Avery Dennison Puts Its Stamp on the U.S. Mail : Communication: Its self-adhesive postage is considered one of the biggest innovations for the Postal Service since the Pony Express.

Think of common products that have made your life easier. Innovations such as sticky notes, paper diapers and Velcro. Things that are so simple yet revolutionary that you wonder why no one thought of them before.

Maybe someone did. Maybe it just took a while to work out the kinks and get the product to the mass market.

Consider the self-adhesive stamp, one of the biggest innovations the mammoth U.S. Postal Service has seen since the Pony Express. The world’s first peel-and-stick stamp crept out of the research and development offices of Avery Dennison Corp. in Pasadena more than 20 years ago. It was a 1974 holiday stamp that cost 10 cents and said “Peace on Earth.”

Although more than 15 million were sold, the stamp stalled because of technical problems. Chief among them: the adhesive leached from the back of the stamp onto its face, creating unsightly stains that made collectors complain.

In 1989, Avery Dennison agreed to try again, signing up for a multimillion-dollar research and development project with the U.S. Postal Service that lasted five years.

This time, the company’s research paid off big time, culminating in the production of self-adhesive stamps that are now sold at post offices and dispensed from ATM machines and manage to satisfy everyone from collectors to postal inspectors to Aunt Millie.

The self-adhesive postage stamp is gobbling up market share faster than you can say Pac-Man. More than 6.8 billion were produced last year, about 8% of the stamp market and a 200% increase over 1993. In the next five years, the U.S. Postal Service estimates that self-adhesive stamps will multiply until they account for up to half of the 40 billion postage stamps sold annually.

And Avery Dennison expects to be right on top of this exploding market. In 1994, the multinational firm was awarded the single largest contract for producing self-adhesive stamps. The U.S. Postal Service says it is a three-year, $14-million deal to produce up to 2 billion stamps a year.

Not bad for a firm that made $1,391 in its first year of operations. That was in 1935, when struggling college graduate Stan Avery started his own company. Avery, who at 88 has long since retired, still lives in Pasadena and goes to the office regularly (corporate officials declined requests for an interview with him).

Today, Avery Dennison, still headquartered in Pasadena, boasts $2.9 billion in annual sales and 15,550 employees in 200 manufacturing facilities and sales offices in 27 countries.

And it keeps moving forward. On April 18, the company unveiled a self-adhesive stamp of an American flag waving over a porch, of which 2 billion will be produced in 100 million books. Thanks to the firm’s research and development, which continues to improve the stamps, this latest issue will contain the simulated perforation die cut, favored by collectors, that gives stamps scalloped edges.

Both Avery Dennison and the U.S. Postal Service confirm they have stepped up production of this latest issue because of consumer demand.

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“They are being sold as fast as they can be printed,” said Robin Wright, a spokesman for the U.S. Postal Service.

Avery Dennison--best known for its huge line of office supplies--is one of three firms in the United States that produces either the paper, the adhesives or the entire self-adhesive stamps, according to Alim Fatah, a materials engineer and program manager for stamp acquisition at the Postal Service.

Although Avery Dennison doesn’t disclose exact figures, the U.S. Postal Service confirms that the company has the largest market share for self-adhesive stamps. It was certainly the first one out of the starting blocks.

Until this year, Avery Dennison produced some of its self-adhesive stamps in a secured facility in Pasadena. Now they are all manufactured at the company’s Security Printing Division plant in Clinton, S.C.

Avery Dennison is also the sole designer and supplier of self-adhesive stamps dispensed in a sheaf from the same bank ATM machine that spits out $20 bills. The ATM stamps are available at more than 2,000 bank ATM machines across the country.

“We think that peel-and-stick stamps will soon become as indispensable as fax machines, answering machines and ATMs,” predicted Charles D. Miller, chairman and chief executive officer of Avery Dennison.

Analysts who follow the firm add that it has shrewdly positioned itself to take advantage of a market opportunity in self-adhesive stamps.

“They’ve revolutionized this industry; they have excellent technology and this is just a further sign of it,” said Otto F. Grote, who studies Avery Dennison for Derby Securities in New York. “The other stuff--licking stamps--it’s not sanitary.”

The firm is poised to cash in on emerging markets in China and Eastern Europe. Overseas operations account for 40% of sales, and includes a plant in Shanghai that will manufacture pressure-sensitive materials starting next month.

“Avery’s strategy is to continually develop new products for the future,” said Bob Birnbaum, the project manager in charge of manufacturing Avery’s self-adhesive stamp. “Fifteen years from now, people will take self-adhesive stamps for granted. Eventually, I think the gum stamps will all but disappear.”