Sonoma County health products maker NeilMed builds room to breathe with headquarters expansion project

NeilMed Pharmaceuticals Inc.., the company best known for its nasal rinse formulations, is embarking on a second major growth spurt at its Santa Rosa base of operations to keep pace with sales growth in the domestic market and in emerging overseas markets.

Started 22 years ago in a 170 square foot medical practice with two employees to supply a few pharmacies in Santa Rosa. Today, NeilMed has 440 employees and facilities in 17 countries to supply stores in 30 countries.

The private company does not disclose its financial performance, except that sales have increased each year, usually at double-digit percentage rates.

Currently under construction at its headquarters on Aviation Boulevard near the Charles M. Schulz–Sonoma County Airport is a two-story storage and distribution building. And in the planning is a large new manufacturing plant to be built in an empty field just to the south.

Together, these buildings, which are expected to employ 70 to 80 people, are intended to give the company more operational leeway to keep store shelves stocked around the world and particularly in new markets while working on supply chain challenges.

“Our fastest growing regions are China, Japan, South America, Central America and Mexico,” said CEO Dr. Ketan Mehta, 66. A pulmonologist and resuscitator, he founded the company with his wife, Nina, 61, who is president of the company.

But China’s ongoing campaign to stamp out the spread of the coronavirus has complicated the movement of goods in and out of ports there.

“We believe in always supplying retailers. We don’t like products not on the shelves,” Dr. Mehta said. “So even if you take the loss, we will take the loss and put it on the shelf by air cargo. We use a lot of airfreight to make sure we’re not out of sight or out of mind.

NeilMed also receives raw materials for products and then ships finished products for overseas markets through the California ports of Oakland and Long Beach. Both have experienced freight delays last year and recently with a brief labor dispute.

For this reason, the company has increased the amount of raw materials and finished products available.

“We initially stocked one year of raw materials, and now we’ll go to two years – 18 months for sure,” Mehta said. “And we supply our international sites for six months of sales.”

And that’s where Santa Rosa’s new 60,000 square foot warehouse comes in. Pacatte Construction in Santa Rosa should be completed in February. At 53 feet tall, its height is unusual for the industrial area of ​​the airport.

The company is seeking permits from Sonoma County to construct a 105,000 square foot manufacturing building just south of the company’s main offices at 601 Aviation Blvd. It will be designed to have more automated production than even what is currently used 24 hours a day, almost seven days a week.

In this way, NeilMed is among other local manufacturers that have introduced more automation to allow increased production without a substantial increase in labor. For example, lab test supplies maker Labcon in Petaluma has invested more than $50 million in robotics and other automated manufacturing. But finding technical staff to program the equipment has been difficult as the labor market has tightened.

“We need them, but they are hard to get,” Mehta said. “We are training our existing staff as much as possible. And the people who do this work (automation programming) are obviously a bit more burdened. »

Previous labor issues

It’s been a decade since NeilMed struggled with its workforce.

In 2009, the Teamsters won a union certification vote at NeilMed, and five dozen union members walked off the job the following year for six months, alleging unfair treatment and poor working conditions. This culminated in a decision by the National Labor Relations Board in early 2012 that a union representative was allowed to return to work after an incident at a picket line.

Unlike today, much of the work of assembling goods in this era was by hand. Santa Rosa’s workforce had grown to more than 400 as the company added product lines and major national distribution agreements with Rite Aid, CVS and Costco Wholesale over the previous three years. Sales had also started to move beyond North America, to the UK, Ireland, New Zealand, Australia and Singapore.

Today, Santa Rosa’s workforce numbers approximately 325 people. Beyond that, there are approximately 80 workers at a 90,000 square foot manufacturing and distribution facility in South Plains, New Jersey, on the east coast, which opened in 2020. In 2016, NeilMed opened a 35,000 square feet. a 1-foot manufacturing facility in suburban Los Angeles, Ontario, then in 2020 leased an additional 100,000 square feet in that city for warehousing and distribution.

Beginnings in Santa Rosa

NeilMed started in Dr Mehta’s former medical practice on Farmers Lane in January 2000 with the idea of ​​a balanced mixture of sodium chloride salt and baking soda that would help prevent burning and stinging when flushing nasal and sinus passages.

From the first sale of six boxes of the solution at what is now a CVS Pharmacy on Fourth Street east of Santa Rosa, the Mehtas marketed the product to otolaryngologists as well as allergists to suggest to their patients after treatments and surgery or for acute or chronic allergies.

Sales expanded in 2000 to individual Safeway and Rite Aid stores in California until the product reached a wider audience at a national show later that year. In 2004, CVS picked up products for 400 stores in four western states, and drugstore chain Meijer picked them up for the Upper Midwest. The following year, Walgreens moved it to the Sacramento area, then expanded its placements nationwide.

At that time, NeilMed expanded to a facility on Tesconi Circle in Santa Rosa, and in 2006 moved to its current 55,000 square foot headquarters at 601 Aviation. In 2009, a nearby 120,000 square foot building was leased for manufacturing.

“I love Santa Rosa, so even though I have other options, I would love to create more here,” Mehta said.

Jeff Quackenbush covers wine, construction and real estate. Before joining the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Contact him at [email protected] or 707-521-4256.