West Jordan, Utah
A subsidiary of SnugZ USA (Founded: 1989)
Employees: 310 (SnugZ total)
CEO Brandon Mackay keeps employees smiling by launching a natural skincare startup out of SnugZ USA.
NAAWK is a relatively new foray into retail by the private-label giant, but the move also represents a return to the parent company's roots.
When Mackay bought SnugZ USA in 2005, it was initially a retail brand before moving into private-label lanyards, lip balm, and other accessories. "It took off on the private-label side, so we abandoned retail," says Mackay.
Today SnugZ USA counts Fortune 500 companies and a host of retail and travel brands among its customers. Mackay says revenues have ballooned from $10 million in 2005 to an anticipated $35 million for 2014. The company manufactures from a single 121,000-square-foot facility in West Jordan. Launching a skin protection brand in NAAWK represents the company coming full circle, he adds. "We were producing crazy volumes and wanted to dip our toes back into retail."
SnugZ management saw a market void in sun protection for outdoor enthusiasts, says NAAWK Brand Director Kathy DiFrancesco. While the sun protection market is dominated by a handful of big brands -- namely Coppertone, Hawaiian Tropic, Banana Boat, and Neutrogena -- the mass-market brands "are really just made for the beach," says DiFrancesco. "There was really no brand that spoke to health, wellness, and fitness folks -- people who are runners and people who are cyclists."
It follows that's exactly the target market for NAAWK. The brand, named for "out, outside, outdoor” in Thai, launched in summer 2013. "If you're a long-distance runner or long-distance cyclist, these things can be a pain in the butt to carry," says DiFrancesco. Worse yet, the market norm are products that only stand up to perspiration for about an hour, she adds. "It's a real problem. How do you re-apply?"
To this end, NAAWK sunscreen is water- and sweat-resistant and easy to carry. It's currently available in a 30 SPF spray, but a small, disc-shaped package in coming soon.
Beyond targeting an untapped market, DiFrancesco and company are changing the formulation. Because of the prevalent coconut and fruit scents, "Nobody wants to wear sunscreen," she contends. NAAWK, on the other hand, "just smells clean and fresh. It has fruity notes in it, but it smells nothing like Coppertone."
The brand also has "ingredients you would find in luxury skincare," adds DiFrancesco, including shea butter, cocoa butter, and natural oils. "From a consumer's perspective, they just want to know what's in it. These are people who shop at Whole Foods -- whey want transparency."
The NAAWK catalog also encompasses lotion, aloe gel, and lip balm. The last of the three represents another wide-open market for endurance athletes. "SPF 30 lip balms are not easy to come by," says DiFrancesco. That's necessary when it comes to outdoor activity. "Your lips don't tan. If you're going to be out in the sun for hours, your lips will take a total beating."
The aloe gel is taking off as well, she adds. "We don't use any colorants. We don't use any alcohol. We basically try to emulate what it would be like to cut an aloe plant and put it in the bottle." But the company adds one active ingredient: lidocaine for pain relief.
While NAAWK is something of a startup, it's a startup embedded in an established company. "It's important to know SnugZ has the resources, the experience, and the years of making products."
Challenges: Brand awareness. "Launching into the sunscreen category is exceedingly difficult," says DiFrancesco. "You have four major players who just dominate." In response, the NAAWK strategy: "Don't directly compete with those guys. We don't play on the same field. Most of our customers don't want to use Coppertone."
Opportunities: NAAWK's location represents big opportunity. "Being a Utah company and a lifestyle brand , it's so much of a better fit," says DiFrancesco. "Just our region alone gives us clout."
Needs: Expanding the distribution footprint, currently heavily skewed to the Rockies and Midwest. DiFrancesco says she wants to aggressively move the brand into the Southeast and coastal regions, "basically where your summer seasons are longest."