Blueberries, Gold Bond, Ovaltine and Obesity: The Makings for a Very Good Story (Part 1)
It All Began When Someone Pulled Out a Bottle of Gold Bond...
Like any good story should, this story begins with Gold Bond. Oh yes, we are going there.
Not so very long ago, Gold Bond Medicated Powder was an unimpressive product on the drugstore shelves of Rhode Island. Most readers would have never heard of it, nor ever thought to conceive of their own locker room pranks for its use. Bottles sat quietly in medicine cabinets, mostly in suburban bathrooms or at local apothecaries. Gold Bond's east coast distribution amounted to paltry sales of less than $1 million annually, and life selling Gold Bond was mundane, terribly predictable, and steadily winding down as its salespeople left for more exciting projects. That is, until Jeff Himmel arrived.
In the early 1990s, Himmel was working at his family's marketing business when, one day, it decided to acquire a regional brand, Gold Bond Medicated Powder, from Block Drug Company for $1 million dollars. Consumers were using Block Drug's powder only in rare circumstances, such as baby care or skin injuries. A single bottle was easily lasting over a year, and unsurprisingly, sales were abysmal and going nowhere fast. Himmel started aggressively marketing the brand in 1991 and quickly grew sales over 70% annually.
Gold Bond was the first product Himmel put on his resume, and it became one of his biggest professional accomplishments. He had managed to break Gold Bond's downward sales spiral by expanding its consumer utility to daily hygiene, post-shower use, and most importantly, athletics. Gold Bond soon became the definitive daily-application powder and the go-to product for athletes across the nation for reducing friction, dryness, chafing, and heat. By expanding the brand's utility through creative advertising campaigns, Himmel transformed Gold Bond into a $27 million business by 1995.
Once Himmel's partners had seen his success with Gold Bond, they were ready for more. As Gold Bond was taking off, Himmel very quickly picked up the brand Ovaltine from a company called Novartis (NYSE: NVS). Continuing with his momentum from Gold Bond, Himmel quickly found a similar passion for Ovaltine. He developed its marketing campaign by transforming its utility from a fringe beverage into a leading instant milkshake brand. When his work with the milkshake was finished, "More Ovaltine please!" had become a household phrase and its sales began to threaten the major beverage corporations. By the end of his tenure at Novartis, Himmel had negotiated rights to Ovaltine and ended up selling the brand to Nestlé.
The Doctor Calls
Not long thereafter, long-time friend Dr. Phillip Frost gave Himmel a call. The two businessmen had known each other for decades, and Dr. Frost had a prospect that he thought might interest even a wealthy, retired marketing guru. Dr. Frost invited Himmel to Florida to discuss an opportunity about, of all things, blueberries.
Now, when this story began, there was fair warning that it would start with Gold Bond and only get more interesting from there. Blueberries. Here we go.
See, once Himmel arrived in Florida, Dr. Frost introduced him to one of the companies in which he had made an 19% investment, Chromadex (OTC: CDXC). Dr. Frost was a serial entrepreneur and investor, having led a pharmaceutical company called Ivax from nothing to a billion-dollar sale to Teva (NASDAQ: TEVA). Dr. Frost followed that accomplishment by building another multi-billion-dollar corporation called Opko Health (NYSE: OPK) which had used a growth-by-acquisition strategy to become one of the largest pharmaceutical holding companies in the world. Throughout his career, Dr. Frost was constantly investing in or acquiring small companies, and Chromadex was one of those companies. Dr. Frost thought Himmel might be interested.
He was right. Himmel was immediately fascinated by Chromadex and, counterintuitively, made a $1 million personal investment in the company while joining to become its CEO. (Not often does someone get recruited for a job and end up spending a million dollars for accepting the position.) Despite his wealth and having to leave retirement for the opportunity, Himmel was intrigued about this tiny company that had become known for one thing, but which had potential for something far, far different.
Why did Himmel leave retirement while surrendering $1 million in personal funds to go back to work? The next segment will continue looking at this curious decision and his further odyssey into the world of blueberries, Gold Bond, Ovaltine and obesity- the makings for a very good story, indeed.
The story continues here: http://www.benzinga.com/node/2615863.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.