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Selling $8 Soap in an Era of Frugality

Jay Greene (BusinessWeek)

3 Comments

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February 4, 2010

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“Onysko's story is at once poignant and ...”

Monica Luedecke

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In just a few short years, Joshua Onysko went from a vagabond hawking homemade soap from the trunk of his car in Jackson Hole, Wyo., to a hotshot executive whose premium-price skin-care products could be found in Whole Foods markets from coast to coast. Sales at Onysko’s Pangea Organics soared to $5.8 million in 2008 from $250,000 in 2005, largely because of clever packaging—seed-infused material that could be planted to grow basil or amaranth rather than dumped in a landfill.

But like a lot of entrepreneurs who came up with a breakout product, Onysko has been struggling to figure out his second act. He may finally have it. After several months of talks with Sephora, the beauty retailer added Pangea to its online offerings in early November, making it one of only two organic brands on the site. (The other is skin-care product maker Juice Beauty.) Sephora plans to test Pangea’s soaps, lotions, and creams in a handful of stores next spring and, if all goes well, roll them out at the rest of its 250 North American locations next fall. “They got credit for being a brand that’s organic, the packaging looks really great, and it works,” says Allison Slater, vice-president for retail marketing at Sephora USA.

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Pangea needs a boost. Recession-battered consumers have cut way back on purchases of $8 bars of herb soap and $50 oils, sending total sales down by half this year, Onysko estimates. To cut costs, he outsourced manufacturing to a Denver outfit early this year, laying off 25 employees and leaving his Boulder (Colo.) company with a staff of 14. “It’s been like going through an MBA program in nine months,” Onysko says.

But Onysko, 32, is a zealot, whose goal is to displace conventional skin-care products. Pangea’s line isn’t just organic. It uses no petroleum-based ingredients, no synthetic preservatives, and no artificial colors or fragrances. “He’s a nut-case, and they don’t die easy,” says Steve Demos, a Pangea investor and founder of WhiteWave Foods, maker of Silk soy milk.

Pangea’s rapid rise started with Onysko making natural soaps with his mother a decade ago and, a few years later, marketing them at county fairs in the West. But selling soap wasn’t his only aim. Onysko has funneled 5% of profits to underwrite his Pangea Institute, a startup whose goal is to research and teach sustainable business practices.

He approached Whole Foods in 2004 but got shot down for the generic quality of Pangea’s packaging. It took design consultancy Ideo of Palo Alto, Calif., to come up with a novel way to convey the idea that Pangea’s products were good for the environment: the seed-infused packaging. Onysko couldn’t afford Ideo’s original price, which was double Pangea’s annual revenue, but the firm adjusted its rates for a limited contract in order to develop its own expertise in sustainability.

Pangea’s creations often sprout from Onysko’s musings. He came up with a new facial scrub, for instance, after watching his girlfriend exfoliate with adzuki beans. He then ground some beans at home in a coffee grinder and mixed them with a bath gel. He now has to make sure those organic creations stand out among the 200 other brands Sephora sells. His idealistic mission depends on it. “Organic is the largest-growing segment of the cosmetics industry, and it’s because wingnuts like me started creating relevance,” Onysko says.

Reprinted from the November 30 issue of BusinessWeek by special permission, copyright © 2009 by Bloomberg L.P.

For more small business articles from BusinessWeek, please visit www.businessweek.com/smallbiz.

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Join the conversation ( 3 )

Monica Luedecke 2 years 0 months and 0 days ago

Onysko's story is at once poignant and inspiring. It is just terrific to read about his success, and the perseverance and innovation that is making it so. The packaging containing seeds is one of the most innovative ideas I have ever read...love it. He should consider reaching out to other businesses that support organic products...there is a wide open universe in the alternative medical care world with a built in market of believers. I'll be looking for Pangea products!
TJ McCue 2 years 0 months and 6 days ago

This is a terrific read. Here's an entrepreneur who has hung in there, come desert or high water, to stay true to his purpose, his call. I hadn't heard of the Pangea Institute, but its time has come. I live not far from another well known sustainable MBA program at the Bainbridge Graduate Institute and marvel at their passion and ingenuity.
http://www.bgiedu.org/
Jagath Narayan 2 years 0 months and 6 days ago

I love the idea of using seed-infused packaging. This is a great example of truly understanding the product you are selling - you are not selling just soap, but the whole organic experience - and adapting your company to follow through your promise.

I wrote about Pangea's seed infused packaging recently on my blog. http://blog.ordoro.com/2009/12/29/differentiate-your-product/