NEW YORK — Leo Weinstein didn’t live to see the sale of the natural products company he founded 30 years ago with his brother, Vladimir. The co-founder of Levlad Inc., maker of the Nature’s Gate personal care brand, died in the midst of due diligence last summer after a long battle with cancer.
The Russian immigrants, who virtually established the category in 1972 with Rainwater Herbal Shampoo — a concoction of California rain and herbs sold out of the Weinsteins’ herb shop — had, by 2004, become a $200 million a year business. Now, the company that pioneered a new way of looking at personal care is off to start a new life under an investment firm and a natural products industry expert.
Paddy Spence, Levlad’s new president, joined the Chatsworth, Calif.-based firm six weeks ago. He became attracted to Levlad during the sale process. He was helping New York City-based Harvest Partners with the deal as a consultant.
The natural and organic world is familiar turf for Spence — prior to joining Levlad he headed up the popular organic cereal brand, Kashi, which is now owned by Kellogg’s. And, in 1995, he founded SPINS Inc., a market research provider to the health and wellness industry which tracks more than 200,000 food and personal care items. Nature’s Gate had been — and still is — a client of SPINS, so Spence was familiar with the company, its competitors and some current trends that are taking organic personal care more mainstream.
“I am seeing a lot of the trends that happened in the organic food industry five to six years ago now happen in personal care. One striking trend was when ‘natural’ and ‘organic’ began to merge on the food side within premium and specialty brands. We’re starting to see the same thing in personal care,” Spence said.
For example, some salon brands, such as Alterna and Ken Pavés, stay away from sodium laureth sulfate, a surfactant commonly used in hair care products to make a lather.
Indeed, there is a tremendous amount of growth in the premium personal care arena. According to SPINS data, sales of total personal care products, which includes hair care, skin care, oral care, deodorant, soap and bath and body products, grew 13.7 percent last year to $522 million versus 2003.
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Nature’s Gate’s 30-year heritage as a trusted brand has always been science-driven rather than one that makes products based on trendy scents and funky packaging. The company is responsible for making more than 2,000 formulas.
“What [Harvest Partners] saw in this company was technology sophistication,” Spence said of Harvest’s interest in Levlad, which had not previously dabbled in the beauty care arena.
After the acquisition, Harvest formed holding company Natural Products Group LLC, under which operates Levlad, makers of Nature’s Gate and Nature’s Gate Organics, as well as its manufacturing facility, which makes product for Alterna and Dermalogica, among others. Arbonne International, Levlad’s sister company based in Irvine, Calif., sells the antiage brand RE 9 door-to-door.
Currently, both Nature’s Gate and its organic counterpart offer close to 250 products. Last year annual sales neared $20 million, up significantly more than the category’s annual growth, according to Spence. Stores such as Whole Foods Markets and Wild Oats Markets are the brands’ key sources of distribution.
Now, its first antiage line is coming out, under the Organics brand. There are five items in total, which will sell between $20 and $35. Products are scheduled to arrive in stores next month. When formulating the line, Spence wanted to offer consumers the best of what was already available on shelves from premium brands, but with natural formulas.
“Because of our strength in science and R&D our products have the efficacy of an Olay Regenerist but the pureness of what consumers are looking for. We are taking a mainstream concept and applying science to get an organic version,” Spence said, who immediately realized the seeming contradiction in his statement. “Science,” he explained, “helps us in refining the appropriate active ingredients.”
The new antiage line includes a day cream, a night cream, a texturizing serum, a wrinkle serum and a skin brightener. The active ingredients in the Chardonnay Hydrator day cream are palmitoyl oligopeptide and palmitoyl tetrapeptide-3, both used to reduce the signs of surface wrinkles. Different versions of peptides are used as active ingredients in Olay’s Regenerist, as well as many other wrinkle-fighting lotions.
There’s also a Vitamin C Texturizing Serum, which uses organic rose geranium, lavender and vitamin E, as well as vitamin C to help refine skin tone. The Wrinkle Diffuser Serum contains Ameliox, a patented European bioactive complex, to fight fine lines and wrinkles. The Lemon Skin Brightening Serum uses Japanese mandarin to help brighten skin.
None of Nature’s Gate Organics products contains parabens, preservatives or animal ingredients.
Spence is a strong believer in appealing to the customer in a personal way, rather than through print and TV advertising. In turn, the company this year will focus on participating in consumer events and women’s expos, anywhere “we can meet face-to-face and get product in their hands,” Spence said.
Vladimir Weinstein, it turns out, isn’t unlike Spence, in terms of working to get new technology in people’s hands.
Prior to his brother’s death, Weinstein, who specialized in biology studies at UCLA, and biology professor M. Karen Newell, among others, founded Newellink Inc., a center that researches and develops drugs to someday cure cancer.
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