Puckering Up to Mass Retail

Working out of a former feed store in rural Gardiner, NY, Kiss My Face is far removed from the corporate cosmetics hub of New York City. But in-store, the natural and organic body care brand is butting up against the big guys as it expands its retail presence from health food stores to Target, Safeway, Publix and more, as well as overseas. Founders and CEOs Bob MacLeod and Steve Byckiewicz started the company by selling olive oil soap to local natural food stores in the early 1980s. Today, Kiss My Face has maintained its independence, added more than 200 SKUs and is beginning to outgrow its warehouse, experiencing record sales in late 2008. "A lot of what we're doing is figuring out how to have enough product to be able to sell," says Lewis Goldstein, vice president of marketing. "As we're growing, we have to figure out how much we can afford of extra inventory to keep so we can meet this growth that's happening, which hopefully in these trying times we can continue to move forward."Goldstein joined the company last February after six years at Cadbury Schweppes, leading the merchandising and licensing of 60 beverage and confection brands. Before that, he spent seven years at Boston Beer Co., managing the point-of-sale, promotions and events for Sam Adams and the company's other brands. At Kiss My Face, Goldstein is improving the company's processes and systems to better merchandise the brand at retail. P-O-P is the company's primary marketing tool, doing minimal print advertising and no TV.Working closely with the small marketing team is Jane Santopietro, vice president of sales, who formerly held that title at Bonne Bell. Like Goldstein, she is an industry veteran whom the owners tapped to take charge of the brand's sales activities six years ago. The in-house sales department has 12 members, but the company doesn't get too wrapped up in titles and department divisions."Structure is not one of the hallmarks of this company, which is also cool in some ways; everyone does whatever it takes," Goldstein says. "I definitely do whatever is needed. Two weeks ago, we couldn't get all the orders we had out, so I went out and worked in the warehouse the whole day."Staying IndependentAccording to a recent study by Chicago-based Mintel, nearly 30% of beauty products launched in the U.S. last year were organic, ethical or all-natural, up from 23% in 2007. Additionally, most of Kiss My Face's competitors are owned by massive CPG companies -- Burt's Bees was purchased by Clorox, Tom's of Maine is under Colgate-Palmolive, and Jason is part of Hain Celestial Group. This means Kiss My Face is one of the only independently owned companies in its category, which can be challenging but also allows the brand to stand out from the crowd. "When the giants jump on board and decide to be a part of it, on one hand it's a little frustrating, but on the other hand it's all good," MacLeod says. "They bring a greater awareness to the consumer, and they bring the costs down because of their buying power."Having more brands to put in the natural section also benefits the retailer, in turn creating more opportunities for Kiss My Face, as stores look for a variety of products to fill out this growing section. "There's such a level of interest in our category that we end up helping [the retailers] with their assortments," Santopietro says. "Sometimes it's not even good to be alone, you want the competition with you so you can create an environment with products."Being smaller also allows the brand to be more creative. "I am a firm believer in one of the advantages to [being small and independent] is we can move quicker, and we can take more risks," Goldstein says. "There aren't a lot of taboos here, so I think those are things that our consumers appreciate and that we can do that maybe Clorox would be afraid to do.""The big multinationals have vast resources to throw at marketing and advertising that we don't have, so it just keeps us nimble," MacLeod adds. "We've had to be creative from the get-go, and we try not to forget that."This independence also allows the brand to put a human face on its products. Every new package, display and selling material has a note from Bob and Steve, a personal touch that both consumers and retailers seem to appreciate."I included their picture [in a sales presentation], and buyers were just so in awe of real people running a real company," Santopietro says. "Now we're taking it to the next step and putting them on the back of the packaging and incorporating them on our displays. On our oral care we put 'founders and chief brushers'; on our shaves it's going to be 'founders and chief shavers.' It just has a little twist of fun, and it really works out quite well."Learning From ShoppersFor better or worse, as a small company, Kiss My Face doesn't approach shopper marketing in the same way as its larger competitors. For new product launches, Goldstein sends samples to friends and colleagues and asks for their feedback. For the launch of the kids' line, for example, the company assembled a focus group of 20 mothers and asked them questions about the products. "I don't see us doing it like the big companies do it; it's not going to be the way we operate," he says. "Maybe we can afford it, it's just not who we are."Every member of the company also goes to stores, asks shoppers what they think and observes how they shop. At stores where MacLeod and Byckiewicz have close relationships with the owners, including one down the road that is owned by a Kiss My Face employee, the company tests out new products and displays to see how well they work. "We're always looking at what the competitors are doing but also looking at how people are buying our products and where things move better," Goldstein says. The brand's target audience is different for different products, with things like lip balms attracting women between the ages of 20 and 40 -- smart consumers who read labels and perhaps got into natural and organic food first, MacLeod says. But with new product introductions like the kids' line, a growing presence in mainstream retailers and more shoppers seeking natural and organic alternatives, Kiss My Face is attracting new customers every day. "Gradually over the years, people have become much more aware of the toxins in the environment and in products. It's only in the past three or four years that it's really becoming mainstream," Byckiewicz says, a trend he thinks is going to stick. "It's the way people are going to eat, the products they're going to buy, everything will be all about natural and organic and clean."The brand's users are also very loyal and not afraid to offer feedback, "good, bad or indifferent," MacLeod says. When the company changed the fragrance slightly on a product a few years ago, MacLeod says they were flooded with e-mails and letters from dissatisfied customers. "We quickly reverted back and realized