At RDC we are quite proud of our company’s history. Just as many older pharmacies display invaluable keepsakes and memorabilia we have a number of nostalgic photos and records carefully preserved throughout the years. The following article was written in 2005 for our 100th Year Anniversary Celebration.
Our First Location 1905-1922
Humble Beginnings – 1905
Almost 100 years ago, on February 6, 1905, ten independent pharmacists met at the pharmacy of Bert O. Heath, located at 193 Central Avenue, Rochester, New York. It seems amazing but at that time market conditions for pharmacies were similar to today. According to one of our historical records, “Because of extreme cut-price conditions that prevailed in the drug business in the early 1900’s, small, independent drug retailers were threatened with extinction due to their inability to compete with the large, downtown stores who were able to buy directly from manufacturers at wholesaler cost prices.”
Thus, our “founding fathers” came together to start a buying group. They formed an organization entitled, “Rochester Drug Exchange” and adopted by-laws, stating that the object of the organization was the cooperative purchase of merchandise for the mutual benefit of the members. Heath, whose store was selected to house the initial inventory, was elected Secretary and Treasurer, and Manager.
The Heath Years 1905-1926
Under Heath’s leadership, each member agreed to pay to the Treasurer $5.00 a month for 12 months, to be used as working capital and to pay cash for all merchandise ordered. In February 1906, exactly one year after their first meeting, members voted to reorganize the business under the corporate name “Rochester Drug Merchants’ Exchange” with authorized capital stock of $5000.00. At this meeting it was reported that the business transacted the first year was $3,000.00 with year-end inventory of $909.00.
In 1908, members voted to authorize increase of the capital stock to $10,000.00, and at the annual meeting in 1909, President Elmer E. Chilson reported that the company now had an inventory of $14,000.00, all located in Heath’s downtown drug store!
The young company continued to grow and in 1922 was relocated to 263 Central Avenue. This location no longer exists in Rochester, but accommodated the company’s operations until 1926, when it was again relocated to 238 North Water Street.
Our Second Location 1926-1947
The Chilson and Bellinger Years 1933-1958
In 1933 President Elmer Chilson succeeded Heath as Manager and ran the company until 1936, when Wyllis Bellinger in turn succeeded him. During this entire period, the company experienced successful growth and membership increases, mostly within the local Rochester area. In 1946, the company’s authorized capital was increased to $100,000.00.
In 1947, the North Water Street location saw the company’s first crisis. Residing on the floor above the Exchange was a wool processing plant. Part of their operation entailed the use of very large water tanks. One weekend the floor simply gave way and the “Rochester Drug Merchants’ Exchange” was drenched. But under Bellinger’s leadership the company bounced back quickly when the operation was immediately salvaged and relocated to 54 Brown Street.
Shortly after the move, members of the Exchange voted to incorporate the firm under the Cooperative Corporation Law with capital of $150,000.00 and the name “Rochester Drug Cooperative, Inc”. The authorized capital was increased in 1952 to $500,000.00 and the company was again moved to 320 North Goodman Street, the location we owned until 2001.
In 1955, the company celebrated its Golden Anniversary recognizing fifty years of history and achievements. One of our favorite keepsakes from that year is a Banquet Program dated March 15, 1955. The Banquet was held in the Hotel Seneca Ballroom in downtown Rochester, and featured a speech by Joseph R. Allendorf, the Assistant General Sales Manager of the prominent Eastman Kodak Company. Membership and families kicked off the banquet with singing of the National Anthem and “God Save the Queen”.
Board of Directors 1954-1955
The Delibert Years 1958-1973
In 1958, James Delibert succeeded Bellinger. Providing leadership until 1973, Delibert led the company to expand its geographical presence throughout Central New York State. The following out-of-town delivery route details were taken from the Minutes of the Board of Director’s Meeting held Tuesday, September 14, 1971:
Total 1970 volume for out-of-town Route #1 (delivered Tuesdays and Thursdays) was $658,000.00, and $514,000.00 for out-of-town Route #2 (delivered Wednesdays and Fridays). A new proposal for a third truck and driver was estimated to cost $13,000.00 as well as a salesman at $10,000.00. These numbers are quite a contrast to our current operations, with over 10 sales people and 5 major line haul loads leaving each night!
