The sweet smell of success: For Lafe's Natural Body Care, exporting is no sweat
by Stuart Wade
Austin Business Journal
Published: February 9, 2004
Lafe Larson knows the trials and tribulations of exporting.
About six years ago, a new client in Japan placed an order for 3-ounce deodorant stones from his company, Lafe's Natural Body Care. To complete the huge order, the Austin company substituted some larger stones at no extra cost.
However, the plan hit a snag. An export broker informed Lafe's Natural Body Care that, based on Japanese health regulations, each stone couldn't exceed 4 ounces. If the shipment was overweight, the client probably would refuse it.
"We realized that we would need to manually weigh and resize every piece that was 4 ounces or larger -- a pretty large undertaking," Larson says.
"I ended up spending five or six 14-hour days in McAllen working in a large, very dusty warehouse under horrible working conditions, reshaping about 4,000 deodorant stones."
In the end, the order was delivered and everything was fine, Larson says.
The company, founded in 1997, has capitalized on lessons like that to become an exporter of natural deodorant products to 12 countries, including Canada, Mexico, Hong Kong, the United Kingdom and Japan.
"There is a strong demand for U.S.-made natural and organic personal care products, although price points make local marketing difficult since orders usually are small and freight costs considerably drive up the price for the end consumer," Larson says.
Last year, Larson earned recognition from the U.S. Export Assistance Center in Austin for his company's entry into three new international markets. The center helps small and midsize companies overcome export hurdles.
Karen Parker, international trade specialist and director of the center, says: "Some businesses are afraid to get involved with exporting and the related complexities."
Larson has overcome those complexities partly by tapping the U.S. Export Assistance Center for help with statistics, research and advertising. Most of Larson's export business comes from contacts he makes at trade shows such as the annual Natural Products Expo in Anaheim, Calif.
Exporting can be challenging because local distributors sometimes might not have effective marketing programs in place to sell consumers on the enhanced value of natural products compared with conventional ones, Larson says.
"That consumer education is critical since price points on natural products are generally considerably higher than conventional personal care products," he says. "We believe there is huge potential for our market overseas, and it's just starting to take hold in the past five years."
New products are about to take hold as well.
After founding his company in a spare bedroom, Larson is working on new product lines, including baby care items, body lotions and oils.
Locally, Lafe's deodorant products are available at Whole Foods and Sun Harvest stores. The company sells through distributors, ships directly through an online store and provides some clients with private-label products.
Ten years ago, Larson, a former nonprofit political consultant, started selling deodorant stones, which use mineral salt to kill bacteria. Salt deodorant has been used in Southeast Asia for thousands of years.
Importing the stones from Thailand, Larson learned the ropes, moonlighting in the growing natural body care sector by selling to heath food stores. Setting up shop permanently a few years later, the startup was the "ultimate bootstrap operation," he says.
"Credit cards, a small family loan, refinancing the house -- you name it, I did it," Larson says.
"Eventually, you grow into where you can go into conventional credit. I went from selling ideas and concepts I believe in to selling products I believe in. I never thought I'd be selling natural body care products to a dozen different countries."
The company has enjoyed sales growth of 25 percent to 30 percent each of the past five years. With the number of products Larson plans to introduce this year, he expects that growth pattern to continue. Sales of about $350,000 are projected for 2004.
"The new product lines will generate most of the increase in sales along with our export sales," Larson says. "Additionally, our private-label program should bring in significant international income for the first time. We expect strong sales from both Canada and the Middle East in 2004."
The cosmetics and toiletries industry is estimated to grow by 15 percent through 2007, to $34.3 billion, according to Vermont-based Impact Marketing Consultants. Products based on natural ingredients will gain share within most categories, the firm says.
"Lafe's products have done very well for us," says Milo Dhanoa, co-owner of Vancouver, Canada-based Tara International, Lafe's largest Canadian distributor. "His product is among our top lines. Last year, we sold 5,000 units in all, about 2,000 of the roll-on and another 900 or so of the pushup stick."
Soon, Larson's company will launch six new deodorant products in a twist-up version, the most common form of deodorant on the market.
At the same time, Lafe's is introducing a new natural and organic baby care line of shampoo, lotion, massage oil and baby powder. Larson says he'll follow the new line with several more items this spring, including hemp oil shampoos, lotions and massage oils, and will top the season with new, botanical hair growth/hair energizer products for reduction of hair loss in men and women.
In the works for this summer are an all-natural, botanical-based version of baby and hand wipes, and an all-purpose makeup removal product, he says.
So far, the company's biggest single-day activity occurred four years ago, when Larson sold 6,000 deodorant sprays during a single eight-minute appearance on shopping network QVC. That's when Larson first saw broad evidence of the consumer movement away from chemical application toward natural body care.
Masking odor is one thing, he says, but using synthetic chemicals to prevent perspiration or abate unpleasant odor has come under some scrutiny lately.
Human beings sweat to regulate body temperature, but perspiration -- a chemical mix of water, sodium and chloride -- doesn't begin to smell unpleasant until it comes in contact with bacteria.
Zirconium and aluminum in antiperspirants block the pores that release sweat. For those who dislike the idea of chemically stopping perspiration, deodorants mask the smell of sweat but don't prevent it.
Most leading deodorants use triclosan to kill bacteria. Natural deodorants like Lafe's use only mineral salt to minimize the odor-causing bacteria.
"I make the analogy that using an antiperspirant is akin to plugging a car's exhaust system," Larson says. "Plus, it just seems like a bad idea to be constantly introducing even small amounts of toxins into your body."
Although there isn't a proven connection between underarm cosmetics and breast cancer, The Journal of Applied Toxicology in January released new research showing that parabens, chemicals found in underarm cosmetics and other products, can be detected in human breast tumors.
"Parabens are used as preservatives in thousands of products, but this is the first study to show their accumulation in human tissues," says Dr. Phillipa Darbe, author of the study.
Alum, a mineral salt used for centuries as a bacteria-killing astringent, is the key ingredient in Lafe's deodorants.
"Our skin is our first line of defense and our last point of elimination. Putting chemicals on the skin which actually stop us from sweating seems like a bad idea," says Larson, who arrived in 1981 in Austin, where he earned a master's degree from the University of Texas' LBJ School of Public Affairs.
Lafe's deodorant product line comes in a variety of scents, including lavender, powder, active and unscented, as well as in different sizes and applications.
There's a three-ounce hemp oil roll-on; 4- and 8-ounce sprays with aloe vera, which are popular with women; and a 4.25-ounce deodorant stick for those who want a drier application. The company's original 6-ounce deodorant stones still are available, as is a 3-ounce travel size.
Because the personal care niche market faces short product lifecycles, price-driven competition and fast-evolving trends -- all of which can decimate a brand -- understanding market trends is critical to developing successful products, Larson says.
"Because consumer demand is segmented to sprays, roll-ons and sticks, most of our competitors, who are still selling 'rocks,' are not going to see a lot of growth potential," Larson says.
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