1970s

During the early years of the decade, Recycled Paper Products focused on producing cards for the Christmas season. Yet Friedmann and Keiser wanted to create a line of cards that could be used for occasions throughout the year, including Earth Day, Valentine's Day and such life events as retiring from a job. In addition, they wanted to include animals in their greeting cards, an idea which would tie appropriately into the company's environmental orientation. Luckily, at a trade show in New York they met Sandra Boynton, a freelance card designer. Having been criticized in the past for the fact that her cards had too much white space on them, Friedmann and Keiser found her to be highly talented and one of the most innovative card designers they had met. At the same time, Boynton took to the two creative entrepreneurs. The result was a long-standing contract for Boynton to design cards for Recycled Paper Products. When she created the "Hippo Birdie Two Ewe" birthday card, with a hippopotamus, a bird, and a pair of sheep on the card, it garnered such widespread success and sales that Recycled Paper became known as the "Hippo Birdie Two Ewe" company.

From the beginning of the business, Friedmann and Keiser looked at greeting card design in a different light from most other companies in the industry. Rather than hiring a staff of 10 or 20 in-house designers, the two men relied entirely on freelance writers and artists. The reason behind this approach was that both owners were convinced a higher level of creativity and diversity could be gathered from widely scattered freelance artists than 20 people in a single location. Thousands of humorous card designs, the mainstay of the business, soon came pouring in. In addition, Friedmann and Keiser were the first company within the greeting card industry to transplant the humor of their cards to coffee mugs and note pads, thereby creating fun and inexpensive gifts for office birthday, engagement, anniversary or retirement parties.

By the late 1970s, Hallmark, American Greetings, and Gibson Greetings had designed and introduced a line of greetings cards they dubbed "alternative." Unfortunately, it was not what Friedmann and Keiser expected. It was the offbeat humor that the Big Three imitated and incorporated into their own line of greetings card, not the use of recycled paper. Friedmann and Keiser thought it ironic that the Big Three used the term "alternative" to describe their own lines of humorous greeting cards, since the original meaning of "alternative" was used by Recycled Paper Products as an alternative to the Big Three.

The 1980s and Increased Competition

By 1981, Recycled Paper Products had grown so rapidly and so large that the company moved its headquarters into a much larger space on North Broadway Avenue in Chicago. Although the company had a full-time staff of only 40 people, the total work force amounted to more than 1,100 individuals, including over 700 field representatives and 300 freelance artists. Revenues climbed to more than $20 million annually, but during the mid-1980s the Big Three greeting card companies began to offer stiff competition to Recycled Paper Products. Hallmark, already having established an "alternative" line of greeting cards, introduced its Shoebox line in 1986. Offering cards with such cartoon characters as Maxine, the frazzled, crabby, old lady with her hair in rollers whose caustic remarks include "Remember When Life Hands You A Lemon...," and on the inside, "Tuck 'Em Inside Your Bra. Couldn't Hurt Might Help," Hallmark tried to recapture part of the market it had lost to Recycled Paper Products.

Friedmann and Keiser fought back, and by the end of the decade were offering more than 9,000 greeting card designs throughout the year. One of the innovative selling techniques that helped Recycled Paper Products increase its sales and retain its share of the market in spite of competition from Hallmark was a new computerized system that tracked the sale of cards in numerous stores throughout the United States. Rather than lugging a deck of greeting card samples to each store and showing them to store managers, the new computerized system enabled the company representative to drop off a number of new greeting card designs and discover within weeks which were the top selling cards. Having strategically placed these cards called "testers" at pre-selected locations across the country, there was no other system like this in the greeting card market, and Recycled Paper Products continued its success largely on the basis of this system.

Using this computerized testing system, Friedmann and Keiser looked at over 30,000 designs, selected approximately 1,500 to place in store as tester cards, and finally selected just 500 for the Recycled Paper Products catalogue. Of course, the partners also had some of the most creative writers and designers in the country working for them. Nicole Hollander, whose Sylvia cartoon character expresses the hopes, fears and concerns of a woman fighting but sagging grandly under the pressures of age and stress, was one of the most successful freelancers working for the company. One of Sylvia's best cards was a Valentine linking her hope for romance with the threat of salmonella. "You will have dinner at an elegant restaurant with a handsome, witty man," says the fortune-teller to Sylvia on the front of the card. The inside reads, "Don't order the chicken."

Not all of the ideas at Recycled Paper Products worked however. The highly respected and enormously successful syndicated cartoonist Cathy Guisewite brought her Cathy character to the stable of Recycled Paper Products, and introduced a line of greeting cards with Cathy-style colognes for emotional states such as jealously, revenge, and anger. Unfortunately, no one could figure out what revenge or anger smelled like and the whole concept for the cards fell flat. Another unsuccessful idea was a line of cards attempting terrorist humor. Still another was the infamous "PMS Attack #5" greeting card line showing a woman waving an axe with her living room in shambles. The caption said, "To take her mind off pre-menstrual syndrome, Melinda decides to rearrange the furniture." To say the least, the card was not popular among most women. Of course, such mistakes were the exception rather than the rule at Recycled Paper Products, and the success of 99 percent of their cards was indicative of the company's sensitivity to its customers. By the end of the decade, despite the introduction of their own "alternative" lines, the Big Three greeting card companies were not able to significantly cut into the share of the market captured by Recycled Paper Products.

The 1990s and Beyond

In 1991, Recycled Paper Products reported revenues of $100 million on sales of 173 million cards. The company was selling offbeat humorous cards for Christmas, Easter, Mother's Day, Father's Day, Thanksgiving, Halloween, St. Patrick's Day, New Year's Day and such lesser occasions as Sweetest Day, Secretary's Day, and April Fool's Day. Recycled Paper Products had become the fourth largest greeting card company in the world, behind Hallmark with $2.5 billion in sales, American Greetings with $1.4 billion in sales, and Gibson Greetings with $500 million in sales. Paper for the company's line of 6,000 cards came from mills in Ohio and Michigan, mostly from smaller firms such as Waldorf Paper Corporation located in Grand Rapids, Michigan. Waldorf Paper grinds up newspaper, computer printouts and a host of other things gathered from garbage dumps around the Detroit area. In 1991, Recycled Paper Products used approximately 1,350 tons of recycled paper.

During the early years of the decade, Friedmann and Keiser decided to rename their company Recycled Paper Greetings in order to reflect their commercial success. Even though the company continued to grow both in terms of sales and number of cards on the market, Friedmann and Keiser continued to personally select each of the cards that the company distributed and sold in stores throughout the country. In the mid-1990s, one of the company's undisputed successes involved a new line of political greeting cards featuring the president and first lady. In fact, the firm's best selling card in 1993 was a cartoon of the smiling first couple, Bill and Hillary Clinton, on the cover with an inscription on the inside reading: "See--there are scarier things than growing older. Happy Birthday."

In 1996, the company reported $140 million in sales from approximately 200 million greeting cards. Friedmann and Keiser continue to direct the company, yet have started to relinquish their hands-on control of the day-to-day operations. Hallmark, although still the giant in the greeting card industry, has not been able to overcome the market niche created by Recycled Paper Greetings. Indeed, if future projections for Recycled Paper Greetings are correct, the company will continue to prosper into the next century.

Recycled Paper Greetings, Inc. History

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