To hear Paul Woelbing tell it, all he ever needed to know about lip balm he learned from … motorcycles. Woelbing is the third-generation president of Carma Laboratories, the Milwaukee-based company that makes Carmex lip balm. As a man who literally grew up with the product (his grandfather mixed the first batches in his home kitchen in 1937 and sold them out of the trunk of his car), Woelbing could run the company without breaking a sweat—and in the early years, he didn’t have to. When Woelbing took his post in 1991, “they were growing nicely,” he said, “about 8% a year without really doing anything.”
But when Carmex’s sales took an unexpected nosedive in 2011, Woelbing realized he needed to do something, and fast. Turning the brand around would involve everything from hiring the right talent to engineering new line extensions to venturing into social media marketing. But the ethos behind all of it would come from Woelbing’s love of Harley-Davidson motorcycles—which he’d collected for years and which, like Carmex itself, was an American legacy brand.
In the decade after Harley’s 1903 incorporation, America had nearly 40 motorcycle manufacturers—but by 1939, it was down to two. “One of the reasons [Harley] survived was because they recognized the emotional quality of connecting with customers,” Woelbing said.
The task, then, was to update Carmex enough to differentiate it within an increasingly crowded category, but still maintain the brand’s personality to retain longtime fans.
For decades, Carmex had done a brisk business in a fairly sleepy category known mostly for ChapStick. But the appearance of new brands (EOS, Le Labo) and the migration of overseas balms (Lypsyl, L’Occitane) inundated Carmex with competition. Complicating the picture was Burt’s Bees’ aggressive advertising. Carmex had never invested heavily in marketing, and it had a stagnating product line. “The compound annual growth rate trends were moving in the negative direction for several years,” recalls Jona Mancuso, vp, marketing at Carma Laboratories. By 2013, it had become clear that Carmex had to innovate or perish.
Carmex’s management sought to expand the pool of creative and executive talent, allowing the company to make quick strategic changes to respond to market pressures. Those executives would then face the mandate to change Carmex’s product and marketing mix enough to draw a new generation of consumers, while not changing it so much that its core audience would abandon the brand. Matt Herrmann, creative director of agency BVK, which was hired in 2016, explained that “you don’t do anything that is going to jeopardize what has been so successful for so many years, but still [you want to] be able to push out a little bit and find ways to appeal to a younger audience.”
Woelbing hired Rich Simonson as Carmex’s COO, while Mancuso came aboard to run marketing. BVK signed as the brand’s creative shop. Under this management, Carmex updated its packaging with a modernized logo and trade dress, then used them for new products such as Carmex Daily Care (which featured flavors like strawberry and wintergreen), an all-natural formula called Comfort Care and the cranberry-flavored lip butter SuperCran. “We wanted to be fresh and use more contemporary typefaces, fresh, bold colors and some animations and different things that maybe were a little bit more unexpected,” Herrmann recalled. Meanwhile, a new slogan (“Be comfortable. Be confident. Be you”) updated the brand’s voice, and a redesigned website gave the brand a reinvigorated platform to show off its trendy new self.
Since the overhaul, Carmex’s multi-outlet sales have lapped those of its category for 28 consecutive months. While category sales rose 3.1% over this time frame, Carmex has grown by 13.7%. In the convenience channel, Carmex’s growth of 8.2% vastly exceeds the category gain of 1.5%. Carmex now generates in excess of $100 million annually in retail sales and is on track for the strongest year in the brand’s history.
Be smart enough to admit when you need help
Had Woelbing not been honest with himself about the amount of help his company needed, Carmex wouldn’t have hired the talent that led the turnaround. “I’m good at running a small company,” he said, “but the company has gotten to the point where it has sort of grown beyond my ability and about five to six years ago, I realized I’m in over my head.”
Evolutions are better than revolutions
Carmex’s team realized that the classic balm’s flavor and aroma needed to be addressed. As Mancuso puts it, “We have a polarizing product formula and there are people that either love it or hate it.” But rather than scuttling the old formula, the team decided to hold onto it while also introducing alternatives. “We did not want to lose any of the strength of any of this iconic heritage brand in our rebranding,” she explained. “With such an iconic brand, being evolutionary instead of revolutionary is sometimes the right step.”