In Black America; Black Hair Care Manufacturers

up I'm John Hansen, join me this week on In Black America, we examine Black Hair Care Manufacturers. I would like to think that Stace Off-Roll is at the forefront of that change. Stace Off-Roll was one of the first products to be marketed exclusively to Black men. Black Hair Care Manufacturers this week on In Black America. This is In Black America, Reflections of the Black Experience in American Society.

A lot of men use whatever the wife buys and bring into the house and so therefore they have never stopped to look at what they need themselves. But I think that is changing and I would like to think that Stace Off-Roll is at the forefront of that change. Stace Off-Roll was one of the first products to be marketed exclusively to Black men as such, even though we have somewhat of a female franchise in terms of female using the product as well. It's just that from an identification standpoint, men will be better served finding out what's suited for them. Cornell McBride, President and Chief Executive Officer of the M&M Products Company. Not more than a decade ago, the $1.5 billion Black cosmetic industry was in a fight for its financial life. Johnson Products, the Chicago-based Black Hair Care Manufacturer, had ended a period of declining

sales that would last until the late 1970s. Today, most Black companies have survived. Black cosmetic industry is healthy, alive and well, doing part to a steady flow of new products especially designed for Black consumers and the application of up-to-date marketing techniques. I'm John Hansen and this week, Black Hair Care Manufacturers in Black America. Johnson Products has done a lot of research and development in this area of hair care. But Johnson was only one and frankly, we felt that they had stagnated. Johnson grew fast and they kind of lost their commitment to creativity and we saw that opportunity and today we are the most creative, innovative company in the business.

What's interesting is when we created the Curly Kit, the Curly Kit did more sales and the initial distribution than any other product, Black or White, to ever hit the industry in this hair care industry, Black or White. We did $11 million worth of sales in eight months with a brand new product and that has never been done before in the history. Comer J. Cotrell, Chairman of the Board, Proline Corporation, the Dallas, Texas-based Black Hair Care Manufacturer that created the Curly Kit's line. Today, Black Hair Care Manufacturers employ new strategies to gain the competitive edge in a crowded marketplace. General cosmetics, marketing companies such as Revlon, Elvardo Cove and Avon have invaded the lucrative Black Hair Care and Facial Cosmetics markets. XStake is the $1.5 billion spent by Blacks last year on cosmetics and hair care products and services.

Black Americans spent more than $800 million last year at retail stores along on hairspray, conditioners, and shampoos. Over $700 million on facial cosmetics and fragrances and another $500 million on salon services to wash, curl, and set their hair. Where there were fewer than 10 small Black owned companies prior to 1970 with sales of a few thousand dollars each, there are now nearly two dozen. Which would sales of $1 million or more. Johnson Products, the leader among Black cosmetic companies, may be the most prolific producer of new products. In the last three years, the Chicago-based manufacturer has introduced nearly 30 new products. Recently, I spoke with Cornell McBride, President and Chief Executive Officer of the M&M Products Company, one of the fastest-growing hair care manufacturing and marketing companies in the industry. M&M Products, the Atlanta-based hair products manufacturer, started 12 years ago by two pharmacologists.

Recently, M&M Products entered the lucrative hair care products market and moved to firmly position itself in the professional beauty salon market. Mr. Cornell McBride. Ironically enough, my first job was in the pharmaceutical field, working in a pharmaceutical company. And little did I know back then that I would end up in pharmacy. But when I reflected on what I wanted to do in life, I realized that my strength was in the biological sciences. So therefore, I selected pharmacy as a field to major in. When and why did you establish the M&M product company? Well, you know, I've always been one who was, who continues to look forward to look ahead to what else can I do sort of thing. And after a while in pharmacy school, we began to talk about other things that we would like to do, utilizing our pharmaceutical knowledge and background. And one of the things that we considered was opening drug stores. But then that had its limitations as we discussed it. Later, we came upon the state's off-road formula while working in the labs and started using

the products and decided to pursue that. And after pursuing that, we felt that it did have a great deal of potential. And we then proceeded to develop a company and market the product. How did you all go about putting the company together and financing it? Well, again, I think that I'm a very practical person. And that is that I tried to do the most of what I have. And at the time, we didn't have a whole lot of money, so we had to utilize the resources that were available to us. And in fact, one of my beliefs is that you first look at your own resource base when you're trying to do something, when you're trying to put something together. And our resources said to us that, first of all, that we didn't have a lot of money. And so therefore, we were going to establish a manufacturing facility. We had to first, perhaps, use, like, princes, my basement, those things that were available to us.

