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From selling honey on the roadside to a $1bn valuation, Burt’s Bees

Original Burt's Bees lip balm in terra cotta pots

In 1991 Roxanne Quimby, co-founder of Burt’s Bees, had the idea of testing out the idea of a beeswax lip balm, which was a simple recipe from an old 19th century book on personal care – the recipe was just beeswax, a supplemental vitamin E and some peppermint oil. This new product would go on to completely change the direction of Burt’s Bees. The product’s success lives on today and is enjoyed as the go-to lip moisturiser by millions around the world. Burt’s Bees was acquired in late 2007, by Clorox for a reported sum of US$925 million.

Burt’s Bees as we know it today

Burt’s Bees is a leading manufacturer of earth-friendly natural personal care products. The company manufactures more than 150 products in categories such as lip care, face care, body care, hair care, men’s grooming, baby care and outdoor remedies. Burt’s Bees products are carried in nearly 30,000 retail outlets, including major grocery and drug store chains in the U.S., United Kingdom, Ireland, Canada, Hong Kong and Taiwan.

How it all started

The founders of Burt’s Bees

In 1984, Burt Shavitz and Roxanne Quimby founded Burt’s Bees in Dover-Foxcroft, Maine, U.S.A.

Burt was a beekeeper well known around his hometown in Maine, he made his living from keeping bees and selling honey at the weekend markets and on the roadside from the back of his yellow pickup truck.

Roxanne was a city dweller who moved to Maine with her husband at the time and father of her two children, to live a simple ‘off-grid’ lifestyle on the land.


Roxanne, Rufus the dog and Burt3                        Burt Shavitz and his yellow pickup truck

The back story before the brand

Ten years prior to the founding of Burt’s Bees, Roxanne and her husband George moved from Massachusetts with $3,000 in the bank, enough to purchase a good-sized 30 acre block of land in Maine. But they had to tough out a very basic camping lifestyle while they built a makeshift house on the property. They lived completely off the grid with no running water, no phone and no gas or electricity, which Roxanne says was challenging but simple because as they had no bills and needed very little money to live on.

After parting ways with George, Roxanne became a single mum, she waited tables at a local diner, she still lived off-grid but was looking for something more challenging to do next. She had the idea of working with Burt who she had initially met when she hitchhiked a ride from him.

Burt had also traded in his city life in Manhattan as a photojournalist and headed back to the land. He was an off-gridder, a long bearded local beekeeper known for his non-talkative character who lived a very simple lifestyle in a converted turkey coup.

“I was very attracted to him, he was kind of an inspiration for how one could live very independently and with their own unique set of rules, I was very inspired by his lifestyle” says Roxanne.

She approached him to see if he needed any help with this beekeeping business and she joined Burt as his summer apprentice, tending to the bees, extracting honey, and hauling around gallons of honey for sale around town.

“After the summer where I apprenticed with him, I suggested that we could package the honey in nicer containers and sell it at craft fairs and put little labels on them” says Roxanne.

The evolution of Burt’s Bees the brand

Burt had been selling his honey in used gallon jars (3.8 litres) but he was not opposed to her suggestion, so Roxanne ordered in some nice bear shaped 12 ounce plastic bottles with squeezy ears (350ml). Complete with a new label this pure Maine honey was ready for the craft fairs and the markets. Roxanne wanted the packaging to look really cute so people would want to buy it and she wanted it to also say “I am giftable” so people could buy it as a gift, and it worked.

Christmas craft fairs, local high schools, junior highs around the area and farmer’s markets is where they sold their honey. In those early days a weekend outing at a local school bringing in $200 cash for the day was pretty good day and plenty encouragement for the duo to keep at it.

Reports say Burt’s Bees formally incorporated as a company in 1991, Burt held a third of the ownership and Roxanne had two thirds.

Product line expansion – enter Candles

Burt had kept a supply of beeswax, which is a natural by-product of honey production, but he did not have an immediate use for all the beeswax his hives were producing at the time.

[Beeswax is a natural wax produced by honeybees. They have glands on their abdomen that produce flat discs of beeswax which they then build into their honeycomb. After you harvest the honey from a hive, you remain with the beeswax.]

Roxanne had the idea of making candles from the beeswax as a second product for them to sell at markets, selling them for $3 a pair. This was a year into her partnership with Burt. The new product line was received well consumers, and this helped the founders to keep going.


One of the first beeswax candles the company made3.

The business was growing, demand was steady, there were good days and some bad ones out on the road. Their initial revenue goal was to get their annual business sales to $20,000 which was about $385 a week, a goal which they soon achieved in their first year of trading.

“It was exciting because I was maintaining my independence using my sense of aesthetics and making enough money to live on” says Roxanne. Being the more ambitious in their partnership, she had now set a much loftier goal of $1million in annual revenue by the time her girls graduated from high school.

