Byron Bay company Refreshed Lemon Myrtle has started exporting to the USA and Mexico, with a novel licensing deal that made the high Australian dollar irrelevant and took the hassle out of exporting.
Australian company Refreshed Lemon Myrtle has just cracked the US market, despite the high Australian dollar.
|Lemon Myrtle soap|
The Refreshed story starts in 2004 when David Dane, one of its Directors, sold two tea tree oil business to market leader Thursday Plantation. After serving a three year non-compete period, Dane started to work with Refreshed, then a bush tucker company producing food products Lemon Myrtle, a native plant with a pleasant lemony scent and flavour. The plant also has some useful antimicrobial qualities.
Dane quickly realised the potential for the plant beyond foods and helped Refreshed to create a range of personal care products including soaps and shampoos. When the owners sold out in 2009, Dane and Mike Dean – a former senior executive at Thursday Plantation – stepped into the company.
Dean had previously set up licensing arrangements for Thursday Plantation and set about striking similar deals for Refreshed in the USA. He visited the world’s biggest trade show for natural foods in the USA and re-built a relationship with Thursday Plantation’s US distributor.
Refreshed hoped to export finished products, but exchange rates changed the game during negotiations.
“By the time we got into the nitty gritty the dollar took off,” Dane says, and the US company’s interest wavered. To rescue the deal “We thought why not do a licensing deal like Thursday Plantation had done?”
That deal was done and now sees Refreshed own its trademarks in the USA and provide its US partner with a website, a back story, logo and other branding elements used on products sold in the USA
Refreshed also supplies bulk Lemon Myrtle Oil and leaves, but its partner takes care of manufacturing and distribution. Refreshed keeps its branding up to date, but is otherwise hands off other than banking the monthly cheques that flow from the licensing agreement.
Dane says this licensing arrangement has made it possible to enter the US market far more easily and cheaply than would have been the case if Refreshed tried to establish its own presence.
“95% of the soap we sell is in a paper sleeve,” Dane says. By contrast, most of the Lemon Myrtle soap sold in the USA ships in boxes. Learning those peculiarities and applying then to the US market is something Dane is happy to leave to others, especially as the licensing arrangement means Refreshed keeps going about the chores it must do to service the Australian market, exports those efforts and then receives a royalty cheque without expending any extra effort in the USA.
“More Australian companies could be successful this way,” he told My Business. “In our industry on Thursday Plantation has cracked America. The likes of Blackmores never made it there.”
Dane and the Refreshed team now hope that Lemon Myrtle’s popularity continues to grow. Celebrity Chef Jamie Oliver declared the product “pukka” in late 2010, leading to shortages in the UK. Dane says future shortages are possible. “There’s not a scarcity but we’re close. It is on the edge and if it took off it would be hard to source product.”
But Refreshed is confident it can survive a surge. “We sell the real deal,” Dane says, and thanks to strong relationships with growers feels he can get his hands on sufficient supplies.
Even if there is a shortage, Refreshed’s deal with the US means it will win.
“Lemon Myrtle is $120 a kilo versus $35 a kilo for Tea Tree,” Dane says. “Our US partner needs us and our connection.”
Local growers also need Refreshed to succeed, and Dane is committed to making sure everyone in the Lemon Myrtle supply chain succeeds together.
“This is truly a north coast indigenous product,” he says. “We have tea tree, macadamias and now Lemon Myrtle.”
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