that was rather arrogant of us because we don't use it every day of the week and they do, so lesson learned."Another source of feedback is bloggers, who review new products and give them away to their readers. Kiss My Face also relies heavily on its website, e-mail communication, and beauty and lifestyle websites to spread its message online, but the place the brand really tries to reach consumers is in-store. "We do some print advertising, but I believe a lot in the way we'll grow is putting the product in people's hands and letting them try it," Goldstein says. "Some of our competitors can afford to spend a lot of money on print, so if we can't do it, let's do something that's a little more off the wall, a little controversial because we can, because our company is still independently owned."In-Store GrowthFound in expected places like Whole Foods, Trader Joe's and independent food co-ops, Kiss My Face is gaining shelf space in more mainstream channels, including Kroger, Longs, Wegmans and Target. The products can also be found in drugstores, outdoor retailers, other specialty stores and in more than 25 countries, including Hong Kong, Finland, Australia and Russia. All packaging is bilingual for Canada, where the brand can be found in national chains like Loblaws and Shoppers Drug Mart, but is not customized for other countries, partly because "there's a desire to have American products as they are," Goldstein says.In many cases, the big chains have come to Kiss My Face to help flesh out their natural and organic sections, a reaction to growing consumer demand for such products. "Those places are sort of gradually dipping their feet in the water," Goldstein says. "They may start with a toothpaste and a shave cream and see how that goes, so it's sort of at the infancy in the conventional world." At Target, for instance, Kiss My Face shampoo, conditioner and shower gel are merchandised in the natural beauty section of the store's cosmetics department. The brand name and "obsessively natural" tagline appear on the shelf, and an in-line display highlights the key attributes of every product in the section (no animal testing, recyclable packaging, paraben-free, etc.). Target also carries the new kids' line in the personal care aisle alongside other kids' bath products, and Goldstein says they will add Kiss My Face's organic facial care line and lip balms next year. The company is also working on a customized endcap.Products are often restricted to shelf placement at stores like Target and Safeway, but whenever possible, the brand uses testers and sampling, including new sample packets that will either hang on bottles or sit in boxes, each with a coupon attached. Corrugated shippers have also proven successful in the past and remain a key merchandising vehicle."A lot of stores use our floor shippers, and that's one of the ways we get into some of the accounts that this is new for, because it allows them to try the product out without taking any shelf space," Goldstein says.The newest display in Kiss My Face's P-O-P arsenal is a multipurpose permanent rack (pictured on Page 26). The rack ships in two boxes along with a product assortment chosen by the retailer -- giftable items like lip balms, trial-size products and lotions for some stores, or toothpaste and deodorant for supermarkets and drugstores, for example. Any retailer who orders a minimum of $1,000 worth of product can get the rack, and multiple national accounts have already expressed interest."We want it to be nice enough so that it can go into a nice natural store, but it could also fit perfectly on the floor of a conventional grocery store," Goldstein says. Depending on the unit's success, the company may create a counter unit with the same look and feel, as well as a floor rack for the kids' line.Goldstein is trying to convey a consistent message with every consumer touchpoint, which hasn't always been the case. "In the past, some were done really well, some were done sort of off the cuff. It needed to be brought together and cohesive," he says. The new rack, shippers and counter units tell the brand story through a note from the founders, lifestyle imagery of people kissing and copy with a little bit of attitude, like "Get Kissed" for lip balms, "Keep it Squeaky" for the Sudz line and "Get Out and Stay Out" for sun care.Defining Natural and OrganicLike the products themselves, Kiss My Face displays, packaging and sales materials are designed to be as eco-friendly as possible. The new rack, designed by Paramus, NJ-based LG&P In-Store Agency, the company's main P-O-P company, is made with recycled metals, eco-friendly inks and lacquers. Although doing so cost about 25% more and made it harder for the manufacturers to find the right materials, the company wouldn't think of doing it any other way."It's a whole different mindset here. In the corporate world, we were much more likely to do what was easiest and what was quickest and what was most cost-effective, whereas here, we're also conscious of our impact on the environment in everything that we do," Goldstein says. All sales materials are printed on 100% recycled paper in a wind-powered plant, counter units are made with 100% recycled cardboard (floorstands can only be 65% recycled to retain stability), and the company hopes to have all plastic bottles made with 100% post-consumer materials by the end of 2009. Weber Display and Packaging, Philadelphia, did this year's kids and holiday shippers; Keystone Folding Box Co., Newark, NJ, produces the counter units; and New York-based Alternatives is the company's packaging designer.Product packaging and displays also do their part in communicating the brand's green message to consumers. Even more complicated than the food world, where products must receive certification to be considered organic, personal care products are much less regulated. Minerals, for example, cannot be called organic, since the USDA organic seal doesn't apply to non-food items."There are a lot of questions in this industry and a lot of different certification groups that are coming out trying to figure out what [the standards for body care] should be," Goldstein says. In the meantime, the company is calling out which ingredients are organic -- such as shea butter and jojoba oil in the new lip shines -- on the packaging to ensure consumers know exactly what they're getting. "We put asterisks on which parts of it are organic, so while there's all this indecision out there we're trying to be as aggressive as we can about what parts are organic."As a rule of thumb, Kiss My Face only calls a product organic if it contains more than 70% organic ingredients. The company is also working with others in the natural and organic world to come to a consensus on how the terms should be applied so consumers aren't misled about what they are buying.

Puckering Up to Mass Retail

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