Paper-pushers
AN AMBITIOUS DUO HOPES TO CHANGE THE WORLD WITH AFFORDABLY PRICED PERSONAL-CARE PRODUCTS PACKAGED WITHOUT PLASTIC
THE GLOBAL BEAUTY industry, worth US$532 billion, sees hundreds of new health and toiletry brands appear each year, many of which go belly-up within 12 months. This didn’t deter Aucklanders Vanessa Farrington and Monica Budd from launching a natural health and beauty brand two and a half years ago; they saw both the risk and the opportunity that outweighed it.
Vanessa (above right) was a former business manager for L’Oréal in New Zealand and Britain, and sales manager for Mondelēz (the international company that owns the Cadbury, Green & Blacks and Kraft brands). She knew the pair must be brave to enter the domain of FMCG (fastmoving consumer goods), especially in the crowded beauty aisles. “We had a good idea, but our success was dependent on speed to market,” she says. “We needed to establish our brand quickly, or other big international players would copy us. I’d seen that happen before.”
Like Vanessa, Monica, who has a background in natural medicine and organic farming, was determined to create a product that minimized wasteful packaging. Most products in the toiletries category come excessively wrapped. The global cosmetics industry produces more than 120 billion units of plastic packaging a year, with 70 per cent going to landfill because it’s made from plastic grades that aren’t widely recycled. In New
EMMA RAWSON
Zealand, most councils will accept only grades #1 and #2 for kerbside recycling.
Aotearoad is a range of natural deodorants, moisturizer sticks, lip balms and hair care presented in 100 per cent recyclable or compostable cardboard tubes. The cardboard is made from Forestry Stewardship Council-certified sustainable paper with environmentally friendly soy ink. (The same as NZ Life & Leisure.) “Consumers say they tried our deodorant for the first time because of the packaging and they love it,” says Monica.
Aotearoad has increased production by 66 per cent year on year and doubled its profit. The range is stocked in more than 200 outlets nationwide, including health stores, pharmacies, Farro Fresh, Pak’nSave and New World supermarkets and exported to Britain, Australia and Germany. Paper packaging is not a new concept; early last century, personal-care products also came in cardboard packaging. The consumer boom of the 1950s, coupled with plastics innovations, saw the beauty industry turn almost exclusively to what was regarded as a cheap mouldable medium. Today, plastic is viewed as pervasive and excessive.
“It is a huge outlay for us,” says Monica, of the packaging that costs 60 cents more per unit than plastic. She manages production and manufacturing of Aotearoad products and says the duo are proud of their environmentally friendly stance, despite the added expense.
THE NUMBERS
5 staff 150,000 units hand-poured in the past 12 months
59% increase in net profit
25% of sales are exported
60 cents per unit — cost of packaging
66% increase in production year on year
“It’s important for us to keep the price affordable,” says Monica. “We want to keep it at the $11 mark. We can’t make a difference if we are an elite brand that only some people can afford.”
Storing a product such as deodorant in a cardboard tube can be complicated due to its semi-solid state. At certain temperatures, seepage is a risk. Monica trialed hundreds of options for Aotearoad’s deodorant composition. The first formula was based on a family recipe of magnesium, bicarbonate of soda, shea butter and essential oils. The products are currently made in a private kitchen and poured into the containers by hand. In the next few months, Aotearoad will move production into a contract manufacturing facility so it can scale up.
ELEVATOR PITCH Aotearoad is a range of organic personal-care products in plasticfree packaging, and includes aluminium-free deodorants. The active ingredients in the range are essential oils with antimicrobial properties, including mānuka and bergamot.
HEADWINDS To make its product affordable, Aotearoad had to buy packaging in bulk. After launching the moisturizer sticks, Monica and Vanessa realized the containers looked too similar to some of the deodorants, confusing customers. “People started putting the moisturizer under their arms and wondering why it wasn’t working.”
TAILWINDS A 10,000-unit order from an international stockist at the launch of the business helped the company achieve economies of scale. “Vanessa landed an overseas order straight off the bat through one of her New Zealand contacts,” says Monica. “This meant we could produce more deodorants at the beginning and achieve a lower unit price. Some of our competitors who make natural deodorants charge $18 to $29 per deodorant. Ours is $11.99.”
WHAT’S NEXT? Aotearoad has just launched a new range of lip balms and, this summer, plans to release a coloured-zinc sunblock. In the next 12 months, the pair aim to double their range, expand supermarket distribution and secure more stockists in Australia.
LESSONS “In the first couple of years, you don’t have to have the flash office space with the big sign on the door,” says Vanessa. “By having low overheads and low levels of debt at the beginning, we were able to spend our money creating products without the added financial pressure.”