IN CONVERSATION: Pharma’s Almanac Editor-in-Chief David Alvaro, Ph.D. had a (virtual) conversation with Federal Equipment Company’s Justin Kadis about how the company is using virtual means to support their business and that of allied companies.
Federal Equipment Company, a long-time leader in the provision of used manufacturing equipment to the pharmaceutical, chemical, plastics, packaging, and food and beverage industries, has responded to the COVID-19 pandemic by becoming a pioneer in organizing virtual trade shows to fill the gaps left by the necessary cancellation of traditional trade shows.
Q: Justin, what can you tell me about how Federal Equipment Company got involved in the Virtual Pharma Expos and what that experience has been like so far?
Our team recognized early in the coronavirus outbreak that most trade shows would be canceled this year, which would have a detrimental impact on our business and other businesses around the country and the world. Our response to it was to take ownership and get ahead of the situation. One of Federal Equipment Company’s most important resources is our strong relationships with original equipment manufacturers. We were able to leverage our relationships with OEMs to launch the Virtual Pharma Expo — our first event took place in May and featured 13 speakers from 12 different companies.
The first expo turned out better than we originally anticipated. We had around 1,100 unique registrations from the event; the feedback from exhibitors was overwhelmingly positive. One of the reoccurring comments we received was both the surprise over price and the corresponding reach — the exhibitors were able to reach a large audience at once, and at a fraction of the cost of exhibiting at INTERPHEX, CPhI, or similar events.
To make the virtual event a success, we partnered with Pharmaceutical Online, who helped coordinate behind the scenes, including managing the video webinar platform, and Techceuticals, our partner here in Cleveland that operates out of our pharmaceutical warehouse. Techceuticals’ Mike Tousey was the moderator for the event, and his personal relationships with all of the exhibitors helped assure everything ran smoothly.
Because of how well things went in May and, owing to requests we had from exhibitors interested in more virtual events, we decided to hold a second Virtual Pharma Expo this September with 24 speakers representing a more diverse group beyond the solid dose machine companies at the first event.
Q: With these successes, are you planning on holding more expos?
The next event will likely be held February 24–25, with 10 speakers focusing on aseptic/sterile processing and packaging on the first day and another 10 speakers discussing pharmaceutical packaging on the second. If there are equipment manufacturers out there that would like to participate, they should contact me. We will likely move back to oral solid dose manufacturing for the fourth event, which will most likely be held in early May 2021.
Q: I would imagine that it’s easy to transfer talks into a virtual format. But are you looking to find ways to replicate the booth exhibits experience as well?
That’s a great question. For the first two events, we focused on the presentations but used a platform that incorporated polling questions and other ways to interact with the audience. As we speak to exhibitors regarding future events, we want to stress to them that this is essentially taking the place of trade shows. So, if you can stand with a machine behind you and maybe talk about what it is and how it works, this is your opportunity to do so, because you’re not necessarily going to be able to do it at a physical show. But for our next expo, we are exploring some additional technology platforms that can enable breakout and networking sessions and other possibilities.
Q: For some companies at trade shows, the booth presence is minimal, so there probably isn’t much disruption. But for Federal Equipment, showcasing physical machines is more critical. Does that create greater challenges for you?
We considered this when planning our presentation for the first Virtual Pharma Expo and decided to step outside of the box. When our President Adam Covitt gave his presentation, we had five different machines behind him, and he was able to discuss those machines and how they were a representative sample of the type of equipment that we sell. We received feedback that it was the best presentation of the event.
Q: When you originally were pitching the expo to potential exhibitors, was it a tough sell or was there immediate interest?
The interest was strong from the start. Between Adam’s and Mike Tousey’s relationships with these OEMs, they were able to reach out right away and say: “Listen, trade shows aren’t happening but here’s a great opportunity to get involved, get in front of a lot of people; really get some leads that you wouldn’t necessarily be getting this year, because there’s nothing else going on.” Again, the response was tremendous.
An important differentiating factor with the Virtual Pharma Expo is that you’re getting exposure to a new audience. When you’re using your LinkedIn and your email list to try and promote to your typical audience, that’s one thing, but with all of these different companies — along with us, Techceuticals, and Pharmaceutical Online —promoting it to their audiences, it reaches a larger group that may be different than who you’re already touching.
Q: Were there any things that didn’t go as planned or lessons learned that will influence how you do things going forward?
