Schmidt’s Naturals Company LLC knows the scent of success.
The natural deodorant company had experienced three years of explosive online sales growth when consumer packaged goods giant Unilever caught wind and snatched Schmidt’s up for an undisclosed amount in December 2017.
Since then, the natural deodorant has embarked on a global rollout of soon-to-launch country-specific e-commerce sites and has extended its placement with several U.S. retail chains, including online and in stores at Costco Wholesale Corp. (No. 12 in the Internet Retailer 2018 Top 1000 ), says CEO Michael Cammarata.
But getting to this point took the personal funding and faith of Cammarata, who is a serial entrepreneur and angel investor, who made his first million at 13 years old from his own web hosting business. Cammarata discovered Schmidt’s deodorant and the product’s founder Jaime Schmidt in 2014. Cammarata was looking to invest in a natural deodorant. From personal experience, he knew there was a demand for it, but a lack of products that worked well. He found Schmidt’s and decided this was the product he wanted to get behind and partnered with Schmidt. The pair became co-founders and co-CEOs of Schmidt’s Naturals from 2015 to 2017, and after the acquisition by Unilever Cammarata continued as CEO. Schmidt is now a brand ambassador for the deodorant line.
Initially, the product was sold in a jar; so, step one was getting the product manufactured in a stick form, Cammarata says. The company began manufacturing a stick formula in its Portland, Oregon, facility. Later, to increase production, Cammarata and Schmidt worked together to find a copacking company facility that was capable of making a powder-based natural deodorant.
After six months, in 2015, Cammarata was ready to put more marketing dollars behind the product, especially on Instagram and Facebook. Schmidt’s also received a lot of traction from media featuring the product, such as having the deodorant in a segment on the Today Show and in magazines. Plus, it had a few unsolicited celebrity endorsements, such as Kourtney Kardashian, Cammarata says.
In 2016, Schmidt’s began selling on Target.com and into 200 Target Corp. (No. 17) stores. Six months later, in February 2017, Schmidt’s products rolled out chainwide at all Target stores, in addition to 200 Walmart stores, he says.
Part of the success at Target was being able to prove that shoppers who bought Schmidt’s deodorant had not previously bought deodorant at Target, according to Target’s data from shopper insights and data from Google in online and offline purchases. Therefore, it was incremental revenue for Target, and not cannibalizing Target’s own deodorant sales, says both Cammarata and a Target spokesman.
Schmidt’s saw consistent year-over-year growth for the past four years, in large part due to Schmidt’s success converting shoppers from conventional brands at mass retailers, says a spokeswoman for Schmidt’s. In 2017, it had generated much more sales than 2016’s sales, although because of the Unilever acquisition, Cammarata could not disclose any specific figures.
Direct-to-consumer sales are still important
When Schmidt first launched, about 60% of its sales were direct to consumer from its own site, and the remaining 40% came from trade shows, spas, co-ops, mom-and-pop shops and a handful of regional Whole Foods stores (now owned by Amazon.com Inc., No. 1). Once it launched in mass retail, including Target, that percentage decreased to around 50%, and Cammarata would not disclose what its direct-to-consumer breakdown is now.
Throughout the entire growth period, Schmidt’s has been “extremely profitable” with triple-digit sales growth, he says. Schmidt’s has not raised any funding, he says.
“I don’t need to raise rounds,” Cammarata says. “When I get involved, I am able to give my resources and that stops the need for outside funding.”
Now, Schmidt’s products are sold online and in stores at many retail chains including Macy’s Inc. (No. 6), and Macy’s-owned Bloomingdales, Walgreens Boots Alliance Inc. (No. 37), Whole Foods, CVS Caremark Corp. (No. 114) and Costco.
The acquisition allows Schmidt’s to plug directly into Unilever’s supply chain, meaning it can manufacture enough deodorant to keep up with demand and scale at a global level, Cammarata says. Schmidt’s also is expanding its product line. It launched toothpaste in December 2017 and a body wash a few months ago.
Still, Schmidt’s’ direct-to-consumer business is still very important to the brand, he says.
“Brands can have a one-on-one conversation with its customer,” Cammarata says. “In our mind, (direct-to consumer) is a way for us to talk directly with consumers.”
The retailer can solicit customer feedback and try out limited runs of products without investing a ton of capital, he says.
For example, Schmidt’s will send an email to its email subscribers and core customers, giving them a poll to choose which scents they would like best. The brand discovered its current No. 1 selling deodorant scent, Rose Vanilla, this way.
Similarly, this month Schmidt’s launched a product with anthropologist Jane Goodall, who aligns closely with the retailer’s brand mission, he says. Schmidt’s and Goodall collaborated on a scent—Lily of the Valley—and 5% of every Lily of the Valley purchase benefits the Jane Goodall Institute’s efforts to protect animals and conserve the environment.