Raw Sugar's careful growth strategy, including a heavy emphasis on brick-and-mortar in a world ruled by e-commerce, has proven to be fruitful.
When other companies had sold out of hand sanitizer, liquid hand soap and other items early in the pandemic, Raw Sugar Living managed to keep those items on store shelves.
The Sarasota-based personal care products company maintained its ability to deliver needed items to retailers because it had stocked up on raw materials. “We took a gamble, and it worked out for the general public because we were able to give liquid soaps, bar soaps and hand sanitizers to Target,” says Ronnie Shugar, the co-founder and CEO of Raw Sugar Living.
Shugar’s experience, contacts and familiarity with the Chinese market had allowed him to come to an educated conclusion at the onset of the crisis: The coronavirus would likely impact the U.S. and cause severe shortages of necessities. “I saw the pandemic issues in China and issues of shipping product and factories shutting down and the same thing happening in Italy,” he says. “I had a premonition the pandemic was going to come to the U.S. and create demand for essential products, which came to fruition.”
That foresight and ability to continue fulfilling orders spelled a good 2020 for the company, with Raw Sugar’s growth increasing amid the pandemic. The company has had a run of good years as well, generally stemming from a counterintuitive strategy: Unlike many 21st century companies, Raw Sugar mostly avoids e-commerce and instead leans into brick-and-mortar retail. The firm also focuses on careful expansion into new retailers and products — and isn't afraid to turn down a chain if the fit isn't right with the brand. “We have a very strategic outlook and forecast of where we want the brand to go,” Shugar says. “We’re doing that very thoughtfully. We only add one to two retailers a year.”
'Despite getting phone calls from all major retailers within every segment, we’re choosy because we don’t want to oversaturate. We want to be very strong partners, ship on time and be super efficient.’ Donda Mullis, Raw Sugar Living
Shugar and co-Founder and Chief Marketing Officer Donda Mullis launched Raw Sugar six and a half years ago. Since then, the company has seen several successes, including launching in Target stores chainwide and introducing more than 140 products into the marketplace.
Company officials decline to disclose specific revenue figures but say Raw Sugar is in the top three selling brands at Target in the personal care category. Shugar also says the company has experienced double-digit growth every year since its founding. “The trajectory has been huge from the inception,” Mullis adds.
The pair met in their 20s at a retail trade show. Mullis was working in product branding and marketing, and Shugar was there with his brother and father, who’s worked in the personal care and cosmetics industry for nearly 60 years. “His father is a huge pioneer within the natural space — before naturals was a category,” Mullis says. “Now it’s the fastest-growing category within personal care.”
Make the Move
Shugar and Mullis dated in their 20s, but the long-distance relationship — Mullis in Boston and Shugar in LA — became stressful, so the pair broke it off. About 20 years later they got back together. It wasn’t long before they decided they wanted to collaborate on a business venture.
Their company, Raw Sugar Living, sells hand soap, shampoo, body wash, body lotion, bar soap, body butter, lip balm, sugar scrub and other items. The products are made with plant-derived ingredients using cold-press technology, appealing to consumers seeking natural choices.
The products are manufactured in California, but two years ago Raw Sugar moved its headquarters to Sarasota. The plan was to bring manufacturing to Florida as well, but the pandemic shelved that for now.
Shugar and Mullis became Florida residents about three years ago and now live on Longboat Key. Mullis was familiar with the area because she’s visited Sarasota with her family since she was 2. Shugar and Mullis purchased a corporate office for Raw Sugar in downtown Sarasota — a building on Second Street known for its colorful mural honoring health care heroes. (Shugar paid $1.25 million for the building in March 2019, according to Sarasota property records.) Amid the pandemic, the company’s 22 employees have been working remotely.
For retailers and consumers, Raw Sugar’s products tick a number of desirable boxes — they’re natural, clean, affordable and look high-end. Products with those traits filled a void in the marketplace, Mullis says. “Not everyone can afford natural products,” she says. “That hit a chord — filling that white space. It’s a product that looks, feels and is premium, but it is accessible to everyone.”
The company’s first retail partner was a big-box giant: Target.
