When Laguna Beach-based men’s grooming line Cremo Co. LLC launched in 2005 with a single product—shaving cream—it was years before the industry of men’s grooming products would see the kind of disruption ushered in by the likes of Harry’s Inc. and Dollar Shave Club.
Like a slow-to-grow beard, sales were patchy and incremental as the company’s founders focused on selling its single product in mall kiosks and local boutiques.
That beard has filled in quite nicely, thanks.
As Cremo added products for haircare and skincare the last four years, sales have grown.
The company’s revenue grew 56% last year with retail sales at $75 million. It now has full-store distribution deals with mass retailers CVS, Target, Walmart, Kroger and Walgreens.
Chief Executive Matthew Biggins said the brand has come a long way from when he stepped into his role in 2015 following a 10-year stint at Nestlé.
“My [Nestlé] colleagues thought I was crazy … saying you’re going to this business that has one product and, at that time, doing around $2.5 million and no resources,” Biggins said.
“From a professional standpoint, it was by far and away the best decision I’ve ever made.
“We’ve grown significantly in the last couple years, but we’re still the small guy,” he said.
Expansive Offerings
While it still banks on its flagship shaving cream product, Cremo’s growth comes as the company continues to add items to its beard, haircare, body and skincare line; its website now lists nearly 100 offerings.
Cremo’s product expansion plans play into the overall trend of more men—and retailers—becoming interested in skincare products. Last year, L’Oreal partnered with David Beckham on his House 99 grooming line, and L.A.-based women’s brand Beautycounter this month introduced a men’s shaving and skincare line called Counterman, for example.
Men’s grooming product sales in the U.S. are projected to top nearly $5 billion by 2022, with skincare products—making up roughly 10% of that figure—one of the largest sources of growth, thanks in large part to changing views on men’s grooming from millennials.
Recent figures show the annual average sales growth of men’s skincare products the past five years was 7.2%.
Meanwhile, men’s shaving products declined on average 1% during the same period, though overall it’s still the largest category in men’s grooming with sales of $2.8 billion in 2017.
“The real growth in the future is going to come from moving into those final categories of grooming,” Biggins said. “So deodorant is a big one [as is] bringing innovation in the category like new ways to deliver shave cream.”
The main challenge for the privately held company? “Get people to try our products,” he said.
The company hasn’t disclosed any outside funding, or if it is looking to be acquired.
Groomed Regimen
Cremo’s products retail from about $8 for a tube of shaving cream and up to $22 for shaving tools. Its products are manufactured in Los Angeles, except for its shaving and grooming tools.
The company employs about 30—a lean team, said Biggins, who notes the company “likes to say we have the highest revenue per employee of any company.”
Cremo founder and Newport Beach-native Michael Boone started the company after selling his previous firm Boone International, a maker of bulletin and dry-erase boards and markers, in 1999 for an undisclosed price to Fortune Brands Inc.
At the time, Boone’s sales were reported to be about $56 million.
Boone, an engineer by training, said in news reports he invested nearly $50,000 on his “private obsession” to create a shaving cream that would deliver a close shave without nicks and irritation.
He brought on Kyle Schroeder—referred to as a co-founder by the company—in 2007, who focused on making the product accessible to the average guy by eyeing distribution with mass market retailers.
While the company expanded distribution with a single product, Biggins said that when he joined the company four years ago he saw an opportunity to add other categories, starting with beard care items in 2016.
“We found that 60% of millennials don’t shave everyday and as a shaving company we said OK, that’s a little scary,” he said.
Last year, it introduced haircare and styling products such as pomades, gels and even dry shampoo.
It also released body washes in scents like sandalwood, citrus and vetiver in packaging reflective of an old gin bottle.
Biggins said the company tapped fragrance consultant Lisa Wilson, who has collaborated with Missoni Home, Fred Segal founder Ron Robinson’s apothecary Apothia, Gap, Yankee Candle Co. and Pottery Barn.
“Scent was really the main purchase driver in body wash … and we looked at [competitors] and they’re naming things like ‘Wolf’s Howl’ and ‘World Peace’—generic names that don’t speak to the scent because the category has become so commoditized,” he said.
“We saw an opportunity to elevate the scents and design something that would stop you in your tracks.”
Retailers like Target were hesitant as the product retails for about $8—pricier than other lines it carries—but after a successful test in 500 Target stores last year, the Minneapolis-based retailing giant expanded Cremo’s body wash to all of its 1,850 locations.
Biggins said each of its retail partners carry at least eight of the products in each store and buyers have enjoyed how well the brand sells.
“I mean, you take someone who is buying a $3 shave cream and now they’re buying an $8 shave cream—that’s good for everyone,” he said. “The consumer gets a better product, the retailer makes a higher profit and our business grows.”
Barber Approved
Biggins said it also plans to switch up its marketing strategy this summer by taking a Cremo-themed mobile barbershop to music festivals and events where it can offer samples and meet new customers.
One of its first major marketing efforts was a partnership with the Boston Red Sox two years ago to become its official grooming sponsor.
Biggins said while the one-season deal with the heavily-bearded baseball team was effective for brand awareness, company officials believe that working with barber influencers and local shops is a better use of its marketing dollars.
“There’s been this resurgence of barber culture,” he said. “We realized our brand is almost the personification of a barber—very approachable, can give advice and help guys with their grooming regimen.”
Last year, the company purchased a vintage Spartan trailer, outfitting the interior as a vintage barbershop, and drove around the country offering grooming services.
Cremo plans to focus on inking distribution deals this year with specialty stores and warehouse clubs like Costco, as well as develop new products such as deodorant—a more than $3 billion segment that’s been gaining attention thanks to the rise of natural and aluminum-free startups like Type A, Native and Corpus Naturals. Biggins said customers can expect the company to roll out new versions of its products such as shaving cream in stick form.
It’s also added a line of shaving cream for women.
“We’ve sort of filled the gap of base products,” he said. “We take it upon ourselves now to bring innovation to those categories.”
