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Cargo Cosmetics founder and president Hana Zalzal (DANIEL EHRENWORTH)
Cargo Cosmetics founder and president Hana Zalzal (DANIEL EHRENWORTH)

Small Business

Cargo Cosmetics puts star power into products Add to ...

The panicked calls from Hollywood started coming in shortly after high-definition cameras began appearing on movie, television and commercial sets.

Before that technological innovation brought an unprecedented level of detail to large screens and small, the legions of makeup artists tasked with the behind-the-scenes job of making stars beautiful – and of hiding whatever flaws they have – relied on the application of large amounts of cosmetics, slathering faces in foundation, overemphasizing features and piling on the concealer, until every star looked as smooth and shiny as a department-store mannequin.

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But with the new cameras amplifying every pore and clump of mascara, a heavily made-up face no longer looked beautiful; it just looked heavily made up.

The crisis was solved in the offices of Cargo Cosmetics, a multimillion-dollar international makeup brand headquartered in a modest building on an unassuming strip of Toronto’s Don Mills Road, and guided by president Hana Zalzal.

In 2008, the company introduced a line called blu_ray: high-def-friendly blushes, concealer and powders that became an instant hit in Los Angeles, with TMZ-worthy reports of celebrities stealing the goodies from production sets.

“There are photochromatic pigments in it that adjust with ambient lighting, and microfine particles and irregular particle size to diffuse the light,” Ms. Zalzal explains. “So you still look great, but it doesn’t look like you’re wearing product.”

The cosmetics industry has long employed pseudo-scientific language – Lash Lengthening Serum! Pore Minimizing Enzymes! – but coming from Ms. Zalzal, it sounds a lot less like marketing jargon.

The 47-year-old entrepreneur knows her physics, having earned a civil engineering degree at the University of Toronto followed by an MBA, and worked for two years designing cable systems for Bell Canada before founding Cargo in 1995 with the idea of modernizing makeup.

The company has since become a global brand and a favourite of celebs and regular chicks alike, due in large part to the way she has applied her engineer’s eye to the design and packaging of cosmetic staples.

Long before she came up with blu_ray, Ms. Zalzal introduced the world to Cargo’s first hit, a lip gloss that did not come in a tube, but in a small round tin, better able to endure the rigours of living inside a woman’s purse, and allowing users to scoop out every shiny drop of their product.

Since then, Cargo has built its reputation on single-use lip gloss packets that resemble the packaging of birth control pills, and eye shadows that walk women through the correct application process with the words “crease” and “outer corner,” “browbone” and “lid” stamped right into their glittering powder.

Ms. Zalzal believes that, with the right tools, makeup can be empowering for women of all ages and backgrounds, and says that Cargo attempts to bridge the worlds between professional makeup artists and everyday users.

It doesn’t hurt that her friendships with cosmetologists can get Cargo products into famous hands. In the company’s conference room, a board of press clippings includes a picture of Jennifer Aniston holding a Cargo compact. Ms. Zalzal says that celebrities “have access to everything and the world’s best makeup artists. So when they select our product, it really says to me, ‘You guys are doing a good job.’ It’s a huge honour.”

And a great selling feature, too. Wayne Peterson, divisional vice-president of prestige cosmetics at Sears Canada, says the brand has a “nice celebrity buzz about it from the American market.”

Cargo products are sold in more than 1,400 stores in 11 countries, from the United States to Romania and the Middle East. Sears has carried Cargo since early 2010, with products currently available in 40 stores and plans for a larger rollout.

Mr. Peterson says Cargo’s EyeLighter and Reverse Lip Liner, designed to complement lip gloss rather than lipstick, are selling well. “There’s something special about Cargo. It’s a little more urban. It’s cool,” he says. “And Hana is an engineer with an MBA, so we know her products work.”

If Cargo products promote beauty with brains, Ms. Zalzal herself is the perfect company spokesperson. A successful hybrid of left and right brain, she looks the part of the cosmetic executive: small and trim and perfectly made up in her go-to OneBase foundation.

Born in Egypt, her parents moved to Montreal when she was two. When she was a little girl, she loved art, painting, writing and drawing. But as she grew up, she found herself drawn to physics and math. After initially enrolling in the University of Toronto’s school of architecture, she switched to the faculty of engineering, which she loved for its emphasis on problem-solving.

