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NEW YORK — Naterra Brands may be a small firm, but it’s ready to play with the big guys.
This story first appeared in the August 8, 2003 issue of WWD. Subscribe Today.
Naterra, best known for its Skin Milk line, is extending into two major categories dominated by the likes of Procter & Gamble and Unilever, with launches in hair care and skin care. Plus, the Texas-based company is initiating its first national advertising campaign with print advertising for Skin Milk, a milk-based skin care line. The new items could add more than $20 million in sales to Naterra’s portfolio, industry sources estimate.
For Naterra, the key to getting precious shelf space is to deliver niche items. “We can’t go head to head with the Procters of the world,” said Dan Zarazan, vice president of sales and marketing at Naterra and a former executive with consumer product marketing giants such as Dial, Clorox and Coca-Cola.
With its launch in November 2003 of Time Block, Naterra will vie against other antiaging skin care products such as P&G’s Regenerist and Neutrogena’s Healthy Skin. “However, we have an ingredient called INDOL-3 that no one else has,” said Zarazan. “It is a natural plant hormone that results in a visible reduction in wrinkles.”
Time Block comprises 14 items and retails for $9.99 to $12.99. “The antiaging portion of skin care is showing double-digit gains and we think this could be bigger than Skin Milk.”
Skin Milk, now stocked by more than 10,000 stores, will receive a shot in the arm with a print campaign, contends Zarazan. “We’ve grown so much by just word of mouth, but we think we’ve done the line an injustice by not advertising it.”
In addition to muscling its way into skin care, Naterra is expanding its popular shea butter products marketed under the Tree Hut logo into hair care. This fall the company will ship Tree Hut Shea Butter shampoos and moisturizers into stores. “Shea butter is an effective skin moisturizer and it is found to have moisturizing benefits for the scalp. It revitalizes damaged and processed hair,” Zarazan added. The hair care products will retail for less than $6 for 7 oz.
The company has long offered shea butter products in traditional tubs and is now extending that with a Shea Butter Stick. Shea butters have traditionally been popular with ethnic markets. However, thanks to specialty retailers such as The Body Shop, which have spread the word about the benefits of the shea butter, the ingredient has had strong crossover sales. “Retailers are excited about the stick delivery form,” he said.
Drugstores are showing signs of better health. Three major drug chains reported buoyant July sales. Walgreen Co. had July sales of $2.7 billion, up 13.7 percent over the same month in 2002. Sales in comparable stores rose 9.8 percent. Front-end sales, where beauty is located, rose 3.9 percent in July. Rite Aid Corp. reported July sales at stores open at least one year rose 6.3 percent. Nonpharmacy products, including cosmetics, had a sales increase of 4.3 percent. And CVS had a 6.1 percent jump in same-store sales for July.
The gains are bright news after a slow summer and fall last year, especially at the front end for drug chains. Efforts to shore up sales of nonprescription products appear to be paying off for the drugstore channel.