Craig Fallshaw

Being suddenly retrenched from the family business was a slap in the face, waking Craig Fallshaw up abruptly. As a third-generation producer of pharmaceutical medicines, he reluctantly swallowed that bitter pill, going on to fortify his resolve, and forge his own way forward in this fiercely competitive sector.

Craig’s grandfather was one of the first suppliers to the Australian vitamin giant, Blackmores. But that dependence was the company’s Achilles heel. Losing that account meant overnight disaster for the small business on Sydney’s Northern Beaches.

Recipes and nutrition are a common factor in Craig’s career, and his life after school was initially as a chef.

There’s a theory that the best teachers are those who have spent time in the real world before going back into the classroom. Instead of going straight from school to university and then back to school as a teacher, the thinking is that they are better equipped if they’ve had some life experience outside the classroom.

Craig Fallshaw never wanted to be a teacher, but his decision to break away from the family business and ‘live life’ has been crucial to the success of his company, Complementary Medicines Group (CMG).

Craig was first introduced to the family business while still at school, spending weekends and holidays working for his grandfather. “He had been an undertaker and a builder before getting into the vitamin business, so I suppose I learnt more from him than I realised at the time. He had quite varied experiences before seizing on an opportunity that literally appeared across the road.”

At the time, the Blackmore family lived opposite and was manufacturing cough mixture on the family stove. As Craig recalls, “that launched a thirty-year business relationship with my family who undertook contract manufacturing for them. I literally grew up in a factory that made vitamin pills.”

Cough mixtures and vitamins had lost their excitement for Craig by the time he left school though, and cooking seemed like more fun. When he was seventeen, Craig went to TAFE where he completed a chef’s apprenticeship, so he’s actually a qualified chef.

While doing his apprenticeship he worked for a catering company in Balgowlah, on Sydney’s Northern Beaches and then landed a plum job as a sous-chef on a resort island on the Great Barrier Reef.

Craig recalls “there was lots of cooking mixed with lots of diving. I was in my early twenties and living the dream. A job came up in Cairns selling catering equipment and I snapped it up. It was the best job ever.”

For three weeks of every month Craig would service clients from Port Douglas to Cape Tribulation, and “then for the fourth week I’d join the Wills cigarette rep, the beer rep, the hardware guy and a guy selling pies servicing the rest of the Cape.

“We’d all pile into a six-seater plane and fly up one side of Cape York then down the other. We’d service all the communities and towns in the area. It was like an extravaganza sales trip. I did that for four years.”

Craig then got married, travelled, lived in Greece for a year, got divorced and returned home to Sydney. With a myriad of those life experiences under his belt, Craig felt better equipped to join the family business, which was then being run by his father.

That was the beginning of Craig’s adult apprenticeship. As he recounts, “I worked in all the departments of the business for the next three years.”

The apprenticeship in adulthood proved to be a more difficult one – it certainly wasn’t a cake walk as it had been when he did his TAFE studies.

The business employed around sixty people but had only one customer, and in the early two-thousands the unthinkable happened, and they lost their one account.

Obviously it had a huge impact.

Craig remembers “my uncle came down one day while I was working in the coating area – a horrible job – and said we’d lost the account so I had to go on the road and find new customers.”

Selling wasn’t the problem: he’d developed that skill travelling up and down Cape York. The issue was product knowledge. While the art of selling catering equipment and vitamins is basically the same, you still have to know everything about the product.

Although Craig knew the products, he was short on details such as how they actually worked, together with knowledge about the ingredients and dosages. At that point he decided to study for twelve months to gain a diploma in naturopathy at Nature Care College.

That study enabled Craig to develop in-depth product knowledge. As he notes, “so much so that I was able to help bring back the company from zero to re-hiring around twenty people. The business grew so much that we bought the assets of another company and re-launched our own company as Sphere Healthcare. Our staff grew to over a hundred.”

Amazingly though, Craig’s apprenticeship in adulthood wasn’t quite complete. There was one final lesson.

“I got the sack!”

That’s right! The family business Craig had helped bring back from the ashes, no longer needed him.

Looking back, Craig recalls, “It’s funny how things happen. I was on a holiday with my wife, we’d only recently been married, and I was reading a Ben Elton book where he talks about getting the sack and having everything deleted from his Blackberry.

“I can’t remember what the book was called, but I know I’ll never read it again. I arrived back home to the news I was fired.”

The family sold Sphere Healthcare in 2009 and the next year Craig launched CMG.

“It was a low-key start, to say the least,” notes Craig. “I was working from my laptop on a desk in a mate’s warehouse. It was far from ideal.

“I’d be on the phone to prospective clients and there would be this racket in the background. They’d ask ‘what the hell is that noise? Is that a plane?’, and I’d have to confess, telling them it’s a guy with a tape gun. My no-cost desk was next to the pick-and-pack area.

“That was in 2010; now I’m in a building I own, along with a lot of staff.”

Rather than tackle the big companies head-on, Craig realised there was a gap in the market where the needs of the smaller operators weren’t being met.

Confirming the three big manufacturers serviced about seventy percent of the industry, Craig decided to look after the remaining thirty percent.

One of the lessons Craig learnt during his adult apprenticeship was that when businesses are starting out, they tend to be resource- and time-poor. These are businesses with substantial capital at risk and desperately needing to receive a return on that outlay.

In his industry, “they’d struggle with all the stuff you’ve got to do to bring a vitamin product – which is called a listed medicine – to the marketplace. To bring a listed medicine to market you need something like seven different service providers.

