An Edina couple braves the cosmetics market
with soy-based lotions and cremes.

By E. M. Morrison

Edina, Minn. — Cliff and Lucy Larson have turned careful observation to invention and are marketing the first skin-care products made primarily from soybean oil. Their SoySoft Deep Treatment Penetrating Creme and SoySoft Daily Moisturizing Body Lotion are being marketed across the region.

And it all began in an unlikely place — a rural Minnesota feed mill.

The Larsons own Midwest Protein, a Grove City extrusion plant that processes about 12,000 bushels of soybeans a month. Extrusion uses heat and pressure, rather than solvents, to make soybean meal; a co-product of the process is high-quality vegetable oil.

The Larsons had been selling their oil to another Midwest refiner. But soy oil prices have been hit hard in the past few years. “We needed a higher-value market,” Cliff says. “We were looking for a value-added product for the soy oil.”

It was a pair of work-worn hands that gave them an idea.

Hard to soften

In 1996, an electrician wiring machinery at the Larsons’ plant noticed that his cracked and damaged skin was suddenly improving. “He worked outside in the winter, and you can’t strip wires wearing gloves,” Cliff says. “His hands were pretty bad.” Soon, others at the plant were also reporting softer skin.

The reason: contact with soybean oil, Lucy says. “It’s rich in vitamin E and essential fatty acids that are beneficial to the skin.”

Since most skin lotions are made from mineral oil or other petroleum derivatives, Lucy and Cliff asked the critical question, ‘Why not use soybean oil instead?’

Soy oil feels healthier

Working with a cosmetic chemist, the Larsons developed two soy-based moisturizers: a cream containing 20 percent soybean oil and a lighter body lotion containing 2.5 percent soybean oil.

They passed out samples to friends and neighbors and “people really liked it,” Lucy says. Even men who didn’t ordinarily use hand lotion wanted more. Consumers associate soy products with health, she says. “People are concerned about what they put on their skins. Soy has a very positive connotation.”

The Larsons estimated turning their soybean oil into hand lotion could quadruple its value and provide a stable market. But Cliff, a grain farmer and commodities trader at the Minneapolis Grain Exchange, was wary of the cosmetics business. “At first I was saying, ‘I really don’t think I want to get into cosmetics.’”

Smooth hands, rough market

Cliff had good reason to be cautious; the cosmetics industry is fiercely competitive, says Max Norris, an oils scientist at AURI who has been working with the Larsons. “It’s a large market, but it’s a very hard market.”

Two-thirds of American adults use hand and body lotion, pushing retail sales to more than $711 million a year, according to a 1997 Consumer Expenditure Survey by Supermarket Business.

Nevertheless, the lotion market is dominated by five major players, which represent more than half of industry sales. Another 30 companies have well-established brands. Distributing through drug stores, supermarkets and mass merchants, these companies spend $200 to $300 million a year in product promotion.

Bogged down

By early 1997, the Larsons had refined the SoySoft formula and produced their first commercial batches of Deep Penetrating Creme and Daily Moisturizing Body Lotion.

They marketed directly to consumers, working fairs and trade shows with their two teenagers. Relying on word-of-mouth advertising, they distributed the product to a handful of stores in the region. Consumers seemed to like SoySoft — the Larsons have a file of testimonials — yet sales were slow.

“Our marketing was kind of random,” acknowledges Lucy, a longtime community volunteer and civic leader. Adds Cliff, “The hardest part was getting into retail stores. For a long time we were in only a few.”

In 1998, the Larsons came to AURI for help. “They had already done the up-front work of product development,” says Michael Sparby, manager of AURI’s Morris office. “They had hired a chemist, put together packaging and made manufacturing arrangements. Their difficulty was marketing; they were trying to go in too many directions. We were able to help them focus on a couple of specific markets where their return would be highest.”

Assisted by AURI and a marketing agency, Cliff and Lucy concentrated on distribution channels in the gift, health food and beauty shop markets. Late last year, Jansco, a Minnetonka-based giftware distributor, picked up SoySoft and began selling it in the five-state Midwest region.

The Larsons created a point-of-purchase display and starter kit for new retail accounts. Jansco suggested new packaging so the Larsons redesigned the bottles, adding bolder graphics and dropping their trademark soybean plant. Sad to say, few people these days recognize a soybean plant, Cliff says. “They would ask, ‘What’s that bush on the bottle?’”

Welcome to SoySoft Central

With more focused marketing, SoySoft sales have started to increase. In January, the company sold more than 1,000 small bottles of SoySoft during a three-day Women’s Expo at the Minneapolis Convention Center. Several dozen Twin Cities stores now carry SoySoft. And in February, SoySoft earned a spot on the Home Shopping Network. Now the Larsons are adding a new product to their line: SoySoft lotion with sunscreen. “The chemicals are encapsulated so they do not touch the skin, making it a more natural sunscreen,” Lucy says. “It also provides protection against UVA and UVB rays.”

By the end of the year, the Larsons hope to do at least $200,000 in sales. Meanwhile, their Edina home has become “SoySoft Central.” Pallets of lotion have taken over the living room, display cases line the dining room, and soy oil fills the garage. Lucy oversees operations from her dining room table. “I like things orderly,” she sighs, “so it’s been hard. But this is what comes with a new business.”

Lucy says they are now renting storage facilities and hope to soon “rent space where there is an office, loading dock and storage space so the operation will be out of the home and consolidated.”

Adds Cliff, “We’re finally starting to grow. There’s still a long way to go, but it’s starting to look like a business.”

For more information, or to order SoySoft, call 1-800-668-2262.