| San-Mar Laboratories: Fresh and Clean |
| Manufacturing | |||
| Written by Eric Slack | |||
| Wednesday, 30 April 2008 | |||
 Marvin and Jim Berkrot tell us how this private label cosmetic manufacturer thrives despite heavy offshore competition.
 “We’re a private label manufacturer, so our prominent clients wouldn’t be happy with us if we revealed that we were their manufacturer,” said Marvin Berkrot, president of and partner in San-Mar. “But with many of our clients, we started with several hundred pieces and one or two stores and now we do a million pieces in thousands of stores. They’ve grown with us.”Berkrot started San-Mar in 1975, along with Frank Penna and Irwin Silverberg, after a successful career as an entrepreneur. His son, Jim, now serves as the firm’s VP of sales and marketing. When the company began, there was an oil shortage caused by an Arab boycott that put private labelers in the midst of a big crisis. Chemists ran most of the private label manufacturers and had little business savvy. Marvin was working in chemical sales at the time, and his company explored increasing sales through private labeling cosmetics rather than simply selling industrial chemicals door to door. When San-Mark Pharmaceutical went out of business and was in debt to the small business administration, Marvin stepped in and ably raised funds on Wall Street to acquire the company’s assets, thus creating San-Mar Laboratories. Jim became fascinated with the business at an early age and, throughout the years, worked in every facet of San-Mar’s operations. From production to manufacturing and quality control and assurance, to warehousing and purchasing, and now in the front end of the company in new business development, sales, and marketing, he has extensive knowledge of all the ins and outs of the house that Marvin and his partners built. After originally starting with about 12,000 square feet, the company moved into its current facility in 1989. It started there with 35,000 square feet and has since grown to 135,000 square feet and 285 employees. In the last four years, a major expansion and renovation was initiated and completed. Part of the reasoning behind the expansion was due to the focus of the company’s long-term strategy. Pushing the envelope According to Marvin, American manufacturing is suffering simply because it cannot compete with the low wages in countries like China and Vietnam. But what many of San-Mar’s clients want are the unique new technologies, better service, and intellectual property rights the company can offer. Also, the quality and efficacy of foreign products often don’t live up to American standards. To keep its edge in this arena, San-Mar started its San-Mar Advanced Research and Technologies (Smart) team. “Smart is comprised of a consultant board of professors, doctors from universities and chemical specialty houses, and scientists,” said Jim, who works with Penna, now an executive vice president and head of the team. “We tap their database of research and their knowledge of ingredients and technologies that could benefit our clients, so we are adding value to the private label manufacturing industry.” Research and development is central to San-Mar’s long-term viability. Throughout all of its product lines, which include skin and hair care, bath and body products, naturally derived products, sunscreen, over-the-counter (OTC) ointments, and health and beauty aids, San-Mar is constantly looking for the latest technologies and formulas to improve its products and offer clients quality products they won’t find anywhere else. This includes an affiliation with The New York Botanical Garden, a nonprofit institution that researches plants around the world. “They have ethnobotanists who study the interaction of plants and people. That relationship gives us access to new botanically-based ingredients,” Jim said, noting San-Mar works on programs to harvest plants and flowers to create pure extracts, which give its products a highly competitive edge. “The program’s purpose is to benefit indigenous people and different regions of the world socially, economically, and environmentally. This model allows us to create a viable business while helping the earth and people by planting in harvest cycles.” San-Mar can control its own destiny as a business by partnering with only those companies with a solid business strategy of their own. San-Mar may produce both inexpensive and high-end product lines, but not for just anyone. Its clients are carefully qualified based on how well financed they are and the strength of their distribution plans. Jim said San-Mar looks for clients that are strong candidates for growth and who also might go beyond the personal care industry and into other areas like medical, hospital, and OTC drugs. The company is also focused on maintaining its own internal talent levels. Marvin indicated San-Mar has little leadership turnover as most of the firm’s senior staff has been with the company for years. Jim also said the company is constantly on the lookout for bright young talent. As an example, Janet Bass, San-Mar’s director of research and development, honed her skills with giants like Bristol Myers Squib, P&G, Elizabeth Arden, Avon, and Unilever. Jim described her as a huge asset in moving San-Mar’s innovation team forward. Despite the problems facing the manufacturers in the US, San-Mar’s technological superiority should keep it among the leading private label cosmetic manufacturers for years. The company is committed to consistently improving its processes, exploring new ingredients, investing in technology, and forming alliances with major players in the industry. By producing products that make a demonstrable difference in skin appearance and health and providing its clients with added value services, San-Mar will be able to compete with offshore manufacturers. “When we started, Japan was taking the lion’s share of manufacturing business, but, once it became industrialized, it faced the same challenges we are. China and India will eventually face that same problem,” said Marvin. “Ten years from now, Africa could be the center of offshore manufacturing. The only way it can survive in the US is through technological superiority and intellectual property rights, which is what we provide.” |
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© 2008 American Executive - RedCoat Publishing. All rights reserved.
American Executive is a RedCoat Publishing publication.
American Executive is a RedCoat Publishing publication.
