PharmaCare Laboratories is a major player in Australia’s health and beauty market, with a portfolio that includes brands as well-known as Nature’s Way, Brut, Bioglan and Norsca. Its products are available in more than 5,000 pharmacies and 3,000 grocery stores. Headquartered in the Sydney suburb of Warriewood, PharmaCare has expanded internationally in recent years and has experienced rapid growth in Asia, Europe and North America.
John Donlan has been at the company since 2000 when he joined after a decade as Business Manager of Sunbeam Foods. After initially coming on board as General Manager, he moved into the CEO chair in 2017. Here, he speaks with The CEO Magazine about his first year in the top job, the company’s expansion plans and how it creates a happy, healthy environment for its staff.
The CEO Magazine: Let’s start with your move into the CEO role. Did you find it a seamless transition given your extensive experience in the company, or was there still a learning curve involved?
John: I suppose a bit of both, given that I’ve had eight or nine years with this management team. Over that time, I’ve developed a pretty good understanding and played a key role in its development, so I had a fair knowledge of it all. Obviously, there were new areas that I had to get my head around and things that I hadn’t worked on in a day-to-day basis previously, so there was a bit of learning as well. However, overall, the history I’ve had here made the transition a fairly smooth one.
How would you describe your approach as a manager?
I lead from the front. My strengths are around strategy and forward-thinking in the business. I like to align everybody in the business with our goals and then measure them accordingly. Then, I ensure everybody enjoys the fruits of those successes. Along the same lines, when we do experience challenges, I ensure that everybody takes responsibility. So, I like to create an environment where it is important that everyone knows what our goals and strategies are so that we can work together accordingly.
Do you think it is important for a manager to be accessible to their team?
Yes, very much so, and one of the interesting aspects of the new role is that when you become CEO, it means more people are coming into your office. I make a lot of decisions and having an open-door policy is an important part of that. It’s how I’ve always operated, but the doorway is busier now than it has been in the past.
PharmaCare prides itself on providing a healthy workplace; how do you go about improving the wellbeing of your team?
It’s certainly a work environment where we like to see a balance between work and productivity. Family is obviously very important and the other part of the equation is encouraging a healthy lifestyle, particularly during work hours. We do a number of things. For instance, we have a fully equipped gym, which is free of charge to all full-time staff and we have fitness classes in the morning, at lunchtime and at night. We have a dedicated training room for boxing classes, yoga, meditation, spin classes and many other things.
We have a barista onsite most of the day to make coffees and teas for the team and we also have a smoothie bar and free fruit for everybody. So there are a number of things along those lines to create a healthy workplace. Our aim is to practise what we preach, and having staff who are happy and leading healthy lives is very important to us.
How do you encourage entrepreneurialism in your team?
It’s bred into everybody in the business. It’s what we’re about. I’ve certainly seen a lot of innovation within our industry and that is one of our areas of strength and where we see that we have an advantage and leadership position in the marketplace.
We have a very strong alignment with many of our retailers because they understand the importance of innovation within their business and know it’s something we pride ourselves on and have a proven record of success over many years.
As a private company, we’re able to make decisions quickly and move into new and innovative areas of opportunity. While we don’t always succeed with our innovation, it doesn’t stymie our ability to continue to push on and innovate. Our range of products and brands are refreshed regularly.
Consumers are always looking for new health products and we have to be at the forefront of that. We are very much in step with the retailers because they understand the importance of innovation to their markets and it’s something we pride ourselves on. Anybody who comes into our business is aware that PharmaCare is an innovation company and that we place it at the forefront of what we’re doing every day.
Let’s talk about strategy; do you find the concentration of the Australian retail market presents particular challenges?
Yes, and it’s changing at quite a rapid rate with the consolidation of several retailers, as well as launches by international players both in physical stores and online changing the dynamics of the market. The grocery and pharmacy market is still quite concentrated but a retailer like ALDI has come into the market and done exceptionally well as a result of both a differentiation to the status quo and not a great deal of competition in that market.
The marketplace concentration has been a challenge in many ways but I think it’s an interesting environment. In the global market, we have quite a considerable business going on in China across online platforms and that’s not unique to us. Many health and beauty consumer brands in Australia are benefiting from the opportunities in the closer regions in Asia, particularly China. So, the diversification in that important market is changing.
How will you capitalise on the rapid growth of the Chinese market?
We’ve operated in that area for about five years now and the dynamics of that market changes frequently. Nobody has written a book on how to operate in the Chinese market but, if they had, it would have to be revised regularly. We’ve had to vary our strategies in China and we have set up an office there. We also have dedicated people in our Australian office who concentrate solely on the China business, so we’re getting some experience in that area. We have a good understanding of that market, but it’s not a simple process and we need to be open to learning every day.
PharmaCare also has relatively new offices in Malaysia and Thailand. Can you tell us a bit about how they’ve progressed?
They’re very small starting points for us, but what we’ve done with most countries we’ve moved into is we’ve tried to start small and either align with a partner there or put in our own people.
We have an expectation that those markets will grow substantially in the years to come, not as quickly as China has, but we certainly see some strong opportunities.
Asia as a whole has a real appreciation for both natural health products and natural beauty products, and for the quality that Australian manufacturing and provenance can bring to the market.
You’ve seen a lot of growth in the superfoods sector over the past few years. Is that a market segment you expect will continue to grow in the short to medium term?
Yes, we think it will, though it has probably slowed a little bit in the past 12 to 18 months, and it’s diversifying now. It remains a market that we’re extremely conscious of and concentrating on and it is certainly a major part of our strategy going forward. It falls within the health and wellbeing category which is where consumers are aligning themselves with at the moment.
While there’s that push towards healthy lifestyles and healthy communities, we will certainly be at the forefront of it and we are confident it will continue to grow.
How does PharmaCare go about staying up to date with what consumers want? Are you involved in focus groups, for instance?
We have a few things happening in terms of developing innovations. We do many focus groups, both internally and externally. We also do extensive surveillance and educate ourselves on what is happening in international markets. There is a lot of innovation happening in the US so we keep a particularly close eye on America with regards to natural health products.
We also have an office in the States and our marketing groups travel there a number of times each year to fully explore what is going on and to gain an understanding of the changing dynamics within this category.
Are there particular challenges in this field given the lengthy lead times involved with getting pharmaceutical products to market?
Lead times are always a challenge and we work as best we can with our strategic partners from supply to ensure we reduce those times as much as possible. It is something we certainly want to focus on in our business and I think we are getting better at it.
But it’s something that is an issue right across the industry. After a long period of time, you get a good understanding of the complexities of regulation in our industry, although lead times will still be slower than unregulated products to ensure great quality products, and that’s something we pride ourselves on, we don’t compromise quality. It’s something we have to deal with but it remains something the industry as a whole can improve on.
Finally, what is your best tip for increasing productivity within your workforce?
I think planning is very important and I’ve always been a strong advocate of time management skills. I think it is important that every day is planned and that you identify the real drivers within your plan.
One thing that I am always very conscious of in my role is ensuring that the things I am spending my time on are the ones that are going to make the biggest difference to the business.