The minutes also showed that all orders were filled in the same day as long as they were received by US mail that morning. Local orders were delivered that afternoon, but out-of-town orders would wait until the following morning, and the trucks didn’t leave until 9:00 AM! Imagine using that shipping schedule for today’s business!
Of special interest was a notation that PSSNY had sent a thank you note for RDC’s donation of $50.00!
At the end of his term, Delibert was credited as a good manager and affected the company in many positive ways. Unfortunately, his years were forever marred by the company’s second major crisis, a long-term crime committed against the company by its key financial executive.
Our Fourth Location 1952-2001
The Brucato Years 1973-1984
Albert Brucato succeeded Delibert in 1973 and was charged with recovering the company from its financial crisis while returning to solid growth. He successfully solidified the company’s financial position, growth and membership. At the beginning of his term annual sales were $8.2 Million. By 1984 they had grown to $13.5 Million.
In 1975 Brucato implemented the first real wave of pharmacy technology with the introduction of the handheld ordering device. The company chose MSI’s brand and integrated the modem-enabled devices into its existing mainframe system. An excerpt from the minutes of one of the board meetings explains, “Mr. Brucato reported that four stores are now using the MSI. The use by the store saves each individual store approximately a minimum of one-third less time in ordering – it is more accurate because the items are identified by number and a check digit and this prevents clerical error.” Little did Brucato know that these units would soon become the standard of the industry.
The Carlascio Years 1984-1991
In 1984 Al Brucato retired and Lou Carlascio took over as General Manager. His goal was to continue the sales growth of the company while maintaining strict control over expenses and finances. His efforts paid off in 1986 when the company issued its first stockholder’s dividend since 1972 – a dividend of $100,000.
By 1987 Carlascio knew the company was back on satisfactory ground financially. The only problem was sales. The wholesale industry had begun to face heavy consolidation and competition from larger more technologically advanced wholesalers. Together with the board, Carlascio targeted growth as the main strategy of the company. Sales had grown to $17 million but it was clear that RDC needed to emerge as an industry player, or close the doors.
Around that time, Carlascio received a call from an old friend. It was Larry Doud, the VP of Retail Sales with one of the company’s Buffalo competitors. Larry had worked for Lou in his earlier career. He expressed interest in going to work for RDC. After meeting with the Board, the decision was made to bring Doud in as Sales Manager. Larry started in September 1987.
Carlascio and Doud quickly formed a powerful partnership, with Larry leading a tremendous sales growth strategy and Lou managing the finances. Doud commissioned the “horse” logo when the Returns Department manager asked why he thought the company would turn around. He replied that his goal was to make RDC the Knight in Shining Armor for Independent Pharmacy – to loyally service, support, and grow that niche of the marketplace – and to be recognized as a leader in the industry.
Doud hired a sales representative and opened the Buffalo marketplace. He introduced several hard-hitting programs designed to bring in new business. The famous “Feather Plucker” hot list was born and began taking sales from our Buffalo competitors. Within the first year, Larry had grown the company’s sales to $26.1 million. The Syracuse sales territory was also expanded with new sales representation.
Doud was also instrumental in founding and funding Legend Pharmacies of Greater New York, the co-op’s first chain recognition program. Legend was targeted to compete directly against similar programs from other wholesalers, the main difference being that Legend was pharmacist-owned. The program began to grow in strength as Doud racked up new accounts for the company.
The sales growth rate continued, hitting double-digit percentages. In 1989, stockholders enjoyed a huge value increase when the company reclassified its stock and increased the value from $1,500.00 to $19,892. At that same time, the company redeemed 69 inactive stockholders, sweetening the pot for the actives. Sales dramatically rose to $33.6 million.