“There’s someone to formulate the product; someone to make it, maybe a raw materials specialist; someone else to pack it, to make your labels, your box and get the registrations sorted.

“The regulations and rules in Australia are the strictest in the world; we’re regulated in the same way as any drug you could name. So my idea was to provide all those services in the one place.”

Through all the trials, setbacks and hardships of setting up his company, Craig had a life-changing moment. He learnt he loved the industry.

“It’s a cool industry: the people are cool, the products are cool, and it’s an industry that has a profound effect on people’s health.”

His passion for the industry is infectious. When Craig starts talking about the products being developed and how he can help the smaller players in the industry bring those products to the market, the excitement is obvious. He recounts a specific example, “Look at K2 for example. It is the most amazing thing ever.

“K1 is all about coagulation. K2 is a relative, but it activates proteins and nothing else does. This is the cool part about it which I really, really like. There is nothing you can eat in your diet, unless you eat lots of fermented food, with lots of K2 in it.”

Craig is off and running now; his passion takes over and suddenly you’re in the middle of a history lesson about how, where, why and who ‘discovered’ K2.

“…It’s been around forever, but it was the Norwegians who originally discovered it.

“Norwegians are like Tasmanians, they’re so far away from everybody else they have to be really bloody clever.

“I had a mate in Tassie who did his PhD in Omega-3 fortification of lamb. Who would’ve thought there was such a thing?”

It transpires that Norwegians don’t have a lot of sunlight so they don’t get a lot of vitamin D and have considerable fracture issues. Although they’re quite active people – they ski everywhere, for example, as Craig notes – their bone health is often at risk.

Norwegian research then looked for ways to improve this. Craig continues to explain that researchers had seen a study on women in a Japanese village who lived to be a hundred and twenty, had amazing bones and also amazing hearts.

“Just like Julius Sumner Miller,” Craig adds, “they asked ‘why is it so?’”

There’s no way of stopping Craig now; he’s engrossed in his story.

“They looked at this population and found that what they eat every day is something called Natto, which is a fermented food, made from soy. So they asked ‘is it like soy isoflavones or what is it?’ Then they realise ‘no, it’s vitamin K2’, the bacteria, because it’s fermented – it’s made like how you make beer, right?”

You’re so mesmerised with Craig’s story you find an automatic ‘right!’ escapes your lips.

Craig continues, “The fermentation makes the vitamin and they have a really high K2 status with amazing bones and amazing hearts. So the Norwegians commercialised it.”

You feel a little more educated and even a bit healthier for having received a dose of passion from Craig, but he was only taking a breath.

He expands again… “It activates osteocalcin so you can then have all the calcium you like in your diet, and in the West now, everything is fortified, right?”

‘Right.’ Another automatic response.

“You get fortified milk, fortified bread and now like my mate in Tassie, fortified lamb…”

The story continues and you are left with no doubt Craig Fallshaw has a love for his industry that is unequalled.

“You know, you really should take it; right?”

Another automatic response is about to escape your lips, but this time you take a breath, because you really want to know how Craig helps that thirty percent of the industry he’s targeted as his own to get a product like this to market.

His secret is to find a niche market and work really hard at giving them the type of service they’d get if they were a larger company.

He explains, “basically, if you’re a small start-up or even a little bigger, when the big manufacturers are busy they’re really into long runs of one product, because with manufacturing if you make the same thing over and over, what happens? You get really good at it.

“So if you come along and someone like Blackmores is making five million of these tablets this month and you want just a hundred thousand, you won’t get the same level of service.

“That’s my niche, to provide those clients with the same level of service the same as companies like Blackmores are getting.”

The difference is also that his business helps with the whole process. “We make customer service the core of what we do because it’s our point of difference. Quality in our industry is mandated by law, but the level of service you provide to your customers is something you control.”

Craig’s life has turned full circle, via a ‘long and winding road’. He grew up in a vitamin pill factory, experienced life in the big, wide world and returned to an industry that was planted deep in his heart. The journey, though, is far from over.

As he summarises, “My vision for the future is for CMG to be a conduit for innovation by bringing new concepts and technology to sponsors of complementary medicine in Australia. And have a bloody good time doing it.”

ADVICE

Craig can give you advice on many aspects of business and much of it would start with finding your niche and getting “bloody good at it”.

Perhaps more importantly though, at this point, Craig shared a personal aspect which needed work – in fact, a lot of work – and it stands out as some of the best advice young entrepreneurs could heed.

It began while he was working in the family business.

When Craig was in charge of about ten people in sales and customer service for what was then a twenty million dollar business, “I would get angry all the time. Really angry. In fact so angry I lost count of the number of mobile phones I destroyed.

“I had a well-paid job, a title and I thought I was really important, but I didn’t realise until it was too late that I was expendable.”

As a result, about ten years ago, Craig did two things. One was a leadership course that, “in a nutshell, helps you find out what is making you angry, and you either change the way you react to it or reframe it.

“The other thing I did was read a book called Five Love Languages, and it not only saved my marriage but it also proved a valuable business asset.

“The best thing I learnt from both of those was to communicate and keep communicating. In the business sense a big part of communicating with those you work with, or who work for you, is to be clear on the outcomes you’re chasing. If you don’t communicate the outcome you’re after, you will never get it and that will make you angry, really angry; believe me, I’ve been there.”

In summary, the lesson “is to not only work on your business, but work on yourself as well; there’s always room for improvement.”