In addition to that, we had to do a lot of things ourselves, including being the marketing person, the technical person, the sales person, the production person. We had to do all that stuff ourselves. And so as it turned out for us, it was very good because it gave us a tremendous background in manufacturing and marketing. What year was it that you all first officially went into business? We started business in 1973, actually, and we graduated from pharmacy school in 1973. The Wii in this relationship, of course, is my partner, Thermal McKinsey. And I graduated from pharmacy school in July in June of 1973. And our business officially started. We had put the partnership together in April. We launched the products in July of 1973. And we started sort of peddling those products, selling them to barbershops and beauty shops initially to get them started and to create that acceptance. And then from that, we went on to develop manufacturing facilities and, of course, bringing brought in a whole bunch of people and expanding on the whole operation.

We've always tried to look forward to look ahead and to have a vision in terms of where we're trying to go or where we are trying to go. And that has worked quite well for us because it has led us to different parts of the world now as we market our products. How did you all happen to discover the formula for the first product, Staysaw? Well, if you remember back in the early 70s, the Afro was still quite popular. And the worst problem that we had as black men was that of maintaining softness in our hair. And there were several products that were out, the oil, jeans, and the Kuma conditioners. But they simply did not do the job and we were unsatisfied. We were not satisfied with what those products were doing. When we developed Staysaw Afro and started using it on our hair, we found that it did more than all of the products on the markets we're doing. So as a result of that, that sort of motivated us to go ahead and put this product on the

market. But that's how it kind of got started. It's just that in sampling the products, for instance, giving a lot of it to friends and just strangers sometimes, we found that people were coming back and legitimately asking and wanting more products. And that was, again, was encouraging to us to go out and put this product on the market. Is there many products part of a national organization, as far as national companies that distribute and manufacture hair care products? Well, we're not part of an organization that worked together to manufacture products. But we are a member of the American Health and Beauty Institute, which it is the goal of the Institute to increase the distribution on black manufactured products. And we are concerned about black consumers being aware of which products that are manufactured by black manufacturers, because we contend that we put more back into the black community and that we do more research on black hair and that our overall employee's base is black. And so therefore, we provide more jobs.

And we're trying to encourage black consumers to make that piece of the pie, that $1 billion that we spend in personal care products. We're trying to encourage them to give a bigger piece of that pie to black manufacturers because we contend that we are putting proportionate more back into the black community than those companies that are not black manufacturers. And keeping up with the trend today in black America is the curl. Has Eminem products manufactured a product to deal with the curl? And there are so many companies producing curl kits. Well the curl is just one of the hairstyles and there are many other hairstyles. Eminem is a company that is positioned across line. And so we have curl products. We have products for natural hair. We have products for relaxed hair. And so we have products for waves. So we have offerings in all of the major categories. And the curl is one of those hairstyles and we are positioned within that category.

Is it difficult for black hair care products to be included one in our luxury department stores and two at salons and beauty parlors? Well, as far as the department stores are concerned, very few of them carry any black hair care products. You would traditionally find black hair care products distributed through your mass retail outlets. Your mass merchandise, your drug stores, your food stores. That sort of thing. Generally the department stores deal with your fine cosmetics as a rule. So that's where you find black products predominantly. As far as in beauty shops and barbershops are concerned, very few beauty shops and barbershop retail products. We would like to encourage them to retail more products within their outlets. However, you have somewhat of a problem between products being found in the retail environment and products being found in the professional environment.

And they contend that it just will not, does not behoove them to market products from their shops. But I think that there's room for therefore our professional organization, your beauty salons and your barbershops to market products. Is there a concern of yours that the general market companies are now moving into the black hair care market as far as having more money for marketing and having money to develop new products? Well, no, that's not my concern. My concern is that as they move into this market, like everything else, that they don't often put back their share of dollars into the community. They don't help the community grow. They take from the community, but they don't put back into the community. So I'm really not concerned about how much resources they have to market over here because I think that we can compete with anyone who decides to come into this segment and market products. But I have a genuine concern as a black American, and that is that we need to encourage corporations to not just strip our community of its resources, but to put back in the form

of jobs and other kinds of support for the community. Are you out doing any European business and African countries business also? We are one of the leaders in the international marketplace. We've been a marketing products international now for about six years, seven years or so. In fact, as I said here and talked to you a moment away to Europe right now to finish the marketing plans for the UK, yes, we are marketing products there. We do have people stationed there as well. And so we see Europe as an viable, important market for us outside of this country. As a matter of fact, it is our second largest market to the US, followed by the Caribbean and in Africa. But we do expect to market products all over the world, and we are continuing to look for new areas to market our products in. How large is the staff here at M&M products? We have a staff of about 275 people, so I would say it changes, but I would say that's a good and round number.

