Compliments of Investment Monitor
After visiting 100 potential sites across eight different states, nutraceutical company Thorne HealthTech began a huge relocation to Charleston, South Carolina, in 2014 and has never looked back. Here, Thorne COO Tom McKenna explains what drove its decision and subsequent success.
There are many reasons why a life sciences business might make the monumental decision to relocate their company’s headquarters or manufacturing base either nationally or internationally. Choosing exactly where to move is a significant challenge that requires extensive research, visits and careful evaluation.
This was a challenge that Tom McKenna, chief operating officer at Thorne HealthTech, faced first-hand when he led the company’s relocation some 3,500 miles (5,600km) across the US, from a small town in northern Idaho to one within greater Charleston, South Carolina. Here, he shares his experience of the big move and why he feels the relocation was more than worthwhile.
Thorne was founded in 1989 as a manufacturer of premium-quality nutritional supplements. We have since created digital health solutions providing diagnostics and analytics to identify unmet nutritional deficiencies and provide world-class wellness and prevention education. Our goal is to help people at all stages of life to live and age more gracefully.
We believe the future of wellness is personal. For the first time in history, with the cutting-edge advancements in sequencing technology, artificial intelligence and nutritional research, we can now efficiently offer personalised approaches to wellness, which were previously reserved for late-stage disease care or academic research. We strive to be the differentiated leader in the wellness industry by deploying our scientifically rigorous approach to supporting personalised health and wellness.
What prompted the move from Idaho and what were you looking for in your new location?
In 2013, we recognised that by 2018 we would be out of capacity at our manufacturing facility. While there was plenty of available land in the area, our decision not to expand locally was based on utility capacity, lack of local labour and challenges in attracting talent, as well as the significant distance from the airport and major roadways.
We first looked at around 1,000 different options across all 50 states. We narrowed it to 100, and I personally visited every one of those over a two-year period. During that time, we were introduced to South Carolina’s then governor of state, [Nikki Haley]. She suggested the Charleston region and we looked at some sites. The place we ended up was a no-brainer compared with all the other options. After two years of trying to find a home, when we finally came to Charleston we thought ‘that’s it’!
The key criteria in our decision-making included a business-friendly environment; a robust, affordable and available talent pool with comparable salaries to Idaho; proximity to the local airport and major transit ways; an appealing area for staff to relocate; and attractive state and local incentives. Charleston ticked all these boxes.
What are the risks during a business relocation and how did you mitigate these?
One risk is losing or damaging a critical asset or transitional requirement among the significant multitude of moving parts. This required detailed, almost military-like planning and execution to move some 2,500 pieces of equipment, furnishings and tens of thousands of inventory items.Thorne HealthTech’s corporate office and manufacturing site is located at 620 Industrial Blvd, Summerville, South Carolina. (Photo courtesy of Thorne HealthTech)
To make sure there are no operational disruptions, you also need a certain critical mass of existing staff to move with you, in many cases early, and to stay at least for a while to initiate operations, recruit and train new staff. We worked with Charleston’s economic development organisation called Charleston Regional Development Alliance (CRDA). CRDA helped facilitate and participate in 14 ‘familiarisation’ trips for a total of 140 employees and nearly 300 persons. We would kick the trip off with a seminar on the area and the community, led by CRDA. We would then hop on a bus and CRDA would take us on a three-hour tour around different neighbourhoods and areas, down to the beach and out for a barbeque.
It was very informal and almost familial, and to their credit they showed up 14 times to do these things, each time with welcome bags. CRDA was very helpful in getting folks to see the value of the local community. In fact, CRDA was critical in helping us convince 40% of our Idaho-based staff to relocate to South Carolina. When we got here, they were very helpful on the hiring side too.
What attracted your employees to the Charleston region?
What the greater Charleston area provides is a culture that is perhaps not a lot different from the Pacific Northwest. Our employees love to be in the outdoors – they love to hunt, fish, camp and hike. You can do all those things that you could do in Idaho here in Charleston. The big difference is that instead of doing those things in a short window in the summer, in Charleston you can enjoy them for 12 months of the year, thanks to the climate.
The ocean was another big attraction for folks, as was the proximity to multiple downtowns. In Idaho, the closest city was a two-hour drive away. Here, you can generally be in downtown Charleston in 30 minutes or less, depending on where you live. At the same time, it is not a huge metropolitan area like New York City, Philadelphia or Washington DC, for example.
Are there any ways Thorne HealthTech is more competitive with operations in Charleston?
We are now able to attract more diversified and talented staff, in greater numbers. The proximity to the airport and interstate highway transit has greatly reduced our freight costs and improved our supply chain management and timelines. When we wanted to ship and receive materials in northern Idaho, the largest interstate was an hour away. Here, it is just blocks away.
Our new facility and others we are now expanding into have materially improved our productivity and lowered the cost of operations. We now produce more items in-house and have greater control over our supply, and as a result have dramatically reduced our order fulfilment timelines, which are now comparable to Amazon. We continue to feel we made the right decision in our move to Charleston.