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Minnesota Pallet Makers Serve Niche for Certified Wood Resource
Two pallet makers respond to environmental concern about forest management by using timber from forest that have achieved third-party certification.

By Mark Henning, Philip Guillery
Date Posted: 6/1/2003

Heightened public interest and involvement in forestry issues is one trend noted by the forest products industry. Consumers want to act in an environmentally responsible manner, but they do not have time to research the products they buy. This often has led to the perception that manufacturing and using wood pallets are bad for the forest and the environment. In northern Minnesota, some pallet manufacturers are addressing this issue head on.

Stewart’s Forest Products and Savanna Pallet Inc. are owned and operated by families with strong business expertise gained through formal education, industry specific knowledge and a variety of experience. The Stewarts and Raushels are typical American families, but with an entrepreneurial spirit. Their experience illustrates that the future can still hold promise for family owned companies that can identify change, foresee opportunity and adjust accordingly. These two businesses have realized that attending to public concerns about forest management through the certification of pallets can stimulate potential markets.

Third-party certification of wood products, as recognized by the Forest Stewardship Council (FSC) or other organizations, may offer an environmental marketing opportunity directed toward public concerns about forest management.

The Forest Stewardship Council (FSC) is an independent, non-profit organization that established the highest standards for environmentally, economically and socially responsible forestry practices. Chain-of-custody certification presents manufacturers’ confirmation with a tracking system that carries the FSC’s ‘checkmark-and-tree’ label from the forest to end-consumers and industries, providing visible assurance when purchasing forest products.

Over-cutting and high grading in the last century resulted in the need for Minnesota’s forests to go through a ‘healing process.’ The state Department of Natural Resources and two counties, Aitkin and Cass, determined that FSC certification might enhance efforts to restore the health, productivity and value of some public forest lands.

"Certification gives credibility to what the county’s doing," said Aitkin County Board member Darrell Bruggman. "It affirms that county and state land management is doing a good job maintaining our forest for current and future uses."

Minnesota became the first state to broadly pursue FSC certification of its public forest lands and now has over 1 million acres of county, state and private forest land certified. Management plans require that small diameter, lower value trees be harvested and marketed. On a short list of potential commercial uses for this resource, pallets are the highest value-added product.

The Community Forestry Resource Center (CFRC), a program of the Institute for Agriculture and Trade Policy, advocates responsible forestry practices and understands the commitment of forest managers in Minnesota. With feedback from the FSC-certified counties and the Department of Natural Resources, the center recognized the need to develop links in the forest product marketing system. Nudging markets to help match the FSC forest resources with potential buyers would be crucial for certification to succeed. The question was: could a viable market be created for pallets made of FSC-certified lumber?

Christopher Sietz, general manager of Summit Brewing Company in St. Paul, recognized that sustainable forestry would be good for his business. "Supporting sustainable forestry is a smart business investment for us," he said. "Buying FSC-certified pallets allows us to uphold our company values while encouraging forest management practices that protect clean water resources—an essential ingredient in quality beer. We especially like the direct connection between well-managed forests in the Mississippi River watershed supplying wood for our pallets and protecting the quality of the water we use for our brewing."

Stewart’s Forest Products was the pallet supplier for Summit Brewery. Considering its accessibility to Minnesota’s FSC-certified forest resource and Summit’s commitment to sustainable forestry, Stewart’s Forest Products was granted FSC chain-of-custody certification in early 2002. The certification gave Stewart’s the distinction of becoming the first company to manufacture and deliver pallets bearing the FSC trademark label and mark of assurance.

"Stewarts Forest Products originally became FSC-certified to provide a product for our customers that promotes a healthy environment," said George Stewart Jr. "As we became more involved with the Forest Stewardship Council, we discovered that the chain-of-custody system is an excellent way of restoring Minnesota forests for future use."

George Stewart Sr., founder and owner of Stewart’s Forest Products since 1971 with his son, George Jr., originally manufactured wooden ammunition boxes for the military. As the need for small caliber munitions decreased, Stewart’s focused on engineering custom wood packaging. Additionally, Stewart’s acquired a company specializing in manufacturing wood components. Today Stewart’s main sales office is located in St. Paul; the company operates a manufacturing facility in Fort Ripley, Minn. with about 30 employees and another in Anthony, New Mexico with 10 employees.

Savanna Pallet in McGregor shared Aitkin County’s management approach to forest land and encouraged FSC certification. It received chain-of-custody certification in March 2003.

"We’re sitting in Aitkin County, and the county had already taken the initial steps in getting the land certified," said Allen Raushel, vice president of savanna Pallet. "So it made sense for us to be part of that."

His father, Frank, started Savanna Pallet in 1967 in downtown McGregor. Since then, four Raushel brothers — Allen, Larry, Andy and Doug — have returned and continue to grow their father’s legacy. Savanna produces 25,000 pallets per week with 55 employees.

The Raushels’ goal was to evolve into a more ‘professional’ pallet company that can serve a variety of customers with the wood products they need. "We want to be able to offer aspen pallets, hardwood pallets, heat treated or FSC," said Allen.

The Raushels focused on reinvesting in infrastructure to create a balanced material production system. The company’s plant is equipped with a Tipton scragg mill and West Plains Resaw Systems equipment for processing bolts and a Cornell gang saw with automated notcher and stacker. Other Cornell and West Plains machinery is used for remanufacturing 4/4 lumber. Each of three cut-up lines supplies 30-35% of the company’s cut stock requirements, providing flexibility and efficiency. For automated pallet assembly, Savanna has two Viking 505 Turbo machines. The company also supplies specialty products made of OSB and plywood.

FSC chain-of-custody certification entails implementing policies that allow easy identification of certified material from start to finish. Stewarts’s Forest Products and Savanna Pallet integrated custom procedures to their inventory and production systems. Additionally, FSC-certified products are physically segregated from non-certified products. While production of certified or non-certified lumber is similar, there are costs associated with FSC chain-of-custody certification.

Stewart’s Forest Products and Savanna Pallet are utilizing Minnesota’s FSC-certified forest resource to supply the best possible pallet at the beginning of the supply chain all the way to the end. In addition to Summit Brewery, Aveda Corporation, a leading Minnesota-based personal care products manufacturer, has begun phasing FSC-certified pallets into its distribution chain. Aveda, which has a strong interest in and commitment to environmental issues, is replacing recycled pallets with new, certified pallets.

Businesses with ‘green’ purchasing policies or those endorsing environmental protection principles are the likeliest market candidates for pallets made of wood from certified forests. Whether companies will pay a premium for FSC-certified pallets remains to be seen.

Raised awareness, changing business practices and educated venues may open market opportunities that prove environmental stewardship and economic responsibility can be mutually beneficial.

(Editor’s Note: Phil Guillery is director of the Community Forestry Resource Center, the forestry division of the Institute of Agriculture and Trade Policy; Mark Henning is a marketing consultant for the center and co-founder of Henning Wood Products Inc.)

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