'I felt like I was a custodian of the business'
NILES, Ill. — The family ties that built Alva-Amco Pharmacal Cos. span more than a century and four generations.
At the heart of both the family and the company has been Jeff Gerchenson, who worked for the over-the-counter drug producer for over 50 years, leading its growth for decades and cementing its status as a highly regarded supplier of drug chains and other mass retailers. In recognition of his life and contribution to the industry he has been honored with Mass Market Retailers’ Lifetime Achievement Award.
Alva-Amco, which is known for popular brands like Diurex and Fungicure, was acquired last fall by Kobayashi Healthcare International Inc., at which time Gerchenson retired as company chairman. Alva-Amco traces its roots to Gerchenson’s grandfather Henry, who owned pharmacies in Chicago starting in 1904 and would mix his own proprietary drugs for patients. The company expanded under Gerchenson’s father, Emile, and uncle Lester, who started working with a national distributor in the late ’50s. It got the name Alva from a small town in Oklahoma where Lester was stationed during World War II, and got its full name when it merged with the Amco Pharmacal, a sister company.
Jeff Gerchenson, now 72, started working for Alva-Amco part-time while in college in 1968. He initially thought he would go on to graduate school in psychology, but two years later he started making sales calls full time in greater Denver.
He subsequently moved back to work out of Chicago, where he met his wife to be, Jodie. At the time, he recalls, “My father and uncle would give me directions for the day at 7 a.m. and then have me report on my progress at 7 p.m. And I would say, ‘You know I’m only here on a temporary basis, I could always go back to school.’ But that temporary basis lasted over 50 years.”
Gerchenson became chief executive officer around 2000, and he passed on the company’s leadership about five years ago to his son, Micah. Other members of the next generation involved with the company included eldest daughter Shelbi, who worked in marketing and creative development, and middle daughter Kate, who was director of administration.
“I felt like I was a custodian of the business, that — going back to my grandfather, whom I never met, and my father, who I worked with for such a long time — it was my job to keep the faith and steward operations for the family,” he says.
At the same time, Gerchenson recognized the need for professional management skills in various facets of the operation. So Alva-Amco reached out and brought people in from venerable companies like Alberto Culver, Helene Curtis and Johnson & Johnson, where they had gone through training programs and were highly skilled in areas like sales and marketing, R&D, quality control, and general administration. “We brought these people in, and the family members operated with them in a symbiotic, seamless fashion with great respect for their professional skill sets,” he says.
Infusing what was a family-owned and -operated business with outside expertise was a key part of Alva-Amco’s success, and that interplay extended to the company’s work with manufacturers’ reps and food brokers in the U.S. and Canada. “We were wise enough to understand that both on the inside and outside it’s a people business,” Gerchenson says. “You recognize the role that you play, and you invite in people who can make a contribution, and you make sure that they see the rewards of their contribution. I think that helped us dramatically. And I can’t underscore enough the wonderful relationships that we had with our associates, our suppliers — our supply chain from contract manufacturers to packagers — and with the trade, all through the years up until today.”
Gerchenson began his career “on the street,” calling on independent drug stores. “Actually it was a great time. I loved it, because I got to meet a lot of great people, and there was always a sense of immediate gratification when I made a sale.” With few national class chains in those days, wholesalers and independent pharmacies were more powerful, and he focused on them market to market. At the same time he would visit regional chains, from Los Angeles to New York, and Detroit to New Orleans. “I had the privilege of growing up in the industry when there were tremendous personalities and merchants. I encountered a lot of great names, historic names in the industry.”
Around the late ’70s, Gerchenson became more involved with the business’ inner workings, including sales; marketing; rep and broker networks; finance; and operations. “I was a slow learner,” he says, “but I learned.”
His growing knowledge coincided with a period of relocation and expansion for Alva-Amco, and in 1988 he added the title of president to his role as chief operating officer. By then his dad, Emile, who was company chairman, had a plan for his son to take over as CEO. As Emile began to step back, Jeff says he was not shy about taking responsibility. “It was seamless because I had already had a long career with the company, and my dad and I got along well. I really enjoyed all of it. In business you can have ups and downs, but we had a steady trend of ups, and thankfully the downs were just small hurdles we were able to jump over and move on. So I had only positive feelings about my career, which culminated with my four kids being in the business.”
As the chain drug industry took off with exponential growth, “we were fortunate enough to be part of it and to grow with it,” he adds. With the industry’s consolidation and maturation, a lot of the regional retailers and legendary merchandisers are gone, “but what has replaced them are very successful operations with highly talented leadership,” he notes. Alva-Amco’s specialty was building niche brands into mainstream brands through creative marketing. In deciding which brands to market, Gerchenson took to heart the advice of the late Cunningham Drug Stores president Ray Shapero, who once told him, “Concentrate on drug store type products, O-T-C proprietary meds. People are always going to need those type products.” Gerchenson applied that philosophy in categories ranging from women’s health care (Diurex) to foot care (Fungicure) to skin care, and with products for nausea, backache and urinary tract health.
The wisdom of Shapero’s advice was borne out as the lines blurred between trade classes. Today, whether one goes to a Kroger, Albertsons, Safeway, Dollar General, Walmart, Costco, CVS, Rite Aid or Walgreens, and even shopping online with Amazon, there’s one constant, says Gerchenson; “the drug wall — brick-and-mortar or virtual — and we want to be part of the drug wall.”
Concentrating on drug store products was a consistent approach for Alva-Amco and resulted in a reliable, sustainable supply of profitable items for retailers, which sustained the business right through to its acquisition.