Absolutely. One of the biggest hurdles that we’ve run into is bandwidth issues for some of the presenters. We’re doing our best to put together a toolkit of better equipment that can be purchased, most of which are inexpensive but go a long way in making everything more professional, and learning from our experience with the first two shows to home in on what’s worked and what hasn’t. For example, Klöckner Pentaplast had two experts interviewing one another in their presentation, and that conversation was very effective. So, that would be a tip for some folks to look into next time around.
Q: At this point, are you seeing these expos as only a solution for the duration of the pandemic, or do you think that you would continue with virtual expos when things return to normal?
I think that there may still be an opportunity to continue Virtual Pharma Expo even once things got back to normal, although it’s unclear at this point how strong the appetite will be for that. We’re getting a lot of value out of it, both from a revenue-generating perspective and a contact- and lead-generating perspective. We’d love to keep doing this.
It will be interesting to see what happens, because people’s ability to adapt to technology today is on such a steep curve compared with where we were nine months ago, and it’s not totally clear what the event business is going to look like in the future. Are people really going to need a 20 x 20 ft. or a 50 x 50 ft. booth at INTERPHEX or CPhI to be able to accomplish what they want to accomplish? If that’s the case, does that just mean that people are going to scale back their presence? Will people focus on virtual shows moving forward? I don’t necessarily know what the future will hold, but it’s clear that it will look different than what it looked like before COVID-19.
We recently updated the website from a Virtual Pharma Expo website to a broader Virtual Expo Series website, imagining that at some point we will expand to other industries. Pharmaceutical is really our bread and butter, but there may be an opportunity to organize a chemical show in the future.
Q: Is the audience you are attracting to these expos representative of what you would get at a conventional trade show or somewhat different?
We have a lot of the traditional contract manufacturers and big pharma companies participating, but we are also seeing some original equipment manufacturers tuning in to see what their competitors or partners are talking about as well. I think that in a live environment, a competitor avoids direct interaction, but the digital perspective offers a unique opportunity to learn from the competition.
Q: What can you tell me about some of the other virtual solutions you’ve developed other than aspects of your business: tours, audits, or auctions?
Before the pandemic, auctions had already mostly transitioned to virtual models. On top of that existing framework, the world has learned very quickly that there are so many things that can be done remotely and virtually. At Federal Equipment Company, we are communicating internally better than ever before and expanding our capabilities to perform virtual inspections better than what we previously had in place.
Sometimes customers will have to travel here because they need to see the ins and outs of a machine before deciding on a purchase. If we can save them a plane ticket through a FaceTime inspection that allows them to buy the machine and get it into service a lot quicker, that’s a great solution for all parties, now and even after the pandemic is resolved.
One of the major things we’re working on for 2021 is a solid strategy for improving and extending our web presence. Beyond search engine optimization and enhancing the search functionality to make it easier for companies to evaluate equipment virtually, we are looking to launch a comprehensive parts business. We participate in many liquidations where we acquire machines as well as related parts. I would imagine we have several thousand different units of parts in our pharmaceutical warehouse, and we are in the process of cataloging those parts and putting them on a separate e-commerce website, which will become PharmParts. This will be a single, discrete location where customers can find the parts that they need for their machines, whether they are tablet presses, capsule fillers, mills, or other machines.
Most of these initiatives were projects that we were discussing in the past, but the pandemic provided an opportunity to step back and readjust our sights a little. We have been able to look internally to determine whether we have the right people on the right processes, and focus on whether there are projects that can help us grow our business in the future — this intensified our motive to complete them much faster.
Q: How important is Federal Equipment Company’s long history and credibility to making customers comfortable acquiring equipment that they may only have inspected virtually?
Federal Equipment Company has been in the business for a long time, and our name carries a guarantee. The trust that we have built with customers over the years is critical to our success. While we do sell one-off items to companies to meet discrete needs, we always aim to convert that transaction into a long-term relationship.
During the pandemic, customers’ options for in-person inspection of equipment are limited, but that established trust gives customers peace of mind that we will ensure the quality and operability of all equipment we sell, which often means bringing in a technician from the OEM to get a machine into the shape the customer is expecting before it is shipped.
Q: Is there anything else you can share about Federal’s strategy to face other challenges in the coming years?
We’d like to focus on developing more investment recovery programs, as we have already done for a couple of our long-term clients. There’s tremendous value for companies to understand their assets and their worth, and whether they might want to redeploy them to other sites — if that’s an option. When you’re so close to just manufacturing or procurement, you may not understand the bigger picture, and that’s part of what we’re able to provide our clients, given that we’ve been working in the space for decades. I see a real opportunity for us to get much more involved in investment recovery over the coming years.