How Dr. Bronner's, truly one of America's great weird brands, grows more and more successful by being less and less conventional.
How Dr. Bronner's, truly one of America's great weird brands, grows more and more successful by being less and less conventional.
There's a common narrative that unfolds the first time you buy Dr. Bronner's Magic Soap. It starts in the store, where the bottles, with their brightly colored, text-heavy labels, line up like cure-alls from some deranged medicine man. You pick one up. Later, in the shower, there comes a curious tingling sensation after you've lathered up your nether regions. That's when you reach for the bottle again to give it a closer read.
There are quotes from Mao, Jesus, Hillel, Einstein, and George Washington, among others. There's something called the Moral ABC, which appears to be a philosophy for uniting all humans on Spaceship Earth. There's a lot of religious ranting, a liberal dose of exclamation points, and instructions for cleansing your "mind-body-soul-spirit instantly."
Now you're more curious than ever. And if you read enough of the label and happen to Google Dr. Bronner after you've toweled off, you'll discover the story of the late Emanuel Bronner, which reads like bizarro fiction. (We'll get to it shortly.) That story is just the beginning.
The Bronner's story also happens to be the tale of the top-selling organic liquid and bar soap brand in North America. Dr. Bronner's notched more than $44 million in sales in 2011. It has grown well over 1,000 percent in the past 12 years. The company's president since 1998, 38-year-old David Bronner, is a ponytailed marijuana activist who drives a rainbow Mercedes that runs on French fry grease. David is the grandson of Emanuel Bronner, and, along with his younger brother, Michael, he has turned Dr. Bronner's into an instantly recognizable brand and a pioneer in sustainable business, from its vertically integrated organic and fair-trade supply chain to its highly progressive labor practices—all without spending a dime on advertising.
By remaining independent at a time when other hippie-ish personal-care brands such as Burt's Bees and Tom's of Maine have been bought up by major consumer-goods companies (Clorox and Colgate-Palmolive, respectively), Dr. Bronner's has been able to pursue a kind of radical purity that defies conventional business logic.
But first, some background.
Emanuel Bronner was a third-generation Jewish master soapmaker from the small town of Heilbronn, Germany. (The Bronner family, known in Germany as the Heilbronners, commercialized liquid soap.) Alarmed by the rise of the Nazis, Emanuel immigrated to Milwaukee in 1929, at 21, to start consulting for American soap companies.
A self-styled philosopher, Emanuel responded to the Nazis by traveling around the U.S., lecturing about a plan he had been developing for achieving world peace—the Moral ABC, he called it. The basic idea was simple: If people would stop focusing on their religious and ethnic differences and find common ground, we would all be better off. We're all humans, and we all have to share this Spaceship Earth. It was a timely message, despite its wacko undertones, and he started drawing crowds.
Tragedy struck in the 1940s. First, Emanuel got word that his parents, who had stayed behind in Germany, were killed in Nazi death camps. Then, his wife, the mother of their two sons and one daughter, fell ill and died. As he always did, Emanuel responded by diving deeper into the Moral ABC—to the extent that he put his children in foster care so he could continue lecturing without the distractions of fatherhood.
To an unsuspecting bystander, Emanuel couldn't have seemed like a stable guy. His speaking style was laced with bursts of shouting that, in his clipped German accent, could sound almost violent. In 1947, he was arrested in Chicago after giving a public talk without a permit and was committed to a mental institution, where he underwent shock treatments. He escaped and made his way to Southern California, where he started calling himself a rabbi and a doctor and alleged that he was Albert Einstein's nephew (none of which was true).
As he picked up his lecturing again around L.A., he started giving away bottles of his family-recipe peppermint soap on the side. Eventually, he realized that people were showing up for the soap and not sticking around to listen to him, so he started printing his message on the bottles and selling them. Dr. Bronner's Magic Soap was born. The Moral ABC grew into a 30,000-word screed that Emanuel would fine-tune every day for the rest of his life, dictating passages to his loyal assistant until he achieved the optimal levels of outrage, poetry, and staccato punctuation.
As a business, Dr. Bronner's never achieved the same level of polish as its famous labels. The soaps had a brief moment of popularity in the late 1960s—hippies dug the all-one message, and it turned out the versatile soap was useful for outdoor bathing—but the company stagnated in the ensuing years. Annual sales hovered around $1 million for decades, until, in the early 1980s, everything very nearly came to an end.
