EXECUTIVE FORUM: A Conversation With Brad Chalk

Brad Chalk, Wellmark’s vice-president of sales and marketing for Zoecon Professional Products, Schaumburg, Ill., has always prided himself on being an individual. From his childhood growing up in predominantly Italian Nutley, N.J., to his days as an advertising executive in midtown-Manhattan, Chalk – the son of a British father and an American mother – always seemed a bit out of place. “Nutley is just 10 miles outside of New York City and it hasn’t changed since the day I left,” he says. “It’s a wonderful neighborhood. Frankie Valli, Joe Pesci, Yogi Berra, and Robert Blake (a.k.a., Michael Gubitosi) are all from the area. It was like growing up with the Sopranos!”

After graduating from high school, Chalk delayed entering college “just a little too long” and was drafted into the Army. “I landed in Vietnam in August of 1966 with a rifle on my shoulder and a longing to be somewhere else.”

Unfortunately, that “longing to be somewhere else” didn’t include serving as a door gunner in an Army helicopter, but that’s where Chalk ended up, eventually being shot down in enemy territory on his 21st birthday.

“Fortunately, our pilot was very talented,” he says. “A lot of the pilots at the time were young warrant officers whose previous vehicle was a Corvette with a steering wheel and a suicide knob. I asked to be partnered with a regular army officer who was a major.” It proved to be a wise decision. “Despite losing our tail rotor, our pilot was able to land the helicopter like a plane. It was a bouncy landing, but it was much better than pancaking.”

Upon being honorably discharged from the Army in 1968, Chalk went to work as an “office boy” at a New Jersey advertising agency, eventually working his way into the creative department. Along the way, he earned a bachelor’s degree in English from Rutgers University and met and married Cathy Thompson, a British immigrant who grew up watching the Beatles at the Cavern Club in Liverpool, her hometown. They have two sons – Bradley, Jr., 27, and Brian, 25.

Chalk left the agency business in 1974 to join Merck & Co. as international marketing communications manager, earning his MBA from Rutgers in the process. “After eight years of international travel, I returned to the New York ad agency scene where I wound up as vice-president at Saatchi & Saatchi Advertising,” he says. “Something about stability suddenly appealed to me when my boys were developing serious appetites and a need for designer clothes, so I returned to the corporate side of the business, joining FMC Corporation in 1985.” There he began building a reputation as a vocal advocate for the structural pest control industry.

In 1999, Chalk joined Wellmark International to head three units including Zoecon, the company’s structural pest control business. PCT Publisher Dan Moreland recently traveled to Schaumburg, Ill., to interview the 56-year-old chemical company executive. Excerpts of the interview follow.

PCT: Throughout your career you’ve been actively involved in defending the industry against overly burdensome government regulations. Why do you feel so strongly about this issue?

Chalk: Regulatory issues affect many industries, but the structural pest control industry has been and will continue to be shaped by federal agencies. What other industry has lost its two primary working tools as a result of regulatory action within the last 15 years? First chlordane and then chlorpyrifos have been taken from our industry without solid scientific evidence of guilt. That’s why I’ve been so involved in the NPMA’s Government Affairs Committee and now the Issues Committee of RISE (Responsible Industry for a Sound Environment).

PCT: What else are you doing to protect the industry’s interests on the regulatory front?

Chalk: I believe that industry in general and our industry in particular must take a far more aggressive stand against environmental activists. Wellmark has politely explained with great patience and substantiation that methoprene (Altosid) has been cleared by the EPA of every sin cast against it, including claims by activists in Massachusetts that it adversely impacted the state’s lobster population. Many activists are not interested in listening to any contradictory point of view and continue to knowingly disseminate false information. We always try to reason with them, but ultimately I believe we must be prepared to take them on directly. We are being very aggressive about holding people accountable for the things they say and publish about our products, and we will continue to be very aggressive in the future. At some point, a company must accept the cost of defending itself and its products as a justifiable cost of business.

PCT: It sounds like defending the rights of pesticide users is something you feel very strongly about, not just because Wellmark has a vested interest in the outcome, but because it’s critical to the long-term health of the pest control industry.

