Thornton and Ross – Rising to the Challenge

During the coronavirus crisis Thornton and Ross is stepping up to meet skyrocketing demand while protecting its staff.

Thornton and Ross have been going since 1922, starting out as a family run business before being acquired and intergrated into STADA, a German pharmaceutical giant in 2013. Since then STADA has been under private equity ownership, bringing new investments into the business in terms of plants and machinery, but also the talent to give the business a new lease of life.
We’ve got good organic growth and we’ve been successful in acquiring businesses that have moved the business forward,” explains Roger Scarlett-Smith, Managing Director of Thornton and Ross, as well as Executive VP of the STADA group.

Thorton and RossScarlett-Smith has seen Thornton and Ross experience incredible growth over the last couple of years thanks to a finely honed strategy that has allowed the company to work smarter, not harder to achieve growth in market niches others might neglect.

“I think agility and entrepreneurship are our unique selling points. We have good reach into many different trade sectors from specialists to homecare stores,” Scarlett-Smith says. “We have products going into grocery stores, pharmacies, wholesalers, doctors, clinical commissioning groups (CCG)s, and so on. We have a very broad sweep of product categories we serve so we can make the most of opportunities. We’ve never had global ‘big brands’, instead, we are occupying important niches. If you look at our portfolio, it is not mirroring the big boys who tend to have a small number of mega-brands We occupy niches, small by relative size but sizeable and with room for growth. Our idea of scale and scaling up is to grow these niches rather than aim for the biggest market sectors.”The strategy has gifted Thornton and Ross many stand-out products, as well as double-digit levels of growth last year, a feat the company is looking to repeat this year.

“We’re having a real moment with Zoflora® and since coronavirus everyone’s into disinfecting their home, particularly with people like Mrs Hinch discovering it,” Scarlett-Smith says. “Zoflora is a range of disinfectants that are growing really well for us, it’s one of our oldest brands and now our biggest. We have also done well in over the counter medicines, like Hedrin® and Nizoral® a shampoo we recently bought from J&J for problem scalps. It’s a very effective product and there’s always the need for an effective product in a niche. We have a well-developed range of emollients and skincare preparations, in fact, T&R is the biggest supplier for emollients to the NHS. We manage the whole sweep of uses from prescription to the high street. Then we have a generic medicine business where we benefit from the generic medicine pipeline and the low-cost of manufacture we can achieve through STADA. We run the gamut of all healthcare opportunities, by focusing on niche markets with slightly lower competitive intensit. That’s a successful strategy for us.”

Thorton and RossStepping up for the Pandemic

Of course, being in the medical and pharmaceutical industries puts Thornton and Ross in an odd position right now, for while the company has seen a recent surge in demand, Scarlett-Smith obviously wishes it were for different reasons.

“We’ve been thriving even in the coronavirus era. Right now, there’s more demand than ever for a number of our products,” Scarlett-Smith says. “Like every business, we’re worried about the future economic impact but at the moment we have a thriving business ready to invest in further growth and are looking for partners for acquisitions or in-licensing deals to build our portfolio and innovation pipeline.”

Throughout the crisis, Thornton and Ross’s top priority has been the safety of their people. “We’ve taken steps to ensure safety. In factories with our key workers, we are careful with social distancing, cleaning and other measures,” Scarlett-Smith tells us. The measures have paid off, with only a relatively small number of confirmed cases of coronavirus occurring within the company. “We have 500 people normally working on-site in Linthwaite; all staff who can are working at home, with only production staff on site. We’ve adapted and I think we’re sustainable; there’s no rush to get everyone back,” says Scarlett-Smith.

The demand for Thornton and Ross’s products has occurred across its range for a variety of COVID-19 related reasons.
“As far as the business is concerned there’s been a pick-up in demand for Zoflora, vitamins, healthcare food supplements, and probiotics. A broad base of nutritional products has done very well,” Scarlett-Smith explains. “Plus we’ve effectively had another flu season, so the demand for our brands has been strong. Skincare has been doing well and we’re providing these products on a complimentary basis to the NHS because people are finding it’s rough on their skin with masks and PPE, so there’s been noticeable pick up there. If you’re in healthcare right now it’s going to be a time of high demand.”

New Ways of Working

But that does not mean Thornton and Ross are not facing new challenges as a result of the coronavirus pandemic. “We also see the indications several markets are beginning to crash somewhat, so we have to be cautious about that,” Scarlett-Smith admits. The pandemic has also forced the company to find some innovative new ways of working.

“We have a sales team of close to 100 people involved in seeing doctors and healthcare professionals to detail about our prescription products. They’ve obviously been severely restricted in visiting so we’re using it as an opportunity experiment to see how we can use remote meetings,” Scarlett-Smith tells us. “Life can go on, and in some ways go on more efficiently. There are some benefits of changing and adjusting.”

Thorton and RossOf course, this would not be possible without the close relationships Thornton and Ross maintain with its business partners and suppliers, such as Oxford Packaging Solutions. “We are highly reliant on suppliers for our business needs so we must have a productive and transparent relationship with them as partners in innovation. Within our standard supplier network that’s our mantra,” Scarlett-Smith says. “We’re also keen on partnering with trade partners and customers because we want to grow the product categories we’re in. We offer very specialist benefits. The winner here will be whoever’s best at communicating to specific consumers. We work with the trade to develop their merchandising, their displays. Those are the kind of key partnership areas we’re looking at. We’re also keen to find ways to partner with external companies for acquisition or co-development of brands. The most recent was to buy some brands from GSK, who are focusing on their big brands. We’re continually looking for bolt-on acquisitions and we’re not shy about taking brands that aren’t thriving at this point in time.”

From here, Thornton and Ross have big ambitions for the future, as Scarlett-Smith says, “This niche strategy is working so well that we’re going to be quite a large player in the UK healthcare market in the not too distant future. Our business is seeing growth focusing on niches which have headroom. Our profile may be a bit different from what you might find in some blue-ribbon organisations. We’re a bit more pragmatic, with no ego, no political issues, everyone just gets on with it. It might be something to do with Yorkshire actually!”

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