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We shouldn't wash our hair every day, or so the experts say, because it strips the hair of natural oils. But Heather Reier, the president of a bath and beauty products company, decided she needed to do something to freshen her hair on the days between washings. She thought she'd found the answer: baby powder. Until the day she applied it and her husband asked her if she was going grey. "I was horrified," says Ms. Reier, who was 30 at the time.
This encounter awakened Ms. Reier's interest in adding a hair-care product to the proprietary line of body lotions, scrubs and shower gels she had developed for her Toronto-based company, Cake Beauty. She had launched the company from her kitchen in 2002, wanting to deliver quality ingredients in fun and feminine packaging.
Back then, Cake's products numbered 10, including its signature body mousse, made of coconut oil and mango and shea butters. She's since expanded the company to a staff of 15 and has tripled its product offerings to 30.
Ms. Reier had never thought of taking Cake into the hair-care market before. "I had defined Cake as a bath and body brand," she says. "Venturing into the hair market was going to be a huge risk for us. It's a whole other animal." She searched the market for dry shampoos, but couldn't find any, which meant she would have to start from scratch.
The risk Ms. Reier faced was twofold — reputation and money. Her existing body products had succeeded not just because consumers perceived that they worked, but also because they considered them an indulgence. If Ms. Reier didn't get the formula for her hair-care product, and the sales pitch, just right, she would risk losing the trust of her existing customers. Launching this product was going to cost her tens of thousands of dollars, so she also risked losing a wad of cash. "There were moments," she says, "when I thought … are we ready for this?"
What's more, because Ms. Reier's usual manufacturer wasn't equipped to make a dry shampoo, she had to outsource the product to a manufacturer she'd never worked with. "I didn't know their quality-assurance standards," she says.
The entrepreneur in Ms. Reier decided the risk was worth taking. What she wanted to develop was a powder that could be used as both a hair product and a body freshener. "This could help define Cake as more than a bath and body company. It could define us as an innovator," she says.
Her first challenge was to find a base other than talc. "It was great at soaking up excess grease," she says. "But it leaves [the hair] chalky." She and her research team found their star ingredient in cornstarch, and used it to develop a formula that eliminated the adverse effects of baby powder.
Ms. Reier's next job was to design the right packaging. She had to purchase 10,000 canisters up front, because manufacturers insist on minimum buys. "We were forced to buy more than we needed, and we paid a premium for that," Ms. Reier says. She spent 50 per cent more on packaging for this product than for any other Cake product. "I really invested financially," she says. "I was going to have enough finished goods for seven or eight months, which tied up money I could have used for something else."
Money on the line is a huge motivator for entrepreneurs, Ms. Reier says. So eight months later, when she finally had the product — named Satin Sugar — in her hands, she knew she had to launch it with a big splash. "I started to wonder, how am I going to make sure that everyone understands what this product is?" she says. "The minute you confuse a customer, you've lost a sale." She says the cost and challenges of launching Satin Sugar were second only to her brand launch.
Setting a price also proved to be tricky. "I didn't have any experience in that market, and I couldn't find any comparable products," she says. She settled on $18 a canister after analyzing Cake's cost position relative to other body products, and then translating that number for the hair-care market.
To create impact for Satin Sugar's launch, Ms. Reier and her ad agency developed a campaign anchored to the core of what the product was promising to deliver: time. "The whole idea behind it was, what would you do if you had more time?" she says. Cake's promotional materials were designed to help customers fantasize about what they could do with extra time — say, sip a martini with girlfriends or indulge in a pedicure.
Ms. Reier hosted a media event for fashion editors and writers at Verity, a private women's club in Toronto, where guests could rotate through a series of pleasure stations for a pedicure, a martini, or any of the other things Cake suggested Satin Sugar could help busy women make time for.
"The response was incredible," Ms. Reier says. Satin Sugar received more than 25 media hits, from Fashion, Wish and Chatelaine magazines in Canada, and from Cosmopolitan, Self and US Weekly in the United States. A year later, Chatelaine awarded Cake its Innovation of the Year award for Satin Sugar. "That meant a lot to us because we won in the hair category," Ms. Reier says, "and we're not even a hair company."
Satin Sugar also caught the attention of Sephora Canada, an international retail beauty chain that refers to itself as "the beauty authority."
"Satin Sugar served as a gateway for us to get into fabulous retailers like Sephora Canada," Ms. Reier says. "Now dry shampoo is their fastest-growing category. We got in on the ground level and have a loyal following." The product accounts for about 20 per cent of Cake's sales and is included in 95 per cent of all web orders from the U.S. With Sephora on side, about 60 additional retailers (including salons) decided to stock Satin Sugar.
"I don't think Cake would be as far as we are today without Satin Sugar," Ms. Reier says. "It enabled us to reach so many new customers, and really, that's what everyone's challenge is in business. And we certainly would not have been able to define ourselves as innovators."
- Connect with Heather Reier
Ms. Reier will take your questions Friday at 1 p.m. ET. Click here to submit your question.
- Expert insight
"[Cake] must constantly push boundaries and look for ways of raising the bar. The fragrance industry is famous for launching of 'flanker' editions of an original scent. Building on strength is key," says Shelley Rozenwald the president of Murale, Shoppers Drug Mart's new beauty concept store. In an online Q&A, she talks about Cake's success with Satin Sugar and how the company fits into the larger Canadian beauty industry. She will also take your questions. Click here for more.
- Send us your Breakthrough
Know a business that has experienced a big breakthrough? We want to hear about it. Email: nhulsman@globeandmail.com.