"The DNA of this company is, my grandfather ran it as basically a nonprofit religious organization—which it was only to him," says David. When the IRS finally caught up to him, it turned out Emanuel owed $1.3 million in back taxes, and in 1985, the company was forced into bankruptcy. Emanuel was suffering from Parkinson's disease and had gone blind, and at this crucial juncture also had pneumonia. The company would have disappeared had it not been for his son Jim (David's father), who set aside his resentment for how he had been raised and stepped in to right the ship.
David Bronner is wearing a red Dr. Bronner's polo shirt, baggy black hemp chinos with a rasta stripe on the pocket, and a black windbreaker emblazoned with a logo for Proposition 19, the failed 2010 California ballot initiative to legalize marijuana. We're sitting in his office at Dr. Bronner's world headquarters, a warren of low buildings off Highway 78, just north of San Diego. There's an orange velour sofa against the bright blue wall, a few car-stereo parts stacked on the floor, and a copy of A Confederacy of Dunces on the desk.
David didn't grow up wanting to run this company. His father, Jim, a successful industrial chemist, was nothing like Emanuel, and David was raised in a conservative household in suburban L.A., where he had scant contact with his eccentric grandfather. "You couldn't talk to him on a human level," David remembers. "It was just these tirades. 'Why are we not talking about uniting Spaceship Earth? What's more important?'
"My dad was much more down to earth. He didn't care about all the cosmic stuff. As soon as my grandfather would start talking about it, he'd be like, 'I don't want to hear that crap!'"
David left California for Harvard and graduated with a biology degree in 1995, after which he decided to set out with a Eurail pass for a few months of adventure. His second stop was Amsterdam, and that's where things started to change for him.
"There are all these squat communities in Amsterdam, with this interesting international spectrum of people living in abandoned buildings," David says. "I got sucked into the scene." He moved into a squat with a marijuana farm on the top floor and let go of his former identity. He was becoming radicalized politically and socially by the people he met, and having what he calls "huge psychedelic experiences that just blew me wide open"—drug-fueled reflections on things such as truth and hypocrisy, U.S. drug policy, and his purpose in life.
"My poor parents," he says now. After a few months, he flew home to California with a pierced tongue, a new vegetarian diet, and a plan to sell all his possessions and move back to Amsterdam as quickly as possible to start growing cannabis for a living. The plan didn't stick, and he soon found himself back in Cambridge, voraciously reading about Eastern religions while his girlfriend, Kris Lin (now Kris Lin-Bronner), finished school. For the first time, he started to think seriously about his grandfather's company and recognized that it could be a platform for his newfound radicalism.
When Lin got pregnant and the couple decided they would marry and move to California, David went to visit Emanuel, whose Parkinson's had advanced to the point that he had finally stepped away from the company for good. (Jim, who had kept a distance from the company after getting it on solid footing, was again in control.) "He was pretty far gone at that point, so he was much easier to deal with," David remembers. "I was sitting there, combing his hair, and he was smiling back at me. I told him I had reached a state of understanding of my own belief system, and that it led me to finally understand his whole thing. 'You've been saying it! All that crazy stuff!' "
Emanuel died on March 7, 1997, the same day David and Kris's daughter was born. A month later, David, who was 24, told his father he was ready to work in the family business. Just months after that, Jim Bronner was found to have Stage 4 lung cancer. A year later, Jim passed away.
"There's nothing more elegant than a properly formulated soap. It's the most beautiful lather, great skin-feel, great after-feel. You could basically eat our soap," David says, and pauses. "But I wouldn't recommend it. You could eat the raw materials. You could brush your teeth with it." He's trying to explain the difference between a true soap, like Dr. Bronner's, and the soaplike detergent products most of us use every day—the beauty bars and body washes of the world.
At its most basic, the difference is natural ingredients versus synthetic ones. Soaps and detergents are roughly equally effective at cleaning stuff, but most detergents are made at least in part from nonrenewable petrochemicals (because it's cheaper that way) and include a chemical cocktail of foaming agents, preservatives, and fragrances that, by and large, have never been tested and found safe for human consumption.
