How One Company Achieved Organic Certification
A few weeks ago, Dennis and Kayla Fioravanti, co-owners of Essential Wholesale, one of the Indie Beauty Network's longtime members and media partners, shared the exciting news that their company's application to be a Certified Organic Handler/Processor has been granted. Dennis says that the company is now the only such certified natural cosmetics company in the Pacific Northwest.
Because organics are so popular, growing from a $3 billion market in 2002 to a $7.3 billion market in 2007, I am exceptionally happy for Dennis, his wife Kayla and their hard working staff. You can enjoy a video with a little about how Essential Wholesale started at this link.
I asked Dennis to take a few moments to share how the company obtained its Certified Organic Handler/Processor certificate, and what it means for Essential Wholesale and its customers.
dM: What does it mean to be a Certified Organic Handler/Processor?
Dennis: Certified organic handlers are companies that handle organic ingredients and repack them for sale. Certified organic processors are companies that use organic ingredients to create other finished products. If you are a processor, then you are automatically a handler. But handlers are not necessarily processors because not all handlers produce other finished products. We are both.
dM: What entity provided the certification?
Dennis: Oregon Tilth, a nonprofit organization supporting and promoting biologically sound and socially equitable agriculture through education, research, advocacy, and certification. We have an EU and JAL designation which means that we also comply with both the European Union and Japanese organic handling standards. We are also seeking our EcoCert Certification later this year so that we can have many of our Organic Base cosmetic products certified.
dM: How long did the certification process take?
Dennis: About two years, involving constant delays for one reason or another. For example, along the way, we had to stop and provide certain training for specific employees. Other times, delays occurred because were were moving our facility or undergoing building improvements. There was always something, but they day finally arrived.
dM: What was the approximate total cost to attain Certified Organic Handler/Processor status?
Dennis: Fees and inspection costs total about $2000 the first year, but subsequent yearly fees will be calculated based on total organic sales plus a minimum fee.
Having said that it cost $2,000 or so, I need to clarify that that figure does not account for the many hundreds of labor hours and facility upgrades we had to go through in order to attain the certification. Counting those things, the cost is close to $20,000.
dM: Do you expect to be able to make that investment back quickly?
Dennis: That depends on how you calculate the cost.
If we are talking about making back $20,000 in profit dollars, then we have to remember that, for every dollar in profit, you need to have at least $15 in sales. That would mean we'd have to generate $300,000 to break even. Quite a task.
dM: Was it worth it?
Dennis: Ask me in a few months when we have had time to see if our customers are taking advantage of the certified organic products we can now create for them.
dM: What else can you do now that you couldn't do before being certified?
Dennis: We have always sold and used organic ingredients, but now we can actually sell them as "certified organic" and make the claim on our labels and website. It boosts our company and product up a level in terms of quality and standards when compared to non-certified entities.
Of course, there are lots of great companies out there that are not certified, but certification creates standards and practices that most companies do not and most likely would not follow due to the increased costs involved.
dM: Do you recommend that other companies seek similar certifications?
Dennis: Well, as the world turns greener, it can only help. Having said that, a word of caution to be sure and double or even triple what you think it will cost to obtain certification, depending on how much work your facility needs.
It is costly and time consuming, but it sets your company apart from the pack.
dM: How does this new certification feel from a personal perspective?
Dennis: Kayla and I are very blessed to have a company with awesome employees and customers and we regularly take time to reflect on our past. We are personally very pleased with a new service we are offering. We call it the Private Label Selector that allows customers to create products with customized labels and a minimum of only 7 items per product selected. We call this "Click & Pick," and it pleases us greatly to be able to help small businesses get a start without having to make a huge up front investment.
Just 7 years ago, we were operating out of a kitchen and a medicine cabinet. Five years ago, we were in our first facility of 600 square feet. We had no employees and made six cosmetics bases and sold about 20 raw ingredients. Today, we are in a 35,000 square foot facility with 30 full-time employees, several part-time and temporary/seasonal employees, over 400 cosmetic bases, over 800 raw ingredients and a new private label division. We have so many plans for the future that we scare ourselves even.
What do you think?
Dennis's story of business growth is astounding and inspiring. If you ever feel like the cards are stacked against you and you could never move out of your little office or manufacturing area, consider that, with grit and gusto, like Dennis and Kayla, you can do it too!
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