CSPA Rises to the Challenge

February 5, 2009

Last year may have ended on a low note and 2009 may be fraught with challenges, but leaders of the association are prepared to navigate through choppy waters.

CSPA Rises to the Challenge

Last year may have ended on a low note and 2009 may be fraught with challenges, but leaders of the association are prepared to navigate through choppy waters.

Tom Branna
Editorial Director

By the time the Consumer Specialty Products Associa- tion (CSPA) held its annual meeting in Fort Lauderdale, FL, Dec. 7-11, the U.S. recession was deepening, retail sales were falling and consumer optimism was absent. Still, the industry put its best foot forward as attendance remained even with 2007.

“The Association has been around since 1914 and CSPA has shown that it has the ability to adapt,” noted CSPA chairman Kelly Semrau of S.C. Johnson & Son, Inc. “We’re reaching across the aisle even with NGOs (non-government organizations) to build strategic relationships.”

Strong relationships with historically strange bedfellows were more important than ever in 2008, according to Ms. Semrau, who called 2008 an “amazing year” with a full agenda of working with regulators on a host of issues.

In his state of the industry address, CSPA president Chris Cathcart acknowledged that the economy is weak, but he urged the audience to maintain composure, stick to its convictions and sharpen its vision in 2009.

“When things get rough and turbulent, look on past experiences, know what your convictions are and stick by them,” he insisted.

In looking back at 2008, Mr. Cathcart noted that Product Care, the association’s stewardship program for the consumer and institutional specialty products industry, now has 91 companies.

According to CSPA, these firms have agreed to go beyond government regulations in emphasizing health, safety and environmental concerns by carefully designing products, purchasing raw materials and packaging, operating safe manufacturing facilities, promoting safe storage and distribution, providing useful product information, answering consumers’ questions and anticipating product disposal needs.

Product Care provides a framework for companies to identify and commit to stewardship principles, share ideas and information and benchmark better performance.

“Product Care is for your good and the public’s good,” Mr. Cathcart told the audience.

Another CSPA program that has successfully served consumers and member companies is the Alliance for Consumer Education (ACE), which promotes responsible and beneficial use of products to ensure a safer, healthier, and cleaner environment in homes, businesses and the community. Inhalant abuse prevention is ACE’s flagship program.

“Through your efforts, ACE is saving lives,” Mr. Cathcart maintained.

Mr. Cathcart also praised the efforts of the Consumer Aerosol Product Council (CAPCO), the aerosol division’s program to educate the public about the safety of aerosols; CSI, consumer specialties insurance; and Consumer Product Ingredient Communication Initiative, which was launched by CSPA, the Canadian Consumer Specialty Product Association and the Soap and Detergent Association to provide consumers with information about the ingredients in products in four major categories: air care, automotive care, cleaning and polishes and floor maintenance products.

Outside the Association, Mr. Cathcart said CSPA was able to limit damages to industry from the Consumer Product Safety Improvement Act, a bill that was signed into law in August, 2008.Now CSPA is working to keep TOSCA risk-based, rather than hazard-based. Mr. Cathcart noted that the Association supports the Environmental Protection Agency’s Design for the Environment (DfE) program, which aims to reduce risk to people and the environment by preventing pollution.

Looking ahead, CSPA is keeping close tabs on issues such as green chemistry and bittering agents. Mr. Cathcart also warned that more regulations at the state level may be on the way.

“States are looking for new ways to tax products in an effort to boost revenues.”

Presidential Leadership

What does it take to lead the U.S. in a time of great uncertainty? Keynote speaker Jon Meacham, editor of Newsweek and author of “American Lion,” a biography of Andrew Jackson, offered some insight based on past presidents, as well as the new President.

Mr. Meacham noted, for instance, that Barack Obama was the first candidate to win the U.S. presidency with a clear majority in 20 years. But at the same time, his inauguration marks the first wartime transition since 1968 and it comes at a time when the economy has been its worst since 1980. Still, Mr. Meacham remained optimistic.

