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Business Observer Friday, Aug. 3, 2018 1 month ago

Skin deep: Makeup maker finds a successful niche

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Necessity forced Kristen Flaherty out of her comfort zone. Now she's building a manufacturing business — one small batch at a time.
by: Andrew Warfield Lee-Collier Editor

Kristen Flaharty doesn’t see herself as a salesperson.

A doctor of pharmacy, she prefers compounding and creating products over marketing them. But as founder and owner of skin care product manufacturer Trilogy Labs in Fort Myers, she knows she's the most qualified to build her own customer base.

And so in addition to researching, formulating, blending and packaging high-end skin care and makeup products, she is also, in purposefully gradual fashion, growing awareness among skin care professionals and private-label retailers.

'It’s a good niche to be in as a smaller manufacturer because there a lot of people who can’t buy a ton of product.' Kristen Flaharty

Founded in 2014, Trilogy Labs was a finalist in the 2018 Florida Sterling Council’s Manufacturing Business Excellence Awards. From its 2,500-square-foot facility off Treeline Road, Flaharty and her team of four compound, test, package and ship its 60 products across three primary brands and custom blends, all in small batches.

Flaharty identified small batch production as an unfilled niche in the skin care product industry. She got there because many retailers can’t sell quantities they are required to purchase from large manufacturers before they expire. Among the people in the lot was her husband, Dr. Patrick Flaharty, who owns Azul Cosmetic Surgery and Medical Spa in Fort Myers, Bonita Springs and Naples.

Having little success in sourcing high-end skin care products in small quantities for her husband’s practice, Flaharty decided the best source would be herself. So in 2014, she left a 20-year career in pharmaceutical consulting and made an asset purchase of a local company that supplied some products to Azul Cosmetic Surgery. That's now Trilogy Labs. 

“We had looked at a number of manufacturers, and we ended up using five vendors to cobble his line together. It was OK, but it wasn't perfect,” says Flaharty. “The packaging didn't sync together. We couldn't always get what we wanted because it wasn’t available, or if it was available to us we had to buy 10,000 or 20,000 units at a time, and he couldn’t sell that many before it would go bad.”

The solution was to become his supplier — sensing her husband’s predicament wasn’t unique.

“It’s a good niche to be in as a smaller manufacturer because there are a lot of people who can’t buy a ton of product,” she says.

She was right. Since the asset purchase, which included a small customer base, Trilogy Labs has increased sales 400% from baseline and has grown from 14 commercial clients to more than 50. End users of the products number in the tens of thousands, Flaharty says. The company became profitable in 2017. She declines to disclose specific revenue figures. 

The flagship product is the proprietary Azul SkinHealth line, sold at her husband’s offices and online. Other products include ID Skin by Integraderm; Minerale, a line of mineral-based, natural makeup; and private label and custom products, which is her sales-leading sector.

Kristen and Patrick Flaharty.

Flaharty says her current production comfort level is a maximum of 5,000 units of any one product at a time.

“We've been careful about taking on orders I know we can deliver,” says Flaharty. “Could we do 20,000? Yes, but we would have to stop everything else and be dedicated to that one thing, and I don't believe that’s in our best interest.”

Production, though, can be scaled up as demand grows.

“We're not even scratching the surface of what we can do at our facility,” Flaharty says.

Trilogy’s website, direct contact with prospective clients and reputation within the industry are the primary marketing tools. Recently, that strategy yielded an inquiry from a company in Hawaii seeking to private label a line of sunscreen.

“Hawaii recently passed a law prohibiting certain ingredients to protect coral reefs, and now products have to be coral reef safe. Ours are,” says Flaharty. “They asked if we could make sunscreen and label it with their own brand.”

Shelves of product are ready to ship to online retail customers and private-label clients.

Such inquiries are accelerating, Flaharty says, but she remains cautious about balancing the growth with the ability to produce consistently quality products. Although she enjoys the science of formulating new or improved products, she also must be the sales lead, for now. More growth will eventually require additional personnel, she says.

“My husband says I am my own best-kept secret,” Flaharty says. “I have realized I need to be the one to talk about the products because I have the product knowledge."

Building a successful business, Flaharty has learned, is similar to methods used to create her products.

“Build the platform and then build on that foundation layer upon layer,” she says, “and pretty soon you look back and see you’ve really come a long way.”

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