TOWN OF BLUE MOUNDS — Up a winding road deep in the rolling hills of Blue Mounds, with cows grazing nearby and swallows cavorting among the trees, Kyle LaFond and a handful of employees mix up a potion of coconut oil, shea butter, beeswax, baking soda, arrowroot powder and essential oils, pour it into plastic tubes, and label them — all by hand.
They are the home-grown production line, making natural deodorants for the personal care products company that LaFond, 40, started three years ago, American Provenance.
Manufacturing, packaging, distribution and sales all occupy a former machine shed on the farm LaFond’s great-grandfather, William Frye, bought.
But not for much longer. Success is prompting a transfer to a more business-oriented location, where American Provenance has room to grow as sales multiply for this rural startup in a trendy, global industry.
American Provenance will move this summer to new quarters being built by Premier Building Solutions, off Highway 18/151, just south of Mount Horeb, still in the town of Blue Mounds.
Armed with the company’s first outside funding and encouragement from the Blue Mounds town board, American Provenance will expand, add staff and plan for new products.
“This is a great launching pad,” LaFond said.
Starting from scratch
American Provenance makes deodorant, aftershave, beard balm, pomade and lip balm, and it sells candles, also made of beeswax and coconut oil, produced by Katie Doescher, another Blue Mounds artisan.
LaFond — a Middleton High School, UW-Madison and UW-Platteville graduate whose past careers include Wisconsin Department of Natural Resources wildlife biologist, Capital Brewery director of business development, and middle school science teacher — started the business after he realized the students’ “chemical fog of body spray and perfume” was giving him headaches.
A class project showed most products on the market were loaded with chemicals, and research turned up few regulations for alternative products to enter the market.
LaFond decided to create his own line of natural products, bootstrapping the business with $60,000 of his money and a $100,000 bank loan.
Since the company began selling its deodorants and balms in May 2015, sales have steadily increased, from $65,000 in 2015 to $325,000 in 2017.
American Provenance products are now sold in 800 stores in all 50 states and Puerto Rico, LaFond said, from major chains such as Whole Foods and Hy-Vee grocery stores to specialty pharmacies, co-ops and yoga centers.
This year, LaFond projects $500,000 in sales, pumped largely by an online marketing campaign that started in June and will ramp up this fall. Online sales jumped from the previous $3,000 a month to about $20,000 for the month of June.
“We just made another sale,” LaFond said, checking a notification on his mobile phone. “I think we’re going to see this huge exponential growth.”
Help from seed fund
Buoying the company, as well, is a $500,000 investment in May from two sources: Winnebago Seed Fund and Tru Fragrance & Beauty.
The Winnebago Seed Fund is part of the Badger Fund of Funds, established in 2015 with $30 million from the state of Wisconsin and other investors, to give an early boost to young companies around the state. David Trotter, who manages the Winnebago Seed Fund, based in Neenah, said he focuses on the entrepreneur when deciding on investments.
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“After a few meetings with Kyle, it was clear to me that he has something unique. His passion for high quality and natural products is not just marketing, he believes in it,” Trotter said.
“There are plenty of new ideas and products looking for investment, but I believe the success of the business will depend on the determination and grit of the founder. Kyle built AP from scratch, and I feel lucky that he let us join him,” said Trotter.
Tru Fragrance and Beauty, based in Willowbrook, Illinois, with offices in Chicago, New York and Los Angeles, creates beauty brands and distributes and markets them.
“I am constantly on the lookout for indie brands where I find talented entrepreneurs who are real and authentic and ‘get it.’ And I want to help them get better, too,” CEO Monte Henige said.
Henige said he was impressed with LaFond, and said natural deodorants are “really trending” now.
“Kyle is a man of integrity, a man of vision, and he is going to work hard. He’s in a good (product) space. Why wouldn’t I invest in this?” said Henige, a former investment banker, trader and financial consultant.
Nationwide, the natural personal product industry is heating up, with projected sales of $15.6 billion by the end of 2020, according to Transparency Market Research. Two such companies were recently acquired by major consumer products corporations: Native Deodorant sold to Procter & Gamble, maker of Secret deodorant, for $100 million, according to TechCrunch, and Unilever, maker of Dove, Degree and Axe, bought Schmidt’s Naturals for an undisclosed sum.
LaFond said as his business grows, he needs more space, a loading dock and advice. He talked to accountants at Baker Tilly who introduced him to Henige. He attended the gBETA accelerator program in Madison where mentors helped fine-tune his presentation. He continues to meet with Michelle Somes-Booher, director of UW’s Small Business Development Center.
The Blue Mounds town board connected LaFond with Premier Building Solutions, which moved to Blue Mounds two years ago on Highway 92, just off Highway 18/151, next to a silo with logos for Belleville work wear company Duluth Trading Co. and nearby Mount Horeb.
“When the township of Blue Mounds approached us about Kyle, we thought it was a good fit,” said James Leuzinger, president and co-owner. Premier Building Solutions, which travels the U.S. building stores for Duluth Trading, remodeled part of an existing building at the site for American Provenance and is building a second structure, part of which will also house the company.
LaFond will move the business in August. He plans to double the current staff of two full-time and four part-time employees at the outset, and could jump to as many as 20 full-time and part-time workers “very soon” after that, he said, with pay starting at $15 an hour.
He plans to switch from plastic tubes to biodegradable, coated cardboard for deodorants, which make up 90 percent of sales, and he bought the company’s first two labeling machines.
If sales reach $500,000 this year, they could hit $2 million in 2019 and keep doubling every year, LaFond said.
Tru’s Henige said he thinks American Provenance has “a very long runway. I wouldn’t be investing in it if I didn’t think it could be 100 times bigger than it is right now.”
As for the possibility of a big-time buyout, Lafond said, “We intend to stay the course and continue to grow at a manageable rate ... I have all kinds of ideas on how to expand our product portfolio to become a household name.”
But he added, “We are committed to staying here in Blue Mounds ... and doing as much of this on our own as we can.”
“We think the sky’s the limit,” LaFond said.