Has it been difficult in following what you consider qualified applicants for job openings in the positions that you have to fill? No, not at all. We have some highly qualified black people working in this company. Of course, we have whites as well, but we have some highly qualified blacks working in this company. That's the only way we've been able to make it this far is because we believe in what we call synergism, and we believe that you have to go out and find people who can come in and add to what you're doing and therefore make the whole bigger than any one part of that whole. And we have been able to do that. We also have been able to create what I call a family kind of atmosphere here at M&M products company. And so we don't have a problem finding qualified people. We think that there are a tremendous amount of talented people out there just waiting to be hired, and we wish that we could hire them all. You mentioned that M&M is associated with the American beauty aid institute. Is there a way that consumers can tell if a manufacturer is a black manufacturer of

a haircare product? Yes, we have what we call the proud lady symbol on all of the American health and beauty aids institute, the member company products. And if you would look on the back of any of those companies, M&M, Johnson products, pro lion, soft sheen, lusters, Bronner brothers, you name it, worlds of curls, they're all members of institute. And on their packages you will find what we call the proud lady. And any package that you see with that symbol on it is a black manufacturer. What do you see in the future for black haircare companies, particularly yours and the other companies? Well I think that we will continue to expand our businesses here nationally. You're going to see us become even more professional in our marketing efforts. I think that our staffs and entire organization is going to get better at what we do. We're going to expand in the international marketplace as well.

And so just as we are now competing in Europe, we are also competing in parts of Africa and in the Caribbean. And so we're beginning to look at our marketplace not as just the domestic market, just the US market here, but the world as a marketplace wherever we find black people. I was reading an article on the battle of the Carol, I think it was a month or so ago on black enterprise, black companies pulling the resources of becoming manufacturers, botlers, everyone needs the plastic bottles to put their product in. Is that a realistic approach to some of the problems affecting some of the smaller companies? Well you know we have at M&M a division, a plastic division. And we manufacture our own, we make our own bottles and we print our own bottles. And we're now offering that to other companies and we're offering it out of savings to them. And so we will sell our excess capacity and we're in the process of tying down a couple of contracts with some of the member company of the American Beauty, a health and beauty as institute.

So I do think that's a viable way to reduce ones overhead and to also pass that on to some of the member companies. Has the recession that is occurring in black America affected you ourselves drastically or black still keeping their hair looking good? Well, blacks do spend a disproportionate share of their dollars on personal care products as compared to the national average and I think that that's because we as a people tend to be more concerned about grooming. In terms of the recession or in terms of the turn down in the economy, that always has an adverse effect on you. We may not think of it in those terms but I think when particularly when unemployment began to hit 9% percent, then we felt that that did have an adverse effect on our consumers ability to buy products. That's why we tend to focus on jobs within the black community rather than being just a company that's manufacturing products and does not have any concern about the community. We think that a part of our job is to focus on the need to have more jobs within the black

communities and in the black community and to force those other companies, those non-black companies who are taken from the community to put some of those dollars back. We believe that if the non-black companies that are selling products to the black community were to abide by the regulations or shall I say the rules of the American Health and Beauty Institute, they would be welcome members into the institute but then they would be charged with hiring blacks into the Indian proportion by which they had taken dollars from the community. Having been in business for over 10 years, some of the lessons you've learned in this business. All goodness, that's something that it continues. Lesson number one is that you never know it all and that you continue to learn and that you have to put yourself in that kind of a position where you're learning all the time. I would say lesson number two sometimes is perhaps not to make just a quick decision,

particularly when you're in doubt, I think that you need to give decision more time depending on the severity of the decision. I think that lesson number three is to do more planning, more pre-planning, pride to make a decision and so those are just so many things that I think that I have learned as a business person in my 12 years of being in business. Do you foresee the European market being just as lucrative as it's here in the Atlanta and the United States? Well, the European market is potentially as good as here because not just because of Europe, but because Europe represents the crossroad to many other countries, particularly English speaking and French speaking Africa. In that regard, we see the international market as a whole as being perhaps even more lucrative than the domestic market if we could ever develop it. Ten years from now, I come back to Eminem products.