Within the world of real soaps, there are other levels of purity that separate the brands. Most mass-produced soaps are made with animal fats such as tallow (beef fat) or lard (pig or mutton fat). Ivory soap, for instance, is made with tallow. Natural soaps are made with nonanimal fats such as olive oil, coconut oil, and palm oil.
The distinction between fake soaps and natural soaps is at the root of what drove David Bronner to join the company, and it's what continues to drive him today—call it truth in soap. Indeed, to trace the company's history under David is to follow a quest to achieve ever-increasing levels of purity.
For years, Dr. Bronner's soap had included an undisclosed ingredient, caramel coloring. It would be unacceptable, David decided in 1999, to keep the coloring and not start listing it on the label. But it would be equally unacceptable to start listing an unnecessary ingredient; die-hard customers would assume the new guy was compromising the soap's integrity. Just pulling the ingredient wasn't an option, either, because customers would notice the change in color and assume he was diluting the soap. The answer, he decided, was to pull the caramel coloring but take the opportunity to add something better: hemp oil, which would create smoother lather. Even if people noticed the color change, they might also notice the improved skin-feel.
The change came a year into David's tenure, and it was a pivotal moment, because it allowed him to use the company as a platform to talk about issues that didn't really have to do with the soap, much as his grandfather had. "One of the reasons we liked hemp was that it was at the nexus of a bunch of hot issues," David says. "Environmental issues, and also drug policy." Hemp is a remarkably useful plant: It's a good dietary source of omega-3 fatty acids; it can easily be cultivated without pesticides; its fiber is especially strong; and, as Dr. Bronner's had found, its oil is a good natural additive in soap. The Drug Enforcement Administration had a long history of conflating hemp with marijuana, though, and that was just the kind of thing that got David worked up. Adding hemp to his product would be a nice middle finger to the government.
He took things a step further in 2001, when the Bush administration started seizing shipments of hemp seed and hemp oil at the Canadian border. David decided to lead the industrial hemp industry in suing the DEA, and undertook a series of publicity stunts such as serving samples of hemp granola and poppy-seed bagels from a booth outside the DEA's headquarters—the logic being that there was no reason to treat industrial hemp, which has only trace amounts of the intoxicant THC, any differently from poppy seeds, which have trace amounts of opium. After a long series of legal skirmishes, the agency reversed the policy.
Filing lawsuits is now a semiregular part of business at Dr. Bronner's as the company stakes out its market position as the purest product out there and then guards it like a German shepherd. Perhaps most prominently, David decided in 2008 to sue a bunch of his competitors—including Estée Lauder, Jason, and Kiss My Face—for falsely advertising their products as organic. Dr. Bronner's had spent years fighting to become one of the first major personal-care brands certified under the U.S. Department of Agriculture's National Organic Program. But because the USDA didn't (and doesn't) have any rules preventing personal-care brands from calling their products organic or natural by whatever standards they chose to follow, pseudo-organic brands were able to undercut Dr. Bronner's. The battle effectively ended when Whole Foods stepped in and gave the offending companies an ultimatum: Clean up your act within 12 months, or you're out of our stores.
While Dr. Bronner's was busy dragging the rest of its industry into organic integrity, David decided to set the bar even higher for his company. Fair labor practices had long been a core issue for the company, going back to a concept Emanuel liked to talk about called Constructive Capitalism, which held that you should "share the profit with the workers and the earth from which you made it." In 2001, David, Michael, and their mother, Trudy Bronner, who is the company's CFO, sat down to codify how they would put the concept into action. To the company's already generous benefits (fully paid health plan, a retirement-plan contribution equal to 15 percent of salary), they added 25 percent annual bonuses for full-time employees. The highest executive salary is capped at five times the salary of the lowest-paid warehouse employee, meaning David makes about $200,000 a year.
In 2005, David decided he couldn't in good conscience buy raw materials from operations that didn't take labor practices as seriously as he did, so he set a two-year goal of switching all the company's major ingredients to certified fair trade. Only one problem: Nobody could find any certified organic and fair-trade farms that produced some of those ingredients.
The solution: Get into the farming business. By 2008, Dr. Bronner's owned a 200-employee fair-trade coconut-oil operation in Sri Lanka and a 150-employee palm-oil plant in Ghana, and had partnered on a peppermint-oil operation in India. Maybe the most audacious fair-trade project so far has been a partnership that combines olive oils from farmers in the West Bank and Israel, and has become a symbol of Israeli-Palestinian coexistence. Emanuel Bronner would be proud.
