BEAUTY-CARE FIRM THINKS (VALUE-SIZED) BIG DREAM LATHERS UP INTO $20 MILLION-A-YEAR BUSINESS.
SANTA CLARITA -- Al Rodriguez recalls the day in the mid-1980s when he looked inside a bottle of vitamins he was selling and instead of tablets saw a fortune in shampoo and hair gel.
``There was a demand in the market for natural products,'' said Rodriguez, 56, a former vitamin salesman and founder of Santa Clarita-based Newhall Labs, which markets beauty products under the La Bella brand.
``The same customer that would buy Vitamin E would buy Vitamin E oil and Vitamin E shampoo. And why shouldn't they buy it from us?''
The company, based in Santa Clarita since 1990, has about 30 people employed locally and at a research lab in Gardena.
La Bella's line of family-size hair-care, moisturizers and beauty products targets the Latino market, and sales have grown about 23 percent annually for the past eight years.
The privately held company has estimated annual sales of $20 million to $30 million, and plans to tap beyond the value segment, Rodriguez said.
In an industry dominated by multinationals such as Procter & Gamble and L'Oreal, independents have to stay on their toes.
``We still spend about a day a month trying to figure out what's the thing after the next thing,'' he said. ``In the cosmetics business, it's about innovation, especially when you're a small company.''
Rodriguez was 11 when he and his family fled Cuba, arriving in the United States as political refugees. In 1976, he quit a job marketing vitamins and started his own nutritional supplement business, Golden Sun Inc., from the garage of his Northridge home.
``What's a 26-year-old kid -- who made more than what he had at the time -- doing giving all that up for a dream,'' said Rodriguez, recalling his father's take. ``I wanted to do my own thing. I wanted to take responsibility for my own future.
``I sold everything I owned to get a little capital up -- about $3,000.''
Through footwork and contacts, the fledgling company reached sales of about 1 million units by the mid-1980s, selling vitamins under its own name and generic grocery store brands.
It remains a segment of Rodriguez's business, but the core has shifted to hair and beauty since roughly 1983, when it sold its first bottle of Vitamin E-enriched shampoo.
Still on the lookout for new market niches, the then-Van Nuys-based company found inspiration in the era of A.C. Green, ``Showtime'' Lakers and Jheri curls -- activator gel.
African-American hair care was then dominated by a few brands -- Worlds of Curls among them. Rodriguez's strategy was simple: offer more product of similar quality at a lower price.
If the competition sells 10-ounce jars of gel for $5-$10, he'll market a 16-ounce product, and pass the bulk savings along. Still, activator gel, like the Lakers, met their match with the rise of a certain team from the Windy City.
``That sort of went downhill when Michael Jordan came out and shaved his head,'' Rodriguez said.
Rodriguez found a new niche in the mid-1990s in hair products aimed at Latinos, namely styling gel and shampoo enriched by sheep placenta (a common ingredient in Latino shampoos). The spending power of Hispanics in the U.S. hit $736 billion in 2005, according to a survey by the Selig Center for Economic Growth at the University of Georgia.
``We saw opportunity with the styling gel, like we saw with the activator gel market,'' he said.
The company needed a name for the new line -- something that could set it apart from the francophonic beauty products on store shelves: something Italian. They settled on La Bella -- ``the beauty'' in both Italian and Spanish.
The same strategy applied -- offering more product for less. Rodriguez said research showed Latinos tend to share shampoo, gels and other products among family members.
``They have large families, and they share whatever they bring home,'' he said. ``All the men in the family might use the same jar of styling gel.''
Targeting an ethnic niche can be lucrative if a marketer can correctly read a group's cultural values, said Felipe Korzenny, director of the Center for Hispanic Marketing Communication at Florida State University.
``It is true that Hispanics do like to share products with their kids and everyone in their households,'' he said. ``Some of those attributes -- the gel for men and the placenta-based products -- those kinds of things do have cultural value that people can relate to.
``When you add (price) value that is competitive, it's very hard to resist.''
But it's often easier said then done, Korzenny said.
``This combination is not something everybody understands,'' he said. ``That's the problem a lot of larger marketers have -- they don't understand the power of cultural beliefs.''
The company has about 70 items in the La Bella line, most retailing for less than $5. It's within the top five selling brands of hair gel by volume in the United States.
``We don't have the billions in the bank to spend on marketing and advertising. The most important purchase is that first purchase.''
The company is now working to expand into more premium products, including a collagen cream featuring Latin media star Sissi as spokesmodel. There's also a cellulite reduction cream, a new concept for the Latin market, Rodriguez said.
(1 -- color in SAC edition only) Al Rodriguez, founder of La Bella beauty products, has seen sales grow 23 percent annually for the past eight years.
(2 -- ran in SAC edition only) La Bella's line of family-size hair care, moisturizers and beauty products targets the Latino market.
David Crane/Staff Photographer
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Jun 12, 2006|
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