Ads to Augment Word of Mouth on Lip Balm

Iconic Carmex to launch new flavors, lines; will advertise

Published in CSP Daily News

FRANKLIN, Wis. Because of customer devotion, family-run Carma Laboratories Inc.maker of the little yellow-capped jars of lip balm found next to cash registers of nearly every pharmacy and convenience storeis the third-largest selling lip balm in the country despite a lack of advertising, sales campaigns or product updates. But the company has hired a new sales manager, a former employee of rival Blistex, to oversee the company's sales and growth, said the Associated Press.

Carmex has started advertising, is launching new lines and even adding flavors [image-nocss] such as cherry and strawberry in the fall.

Paul Woelbing, Carma Lab's controller and grandson of product founder Alfred Woelbing, said after so many years it is finally time to give the company a face. "We've had our own little world where we come in, make Carmex and ship it out every day. But we have not gone out to meet the buyers," said Woelbing, who works with father Don, the company's president, and brother Eric, the vice president.

Paul Woelbing and other company officials plan to meet officials from retailers who already carry the product, such as Wal-Mart Stores Inc., Target Corp. and CVS Corp., and find out from consumers what they want in a lip balm. But Carma Labs will still be the laid-back, cool-as-menthol business it has always been, he said.

And the trademark yellow packaging? That's not going anywhere. "People sort of think it's like blue jeans or something else," Woelbing said. "It's almost like an iconic product."

Still, the company is evolving. Its first ad campaign this winter took Carmex officials to New York and Chicago, where they hung billboards, bright yellow, of course, handed out magnets and blitzed areas with yellow posters proclaiming: "It tingles" and "It heals." More campaigns will follow, they said.

The most obvious change will be the new flavors. Competitors ChapStick and Blistex have had flavors for years and even expanded their offerings, tailoring products to kids and adding premium and herbal lines, while Carmex for the most part has stayed the same. It began offering a mint variety of its Clickstick in 2002 and that has been slow to sell, Woelbing said.

This fall, the makers plan to roll out two new flavors, most likely cherry and a berry variety, such as strawberry. More flavors, like licorice, bubble gum, watermelon and mocha, will be released the following year. Other possible changes include developing lines of premium and all-natural products, said Woelbing.

The company, based out of the Milwaukee suburb of Franklin, has sold Carmex since 1937, at first in jars, and now in tubes and sticks as well. Alfred Woelbing created the balm for his own chapped lips and originally left sampleswith cards to order moreat pharmacies and other stores throughout the region. Customers liked the feel of icy menthol, camphor, lanolin and cocoa butter on their lips and asked for it, the younger Woelbing said.

Today, customers still clamor for Carmex, which is how the company has stayed strong while keeping a low profile, he said. The company expects to sell at least 65 million units this year, with the jar-form of the balm outselling the other varieties.

ChapStick and Blistex are Nos. 1 and 2 respectively in lip balm, jelly or lip treatment sales, according to Kline & Co., a market research and consulting firm in Little Falls, N.J., cited by AP.

National sales manager Mike Pietsch joined the Woelbings earlier this month after suggesting they hire someone to run sales. As the newand onlysales manager, Pietsch said he is looking to add local sales reps to tap into the growing lip-care industry. Pietsch said the industry will continue to grow as manufacturers expand their user base by tailoring products for different populations, such as men, women and children.

The industry grew 9.6% last year to $336 million in retail sales, Kline said. Sales have grown at an average annual rate of 6.4% over the last five years.

Carmex is sold in about a dozen countries abroad, including Spain, Hungary, and Australia. Management hopes to expand to China and Japan in the future, Woelbing said.

The balm's strong brand heritage and recommendations from doctors have helped it stay strong, said Anna Wang, a consultant with Kline & Co. Pharmacists have voted Carmex their No. 1 recommended lip remedy for the past eight years in trade magazine Pharmacy Times. "What's interesting about them is they don't really do much advertising. They rely more on word of mouth," Wang said.

Pietsch said Carma Labs, which also manufacturers ointments for hemorrhoids and diaper rash, is growing at about 8% a year, with a quarter-ounce jar as its top seller. The company hopes the new products and advertising campaign will bring that up to 10% annual growth. The privately owned company would not release any financial figures.

Though it seems Carmex is following the standard practice of other lip balm manufacturers by expanding its offerings to expand sales, Woelbing said Carma Labs does not see itself as following others' lead. "We don't want to do something just for the sake of doing something," Woelbing said. "But if we can offer a different productsomething unique to uswe'll do it."