“This man hasn’t made a mistake since he came on the national stage,” observed Mr. Meacham. “He’s a cool customer; he’s the Cal Ripken (Baltimore Orioles’ Hall of Fame shortstop) of composure.”

Composure aside, Mr. Meacham explained that effective presidents have four traits:
• Courage;
• Candor;
• Cooperation; and
• Control.

Great presidents, he noted, have the courage to do what’s right, but also leave room to maneuver as the situation warrants it. Mr. Meacham recalled that Ronald Reagan went from calling the Soviet Union an “evil empire” to kissing babies in Red Square.

He expects President Obama, a liberal on many issues as a U.S. senator, will move to the middle as president.

“He wants this (his presidency) to end well,” he said. “He knows he must run the country from the middle.”

Changing course is not waffling, if you go in the right direction, explained Mr. Meacham.

Candor will also be key if President Obama is to be successful. He reminded the audience that President Roosevelt spoke directly to the American public even during the winter of 1942, the darkest days of World War II.

With the global economy in a free-fall, President Obama must remain straightforward with Americans.

“The news is going to get worse before it gets better,” he noted. “But you have to tell it to them straight.”

In terms of cooperation, Mr. Meacham insisted that President Obama is willing to reach across the aisle to Republicans, much as Abraham Lincoln did to build his “Team of Rivals” during his presidency.

Finally, great presidents exhibit some level of control—both of their emotions and the media of their day. Great presidents, said Mr. Meacham, know their limitations.

“Obama has a high level of self-awareness,” he observed. “He knows how to exert authority without appearing tyrannical.”

At the same time, President Obama exhibited mastery of the internet during his presidential campaign.

Following his inauguration, President Obama will have 12-18 months to push legislation through Congress. Mr. Meacham expects little resistance from the House or Senate, as Congress doesn’t want to be blamed for anything that goes wrong during that time.

Finally, Mr. Meacham insisted that democracy depends on confidence.

“If people feel better about things getting better, things get better,” he told the audience.

Aerosol Division Highlights

A range of issues took center stage during the aerosol division’s program. Bill Auriemma of Diversified CPC gave the audience an overview of the wild ride that oil has taken during the past 12 months. But before going over the numbers, he warned the audience, “we remain one geopolitical instance away from a spike (in prices).”

Mr. Auriemma’s prediction was right on target, as Israel’s invasion of Gaza sent oil rising from its low of $32.40 a barrel on Dec. 19 to $42.04 by Jan. 7, 2009. Still, that figure is well below oil’s high-water mark, which occurred on July 11, 2008, when a barrel of crude reached $147.55. So where will oil prices settle in 2009? Mr. Auriemma expects somewhere between $35 and $70. The prices are significant for aerosol product manufacturers, because, “at the end of the day, the aerosol market uses a lot of hydrocarbons,” explained Mr. Auriemma.

Predictions also played a role in Jay Billings’ presentation, “Anticipating the Sustainable Customer.” Mr. Billings, of Ball Corp., noted that 87% of Fortune 500 companies have major sustainability programs in place, and increasing market complexity creates a greater need for collaboration between suppliers and their customers.

Consumers, too, are concerned about sustainability and are recycling more than ever before—if it is convenient. According to Mr. Billings, 71% of consumers recycle if the program is curbside, but that participation rate falls to just 45% for drop-off only programs.

Unfortunately, consumers are misinformed about aerosol can recycling, according to Mr. Billings.

“There is a lot of misinformation about chlorofluorocarbons and recycling,” insisted Mr. Billings. “Consumers are very confused about aerosols, although they acknowledge that aerosols dispense products very well.”

To improve the public’s perception of aerosol, he urged the industry to boost the recycling rate among consumers and develop innovative packaging that increases appeal.

Mr. Billings’ presentation dovetailed with Joe Bowen’s presentation detailing a new direction for CAPCO. He told the audience that many consumers are surprised to learn that aerosol cans are recyclable—just as they were surprised that aerosols are CFC-free. To help consumers get the facts, CAPCO is looking to expand its program with websites and more social media marketing. At the same time, however, CAPCO will continue to reach out to teachers and the media to set the record straight on aerosols.