How to Make Beeswax Candles

If this story has already inspired you to try your hand at some home-made beeswax candles just for fun or even for a possible business project of your own, then take a look at a few resources we have compiled here below complete with recipes and video tutorials to follow:


#1 How to make a beeswax candles – Our Oily House     #2 How to make beeswax candles–Blueridge Honey Co

Ingredients/Supplies

  • 12 oz. beeswax, roughly chopped
  • 12 oz. organic palm oil/shortening
  • Mason jars
  • Square braided cotton wick
  • Kitchen scale – for weighing ingredients
  • Wooden skewers (cut in half) or pencils – to keep wicks in place
  • Old newspaper for covering work areas
  • Large glass measuring cup for melting ingredients
    [More on this recipe at: diynatural.com]

New York, a good break – 1989

A business order came in from a New York boutique in 1989. A buyer or referrer of the company must have seen Burt and Roxanne’s products at a trade show and ordered hundreds of products. This was a pretty large deal for Roxanne and Burt at the time.

The product was a little candle moulded like a teddy bear with a little bow tie under his chin. They sold hundreds of them. Roxanne says fulfilling these orders was a challenge because they were still small, with extremely limited space and resources to work with, so they had to work all the time and for long hours just to keep the orders fulfilled.

By this time the candles were being made out of an old one room schoolhouse that they now rented, but the place was not ideal to have employees, so they only hired some part time help as the business grew.


The old one room school house3                                                              Burt the beekeeper3

The origin of the name Burt’s Bees

Burt had a stencil with the words “Burt’s Bees”, he used it to paint-mark all of his beehives which were spread out all over the countryside. They had about 50 hives which could not all be kept on one property. So Burt spread them out of onto different properties and made sure they were identifiably marked as Burt’s Bees. So eventually the business became known as Burt’s Bees.

The 50 hives were fine for a few years, but they had to start sourcing beeswax from other people to keep up with the growing demand.

Growth

In 1990 Burt’s Bees was enjoying strong revenue growth, selling predominantly candles, and other derivative products of beeswax. Their product range included items like Boot Food, a leather boot waterproofing rub made from melted beeswax and rendered bear fat. The company also sold a furniture polish product made from beeswax.

Sales were mainly to boutiques and independent gift shops based in New England and New York.

Conflicting directions between the founders

Burt was known to have come from a family that had some money, but he moved away to live on the land and enjoy his introverted simple living in a converted turkey coup he was proud to call home in rural Maine. The newfound growth and direction of Burt’s Bees driven by the more ambitious Roxanne was not quite what he had in mind.

However, Burt and Roxanne were not only business partners, but they were also in a romantic relationship, so he supported the new vision because of how much it meant to Roxanne.

Roles and responsibilities

Burt was a fixer, he knew how to get things working again, somewhat hard to deal with at times but the team learned how to work with his personality. He was also in charge of accounts receivable, making sure all customer accounts were paid up which was critical for cashflow in their inventory-based business.

Roxanne oversaw the production, business strategy, product development, branding, marketing, and order fulfillment.

Original Burt's Bees lip balm in terra cotta pots
The original lip balm in terra cotta pots               The modern high tech Burt’s Bees lab

Burt’s Bees lip balm

Roxanne Quimby decided to try out a lip balm recipe from an old 19th century book on personal care. It basically used the same formula they had for all their other products, which was wax and oil. But added some extras, peppermint oil and Vitamin E.

It quickly became apparent that Burt’s Bees customers were more interested in products for their skin and body than their furniture and boots. The company’s focus almost immediately shifted towards skincare and they phased out all the polishes. Eventually the candles were also discontinued.

The company felt that candles were not as scalable, because they were hand-made, more labour intensive while the lip balm production was more scalable with a simpler production process that would not require the same level of capital injection. Plus, the cosmetics and beauty market seemed to have more promise for sustainable growth.

This was now 1991 and Burt’s Bees hit $1.5million in revenue. Quite an achievement when you look back at their humble beginnings selling home grown honey on the roadside and at farmers markets.

Feeling inspired?

Check out the video tutorial below by @WilderNestHive on how you too could make beeswax lip balm for your next side hustle project, charity fundraiser or just for fun with friends and family.


#WildernestHive: Making Your Own Beeswax Lip Balm

Beeswax Lip Balm Recipe:

  • 1 ounce beeswax
  • 5 ounces oil
  • 5 drops of Vitamin E
  • Pinch of Annatto Seed Powder
  • 1 Teaspoon of Turmeric Powder (no longer recommended by author)

Relocation – Maine to North Carolina

The company enjoyed more growth now with about 45 employees which both founders say was a difficult part of the rapid expansion, managing people was not their strong suit. Neither was managing cash flow, billing, recruitment, and long hours of keeping the “factory line” going.