Chalk: I do. The loss of both chlordane and chlorpyrifos has shown the industry how critically important it is for us not only to be alert, but pro-active and aggressively pro-active in defending the tools that we have at our disposal. There are very few new molecules under development for this industry, and those that do come out are immediately challenged so we must aggressively defend all of the products at our disposal. If we don’t do it now, it will be too late 10 years from now.

PCT: As someone who has been deeply involved in regulatory affairs for more than a decade, what are some of the other critical issues you believe must be addressed pro-actively by the industry?

Chalk: Communications. One of the most critical issues we need to address is our ability – or should I say lack of ability – to explain what we do in a clear and concise fashion to the public. We need to let the public know why it’s important we have the tools at our disposal to eliminate pests from their homes and workplaces. We need to help people understand and, even more important, believe that message. It’s critical to our long-term success.

PCT: That seems to be a message that is becoming increasingly difficult to communicate, particularly given the pest control industry’s success in controlling a wide range of pests, most notably the German cockroach. The public doesn’t believe there’s a pest problem in the United States and they seem to be even less aware of the serious health threats posed by pests.

Chalk: I agree. To a large degree we’re victims of our own success. Not that long ago a housing development overrun with German cockroaches provided a dramatic reason for dealing with the problem in a very emphatic way. Cockroach baits have been so effective, however, that pest problems in residential housing and various types of commercial accounts are much more manageable now. As a result, the pest management industry has evolved into selling pest prevention rather than pest remediation. There’s a significant difference in those two positions and a significant difference in the way you communicate that message to the public. Ultimately, it’s a much tougher sell.

PCT: Speaking of selling, as someone responsible for developing Wellmark’s sales and marketing campaign, how would you describe your company’s product positioning?

Chalk: We’ve tried to develop our product positioning with the end user in mind. That’s why we’ve chosen to focus our marketing efforts on preventive pest management in sensitive accounts. We believe that’s a core strength of our product line and a message that resonates with pest management professionals. Our first priority is not to sound preachy, not to sound as if we are giving a lecture to PMPs, so much as stating that we have something of value to offer them when treating sensitive accounts.

PCT: Unfortunately, that’s not necessarily a position designed to sell the most product. Is that a concern for Wellmark?
 
Chalk: Not in the long term. Our corporate positioning is to develop products that will allow the pest management professional to continue to improve his or her ability to control pests in the most sensitive environments in the country. We believe long term that’s a sustainable strategy because the chemistry we have and the delivery systems we’re developing are designed to serve that market segment. We assume that pests will continue to be a problem. We assume that public sensitivity to the way pests are controlled will continue to be an issue. And we plan to provide the PMP with the best tools and the best technology available to manage pests effectively in sensitive environments, with minimal impact on the people and pets living or working in those structures.

PCT: One of the challenges faced by Wellmark is that despite attempts by activists to frighten the public, market research indicates that the public isn’t particularly concerned about the products being applied in and around their homes. Yet Wellmark’s positioning, to a significant degree, rests on the environmentally friendly nature of its product line. What sort of problems does that create for you as a marketer?

Chalk: I believe activists tend to increase the level of natural concern that is already present, to a greater or lesser degree, among the general population. That’s particularly true in the area of schools where you have activists and politicians generating concern among parents that may have not have been there previously, which is a problem for the industry. The ironic thing is in many cases the materials used and the person applying those materials (i.e., a school janitor) may not be someone who is particularly well qualified to do the job, which isn’t the fault of the industry. Yet we inherit the stigma. So the level of concern may be low among the general population, but it dramatically increases when you have misinformation being communicated to parents and school administrators by activists.

PCT: While Zoecon is well positioned to take advantage of the trend towards “low-impact” pesticide treatments, the public doesn’t appear to be clamoring for these products. How do you account for this disconnect?

Chalk: I would disagree. I believe the public is concerned about the products that are being used inside their homes and schools. And they want to know more about these products. That’s where the solutions we provide become even more relevant to pest management professionals, parents, and even the activists. What are we, as a chemical supplier to the pest control industry, offering to help mitigate the concerns they have? Well, the chemistry we have – hydroprene and methoprene – certainly offers a dramatically different way of managing pests than traditional pesticides. I believe that lends credibility to our message. Yes, we are trying to sell more of our products, but we’re trying to do it with “low-impact” pesticides. We assume that the homeowner is going to say, “If it’s the product of choice for a school, if it’s the product of choice for a restaurant, then I don’t want anything less being used in my home. That’s the connection we’re seeking to establish.