Regulators and Relationships

With Democrats in control of both the White House and Congress, many industry executives expect the regulatory burden to increase. But speakers at the Antimicrobial Division’s “Art & Science of Enforcement,” gave attendees some excellent ideas to handle regulators.

John Wood of Ecolab walked attendees through an inspection, how to correspond with inspectors and how to reach a satisfying settlement.

He warned that attendees that Agency inspectors may arrive unannounced; therefore, records and files should be easy to locate. Once the inspector arrives, ask to see credentials and notify management and company lawyers right away. Mr. Wood urged attendees never to leave the inspector unattended, don’t volunteer information and stop the inspector from using a camera. If the inspector removes anything from the facility, be sure to get a receipt and ask for a copy of inspection report. After the inspector leaves, be sure to prepare your own detailed inspection and submit it to your legal and regulatory department.

“Inspectors are very nice people, but they are out to get you,” noted Mr. Wood. “Don’t be overly helpful.”

Upon receipt of enforcement notification, Mr. Wood advised the audience to immediately notify regulatory and legal departments and to seek legal advice before responding to a notification.

Once the notification arrives, Mr. Wood suggested that a company enforcement team, made up of staff from the regulatory, law, operations, customer service, marketing and R&D departments, investigate the complaint.

At the same time, company employees should be transparent and tell the truth, since it may help reduce fines, civil penalties and criminal penalties.

If a settlement is needed, Mr. Wood warned the process is a long one—often a year or more. Furthermore, many enforcement actions involve payment of civil and/or regulatory penalties.

“Even my good southern charm won’t help,” joked Mr. Wood. “I could be dripping magnolia juice, but I’m still going to get fined.”

Fines were a part of Martha Macy-Ruhe’s story of working with regulators too. She recalled that in 2001 Procter & Gamble decided to revamp its Mr. Clean brand with four new scent descriptors. But, due to a variety of issues, the products were never registered in any states before they started shipping at the end of the year.

After a P&G executive was unable to sway regulators, Ms. Macy-Ruhe went to New York for herself. Regulators ultimately did register the products in just three weeks, but the error cost P&G $500,000.

In contrast, when she went to California, the registration specialist was sympathetic, products were ultimately fully registered and the state did not charge an enforcement fee.

The lesson learned?

“Relationships with regulators are vital,” noted Ms. Macy-Ruhe. “Be sure to clean up your own mess and stay on top of your product (registration).”

Navigating the Storm

Successfully navigating rapidly changing regulatory landscape was the theme of the Air Care division program. William Nakhleh, Steptoe & Johnson LLP, explained to the audience the reason to apply for a patent, how to successfully obtain one and how to defend your company against patent infringement.

However, in order for a patent to be issued, the product must be novel and non-obvious. Once issued, most patents are only protected for 20 years. Mr. Nakhleh also advised the audience when to trademark a name, noting that terms such as “aspirin” and “escalator” have lost their trademark status.

“Seek protection with all new products, brand names and services, preferably before marketing the products,” advised Mr. Nakhleh.

Norwin Wolff Honored with Allderdice Award

Norwin Wolff, founder and chairman of Interpolymer Corp., Canton, MA, received the Charles E. Allderdice Jr. Memorial Award, the association’s highest honor, during the opening session of the CSPA annual meeting. The award is presented annually to an individual who has made an exceptional contribution to the consumer specialty products industry and to the Association.
Norwin Wolff is flanked by his wife Patti (left) and Kelly Semrau of S.C. Johnson & Son, Inc.

The CSPA also recognized seven members—one in each division—with the Volunteerism Award. They include:
• Aerosol Products Division: Dan Renn, Bridgeview Aerosol;
• Antimicrobial Products Division: John G. Wood, Ecolab Inc.;
• Industrial & Automotive Products Division: Sean McNear, Honeywell Consumer Products Group;
• Cleaning Products Division: Ken Roach, JohnsonDiversey, Inc.;
• Polishes & Floor Maintenance Division: James F. Hermann, JohnsonDiversey, Inc.;
• Air Care Products Division: Suzanne Hagen, The Dial Corporation; and
• Pesticide Products Division: William D. Gullickson Jr., McLaughlin Gormley King Company.

