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The Buzz on Burt's Bees

Burt Shavitz is no looker. That's what Roxanne Quimby, co-founder and CEO of personal-care product maker Burt's Bees, says of her friend and former partner. "With a guy like Burt on the label, you'd better pray something's in the jar," she says. Those prayers were answered. Burt's Bees, which features Shavitz's bearded, wild-man image on all of its packaging, has grown into a multimillion-dollar operation.

That's a long way from selling honey and beeswax-based products at bake sales, which is where the two started out in 1984. In 1999, Quimby bought out the reclusive Shavitz, who lives in a turkey coop in Maine. Quimby has her sights set on making the Burt's Bees brand widely recognized by consumers while maintaining the values for which the company has become known. All of the products are made with natural ingredients, and the packaging is as environment-friendly as possible. Think Colgate with an earthy-crunchy emphasis. Says Quimby: "I feel that the goal here is to compete among the biggest and best brands in America."

It's a lofty goal, especially for an outfit that has only some 80 employees -- not exactly on par with the huge consumer-products companies. Although Burt's Bees is a tiny player next to the giants of the industry, the company is on a dizzying growth trajectory. Burt's Bees is on target to meet 2002 sales projections of $45 million to $50 million, which is about 50% more than in 2001. That year, sales increased by 46% over 2000 figures. And although it's still privately held and doesn't make its financials available to the public, if its growth continues, this company could go public one day.

Besides its signature product, beeswax lip balm, Burt's Bees sells some 142 items, including the Baby Bee line of infant-care products and a cosmetics line, Wings of Love. Quimby recently spoke with BusinessWeek Online Reporter Amy Tsao about her plans for the company. Edited excerpts of their conversation follow:

Q: You're a long way from making candles and lotions in your kitchen. Where would you say the business is at now?

A: We're not a cottage industry anymore. Compared to other consumer products, we're pretty small, but we see our main competition as household brands that people are using now -- Crest toothpaste, Head & Shoulders shampoo. I'd like Burt's Bees to be among the mainstream consumer products people use every day.

Q: What's the next step?

A: It's difficult for a small company to get into a Walgreen's and compete head-to-head with [major brands]. These brands have much more money and national advertising behind them. We've been choosing our channels carefully so we don't get clobbered by the giants in the industry.

We're making inroads with the consumer rather than through the channel. We do a lot of grass-roots-level marketing, like [giving away samples]. Once people try one of our products, they'll see that it's better. And that demand will ultimately create shelf space for us in the mass marketplace.

Q: In addition to current venues, like health-food stores, where might consumers begin to see Burt's Bees next?

A: We're just beginning to market directly to bigger channels with some overtures to grocery-store chains and drugstore chains. We're doing it on a limited and experimental basis, knowing a little company like ours could easily be stamped out. We're mainly working with less high-profile chains, where we can prove our premise without creating a whole lot of competition.

Q: Will the products ever end up on the shelves of big department stores?

A: No. Department stores project an image of exclusivity. I see Burt's Bees for all the folks. You don't have to be sophisticated to use it, though many of our customers are sophisticated. We want to appeal to just about anybody, and department stores are aiming for a female shopper who is buying a product as part of an image statement. We're an alternative to the image statement.

Q: What new products are coming up?

A: We're still working on shampoo. We have a liquid dandruff shampoo that's over 90% natural, made with essential oils, coming out in January, 2003. This will be our first shampoo. Shampoo is something we need to have in our product line to be a player in consumer products.

Q: What are some challenges you've come across in at this point in your growth?

A: We launched the toothpaste, which sells for $4.50 a tube, in January. It has been an interesting foray for us in earning consumer loyalty. It has been well-received and has shown a lot of promise. But we oversold, and now we're out of stock. That's one of the reasons we're playing out our game here in markets that aren't as competitive as the mass market.

If we sold this to a chain store and ran out, they would've said, "Forget these jokers." The markets we work with now are much more forgiving. We as a small business have to figure out all the operational issues involved -- forecasting, planning, and distribution.

Q: What other steps are you taking to be better prepared for bigger markets?

A: We're working with a salesman who comes from national brands, and he knows how grocery channels work. The whole system of operating rules is important to understand in order to be successful in big chain stores. We'll do a test in two or three chains, try to understand the costs, and see if we can afford to do business in these.

Q: At what point do you see Burt's Bees products as part of the mainstream?

A: I think it will take a solid three to five years to be there. I was talking to someone at Neutrogena. He described the early days there. When they were first launching, no one could even pronounce the name. Over time, they worked on that brand, and now it's as common as anything. I hold that as my role model. With our premise of natural, botanical ingredients, why shouldn't Burt's Bees be in every drugstore in America?

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