When investor Michael Cammarata first encountered chemical-free deodorant, his immediate question was: “Does it work?”
The longtime Old Spice devotee was itching to get in on the booming natural products market when an assistant told him about Schmidt’s Naturals. The Portland startup sold small batches of homemade deodorant with scents like sage, bergamot, and lime with lavender.
“Back then in 2014, [Schmidt’s Naturals] was only in a jar,” he recalls incredulously of the product that was applied with a finger. “A jar.”
Cammarata reluctantly gave it a try—”getting me to switch to that was hard”—and was pleasantly surprised. It was not, as he feared, some “hippie” product with a patchouli smell. It featured strong, distinct scents he believed might appeal to the mass consumer, particularly millennials.
With Cammarata’s investment and business guidance, Schmidt’s Naturals is now the fastest-growing natural deodorant company in the $6 billion body care and deodorant sector.
The startup seized on the natural body care movement with a line of products that, as thousands of testimonials attest to, limit perspiration and mask odor with unique scents.
Schmidt’s Naturals is now carried by 14,000 retailers big and small, including Kroger, Walmart, Whole Foods, and Urban Outfitters. The company has increased its net gross by 269% in the last year, with retailers like Target struggling to keep the stuff—now in a more consumer-friendly stick format—in stock.
“We’re at the point where we’re not just taking market share from Tom’s Natural Deodorant; we’re taking market share from Secret and Dove,” says Cammarata. “That’s how effective it is.”
“I Wanted To Blow It Up”
“That’s the joke in the industry—that natural deodorant doesn’t work,” laughs Schmidt’s Naturals founder and chief product officer Jaime Schmidt, 39. “But we changed that.”
Schmidt boasts an uncanny path to entrepreneurship. She recounts the years spent searching for “the right” career path, as if her job were a long-lost soulmate. Schmidt wandered from nonprofits to human resources, child care, and hospitality. But finding her passion proved elusive.
“I wanted to work with people, I wanted to make a change,” she says. So, she earned a sociology degree. Still rudderless (she does admit her consumer behavior class later came in handy), she decided in 2010 to “take some time off” and drive cross-country from Chicago.
She made her way to Portland, Oregon, and settled into working part-time at a vegan hot dog shack, where she both cooked and served the faux links. The city was, as she describes it, the best place for her to de-stress and simply “figure this life thing out.”
“Portland was really supportive of people trying to find their way,” says Schmidt. “It’s the place where 30-year-olds go to retire. My parents were like, ‘Okay, what are you doing?'”
It was in Portland’s craft-loving environment, without the pressure to make a lot of money, that Schmidt felt able to indulge in what was then just a hobby: brewing homemade bath and body products. Schmidt made chemical-free lotions, oils, and–after several botched batches—a deodorant after learning DIY recipes.
The deodorant contained no fillers, no water, with a very “straightforward listing of ingredients,” explains Schmidt. “Every ingredient served a purpose.”
Her formula was—and remains—a deodorant, not an aluminum-based anti-perspirant, which some scientists suggest may have a link to breast cancer. It was, as she explains, a low-cost and fun way to ensure quality control on what she put on her body. It started nonchalantly, as a curiosity in her kitchen.
The burgeoning chemist crafted her product in scents one wouldn’t spot on a supermarket shelf, like tea tree oil or juniper—and paired the ingredients together in unconventional ways.
“I thought, ‘let me just do this on the weekends,” recounts Schmidt, who soon began making the rounds at the city’s numerous craft festivals and farmer’s markets. She was playing with the idea of taking the concept a bit further, but wasn’t sure yet if she had something that people would buy. At the same time, she was working at a residential facility for kids with special needs, and expecting her first child with her husband. Local shops eagerly responded to the product, and in fact, at one market, a Whole Foods representative straight-up asked her: “Have you thought about selling this in stores?”
Within just a few months, something interesting happened: Stores began contacting her, instead of the other way around. She remembers random shopkeepers calling her, asking, “Why are my customers asking for this? What is this?”
“Locally, there was so much support,” says Schmidt, who admits that such early adoption triggered a new behavior in her: “I immediately got very competitive.”
Schmidt quickly began reaching out to bigger stores within the area, and within a year, the deodorant was selling in boutiques and spreading within the Pacific Northwest. In under two years, Schmidt’s Naturals made it into its first supermarket, and then a month later, in 2013, it hit big time: A Whole Foods market.
“I had a realization that the deodorant industry was weak and boring, and I wanted to blow it up,” says Schmidt. “I saw the opportunity there for some growth and a new, exciting brand.”
An Unlikely Partner
It was roughly two years later that entrepreneur Michael Cammarata took notice.
Cammarata founded and invested in several companies, including internet message board system Ultraboard, before he made the switch to the entertainment industry. At age 25, Cammarata managed Big Time Rush, a boy band with a top 10 program on Nickelodeon and over $300 million in ticket sales and merchandising.
He soon noticed teens’ growing interest in chemical-free products. During Q&A sessions, live audience members across the world would routinely ask the young stars what natural products they liked, used, and where they could get them.
“It got me interested in the category,” says Cammarata. “I saw it was a trend.”
He kept it in mind when in 2014, he launched the venture capital and private equity firm Random Occurrence. The firm invested and strategically partnered with new companies in consumer products, technology, and entertainment sectors, but Cammarata wanted to add a naturals product to his growing portfolio.
