Luk Beautifood is partnering with Healthy Life to enter heath food stores in the next phase of an omni-channel strategy geared for growth.
Founder and CEO Cindy Luken said the company was ready for scale, backed by strong brand awareness, sales and growing consumer demand for toxin-free beauty and personal care products.
“This is our first foray into health channel. Consumers want our product to be accessible but we don’t want to be in the mainstream market so it’s no longer aspirational. That’s quite a hard path to navigate so we have to be very strategic about our partnerships,” Ms Luken said. “You’re not going to start seeing us pop up in every health food store across the country or in the pharmacy channel. It has to be the right fit.”
Healthy Life is in a phase of rapid expansion rolling out a new business strategy, which includes a “Natural Beauty Bar” in all new stores and in-store activations and events to educate and engage consumers. The move highlights growing consumer demand for toxin-free beauty and personal care products, with Healthy Life vowing to support Australia’s growing independent beauty industry.
“We’re working with strategic stockists so we’re positioned in the right place to support the look and the feel of the brand,” Ms Luken said.
Luk Beautifood is simultaneously expanding in the salon and spa market in partnership with Professional Beauty Solutions, is in discussions with David Jones and has a growing following in the US.
“Over the last 18 months demand has really grown. And in the last year, consumers have really built up their understanding of toxins and their effects on the body; they’re craving affordable and beautiful products so the time is right for us to make Lip Nourish more accessible.”
Rewind to 2012 and Ms Luken, a food scientist, was blogging about beauty food before launching the lipstick range (made from food) shortly after that.
“In late 2016 I’d grown the business to $200,000 [in revenue]. The market was ready for a 100 per cent toxin-free lipstick so I did a capital raise to help scale. At that time, we thought online would drive 80 per cent of sales with 20 per cent coming from strategic stockists. After a year of healthy sales through the gift and lifestyle channel we really had to flip that view.”
Online start-up to in-store success: What it takes for independent brands
Australian toxin-free indie beauty brands have been building consumer demand directly since the advent of e-bay and e-commerce – quietly pioneering a new category online that was cemented in no small part by the Irene Falcone/Nourished Life e-commerce juggernaut. Today consumers are more educated than ever before, with demand reaching that tipping point where mainstream retailers are now actively looking to differentiate with toxin-free options and targeted marketing campaigns.
But while more retailers are searching for toxin-free brands, the pathway to shelf isn’t necessarily straight forward.
Key takeaways for independent brands from the Luk Beautifood experience:
1Grow the brand online with founder story and passion
“That’s where the indie brands and founder owned brands are finding our niche,” says Ms Luken. “It’s where we can talk directly to consumers, we can share stores and build a brand very quickly. This strategy not only allows us to compete on the same playing field as bigger brands, but it actually gives us an advantage.
“Consumers relate to the founders – we’re passionate about our motivations, we’re passionate about our ingredients and we’re passionate the environment. The authenticity of the brand shows through. It’s very important for independent beauty brands to build a brand online – and it’s now a simple click from Facebook and Instagram, and provided there’s no barriers to purchase, it makes sales very easy.”
2Earn your sales stripes online
Ms Luken said while retail demand was growing for toxin-free products, she said it was still a challenge for retailers to bring on smaller, independent companies.
“They really need to have proven themselves first; and the retailers need a model where they can cost-effectively bring them onto the market. It’s not that they don’t want them or know how to bring them on, but they can’t necessarily gamble on whether it’s going to work. Brands need proven value,” she said.
“We are at the forefront of this market so we don’t always know if something will or won’t work. The gift and lifestyle channel gave us the runs on the board and now we’re confident because we have the numbers, we see the sales.”
3Be fair and support your retailers
“For a modern day beauty brand to sell direct to consumer and then expand into bricks and mortar stores it has to be fair to everybody in the supply chain. We have parallel pricing, we’ll run the same promotions online and in-store. We’re part of the one family working together,” says Ms Luken.
4Packaging, POS and retailer education
Be prepared to revisit your packaging, develop point-of-sale materials and spend time educating retailers. Luk’s original packaging was designed for the gift market and online sales. A whole new strategy was required for broader shelf-ready packaging and the company is currently devising resources to educate retailers on the products, ingredients and how to sell them.
Are you ready to scale? Can the business systems support the growth and variable requirements of different retailers? And can you meet demand? These are key questions every owner needs to ask themselves at the point of looking to scale. Working with boutique retail partners where you can support each other can help iron out any bumps. “It’s taken us longer, but Luk has been set up to scale from the beginning,” Ms Luken said.