Brandon Truaxe doesn’t believe in starting small.
After creating the blur concept at Indeed Labs, he decided to take a blitzkrieg approach to the beauty segment when he founded Deciem three years ago to introduce multiple brands differentiated by unique market positions, technologies or value propositions. Now, with successful brand launches at Boots in the U.K. under its belt, the Canadian company is bringing the blitzkrieg to the U.S. by rolling out liquid beauty supplements line Fountain, antiaging hand and body cream collection Hand Chemistry, hair restoration range Grow Gorgeous, and hair removal specialist Inhibitif at American retailers, including CVS, Rite Aid, Amazon, Urban Outfitters, Target and Ulta.
“Everyone’s advice is to focus, focus, focus. They say you can’t do 10 things at the same time. The problem is I’m very ADD. The only food I think about at a restaurant is the one I didn’t order,” said Truaxe. Deciem is named for decima, the Latin word for tenth, and the barrage of brands seems to be working for it so far. He disclosed Deciem has generated $16 million in wholesale sales across 17 countries since its first brand, Inhibitif, hit the shelves at Boots in April 2013, and is steering a course toward reaching $180 million in wholesale sales by 2017.
Inhibitif is Deciem’s largest brand by revenue, and Truaxe reasoned it’s because that brand has been available the longest. Assessing Deciem’s four initial brands, which all made their debuts at Boots, by their sales momentum instead of overall girth, Truaxe ranked Fountain at the top followed by Grow Gorgeous, Hand Chemistry and Inhibitif. However, he argued Hand Chemistry and Grow Gorgeous would undoubtedly ascend the list as time goes on. Fountain is priced from $24 to $40, Hand Chemistry from $7 to $28, Grow Gorgeous from $18 to $35 and Inhibitif from $7 to $30.
“Hand Chemistry requires education. It is a lot to ask for a consumer to spend $20 on a hand cream, but we have 90 percent retention. That is an extremely high number in the beauty business,” said Truaxe. “The ultimate success of any business is not that the consumer bought once – I think anyone who has done any business can make that happen – but will the customer come back and buy it again. That second purchase is a good measure for where we are heading.”
Deciem’s brand portfolio is getting ready for another flood of new brands. The company is moving into the facial antiaging category with Hylamide launching at CVS on July 31. Given the size of the category, Truaxe projected Hylamide could eventually become Deciem’s leading brand. Instead of being driven by an ingredient or ingredients, the brand’s premise is based upon ingredients being driven to the right places in the skin. Hylamide is priced from $20 to $38.
“Consumers are focused on what’s in and what’s not in a formula. If the best chef in the world and I walk into a grocery store, he will cook a better dish than I will. So, we really focus on the formulation,” said Truaxe. Speaking of Hylamide specifically, he continued, “There are times when you just want to affect the surface of the skin, so you want particle sizes that are large to sit on the surface. Sometimes you need to increase collagen and that is the subcutaneous level. There are 19 technologies in this one formulation, and the capsule sizes are such that they can penetrate just to the level that you need.”
Ab Crew will mark Deciem’s entrance into the men’s business. Setting it apart from most traditional grooming brands, Ab Crew has a fitness element. The brand has signed up personal trainer and nutrition consultant Lazar Angelov as a spokesman, and sells protein powder and dietary supplements along with self-tanners, aftershave, shampoo and conditioner. Ab Crew’s prices run from $18 to $70. Deciem aims to distribute the brand through gyms, select specialty stores and possibly a nutrition retail chain like GNC.
“There is no question that men are more receptive to beauty regimens, but we are far away from having a man embrace a beauty regimen with many steps. If you look at their fitness regimen, though, they will have steps such as protein before and after. It is the same consumer. They go to the gym because they want to look better,” said Truaxe. “We are marrying these two categories together.”
Salons aren’t exempt from Deciem’s expansion plans. The company is targeting the professional sector with the brand HIF, an acronym for Hair Is Fabric. HIF products are priced from $25 to $65. Truaxe proclaimed the brand takes cleansing to the next level. “Your hair is just like fabric. The more you wash it, the more you damage it. The whole idea is not to damage it,” he said. “We use fractionated particles that bind to dirt and debris, but are repelled by the hair. You are not using a surfactant that damages hair, but you are still cleaning the hair. We are also using fabric technology from the jeans industry to impregnate the hair with actives.”
If HIF, Ab Crew and Hylamide weren’t enough, Deciem has several other brands on tap. On its Web site and in press releases, the company has mentioned forthcoming brands called Niod, White RX, Loopha, Avestan and LHN. Truaxe thinks of Deciem as an umbrella firm for boutique beauty brands. He explained Deciem distinguishes itself in the beauty industry by taking risks and pushing innovation faster than giant consumer packaged goods companies. “It would be foolish for me to look at a giant and follow their footsteps with a lot less money and people, and expect to do better. We have to take advantage of our strengths,” he said.
Deciem may have less money than giant personal care companies, but it certainly has money. Truaxe revealed around $10 million has been invested to date in the firm. Deciem acquired a manufacturing facility, and operates its own laboratory with two chemists as well as its own design, sales and logistics teams with roughly 50 employees. “It is a lot of cost as a whole, but it is a very small cost per brand,” said Truaxe, underscoring why founding Deciem with numerous brands was a prudent choice.
The margins that Deciem operates with made introducing numerous brands a prudent choice as well. “The beauty business is so accustomed to 70 to 80 percent margins that, the moment you touch that, people think you are insane. I just don’t get it. The biggest cost to your business is a consumer not liking you, so I don’t know why a company would risk a consumer not liking them,” said Truaxe, pointing out Deciem spends 4.5 times what’s typically spent on ingredients and formulation for Hand Chemistry products. “We have gone as low as 35 percent [margins] in some cases. That wouldn’t be sustainable. As long as we average out to 50 to 55 percent, it is a manageable business for us.”