PCT: How are you delivering that message? Are you delivering it to the pest management professional or are you delivering it directly to the homeowner?

Chalk: We believe the only truly credible way to deliver that message is to the homeowner through the pest management professional.

PCT: A lot of pest control companies in recent years have moved from treating the interior of structures to treating the exterior of structures. What’s interesting about your product positioning, however, is Zoecon continues to be committed to treating the inside of structures, promoting its “smart chemistry.” Isn’t this counter to the industry trend?

Chalk: The necessity of treating structures from the outside has increased dramatically with the growth of dual-income couples. It’s very difficult to schedule service in these types of accounts, so it’s logical that PMPs have moved outside the home to address this issue. But that doesn’t necessarily mean you’re solving the problem; it simply means you’re addressing the problem from a different perspective.
The need for internal pest control certainly will change as a result of perimeter pest control applications, but it will not be eliminated. There is still a need to prevent pest infestations inside, and that’s especially true of multi-story commercial buildings and schools. There is no better harborage for cockroach infestations than schools, where food is being delivered on a daily basis and large numbers of people are moving in and out of the building daily. Lunch boxes, paper bags, and other items that harbor cockroaches and other pests are brought into the school every day. You can have the finest perimeter pest control program in the world and still have a re-infestation problem. So that’s why we’re focused on providing products that can be applied indoors in sensitive accounts. Once the pests get in, you still have to get them out. So yes, in the long term we see the market changing. We see it becoming more specialized, but there will always be a need for indoor pest control. That doesn’t mean, however, that we are not working on other products for the perimeter of structures. We have some very promising product candidates for perimeter pest control, but there will always be a need for internal pesticide applications.

PCT: Hydroprene and methoprene are established products with a long use history. As a result, they’re sometimes viewed as “old” technology. How are you updating the image of this technology?

Chalk: The most important thing a company can do is to provide new, innovative delivery systems for an established chemistry, which is what we’re doing. Several years ago we introduced Gentrol (hydroprene) Point Source, a passive release product developed specifically for sensitive accounts. We’re currently developing a new Gentrol delivery system that distributes the insecticide through a patented heat process. It features a Gentrol-impregnated pad that when heated for four hours will control insects in a 200-square-foot room for 30 days. It’s an interesting product. So, you’re working with the same compound, but you’re delivering it in a way that is less obtrusive to the inhabitants of the structure. That’s one way to enhance an existing product technology. The other way is to simply acknowledge the fact that cockroach control is a very different problem today than it was just a few years ago. The reality is you can control cockroaches confidently using gel-based baits. Once you’ve done that, once you’ve succeeded in eliminating an infestation, our products prevent that infestation from recurring. The good news is the technology we’re working on currently and the technology we will be introducing over the next several years will improve upon that concept.

PCT: How far are you away from introducing this new delivery system for Gentrol?

Chalk: We’ll be introducing the product in late 2002 or early 2003, once we receive EPA approval.

PCT: What are some of the other things that are on the drawing board at Zoecon?

Chalk: Central Garden & Pet, our parent company, purchased Amdro from American Cyanamid three years ago. That acquisition added hydramethylnon to our product portfolio of toxicants that includes fluvalinate and nithiazine. So, we’re working on combining these products with hydroprene and methoprene. This approach could make an interesting gel bait for cockroach control, combining a toxicant with an insect growth regulator. It also would make a tremendous fire ant and general ant control product because combining these two chemistries would result in immediate kill and long-term prevention. In addition, we think there is a tremendous opportunity for pest management professionals to expand their service offerings into the mosquito control market. Mosquitoes represent the most destructive and dangerous insect in the world, a fact that has been demonstrated with the spread of the West Nile virus in the United States. Zoecon, at the beginning of 2001, created a video news release about mosquito control that was sent to television stations all over the country. Our goal was to generate 1.5 million impressions throughout the summer, but as news about the West Nile virus spread, suddenly this video news release blossomed to over 10 million impressions. Of course, all that stopped on September 11th.  Interest in the West Nile virus became secondary and that is certainly understandable, but mosquito control is a market we think can grow dramatically with greater customer education. Towards this end, this past year we worked with Vopak and B&G Chemicals & Equipment to train more than 2,000 pest management professionals in the various aspects of mosquito control.
 