She graduated in 1988, one of just six women in a class of 60 men, which included her future husband. After leaving her job with Bell, she attended York University’s Schulich School of Business, where she received an MBA, and worked briefly in marketing, spending her evenings at the Toronto Reference Library researching what she saw as an opportunity for a smaller, niche brand in the cosmetics industry, which in 2010 accounted for $8.4-billion in retail sales in Canada alone.

It was there, and at trade shows she attended in the United States, that she figured out which manufacturers she should approach to make her products. Cargo does not manufacture its own lines, but relies on a network of labs in Germany, Italy, the United States and Canada.

Ms. Zalzal has relied on this model from the beginning, and started out by having a lab make samples of lipsticks and brushes that she had designed. She took the prototypes to a meeting at the former department store chain Eaton’s, which promised her space in its Yorkdale, Eaton Centre and Scarborough Town Centre locations.

With money from a small group of private investors, she had manufacturers produce her first line. In 1999, when Eaton’s closed its doors, she found the nerve to reach out to the U.S. market, and Cargo was soon featured on the shiny counters of Barneys. Large retail names have played an important role for Cargo, and its infiltration of the European market has been largely accommodated through an affiliation with the cosmetic retail chain Sephora.

Emily Katz, an L.A.-based makeup artist who employed Cargo products on the set of the hit series Lost, says she first heard about the line from an actress who had brought a lip gloss tin back from Canada. “She said, ‘I hear Drew Barrymore is using it too,’“ Ms. Katz recalls. “The whole concept of the tin was so cool.”

Ms. Katz says she’s not influenced by packaging, but admits that Cargo’s natural-hued colour palette and durability won her over. “It’s deeply pigmented and it stays on,” she says. It is this kind of endorsement that has helped earn Cargo a loyal following.

While blu_ray raised Cargo’s profile because it represented a change in the composition of the products themselves, many of the company’s popular lines have involved a so-obvious-I-wish-I’d-thought-of-it redesign of makeup packaging itself.

Cargo took foundation, one of the more expensive items on the cosmetic counter, and did away with the traditional bottle. Although glass communicates a certain exclusivity to consumers, it comes with the risk of breakage on the bathroom floor and the frustration of trying to reach those last precious drops.

“I thought it would be great to put it in a pouch, like Kool-Aid Jammers. You want to squeeze it out and you want the container to collapse as you use it up,” says Ms. Zalzal. “I hate when you have a tiny bit of shampoo left but the bottle stays the same size.”

The resulting pouches are lightweight, portable and better for the environment, and the product has won various awards for its design.

Ms. Zalzal herself favours two-in-one products, which are more convenient for travel. She develops many of her best ideas on vacation, sometimes during her twice-a-year trips with her husband and three sons, aged 9, 11 and 13.

“I was in Florida and I had a blush and a bronzer, and I thought, Why am I carrying both of these?” she says. “And BeachBlush was born.” Tired of bringing 10 different eye shadows on a trip, Ms. Zalzal then introduced colour cards, a line of ultraslim shadows shaped like credit cards, which can be slid into a wallet.

Cargo tries to introduce innovations each season, while continuing to promote what Ms. Zalzal calls its “workhorse products,” which include popular lines of blush, base and bronzer.

Her efforts have earned plenty of kudos, from 2009 U.K. Packaging Awards Innovation of the Year to InStyle magazine’s Best Beauty Buys, and has been written about everywhere from Redbook to Time.

Ms. Zalzal has been named one of Canada’s Top 40 Under 40, received the Fashion Group International Rising Star Award, and pegged as Brand Innovator of the Year by Brand Packaging magazine.

Ms. Zalzal takes pride in getting fresh ideas to market before her larger, multinational competitors. Cargo was the first to come up with a line of products for high-definition filming, and the first to market with a line of eco-certified cosmetics, called PlantLove.

“I think it’s just doing things fast and staying on top of trends,” she says. “We don’t have a big bureaucracy that would weigh us down. That’s the advantage of being small.”

Although Cargo employs a team of 70, including sales associates, account managers, marketing gurus and supply chain representatives, Ms. Zalzal herself is a one-woman R&D department, coming up with product ideas, explaining them to her suppliers and getting the goods in the right hands – and, more importantly, on the right faces.

Through her network of loyal makeup artists, her product has found its way into the hands of tabloid fixtures from Katie Holmes to Evangeline Lilly on the set of Lost, where her fair white skin was transformed by Cargo into a desert island tan.

The company has largely avoided traditional advertising, instead courting celebrities like Denise Richards and Courteney Cox to design lipsticks, and engaging in social media campaigns.

