Pacific Bag is Fighting Coffee's Archenemy

Pacific Bag is Fighting Coffee's Archenemy
Mar 1, 2017, 5:00am

Anyone who’s grabbed a package of coffee on the shelf at a grocery store or coffee shop has seen them – a small one-way valve in the bag that allows air and gas to escape, but does not let any air back in.

While shoppers may just use the valve to get a whiff of the coffee beans inside before purchasing, that valve is critical for coffee companies because it allows them to store coffee in a bag without it going stale.

“When you roast coffee, it lets off gas,” said Mark Howley CEO of Pacific Bag Inc. in Woodinville. “A bag will blow up like a balloon and almost pop.”

Pacific Bag holds the patent on a one-way valve that keeps those bags from popping. It lets gas escape, but doesn’t let any air hit the beans.

“Air is the archenemy of coffee,” said Macky McNish, co-owner of Seattle- based Middle Fork Roasters. Pacific Bag produces coffee bags for more than 5,000 coffee customers in more than 60 countries, including Middle Fork Roasters, Caffe Vita and other local companies.

McNish decided to use Pacific Bag for its beans seven years ago when Middle Fork was founded.

“There are other places we could have saved some pennies here and there,” McNish said.

The biggest sell, though, was that it was in Woodinville. “We wanted to source everything and anything local as much as possible,” he said.

Originally founded in 1985, Pacific Bag is now majority owned by Howley, who joined the company as the East Coast sales manager in 1999. He had previously been with another packaging company, Fres-Co System USA, which has a patent on a similar one-way valve.

Howley moved to the Seattle area in 2000 and became president shortly after, receiving his first stake in the company. Over the last 15 years – with Howley at the helm and transitioning to owner – Pacific Bag has refined its valve, expanded its product beyond just coffee bags and doubled its revenue and employee count.

In 2016, the company brought in about $30 million in revenue and had 60 employees, Howley said.

When he first started with the company, though, things were not operating smoothly. Because of his nearly 20 years in the packaging industry, he was quickly tapped to help get the valve operating at a higher standard – it was not keeping all the air out – and into the hands of more companies.

“I had been doing this long enough that putting a plan together was not that burdensome,” Howley said. “I knew if we could get the valve operating properly and focus on specialty coffee, I felt very confident we could turn it around.”

After completing the “grunt work to create a reputable company,” Howley and some other top management bought out the investors in 2006, and he became CEO. Howley now owns 78 percent of the company. Becoming CEO of a company was always something Howley wanted to do, but he just wasn’t sure how he could ever get there. He left Fres-Co and Philadelphia because he felt like there wasn’t a chance he could move any higher in that company.

“I didn’t know how it would happen,” he explained. “But, I had the feeling if I kept working hard at something and getting better and better, eventually I would get my at bat.”

While Pacific Bag was originally centrally focused on coffee bags, Howley felt like specialty pet food was a market where the company could thrive. Pet food now makes up 30 percent of the company’s business.

Over the last five years, Pacific Bag has made a bigger push into speciality foods, such as high end popcorn and specialty nuts, which now makes up about 10 percent of the business, with coffee of course making up the other 60 percent.

What gets Howley most excited, though, is the company’s line of Biotre bags. The company spent more than two years developing this biodegradable, compostable and heat-sealable bag that protects products the same way its standard bags and valves do.

The first iteration made coffee taste weird, Howley said, but now that they’ve fine-tuned the design, it could be the company’s next big thing.

Lessons Learned Dedicate yourself to learning every aspect of your product and your industry. Passion and dedication attract good people. Listen to customers for opportunities to differentiate your products and service. Trust employees with specific responsibilities, respect them and get out of the way.

Pacific Bag Inc.
Founded: 1985
CEO: Mark Howley
Headquarters: Woodinville
2016 revenue: $30 million
Employees: 60
On a personal level: Howley has a passion for motivational speaking about business and life balance.

                Coral Garnick
                Staff Writer
                Puget Sound Business Journal