Soaps, Candles, and Home Goods
Industry: Lifestyle & Consumer
Products: Soaps, Candles, and Home Goods
A few years ago, Formulary 55 started experiencing some growing pains. "We knew we hadn't captured nearly the market we could [in Seattle], and decided we needed a bigger facility," says Anthony, the company's COO.
In 2014, he and his wife, Cordelia, the company's chief executive, opted to relocate. "We looked at a number of cities around the country based on a core set of criteria: affordable real estate, reliable shipping and Internet infrastructure, a favorable tax structure, and a pro-business mindset, along with high quality of life," says Anthony. Another lure: Colorado's 300-plus sunny days.
But we're getting ahead of ourselves. It all started when Cordelia started making cold-processed soaps and essential oils in her kitchen in the early 1990s. Her concept has since grown from its farmers market beginnings to a recognizable brand in 769 stores spanning 18 countries.
Cordelia's initial offerings were "as natural as you can get," Anthony says, pointing to clean ingredients and a simple, small-batch process. Within two years, Formulary 55 moved production from her kitchen to a facility in Seattle.
In 2012, she snagged a 1,200-square-foot retail and production space in the Seattle suburb of Ravenna, to make her gentle, all-natural Shea butter soaps, hand creams, and salt-based bath fizzies.
Anthony, an engineering manager for Microsoft at the time, joined the company in 2013 to help with operational aspects of running a small business. It didn't take long for the two of them to realize Formulary 55 needed more room in order to realize its full potential.
When the duo visited Colorado they were sold on Pueblo. The Hills purchased a 115-year-old brick building, and Anthony left his day job to oversee construction on what would become a 3,600-square-foot, live-work manufacturing facility. "We shut down operation in Seattle in September of 2014, and officially started in Colorado on October 1," says Anthony.
Two full-time employees -- Anthony and Cordelia -- serviced 50 active wholesale accounts in 13 states, as well as Canada, the United Kingdom, and New Zealand. The catalog also includes botanical body treatments, soy candles, and a men's line, consisting of shave oil, lotion, body wash, and lip balm. "We also make natural home products," Anthony adds, referencing Formulary 55's laundry soap, room spray, and cleaning concentrate.
The Formulary 55 manufacturing process is straightforward and "very hands-on," as Anthony puts it. "We use machines, but there's no machine automation," he explains. "Everything is melted by hand; temperatures are monitored by hand. Humans seal and wrap our packages. The most automated piece of equipment we have is a machine with a piston that compacts the salts in our bath fizzies."
Consumers appreciate Formulary 55's commitment to quality and natural ingredients, but strong branding and scents are the company's real bread and butter. Most Formulary 55 products are heavily scented with phthalate-free perfumes and essential oils.
In 2015, the Hills partnered with a sales representative group to stimulate growth in underserved regional markets; by the end of the second quarter, Formulary 55 had already reached its total sales for the previous year.
Formulary 55 also received a micro-grant from the Pueblo Economic Development Corporation (PEDCO), which helped it expand physically by obtaining an additional 2,000 square feet of manufacturing space. "In exchange, we committed to create three jobs in the city of Pueblo," says Anthony.
That year Formulary 55 reached 236 wholesale clients, and had a presence in 42 states plus such countries as Canada, Sweden, New Zealand, and China. The company has an account with Anthropologie, and supplies soap, bath tablets, and body treatments to all of the American retailer's North American stores.
Growth continued in 2016 thanks to new relationships in Japan and Taiwan, and the addition of 90 wholesale clients, including Bloomingdale's and Globus, a Switzerland department store.
Business might be booming, but success hasn't impacted Formulary 55's core values. "We started as a handmade company, and it's important to us that we remain a handmade company," Anthony says. Rather than outsource production, Formulary 55 intends to continue growing in Pueblo.
Challenges: "Finding people who excel at this type of work," says Anthony, explaining that making soap and candles requires craftsman-level skill. "We have roughly a 50 to 60 percent rate of retention for new hires."
Opportunities: There's been talk of expanding Formulary 55's product line, but the most pressing opportunity, Anthony says, is pushing the company's existing line into new markets, both domestically and internationally.
Needs: Anthony says Formulary 55's needs aren't particularly unique: "As a company, we are always trying to improve our supply chain and find the best raw ingredients at the best price."