Business Monday

Concept II Cosmetics: Doral firm sells products in 54 foreign countries, and now is going after the U.S. market

A small cosmetics producer in Doral, Concept II Cosmetics LLC, is making its mark in the highly competitive world market of personal bath and beauty products.

Competing against much larger producers, two entrepreneurs who bought the company three years ago have expanded production capacity, added jobs, developed new products, boosted sales and are now launching a new line of sun care products, called SolScents, in the U.S. and overseas.

“When we acquired the business in July of 2011, it was running well and sold products to a number of export markets,” said Maxim Weitzman, 43, who with his partner Daniel Bittner, 39, are the firm’s owners and managing partners.

“We saw opportunities to expand our product line and market reach, and since then we’ve invested over $1 million to add new production lines (from two lines to six), increase our workforce from nine employees to 30 and boost the number of individual products from less than 10 to over 50,” said Weitzman, who has a degree in industrial engineering from Andrés Bello Catholic University in Venezuela and an MBA from UCLA.

The product line expansion means that the number of SKUs (stock keeping units) went from about 100 to more than 300, he added, including items like SolScents Sunscreen Lotions, *hypeMoisturizing Body Mist and Concept II Facial Wipes.

The company now produces two lines: bath and body products (body mists, body lotions, shower gels and eau de toilette) sold under the CII and *hype labels, and sun care products (sunscreen, lip balm, face moisturizer) sold under the SolScents brand.

Concept II also added 21 new foreign markets in 2013 and the first half of 2014, bringing the total to 54, plus the U.S. About 90 percent of the company’s sales come from exports, and the remainder from sales in Florida, Texas, Nevada and Colorado. Around 80 percent of its products are marketed to women, and 20 percent to men. In addition to making its own products, it manufactures and packages personal care items for other brands.

Both Weitzman and Bittner, who met in California, were born in Venezuela and became U.S. citizens. The company was called Concept II when the two bought it from the previous owner.

“Our strategy has been to expand to new foreign countries, deepen our presence in existing markets and penetrate the U.S., mainly through our new sun care line,” said Weitzman, who held executive positions at Telefónica S.A., a Spanish-based multinational communications firm and IBM, and founded and ran Intrigo, a company that developed and sold mobile workplace solutions.

SolScents products are also being sold in foreign test markets like Costa Rica, New Zealand, Japan, Chile and Nigeria.

Concept II sells mostly to distributors in the U.S. and each foreign market. The partners meet new distributors at trade shows in Bologna (the world’s largest), Dubai and Hong Kong, and often travel to new markets to meet potential distribution partners and leave samples. Last year, they spent several months on the road and visited over 40 countries.

To develop markets in the U.S., Concept II now uses one Florida-based distributor, and is selling its SolScents sun care products through retail outlets like Dermstore.com, Walgreens.com and Drugstore.com. It also sells products in the H-E-B (“Hope everything’s better”) food stores, which has about 200 outlets in Texas; Walgreens in Puerto Rico and shops at the Four Seasons hotels.

Pricing is also part of Concept II’s strategy. It’s bath and body line retails for as much as 50 percent less than similar products. However, the new SolScents line consists of premium products and goes up against other top-of the-line competitors. SolScents sunscreen lotion, for example, retails for $12.95 while its SPF lip balm sells for $3.95.

As part of the company’s charitable work, it contributes 2.5 percent of the global proceeds of its seven SolScents products to seven charities, including the Susan G. Komen Foundation and the American Heart Association.

How well has this worked? “We’ve successfully expanded to new markets while our dollar sales have grown over 100 percent since June of 2011,” Weitzman said. “And we have been profitable since our first year.”

The privately held company does not release figures on revenues or profits to the public. Concept II also has won two awards this year. It was named exporter of the year by the U.S. Small Business Administration for the South Florida district and received the Presidential “E” award for export achievement. In addition, it received a U.S. Commerce Department achievement certificate for exports in 2013 and a year earlier was named Manufacturer of the Year (for companies with 1-25 employees) by the South Florida Manufacturers Association.

Concept II’s biggest competitor for bath and body items is in Connecticut, but there are other small producers of these products in Florida. In its new sunscreen line, the tiny firm is competing against giants like L’Oreal, Neutrogena, Coppertone, Hawaiian Tropic and Energizer.

Developing attractive new products and finding and new markets is a time-consuming process, said Bittner, who earned a degree in production engineering at Simón Bolívar University in Venezuela and an MBA from UCLA.

As he walked through rows of clattering machines that filled individual product containers and packaged them for shipment, Bittner described how he and his partner choose new scents and new products, which are critical for expanding sales here and overseas.