“We could not wait to see our product on the shelves, but we went there and couldn’t find it,” Mullis says. They looked in the area where other natural products were for sale. No luck. Then they looked where some niche brands were stocked. Raw Sugar wasn’t there either. “We find out that Target had put us into the mainstream space, next to Dove and Unilever — next to the biggest brands,” Mullis says, a big win for the upstart brand.
Raw Sugar began with nine items at 111 Target stores. “We started with handful of test SKUs,” Mullis says. “Almost from the onset, we have become quickly one of the fastest-growing brands within that clean space.”
In its third or fourth year at Target, Raw Sugar went chainwide, selling in the company’s roughly 1,800 stores. Now the company sells more than 140 items at Target in several categories — personal care, lip care, hair care and beauty care.
In February, Raw Sugar launched a new line of natural deodorants at Target, and a line of products for kids is on the way, too, with bubble bath, body wash and hair care. “We’re going to be a disruptor in the kids category,” Shugar says.
For about the first four years of the company, Target was Raw Sugar’s exclusive retailer. That time allowed the company to prove the Raw Sugar concept. Now its products are also available in Walgreens, Kroger and other regional retailers, including H-E-B in Texas, Meijer in Michigan and Wegmans in New York. “Our philosophy is we only deal with best-in-class retailers,” Shugar says. “We have been very slow with our partnerships. We are true partners with retailers.”
In retail, it’s not uncommon for companies to beg for appointments to try to get their products into that chain. But with Raw Sugar, Mullis says it’s been the other way around — retailers are coming to them. “Pretty much everyone is trying to find that gem and what’s going to feel unique,” she says. Retailers are hunting for independent brands that will create excitement and drive customers to the store. “Despite getting phone calls from all major retailers within every segment, we’re choosy because we don’t want to oversaturate,” Mullis says. “We want to be very strong partners, ship on time and be super efficient.”
Raw Sugar Living Vice President of Sales Bill Schott says he gets at least one email a week from retailers and distributors asking to do business with Raw Sugar. The queries have come from the U.S., Iran, South America, Cambodia, Africa and other spots globally. “It makes you feel good,” he says. “People noticed the brand.”
Yet Raw Sugar doesn’t agree to work with all of them. Saying no and maintaining exclusivity is key to the company’s strategy. “Retailers aren’t prepared for you to say no,” Schott says. “Their idea is you’re going to say yes to everything.”
The fact that Raw Sugar products aren’t sold in every major retailer in the U.S. helps drive traffic to the retailers that do carry Raw Sugar. Because of that, Schott says those retailers reward the company with perks including noticeable displays and product launches on desirable aisle end caps. “They want us, and they’re willing to bend on the rules,” Schott says. “Things they would charge other suppliers, they might not charge us. They want us and are willing to work with us.”
Brick by Brick
Although the retail strategy has been a big win, Schott says customers often ask why Raw Sugar doesn’t sell products through its website. For one, Raw Sugar wants to encourage customers to shop at its retail partners. It also would be too expensive to ship a single product from its warehouse to an individual customer. If Raw Sugar fans want to buy online, they can buy items through the company’s retail partners, such as Target.com or Walgreens.com.
Giving preference to a limited number of brick-and-mortar chains is a strategy that benefits both Raw Sugar and its retail partners. “It makes us different,” Schott says. “You can find Dove shampoo anywhere and everywhere, whether in a dollar store in a small size to all the way up to Target, Walmart, CVS and Walgreens. That’s not us. That’s not our strategy.”
In 2021, the company is focusing on its expansions into the kids and deodorant spaces. It has more product launches planned for 2022, moving into additional personal care categories.
This year, Raw Sugar will also launch in two more national retailers as part of its continued strategy of careful growth. Make that very careful. “By the time they get it, they’ll have waited a year,” Schott says. That’s because when the retailer first approached Raw Sugar, the company told the retailer they weren’t ready to handle the number of stores, the amount of product and the time and effort it would take for social media promotions. Raw Sugar waited until it had the capacity to do it right.
With that kind of unusual patience at the forefront, a core challenge for Raw Sugar moving forward, Schott says, will be to stay relevant. “Retailers are always looking for something new — they’re always looking for that shiny penny,” he says. “Relevancy is huge in this industry.”