Balmy business for Carmex
At the next Icons in Business event, leaders from the popular balm brand will share insight into the history, leadership strategies, and growth of the family-owned and operated Wisconsin company.
Carmex was created in 1937 in the Wisconsin kitchen of Alfred Woelbing, grandfather of current company President Paul Woelbing, pictured right.
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You may not think much about Carmex until you need it — when that little jar with the trademark yellow lid, or much more recently tube or stick, gets dug out from the bottom of a coat pocket or purse to be quickly applied before retreating to its resting place until summoned again by chapped lips — but the iconic brand has a rich history Wisconsin history.
That story will be shared at the next Icons in Business event, Friday, March 16, when Carmex/Carma Laboratories President Paul Woelbing and COO Rich Simonson will share insight into the history, leadership strategies, and growth of the family-owned and operated Wisconsin company.
In advance of that presentation, IB spoke to Woelbing to get the inside scoop on this unique brand.
In 1937, Paul’s grandfather, Alfred Woelbing, started production of a cold-sore remedy in his kitchen, pouring the concoction into what would become the iconic yellow-lidded jars Carmex is known for. His sales method? Visiting pharmacies one by one. That humble approach paid off. Just 20 years later, Alfred’s kitchen could no longer handle the demand for Carmex thanks to its growing popularity through positive word-of-mouth advertising. Production moved to Wauwatosa, but it wasn’t until the 1970s when the family business again outgrew production that the company would employ a mechanical pouring process at its current Franklin facility to keep up with consumer demand, selling its 1 billionth jar in 2008.
Carmex’s beginnings in that kitchen, though, were much more understated.
“My great grandparents lived on a farm in Mequon, a suburb north of Milwaukee,” says Paul Woelbing. While now a bedroom community for Milwaukee, at the early part of the 20th century Mequon was still quite a distance from the city. “If you needed something you often made it yourself. My great grandparents, like many rural people at that time, made soap, salves, and ointments needed by the family and the animals.
“Because of this my grandfather had a good working knowledge of how to combine various ingredients to make things,” Woelbing adds. “When I asked my grandfather how long it took him to create Carmex he said, ‘About two weeks,’ and he compounded it specifically to help with his own dry, chapped lips and fever blisters.”
For the greater part of its history, Carmex maintained its humble roots. The company’s only advertising was the recommendations passed from one satisfied customer to another.
“When my grandfather incorporated Carma Laboratories in 1937, his main concern was simply to make enough income to support his family,” notes Woelbing. “He wasn’t interested in the complexities inherent in running a large business. As such, our growth for the better part of 70 years came strictly from satisfied customers sharing their positive experiences when using Carmex. This was still the case when I joined the business in 1991. Our average growth rate at that time was about 8% per year.”
A big advantage of word-of-mouth is that customers obtained this way tend to be very loyal, says Woelbing. The down side is that it can be slow.
“It took us the better part of two generations for Carma Laboratories to become of any significant size,” states Woelbing. “The world of consumer products is very different now from what it was decades ago. Through the 1960s many drug stores were still small, independently owned businesses. If you could convince the owner to take your product you had time to develop a following. Now, 80% of the over-the-counter products are sold by four or five large chains. While this is much more efficient for a manufacturer to distribute its products, you are lucky if you have a year to demonstrate sales to the buyer. If you don’t produce sales, your products will quickly be replaced by something else.”
Because of this reality, Woelbing says Carma Labs had to learn how to truly market its product for the first time. The company now has its own marketing department and it’s learning how to advertise and use research to develop new products.