When he caught wind of Schmidt’s Naturals, he told his advisors, who vehemently opposed the firm’s involvement. Random Occurrence wanted to invest in a company that made close to under $5 million in revenue, and at that time, Schmidt’s Naturals made less than a half a million.
But despite the caution, Cammarata was convinced there was potential in the small Portland startup. “‘Look at the [online] reviews,'” he told his advisors of beauty and natural health sites. “‘Consumers are raving about this product.'” Goop’s beauty editor Jean Godfrey-June, for example, stated, “It’s the greatest.” Indeed, he saw reviews in the thousands, outnumbering those of traditional big brand competitors like Axe or Dove.
Besides, he thought, “I’m looking at the product. I can build the business [side].”
With his advisors calling him “crazy,” Cammarata went ahead and invested in Schmidt’s Naturals, where he now serves as president and chief global strategy officer. The first order of business? A product remodeling. He saw a broad swath of consumers, like him, who were accustomed to deodorant looking and being applied in a certain way.
“I called Jaime and said, ‘We gotta get this in a stick. I can’t do this jar thing,” recalls Cammarata.
An Army Of Online Reviewers
The investor then went to Schmidt’s Portland office, a 1,200-square-foot space with just four employees and a pet turtle living in the bathroom. At that point, the company was earning half a million dollars in yearly revenue. Within six months, Cammarata expanded the company into a 5,000-square foot facility, hired a dozen more employees, and bought equipment to automate the manufacturing process. They found a new home for the turtle.
Schmidt’s Naturals then added a roster of new product offerings, starting at $4.99, including various sticks (made of 60% recycled materials). It also kept its original jar format, which is particularly popular with spas and upscale boutiques.
New scents included Coconut Pineapple, Jasmine Tea, Geranium, Cedarwood and Juniper, and Ylang Ylang and Calendula. In a way, the scents mimic a perfume line more than a conventional deodorant line. There are even limited-edition scents for winter or summer, thereby inducing a collector’s mentality in their consumers. It’s what pushes retailers like Urban Outfitters to carry deodorant in the first place–then place it alongside trendy fragrances and body lotions.
From there, Cammarata’s marketing strategy was to promote the very thing that convinced him to invest: the reviews. The idea was to “amplify the consumer feedback,” he says.
In advertising and social campaigns, Schmidt’s Naturals touted consumer testimonials and online reviews in hopes to squash the lingering question: Does natural deodorant work?
“Consumers are the biggest-selling people,” stresses Cammarata, who essentially capitalized on digital word-of-mouth. Online reviews, he says, built the company. As of today, 20,000 online reviews exist on third-party websites alone.
Schmidt’s Naturals also made sure to prominently reflect the product’s natural ingredients on product packaging, which was redesigned in bright, modern colors. On the cap, a label reads: “Award winning natural formula. No aluminum. No propylene glycol. No artificial fragrance.” All products contain plant-based powders to absorb wetness, with coconut oil and candelilla wax to provide the sticks’ “glide.”
As Cammarata explains, it’s the right time for natural products to succeed. “Consumers are waking up, they want to know what’s on their body,” he says. “They want to know everything. Transparency is key to them.”
Indeed, the natural beauty and body care market is expected to reach $13.2 billion by 2018, due in part to millennial consumer behavior trends, according to Transparency Market Research. Brands with a natural and/or botanically derived clinical orientation now represent the largest combined share of prestige skincare sales, reports The NPD Group.
“Consumers in the U.S. are showing greater preference toward natural and organic products, especially in the personal care product segment,” states Vijay Sarathi, lead analyst for cosmetics and toiletry research at Technavio.
Schmidt’s Naturals is keen to take a positive approach to selling consumers on the many benefits of natural products.
“There is a lot evidence that shows that there are some ingredients in conventional products that can be problematic to your health,” says Schmidt, “but we don’t like to take the scare tactic. Our philosophy is: If you have a product that’s natural and clean and works as well as a conventional product, why not choose the safe option?”
Of course, the answer to that—and the reason that might prevent Schmidt’s from going mainstream—are twofold: One, the price. It’s nearly 25% more expensive than Degree or Secret. Second, the formula. Many Americans are accustomed to their deodorant serving as an anti-perspirant, which Schmidt’s is not. Some online reviewers attest to yellow clothing stains following use of the product.
As part of their marketing platform, the company publishes content surrounding natural health solutions, including “underarm health.”
Schmidt’s Naturals considers itself a leader and teacher in the natural space for “millennials, who are paying attention to the products on the market,” says Schmidt.
On any given blog or Instagram post, one can see fans share their experiences and marvel at how surprised they are by the efficiency of natural products. The company now has over 500,000 social media followers.
“Seeing people get excited about deodorant is not … well, the norm,” laughs Schmidt.
Today, Schmidt’s Naturals works out of a 30,000-square-foot facility in Portland, with an additional sales office in Florida, and 120 employees. Moving forward, the company plans to expand beyond the underarm; Schmidt’s Naturals will release a full home and bathroom product line in Fall 2017.
It’s not something Jaimie Schmidt ever saw herself doing, but now that she’s at last found her passion, she’s not slowing down.
“I’m still really competitive, I don’t think that will ever go away,” she admits, reflecting on how far she’s come since handing out vegan hot dogs. “I live and breathe the business. It took a lot of time, with a lot of trial and error trying out different career paths, but this is it.”