Frank Jusich of Central Life Sciences Elected CSPA Chairman

Frank Jusich, chief operating officer, Central Life Sciences, was elected chairman of the CSPA board during the annual meeting. “Our industry will be facing many challenges in the new year, and the talented leadership represented in our new slate of officers and directors will be working closely with
Newly-elected CSPA chairman Frank Jusich and outgoing chairman Kelly Semrau.
us to maintain our strong voice in Washington, DC, and in the states,” said Mr. Cathcart in a statement. “Our association has a long history of reaching across the aisles and establishing lines of communication and productive relationships with the various stakeholders engaged in issues of interest to our industry, and that is the direct result of the proactive and positive spirit of our leadership.”

Other board members are: First vice-chairman—Adam Selisker, vice president, technology, CRC Industries, Inc.; Second vice-chairman—John Abplanalp, president and chief executive officer, Precision; Treasurer—David Beaham, president, Faultless Starch/Bon Ami Company; Chris Cathcart, CSPA president; and Immediate past chair—Kelly Semrau, vice president global public affairs and communications, S.C. Johnson & Son, Inc.

Members elected to serve terms expiring in Dec. 2009 are: Michael Hranicka, senior vice president, sales and marketing, Ball Packaging; Joseph Franckowiak, vice president sales, Berry Plastics Corporation; Frank Pacholec, vice president, research and development, Stepan Company; Richard Theiler, senior vice president research and development, The Dial Corporation; James Westerhaus, vice president government relations, Ecolab Inc.; Tammy Westerman, senior vice president operations, State Industrial Products Corp.; Joseph Robinson, vice president, regulatory services, Lonza, Inc.; and Kimberly Wissemann, associate director, The Procter & Gamble Company. Members elected to serve terms expiring in Dec. 2010 are: Ron E. Shuck, vice president, research and development, The Sherwin-Williams Company; Stanley R. Weller, chief technical officer, Zep, Inc.; William Auriemma, president and chief executive officer, Diversified CPC International, Inc.; Tom Mazurek, senior vice president, technical services, Beauty Avenue/Limited Brands; Steve Tanner, president, Arylessence, Inc.; Patricia Verduin, vice president, global research and development, Colgate-Palmolive Company; Lisa Alexander, vice president, counsel to the Americas and corporate secretary, Firmenich; and William Metzger, vice president, regulatory and government affairs, United Industries. Members elected to serve terms expiring in Dec. 2011 are: Todd Nelmark, president, McIntyre Group Ltd.; Paul Siracusa, executive vice president, Church & Dwight Co., Inc.; Carleen Kreider, executive vice president, operations, Seaquistperfect Dispensing; Alexander Lacik, general manager US HH marketing, Reckitt Benckiser; Simon Medley, group vice president, care chemicals and formulators, North America, BASF Corporation; Demi Thoman, executive vice president, Givaudan; and Frank Judge, vice president, general counsel, Honeywell Consumer Products Group.

Division executive board chairs for 2009 are: Aerosol Products Division—John Ferring IV, president, Plaze, Inc.; Air Care Division—Dallas Stokes, vice president, International Flavors & Fragrances Inc.; Antimicrobial Products Division—Reza Rahaman, vice president, global stewardship, The Clorox Company; Cleaning Products Division—Mark Cohen, director of labeling, NCH Corporation; Industrial & Automotive Specialty Chemicals Division—Edward Piszynski, vice president, laboratory services, Bridgeview Aerosol LLC; Pest Management Products Division—Nasser Assaf, regulatory manager, Valent BioSciences Corp.; Polishes & Floor Maintenance Division—Stuart Hughes, vice president, technical service, Hillyard Industries, Inc.
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