PCT: What is the biggest challenge in driving this market opportunity for pest management professionals?

Chalk: The biggest challenge is getting the PMP to understand the difference between opportunistic mosquito control at the local level and broad-scale mosquito control requiring very sophisticated equipment and aerial application of pesticides. We don’t expect PMPs to be buying helicopters and twin-engine planes to control mosquitoes, but they can treat their customers’ ponds, birdbaths, and standing water with Altosid products, thereby generating additional revenue and growing their service offerings.

PCT: One of the most striking changes in the industry in the past decade has been the virtual disintegration of the flea control market, a key profit center for PCOs for many years, but a market that disappeared when veterinarians began offering on-animal flea control treatments. What did Zoecon learn from that experience?

Chalk: Gee, we never noticed (laughter).

PCT: It must have had a significant impact on Zoecon’s corporate culture, particularly since the company’s positioning in the 1980s and 90s was based on its flea control products (i.e., Safrotin, Precor).

Chalk: It had a huge impact. It had a very significant impact on the company since Zoecon was known as the “flea control” company. Given that positioning, how do you survive the fact that there are no more fleas out there? That was certainly a very big problem for the company. The ability of IGRs, like Precor, to knock down the pest population and keep it knocked down over a sustainable period of time changed the nature of flea control. At the same time, a number of manufacturers heavily advertised on-animal flea control products that were only available through veterinary channels. At the same time, pet owners were beginning to spend an incredible amount of money on their pets, making it an attractive market for veterinarians. In the past, pets were often kept outdoors, so flea problems weren’t considered as much of a problem for the homeowner. However, as pets were brought inside the home and viewed increasingly as members of the family, fleas became more of a problem, resulting in direct action by the homeowner. They weren’t going to tolerate a member of their family having a flea problem. As a result, the veterinarian became the practitioner of these services and the market shifted dramatically to the veterinary side of the business. Methoprene is still far and away the most effective flea control material on the market; it just gets to the pet in a different way now. Unfortunately, that has been to the detriment of our industry. So, we see the change as being one of both diminished opportunity for the pest management professional and a changed opportunity for the PMP. You see more and more pest control professionals using “on-pet” materials, leaving behind flea collars, and putting the emphasis on hygiene within the home. The business hasn’t gone away, but it certainly has changed dramatically and the veterinarians have benefited greatly from that shift. What we learned – and what the industry must learn from this experience – is even those things that appear permanent aren’t necessarily permanent.

PCT: Given the pace of change in the industry, where does Zoecon see itself five or 10 years down the road?
Chalk: First of all, I think it is important to note that Zoecon, in its current configuration, is only three years old. The transition from being a business unit of Sandoz to being a business unit of Central Garden & Pet is something that we are still going through. We certainly feel much more confident about the direction we’re heading now than we did three years ago. I think we have a highly effective field organization and we have a very good technology center in Dallas that is critically important to the future of our company. In addition, we recently opened a FDA-approved methoprene/hydroprene manufacturing facility in Kansas, so we’re the masters of our own destiny. I believe we’re well positioned to take the compounds that we have in our product portfolio (i.e., Precor, QuikStrike, etc.) and grow that business. In five years we expect Zoecon to be a prominent technology contributor to the pest management community, both in terms of delivery systems and active ingredients.

PCT: Is there anything else you would like to discuss that we haven’t touched on during this interview?

Chalk: Only that we are focused on enhancing the technology we’re developing for the structural pest control industry, meaning we are interested in developing products that meet the needs of pest management professionals servicing the most sensitive types of accounts. We’ll be driving this market segment in the years ahead. We will be bringing new technology – specifically new delivery systems – to the marketplace, as well as new active ingredients. We will expand the mosquito control market and continue our commitment to the fly control market. We’re also interested in developing termite baits and other termite control products. However, we will not try to push a product into the market without a clear and obvious need for that product. One of the things I think pest management professionals object to is the introduction of new products – particularly “me-too” products – that don’t meet a specific market need. They resent having an artificial need created for a product by a manufacturer. So, we’re not interested in developing products simply to increase our product portfolio. Instead, we’re going to be very focused on our end users’ needs to drive that process.
 
Dan Moreland is publisher of PCT and can be reached at dmoreland@pctonline.com