What type of sales would you want the company to have and new enrows into different markets or different products? Not in terms of dollars per se, but our goal is to be a second generation company and we would like to accomplish that. We would like to be on a solid footing, continue to be on a solid footing with a good balance offering of products to the black consumers out there. We would like to bet the forefront of any new products or any new research that's going on. It continues to do research in our laboratory to find ways of doing different things with black here. And so, ten years from now, I should hope that we are still doing some of the things that we are doing now only better. Cornell McBride, President and Chief Executive Officer of the Eminem products company. I also spoke with Koma J. Catrell, President and Chairman of the Board of the ProLine Corporation. The ProLine Corporation was founded in 1970 in Carson, California. In just seven years, Koma and his brother, James, built a hair care products company from

an initial $600 investment into a company with $22.6 million in annual sales. Mr. Koma, Catrell. We were formed in 1970 in Los Angeles and it was just the fact that I was working at Sears Road Buck at the time as a manager and sales manager, of course. At that time, we found that there was a need for creative, well-managed, black company in the cosmetic field. We were reading about magnificent products that had been in business for two years and had done $2.1 million in sales in this industry. The Afro was new and it was hot and there was a definite demand. We analyzed the industry and we saw that there was opportunity to develop new products and also a successful well-managed company.

We were able to do that and today, most of the companies that came along at that time, we saw that they didn't have the management capabilities and they've either sold to one of the major white companies like Magnificent is now owned by a Royal Crown company and a lot of the others out of business have sold. We felt that this was a great opportunity for us to enter into a new arena. What type of financing did you have when you opened the business? We started with $600 but I've always been a creative person and I felt that that was an opportunity to do some very creative financing and it wouldn't entail the banks or SBA or Magbix and it would entail vendor credit and also we would bother some things and negotiate here and there and we wouldn't need money.

We would be able to use other people's money and we also saw an opportunity to use other people's money because we wanted a good strong organization and we made commitments to people to come to work for us and that had the ability to not concern themselves with instant gratification but understood delayed gratification and we were willing to make some sacrifices with us for a while and see where we are today. Has black Americans somewhat sacrificed their hair and skin because there wasn't a black manufacturer that particularly catered to the particular needs of the black Americans? No. There have been manufacturers and distributors ever since Madam Walker that took a specific interest in the black hair care. Johnson Products has done a lot of research and development in this area of hair care but Johnson was only one and frankly we felt that they had

stagnated. Johnson grew fast and they kind of lost their commitment to creativity and we saw that opportunity and today we are the most creative, innovative company in the business. What's interesting is when we created the Curly Kit, the Curly Kit did more sales and the initial distribution than any other product black or white to ever hit the industry in this hair care industry, black or white. We did $11 million worth of sales in eight months with a brand new product and that has never been done before in the history. Why did you all decide to make the change from Los Angeles here to Dallas? Well the reason we came to Dallas is we were looking at our growth and we had our grown our facilities out there and we were rather spread out.

We had four buildings in California right there in the Los Angeles area plus we had distribution centers in Birmingham. We were distributing into Africa now and also into the Caribbean. So consequently those shipments were being made right out of Houston or they could have been made out of the east coast. So we thought about the cost of energy and we were dead hidden with all of our goods across the desert. Only 10% of the black population is in the 14 western states and so consequently that represented 10% of our market. The 90% of our market was Texas and east. So we just felt that we would look at areas like Louisville, Kentucky, Cincinnati, Kansas City, Atlanta but analyzing the whole spectrum of companies that had states or areas that

had potential. We felt that Dallas offered more opportunity. There was more money, there was more opportunity for growth. There was a definite need for black leadership here that this type of company and my type of staff could bring to Dallas and we found that the climate was one that we could function in and year round. Dallas has 41 freight terminals and it's so easy to ship out of here and DFW Airport where we could go anywhere in the country within a couple of hours and all these things are attractive about Dallas. Was it difficult in the beginning in finding the qualified black scientists?

The creativity does not come from the scientists. It comes from our marketing department. And they find the needs and then we just get the chemists and to go into the lab and create what we ask for and sometimes we ask for some things that they say are impossible but then we say well let's pray about it and maybe we don't believe nothing is really impossible. So we get together and we say a few prayers because everybody here believes that it works. It's been proven for us and we attribute our whole success to some forces greater than we are and for that reason we have been successful. Coma J. Catrell, president and chairman of the board, ProLine Corporation. Black care care companies have proven their ability to compete and survive in an increasingly competitive market.

Success has come to those demonstrating the greatest intranuity and the ability to apply new and some old methods to marketing their products. If you have a comment or would like to purchase a cassette copy of this program write us the address is in black America, Longhorn Radio Network, UT Austin, Austin, Texas, 787-12. For in black America's technical producer Cliff Hardgrove, I'm John Hanson, join us next week. You've been listening to In Black America, Reflections of the Black Experience in American Society. In Black America is produced and distributed by the Center for Telecommunication Services at UT Austin and does not necessarily reflect the views of the University of Texas at Austin or this station. This is the Longhorn Radio Network.