Going fair trade hasn't been cheap. In addition to the start-up costs, Dr. Bronner's pays a 10 percent premium, dedicated to community development projects such as digging wells, on top of what it pays farmers for the raw materials they provide. And of course, it has meant another series of battles to establish better standards and fight so-called fairwashing, in which manufacturers use just enough fair-trade ingredients in a product to put a big Fair Trade on the label.
David says without hesitation that the causes he undertakes are more important to him than money. But one of the biggest contributors to the company's healthy bottom line is the awareness that results from its activism. "Because of the activist mission, we've attracted some amazing people and been able to increase our professionalism and expertise in business management—financial reporting, inventory control, sales," he says. "And instead of spending 10 percent of our revenue on advertising, like a regular cosmetic company, we're spending it on activism." And getting the same effect as advertising, anyway.
If David Bronner comes off as a kind of righteous warrior king, his brother, Michael, is more like the king's distant Midwestern relative. Michael, who has short hair and, the day I met him, was wearing a Green Bay Packers jersey, exudes sensibleness. "My brother is mission driven, whereas I'm more product driven," Michael says. "He is looking to pioneer progressive measures that people don't know they want. I am looking at what people want. And the company needs both."
This balancing act has played out perhaps most clearly in Dr. Bronner's efforts to expand into new product categories. Liquid soap has always been the most popular product—it makes up about 75 percent of sales—but it doesn't fit neatly into the way people tend to use liquid soap. It's less viscous than your typical liquid soap, but in fact it's far more concentrated. Whereas most pump soaps are about 10 percent soap and 90 percent water (the viscosity comes from thickeners),Dr. Bronner's is almost 40 percent soap. That's why if you put the soap in a pump bottle, the mechanism will clog, and inevitably soap will squirt out at an unexpected angle, maybe into your eye. (There's actually a warning about this on the bottle.)
"No product engineer or marketer would make a product like this if they were just getting started," Michael says. "Everything about it is unconventional. But that actually puts us in a pretty secure position. What competitor is going to come up with this? And if they do, it's going to be seen as inauthentic."
In addition to the classic liquid and bar soaps, a household cleaner, and a new line of hair care products, Dr. Bronner's has expanded in the past five years into lip balm, body balm, lotion, and shaving gel. Even the most ardent Dr. Bronner's fans might not know this, however, because all the new products were launched with new labels. Gone were all the references to Emanuel and the Moral ABC, even all the dense text, and in their place was a simple picture of two hands clasped in an embrace around the earth. The company went so far as to formulate a new kind of hand soap that worked fine in a pump bottle. It was a strategy cooked up as the company began to expand into mainstream stores.
The new, more mainstream products and labels haven't sold well, however. "You go into Target, and the old label outsells it 10 to 1," David says. "Ten to 1!" It was a case of conventional product design and merchandising simply not working for Dr. Bronner's. Or maybe a case of Dr. Bronner's ignoring the most conventional business wisdom of all: Stick with what works for you. The company has begun replacing all the new labels with a variation of the classic, slightly mad design—only this time with the text talking about hemp, organic ingredients, and fair trade. "We didn't want to take my granddad's thing and treat it as marketing shtick," David says. "We can only do that if it's sincere, and that means it only works on the classic soap."
David, his brother, and his mother say the company can hit $100 million in gross revenue in five years. It's both a realistic goal (the company has averaged 19 percent annual growth in the past five years) and an aggressive one, because it will require more widespread adoption of the company's unconventional products, a big uptick in sales of its new products, and/or significant mainstream retail growth. So far, natural grocers represent about 65 percent of Dr. Bronner's sales. Target, the largest single mainstream retailer, makes up less than 5 percent. The opportunity is obvious. The trick will be to seize it without compromising the company's image or letting big-box stores muscle down prices, which could alienate natural retailers or, worse, compromise the product.
Meanwhile, offers have begun rolling in weekly from suitors that want to buy Dr. Bronner's—to the point that David tosses inquiry letters in the trash without glancing at them. "We see the companies that sold, and sure, they still have a mission," he says. "But what we're doing is pretty radical; this is not feel-good sustainability, buying offsets and crap like that. This is taking on the Drug Enforcement Administration. My intention is never to sell." Exceptions eternally? Absolute none!