“It takes us six to eight months to develop a new product and get it to market,” said the Concept II co-owner, who previously was vice president of operations at L’Oreal USA in New Jersey and held several key positions for the French company in the U.S. and abroad.

“Our scents have to appeal to women in over 50 countries, and different regions prefer different fragrances,” he added. Women in Asia like floral fragrances, for example, while those in the

Middle East prefer berries and in Latin America, sweet fragrances — like cotton candy and cupcakes — are popular. Mangomania is one of several creative shower gel fragrances that appeal to different audiences.

For their sun care line, which is central to growing new sales in the U.S., the company developed fragrances like Cucumber Melon, Raspberry Dreams, Flower Blast and Piña Colada.

To decide on a new fragrance, the partners ask for a range of alternatives from an outside firm that produces base oils, and then try each one themselves. They work together with the fragrance firm to define scents the partners believe will appeal to customers. “We can only test them for about four hours,” Weitzman said. “After that you get a headache.”

Concept II uses no animals for testing. Test subjects report on how new scents react with different skin types and how well their sunscreen protects against sunburn.

“Quality is essential for all our products,” Bittner stressed. “We only use the best raw materials — oils [for fragrances], propylene glycol and high-quality alcohol,” he said. “All of our raw materials are made in the U.S. and this is an important selling point for us.”

The new sun care line also includes U.S.-made raw materials such as antioxidants, vitamins, beeswax, Aloe Vera, sunflower oil and SPF from 15 to 50.

The only imported items the company uses are glass containers from China.

Packaging is also important, and the company has designed new, colorful boxes and containers for its products. “This is a marketing business,” Bittner said,

International distributors say that Concept II and SolScents products are novel and appealing in diverse markets, and have sold well.

In Costa Rica, distributor Mercadeo Uno has been selling Concept II products to the country’s wholesalers since 2006. “What gained our attention was the excellent quality of their products, their presentation and good pricing,” said Juan Carlos Valverde G., general manager of the company, which he founded. The new owners, he added, “have maintained and improved quality, given the products a fresh image and expanded the product line.”

Concept II, which linked up with customers in Africa at a trade show, works with Kudi Fashola, CEO of Kuddy Cosmetics, a large family-owned distributor based in Lagos, Nigeria. “We’ve been working with Concept II for a little over three years now,” said Fashola, and the quality is excellent.” With the products the company is offering now, she said, “I see Concept II becoming a household name in the future and a must-have product on every dressing table.”

Regional Health, a large distributor in New Zealand, is buying the new line of SunScents products, and reports that they have been well accepted.

“We felt their approach to sun care was novel and refreshing,” said Laura Bradford, the company’s general manager. “In New Zealand, the ozone layer is significantly depleted compared to the rest of the world and our melanoma rates are one of the highest in the world.

Our ‘burn time’ in the summer months can be under 10 minutes and sun cream needs to be used by everybody, every day — not just those going to the beach,” said Bradford, whose firm distributes SolScents to about 200 pharmacies and wants to place the products in supermarkets, beauty salons and other stores.

Bradford believes that SolScents — “with a fusion of sun protection, gorgeous scents and colorful packaging” — is an excellent way to reach teenagers, who tend not to use sunscreen. And “coming from Miami gives it a certain amount of credibility.”

The writer can be reached at josephmannjr@gmail.com

Concept II Cosmetics

Business: Manufactures and sells a range of bath and beauty products, including body mists, moisturizing hand and body lotions, body gels, deodorants, eau de toilette and perfumes, mostly for women. The company, which does not test its products on animals, is launching a new line of fragranced sunscreen products called SolScents. It also makes and packages personal care products for other companies.

Headquarters: 2200 NW 92nd Ave., Doral

Founded: 1988 and taken over by the present owners in 2011

Owners: Maxim Weitzman and Daniel Bittner

Executive team: Maxim Weitzman and Daniel Bittner, managing directors

Employees: 25 full time, rising to 30 during peak production periods

Production center: 20,000 square-foot manufacturing, packaging and shipping center in Doral with six production lines

Customers: Distributors in the United States and more than 50 other countries. About 90 percent of sales go overseas, the remainder to the U.S.

Awards: The U.S. Small Business Administration’s 2014 Small Business Exporter of the Year Award for the South Florida District; 2014 Presidential “E” Award for Exports (presented by Commerce Secretary Penny Pritzker); 2013 Export Achievement Certificate (presented by the Under Secretary of Commerce for International Trade, Frank J. Sanchez) and the 2012 Manufacturer of the Year Award from the South Florida Manufacturers Association (for companies with 1-25 employees).

Websites: www.conceptiicosmetics.com, www.solscents.com

Source: Concept II Cosmetics

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