In 1991, Carlascio made plans to retire and prepared Doud to lead the company. He named himself CEO, a position which had not previously existed. Doud was promoted to General Manager. Larry was ready to take the reins and fondly jokes about the time when Lou said he’d retire when the company built him his own private bathroom. Later that year, Doud had the bathroom built, and Lou retired.
At the end of Carlascio’s career he was credited with completely restructuring the company’s finances, expenses, and profits. He made tough staff cutting decisions and installed modern equipment in the warehouse. The company paid its first dividend in years and has never missed since. Lou sold the last $1,500 share of stock to a progressive young pharmacist who still serves on the Board. He also worked with the Board to pay its first ever employee profit sharing bonus in 1988.
The Doud Years 1991-2017
After Carlascio retired, Doud took both titles of CEO and General Manager. He continued a strategy of aggressive sales growth breaking $50 million in sales in 1992. He also began building a solid responsible management team with an eye on the future. Several promotions came from within while other executives were hired from outside. By this time stock value had grown to over $34,000 and stockholders were enjoying the long awaited benefits of the rejuvenated business.
Doud began opening new territories in the southern tier of New York and Eastern Pennsylvania. Salesmen were hired to serve Jamestown, Binghamton, and Scranton, PA. One of his major goals was accomplished in 1997 when sales broke over $100 million. A second warehouse shift was added and a powerful new computing system was installed to handle the large influx of growth.
In 1998 Doud turned his sights towards the Albany territory, and in 1999 opened Pittsburgh and New York City. All of these efforts paid off when 1999 sales grew 35% to $177 million. During that year Doud led RDC to purchase controlling share of Source One Services, a privately held generic source program. He also worked with the Board to establish a major change to the company’s stock ownership program – a shift which helped his sales team bring in 30 new stockholders.
In 2000, the value of RDC’s stock had risen sharply enough for the Board to vote on a split. The effort set the stage to bring in new stockholders, and an exciting promise of growth considering the company’s weak position just ten years before.
As sales grew and product began to bulge through the walls of the North Goodman Street location (since 1952) it became evident that RDC would either need to add warehousing space or move. After months of research and deliberation, the Board made the decision to move, and selected a new location in Chili, New York. Doud led the company to focus on a Spring 2001 move date and secured a Rochester builder to construct a brand new state-of-the-art facility. On the weekend of April 30th, 2001, almost 130 staff members and hired hands moved the offices, $27 million inventory, and computing equipment to the new location.
Upon arriving in our new home, the Board agreed to change the company’s name to RDC, Inc., giving us a more regionally acceptable brand. With territories in New York City, Pittsburgh, and eastern Pennsylvania the company was branching way beyond its traditional boundaries. By the end of 2001, RDC enjoyed sales over $300 million, and 104 stockholders celebrated the company’s success.
In 2002, the Sales Management team opened New Jersey, and continued concentrating efforts on the mammoth New York City territory. By March 31st, 2005, sales had risen to $464 million with record setting profits and 154 stockholding members. The company celebrated its 100th year anniversary that year with customers, stockholders, and vendors attending a memorable weekend at the Turning Stone Casino in Utica, NY.
Over the next few years the company focused on enhancing operations. Voice picking was added in 2009, and the conveyor system was replaced in 2012.
At the same time, a major shift in generics hit the pharma industry. Doud led RDC to join OptiSource, and upon approval of our membership, the company began earning profits which boosted stockholder dividends to all-time record highs.
As legacy drugs converted to generics, RDC’s pharma partners rejuvenated their pipelines with Specialty drugs. This second trend paved the way for a new type of customer with unusually high sales dollars and low line extensions. Keeping expenses tight with higher top-line sales ensured profits were falling to RDC’s bottom line. By the end of 2013, RDC had become the 7th largest wholesaler in the US.