In 1994 the founders moved the company from Maine to North Carolina, a move that was mainly championed by Roxanne.

Roxanne believed North Carolina was much better situated in terms of its location proximity to Florida, easier connectivity to the West coast and it was a bit of hub for cosmetic companies. There was a great talent pool and better access to suppliers of their input materials such as glass jars and caps which lowered their cost of production.

The ability to hire people who were trained in the industry was also critical and it turns out that this helped them build capacity to be able to ramp up production and computerise some of their key processes such as billing.

They set up the factory in North Carolina as best as they could, an unsophisticated operation that leveraged a lot of used equipment including a repurposed mashed potato mixer that was used to optimize production and a cement mixer hobbled for use in the bath salt production.

You don’t need to wait for everything to align, just begin with what you have, modify certain equipment if you can and repurpose processes to match the outcomes you need today and work on more permanent solutions as time and resources allow, but keep moving forward.

Burt’s Bees’ Marketing Philosophy

Their marketing model was all grassroots based. They made free sample products and gave them away as testers. Roxanne told NPR’s Guy Raz, that they also had catalogues that were almost like a current day blog, it carried all their products, and it would also talk a little bit about the company with engaging stories about Burt and his dog. They also published interesting stories around their ingredients and created some story threads that people seemed to follow and look forward to.

This seems to have been a catalyst in creating a unique story line for the company, a differentiating factor built around the authenticity and eccentric nature of co-founder Burt Shavitz.

The ingredients and formulations used were not unique to Burt’s Bees, there were available in old bee keeping books and journals, but the founders still found a way to add their own touch to the products and used Burt’s image as their leverage factor.

Roxanne says they made a conscious decision to use Burt’s face on the products, “I guess I was a little resentful of the way women were used to market products and I saw some of the big cosmetics lines really exploiting the image of women and defining them through the advertising and packaging in a way that did not respect their full depth, so it was important for me not to follow that lead”.

This turned out to be quite a telling move because Burt had a memorable face with a story to match and consumers connected with the authenticity that his image projected.

Changes, the billion-dollar valuation

During the 1990’s it is reported that Burt was forced out by co-founder Roxanne Quimby after he had an affair with an employee, according to the Associated Press.

Burt was caught up in some personal indiscretion involving other women which damaged their personal relationship. Roxanne’s son is featured in the documentary Burt’s Buzz saying there was a female staff member involved and there may have been a lawsuit risk against the company.

The events that followed between the two founders have left a divided public debate about how Roxanne and Burt parted ways.

Following Burt’s personal transgression, as Roxanne puts it, she bought him out. Burt finished up with 37 acres (15 hectares) in Maine, and an undisclosed sum of money as his payout and he retired from the business, this was 1999.

He continued to be the face of the brand with his image and name still pasted on the products, and he carried on the role of brand ambassador touring around the country and internationally promoting the brand he founded.

Family owned Burt’s Bees to Private Equity

In November 20038, a private equity firm AEA Investors came knocking and Roxanne would go on to sell 80% of her shares. It is believed the company was valued at $177million meaning Roxanne received $140million for the 80% stake she sold. Under AEA ownership, Burt’s Bees nearly tripled its revenue and EBITDA (earnings before interest, tax and amortisation) and became one of the most recognizable natural skin care brands on the market.

What was AEA’s value add?

AEA says they provided strategic guidance and support to management during the successful expansion from Burt’s Bees’ traditional base of health food and specialty channels to mainstream food, drug, and mass retailers. They also invested in new product launches including in strategic personal care categories, such as hair care, sun care, hand washes and high-end facial care.

With Burt’s Bees annual revenues approaching $170million in 2007, Clorox felt the need to join the hive. On 31 October 20079, Clorox (NYSE: CLX) a New York stock exchange listed leading multinational manufacturer and marketer of consumer and professional products, acquired Burt’s Bees for $925million of which $185million (being 20%) would have gone to Roxanne Quimby for her remaining stake in the business, bringing her total exit cash out to approximately $350million (before tax).

The venture that Burt Shavitz started back in rural Maine selling honey by the gallon from the back of his yellow pickup truck made its way to becoming a billion-dollar worldwide brand.

Reports say that Roxanne paid Burt an additional $4million following the Clorox acquisition. Whichever side your view may lie, in Burt’s words to the filmmakers of his documentary “in the long run, I got the land, and land is everything. Land is positively everything. And money is nothing really worth squabbling about.”

Burt continued to receive Rockstar receptions in places like Taiwan as he continued his ambassadorial role for the company. Burt sadly died aged 80 in 2015.