Cargo’s cultural reach is impressive, given the competition. Ms. Zalzal has appeared on Dr. Phil, and Cargo lip gloss was featured in a Scholastic book. The company was also the answer to a clue on Jeopardy!: “Don’t be embarrassed by Cargo’s suede or beach version of this.” (Question: What is blush?)

Many of the products are developed in partnership with an unofficial network of cosmetologists. Ms, Zalzal jokingly refers to herself as the “makeup whisperer,” able to translate the tricks of the trade to the general public.

“These are products that work for professionals but they also work for everyday women,” she says. “We want women to know those aren’t competing ideas.”

Ms. Zalzal did not originally seek out makeup artists to bless her products; they discovered them through word of mouth. Then in 1999, Cargo got a boost when the company was mentioned in a magazine profile of British makeup artist Pat McGrath. After that, Zalzal realized what a resource these professionals could be. Artists now regularly receive new products from Cargo, and Ms. Zalzal actively solicits their opinions and advice.

That feedback can be invaluable. Several years ago, Zalzal noticed that one makeup artist was continually requesting a white eye shadow called Aspen, which wasn’t selling well in retail stores. She got in touch with him and asked how he was using the product.

He explained that he dabbed it on the inside corner of the lid, near the bridge of the nose – a trick that he claimed made the wearer’s eye-colour pop. Cargo’s sales team was instructed to incorporate this information into its pitches, but the shadow still didn’t sell. Eventually, Ms. Zalzal tweaked the design, packaging in a white sponge-tip pen rather than the usual canister. Now called EyeLighter, the company can’t keep up with demand.

The insights of normal women are just as crucial to Cargo’s product development. Every day, Ms. Zalzal logs on to the company’s Facebook page, which has been “liked” by more than 11,000 fans, and which she calls her virtual focus group.

There, women talk about sneezing before their mascara dries and how to achieve the coveted “smoky eye.” Ms. Zalzal reads every post on the page’s wall, and regularly asks questions: What do you find difficult about putting on eye shadow? How is your makeup holding up in the heat? What’s your one, go-to product?

Of course, not all of Ms. Zalzal’s innovations are a hit. The packaging of the company’s Timestrip lip gloss holds a device that turns red when it has been open for nine months, which is when the makeup expires. But not everyone wants to think about the bacteria present in their cosmetics, and the Timestrip lip gloss has been met with mixed reactions and mediocre sales.

Still, Ms. Zalzal is undiscouraged, and sees plenty of opportunity to create more innovative products and expand her brand internationally. “A lot of women end up in a makeup rut – they’re very experimental in their teens and early twenties and then they get comfortable,” she says.

“There are some makeup things that really intimidate women, and I want to understand those things,” she says. “I want to hear it all.”

Today, Ms. Zalzal oversees the company’s operations from her cluttered office in Don Mills. She chose the location because of its well-lit, above-ground parking, which she saw as important for her largely female staff (Cargo has only one male employee, who works in the finance department).

She lives near the office in North York with her husband – a lawyer – and three sons. She drops the kids off at school every day and leaves the office in time to pick them up. Her boys could not be less interested in her work, she says with a laugh, but when asked if she ever wishes they were girls, for reasons of product research, she demurs. “I don’t wish anything. I just feel very lucky,” she says.

Discussing her success, Ms. Zalzal is reserved, but manages to unearth on her crowded desk, amid piles of product samples and tear sheets, a handwritten thank-you note she received from a female MBA student after addressing a class at York. “That makes me feel good,” she says.

Mark Rittinger, Schulich’s executive director of development and alumni relations, says that Ms. Zalzal is one of their most popular guest speakers, and that she is often asked to address new students when they enter the MBA program.

“She’s got the whole package,” he says. “For her to be a woman, an engineer, graduating and becoming an entrepreneur, it represents all that the MBA experience can offer.”

Ms. Zalzal’s talks are especially popular with students who harbour an entrepreneurial bent, he says, and who long to make the drastic changes in their career paths that she has.

To keep her own thinking fresh, the president tries to maintain a balance of interests outside the office. In the evenings, she has taken collage classes at the Ontario College of Art and Design, and a screenwriting class at U of T, after which she produced a script that she says is about “being the master of your own fate.”

“Sometimes finding balance isn’t about taking something away – it’s about adding something,” she says.

And sometimes it’s as simple as photochromatic pigments.

This article originally appeared in the October issue of Report on Small Business magazine.

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