By 2014, sales approached $2 Billion and the warehouse reached capacity for both product storage and outbound shipments. The management team embarked on a project to open a new distribution center in Fairfield, New Jersey. With the purchase of a 106,000 square foot building, our Austrian vendor was again chosen to install the conveyor system. But this time, automation equipment was added including A-Frames and carousels. The integration of these machines was intense. After 9 months the warehouse shipped its first order on July 21, 2015 and the remainder of our Metro business was transferred down by February 2016.
RDC’s state-of-the-art facility in Fairfield, NJ.
In late 2016, Larry Doud began preparations for retirement. Joe Brennan, COO, was approved by the Board to be his successor. The baton was handed to Joe Brennan on March 31, 2017.
The accomplishments of Doud’s career continue to be evident by measuring the company’s size, increase in stock value, and loyalty of its customer base. Together with Lou Carlascio and a Board of Directors willing to accept a bold new vision, he took a company that was struggling to survive and turned it into a major player in the northeast. He led the charge to open more Independent Pharmacies than any other competitor in the country, giving RDC a reputation amongst industry groups such as the Healthcare Distribution Alliance (HDA), Pharmacy First, the National Community Pharmacists Association (NCPA), and organizations on the state and local levels. And he built a strong and loyal staff poised to take RDC well into the future. Doud more than accomplished his goals and turned RDC into a true “Knight to Remember”.
Joe Brennan’s career with RDC started in Sales, then progressed into Sales Management, Manufacturer Trade Relations, and Operations. He was hired in 1992 after setting a national sales record with a generic pharmaceutical company, and started in the Syracuse/Binghamton territory. He was promoted to RDC’s Sales Manager in 1995 and helped opened the Albany territory. In 1999 he opened Pittsburgh and New York City.
The New York City marketplace held great promise because of its size and concentration of Independent Pharmacies. But getting a foothold was difficult because nobody knew about RDC, the upstate wholesaler. Brennan spent countless days and nights in the territory, travelling with representatives and developing relationships with key owners. He sold company stock to several stores and began cementing RDC’s reputation as a service-driven, customer-attentive wholesaler.
In 2001 RDC was feeling industry pressure in relation to the size of its competitors. Despite our growth, sales visits from pharmaceutical manufacturer reps were declining. Brennan entered a new role as Director of Business Development and Trade Relations and began building crucial relationships with Big Pharma trade managers. He attended national meetings and was invited by two companies to serve on business advisory councils. In 2004 he set up RDC’s first Annual business meeting with vendors. The event grew in popularity and to date has become one of the best attended annual trade meetings amongst RDC’s valuable partners.
In 2006 Brennan was promoted to General Manager. He began studying RDC from an Operations perspective. He visited other regional wholesalers and brought back strategies to gain efficiencies. As a result, leadership approved converting the warehouse to voice picking. The new system was installed in 2009 and brought paperless speed efficiencies and improved employee retention to both the night picking and day replenishment crews.
In 2011 Brennan led the charge to retool the warehouse’s conveyor system. An Austrian partner was secured and the new “smart” conveyor was installed in 2012, enabling picking staff to double throughput within the same truck departure deadlines. The system went “live” just in time as deliveries were leaving the building consistently late. With the schedule back on track, our New York Metro customers were encouraged in RDC’s ability to service the marketplace. Purchases increased significantly over $1 Billion, then pressed on to $2 Billion in 3 years.
In 2014 Brennan played a crucial role in opening the Fairfield distribution center. He led the contract process with our Austrian automation vendor. He provided oversight with the teams responsible for retrofitting the warehouse, installing the automated picking machines and conveyor, and developing the software integration. The warehouse was successfully launched within 9 months of the start of the build.
In the ensuing months, Brennan worked with Doud to transfer responsibilities and knowledge in preparation for taking the helm. Our new CEO remains dedicated to servicing Independent Pharmacy and making RDC the best pick, pack, and ship operation in our marketplace.