Burt’s turkey coup lives on

After his passing, Burt’s cabin was moved from Maine to the company’s Durham headquarters, so that visitors can see just how freeing a downsized life can be.

Ironically enough, off-grid tiny house living is back in vogue.

Burt Shavitz of Burt's Bees

Exponential growth of Burt’s Bees

Burt’s Bees grew in sales over a few years into the multiple millions and into tens of millions hitting $60millon in revenue in 2001, doubling from the previous year.

Roxanne says it was a combination of the business being scalable and the business reaching a tipping point where it seemed that everyone knew the brand. Their grass roots marketing efforts had come full circle with a consumer driven demand. She says it was like a pull-effect where customers would ask store owners to order more of the product each time they ran out, and that’s when the brand took on a life of its own.

By the time the opportunity to exit the business came Roxanne felt it was the right time to hand over the reigns as the original passion and inspiration had somewhat faded away and the big box stores and drug store chains no longer seemed as exciting or creative so an exit was the next logical thing.

It proved a lucrative exit and maintaining a 20% stake helped Roxanne cash in on the 4X growth that the company would enjoy between 2003 and 2007.

Roxanne in retirement

As of 2016, she was reported as a resident of Portland, Maine, where she is regarded as a prominent philanthropist and leads a number of charitable organizations in the area, with land conservation being a core cause that she champions. In 2016, she donated about $75 million worth of her land holdings to the National Park Service — over 87,000 acres overall.

Roxanne Quimby of Burt's Bees
Roxanne Quimby

Roxanne has also been named to Forbes list of America’s top 50 givers. Even in her retirement and philanthropy work Roxanne has her critics but she is undeterred and says her goal is to distribute her wealth to meaningful causes before she dies.

Determination, vision, and goals

Roxanne set some lofty goals and was ambitious but those were accompanied by hard work, strategic thinking, and a dogged belief that success was possible.

According to an interview with NPR, Roxanne says she had role models and companies she had selected out and kept in her mind as ideal models, including a big sign over the production floor that said “lookout Elizabeth Arden”.   She believed that if Elizabeth could do it so could they.

When asked what she believed they key to becoming a successful millionaire was she said it all starts with you just having the belief that you can do it, that you have everything it takes to become a millionaire.

Over to you

Burt’s Bees was not birthed out of ground breaking innovation and never head of ideas, it was just ordinary honey, candles, boot food, lip balm, bath salts and other consumer products that followed. Products that ordinary mums and dads still sell today at craft markets and farmer stalls in most cities around the world.

What made the difference was their determination and vision to improve the products they were making, improve the packaging aesthetics so they became more ‘giftable’ and trying out different recipes until they found the niche that would resonate with their audience. They also found a way to differentiate themselves and create a brand, that was through the storied face of Burt Shavitz. Mixed together with a good dose of hard work and risk, things slowly fell into place and at some point the ‘hockey stick’ effect kicked in and sales sky rocketed and the company’s valuation hit the billion dollar mark which was remarkable.

In the book Acres of Diamonds, the author describes how it is possible to overlook a great opportunity in your very own backyard in pursuit of another opportunity elsewhere only to realise that what you overlooked was the real honey pot.

‘Till next time.

@davismutabwa

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Sources:

  1. https://www.npr.org/2019/02/15/695247911/burts-bees-roxanne-quimby
  2. https://www.imdb.com/title/tt3091282/ Burt's Buzz (2013)
  3. https://www.burtsbees.com/our-story/
  4. https://en.wikipedia.org/wiki/Roxanne_Quimby
  5. https://apnews.com/article/bdb4857bbc4c426d858421d9c0865f3f Co-founder of Burt's Bees says he was ousted
  6. https://www.thecloroxcompany.com/who-we-are/
  7. https://www.forbes.com/sites/jenniferwang/2017/10/24/burts-bees-cofounder-on-why-she-gave-away-87000-acres-in-maine/?sh=48b511b575a4
  8. http://www.aeainvestors.com/private-equity/middle-market/case-studies/burts-bees/
  9. https://investors.thecloroxcompany.com/investors/news-and-events/press-releases/press-release-details/2007/Clorox-to-Acquire-Burts-Bees-Expands-Into-Fast-Growing-Natural-Personal-Care/default.aspx
  10. https://www.youtube.com/watch?v=UxVoPUeeT64 Making Your Own Beeswax Lip Balm
  11. https://www.youtube.com/watch?v=1tDWhMxtEqU How to Make a Beeswax Candle
 

 

 

 

About the author, Davis

My Dream of sharing inspirational success stories started many years ago and so we created the Business Generals Podcast an amazing show that brings some of those conversations to light. Combined with our blog, a case study based coverage of inspirational business stories we show case what is possible for you who has a dream and a burning desire to see your dream come alive.

I truly believe you have greatness inside of you 🙂

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