Welcome to The Himmel Group

We had been the marketers of Ovaltine in the United States from August 1, 1992 until May 15, 2007, and were, up until 1996, the owners of Gold Bond Medicated Powder. Our passion is to build brand equity.

The key has always been our belief in the role of advertising to build brand equity, either to revitalize old trademarks or by creating new ones.

The cornerstone of our marketing strategy has always been the belief that:

  • There is a direct correlation between the level of advertising spending and market share, consumer loyalty, the ability to resist price competition and leverage with the trade. It is a belief in advertising, non-stop, 52 weeks/year, without flighting. Over the last 46 years, every brand we have ever owned has been advertised 365 days a year!

  • It is also a belief that brand equity is a company’s most valuable asset, and that even small brands that appear ready for the graveyard can have staying power that can be leveraged in ways that may not be totally obvious from their low sales level.

When it comes to brand awareness and advertising, we never forget the old adage: “Out of sight, out of mind.” So always be in front of the consumer.

Vertically-integrated in advertising and media functions

As advertising plays such a critically important role in building brand equity, we have always been vertically-integrated in the advertising and media functions, and handled that part of the business on our own (writers, producers, media buying). That’s how we are able to achieve efficiencies in media buying, our own know-how for media planning, our own ability to keep production costs down so there’s more money available for the media buy!
The problem with the outside advertising agencies is that they push television commercials, the most expensive media day-parts, extremely high production costs, directors’ fees, creative and talent fees. The average cost of a 30 second national television commercial is in excess of $360,000 (according to the American Association of Advertising Agencies).

During the five years we owned Gold Bond, our average cost of a television and radio commercial including the buy-out of talent was under $5,000!

This can only be accomplished when you have the resources and know-how in house to handle all of the advertising and media functions.

In our experience, the message is clear: Brand equity is a valuable asset, and advertising is the key ingredient in building brand equity. For the most important part of our business, we want complete control and have never been comfortable outsourcing this most important strategic area of the business.

Revitalizing Old Brands

Over the last 46 years, spanning 2 generations, we have acquired old, but well-known trademarks that were mistaken for dead, and revitalized them, and taken what we saw as big ideas, and built them into successful brands, and then sold them.

There are always old brand names that have withstood the test of time, and bring a lot to the table, such as brand equity, consumer awareness and trust, existing distribution in the marketplace, and a low level of sales, all of which are extremely leverageable once advertising starts, assuming the product has a point of difference which is relevant and meaningful to the consumer. This was the case with most of the brands which we have revitalized.

The problem, and our opportunity, is that these brands that are fading are often perceived as dead. But in reality it may be nothing more than neglect, or because it is non-core. Add to that declining levels of sales and awareness, and marketing executives are quick to write off the brand, milk it, and convince themselves that the brand is at the end of its product life cycle. And then they never get to see a dormant brand’s untapped potential.

Examples of small brands we have revitalized are Doan’s Pills for Backache Pain, Cuticura Soap, Bromo Seltzer, Ovaltine and Lavoris Mouthwash.

These are all brands which enjoyed a rich heritage, excellent brand awareness, that had withstood the test of time (from 80 - 120 years old), had existing distribution in the marketplace, and the only reason they were small when we acquired them was that they had small marketing budgets behind them.

Much larger $70-$80 million brands like Scope and Listerine had awareness levels that were no better than Lavoris with $3.5 million in sales.

The $80 - $100 million brands like Mylanta, Tums or Pepto Bismol had awareness levels no better than Bromo Seltzer with only $1 million in sales when we acquired them.

The lesson is that the value of a brand’s equity is not determined solely by its current brand sales.

Doan’s Pills for Backache Pain

Advertising can even make a parity product superior -- and premium-priced, as was the case with Doan’s Pills for Backache Pain, which we acquired in 1981.

Doan’s Pills is a pain reliever positioned for backache. The active ingredient, magnesium salicylate, is no more or less effective at relieving backache than acetaminophen or aspirin. However, heavy investments in advertising, 52 weeks a year, with real, believable consumers testifying in ads as to the relief they derived from Doan’s, and a claim that Doan’s contains a unique ingredient, not found in any of the leading brands, was enough to be successful, particularly given the fact that no one else was telling the story. And during the entire period that we owned Doan’s, from 1981 until 1986, we were the largest advertiser in the category of backache pain relievers.

We paid $0 for our rights when the sales were less than $2 million, and built Doan’s to a sales level of $13 million in 1986. We then sold the brand to Ciba-Geigy (as part of the sale to The Dep Corporation) for $35 million in 1986.

Building New Brands

The alternative to investing in old brand names or well-established brands is new product development, but this is costly and risky. Marketers can typically spend from $50MM to
$100MM to launch a new product, and more than 80% of all new products fail.

The Himmel Group has also developed and built its own brands. Examples of three products we created were Compoz, Topol Smokers’ Toothpolish and Porcelana Medicated Fade Cream. Gold Bond Medicated Powder is another similar example. We didn’t develop it; however, it had heritage only in New England. Everywhere else in the United States, it was an unknown…until we built it.

There used to be a joke with us, that we would create diseases and then, in our products, create the solution.

The first disease we created was in 1960, called Simple Nervous Tension, and with the problem, the solution, Compoz, C-O-M-P-O-Z, and today, 45 years later, people still recall the slogan “Headache, take aspirin, simple nervous tension, take Compoz, C-O-M-P-O-Z.

Topol Smokers’ Toothpolish was originally brought to us by an advertising agency, Schaller Rubin, as an upside down bottle of liquid toothpolish. There were no sales at the time. My father paid $300,000 for the trademark, and remembering an old print ad from 30 years earlier of how if you blew smoke through a handkerchief, it turned yellow, saw a whole unique positioning, a whole new category - Smokers’ Toothpolishes. And Topol Smokers’ Toothpolish was built from nothing to sales of $34MM by 1984.

Porcelana was created based on a television commercial in Mexico for Camay Soap which stated that the soap made one’s skin clean like Porcelain, como Porcelana. It was built from sales of $0 to $14MM.

Gold Bond Medicated Powder

In 1990, we bought Gold Bond from Block Drug Company for $1 million, and built the brand from a regional brand with sales of $1 mm in 1990 to $30 mm in 1995, to become the leading medicated powder in the U.S. Block sold the brand as it was a small brand. In our view, it wasn’t small; it merely had a small budget.

The brand was developed by The Rhode Island Medical Association in 1898, had a unique formula, and did more than ordinary powders which merely absorbed moisture. Gold Bond was a medicine, it contained special skin protectants to soothe and dry the skin, and menthol to relieve itch. In fact, Gold Bond had flat out scientific superiority. Moreover, it was unique in a category which barely existed, which wasn’t being promoted. So our advertising messages stood out in the market. We used real people testimonials and their messages struck a chord with other consumers. Within 30 days of our acquisition, Gold Bond was introduced nationally and advertised on network radio and television. Heavy investments in advertising began to drive consumer awareness and sales, and made Gold Bond the leading medicated powder in the U.S., surpassing Ammens Powder as number 1.

In July 1992, we introduced Baby Gold Bond to treat and prevent diaper rash, and in October 1993, we introduced Extra Strength Gold Bond Medicated Powder which contained in excess of four times the medicine as Regular Gold Bond, and Gold Bond Medicated Anti-Itch Cream, which competed in a category four times the size of the medicated powder category. While most medicated creams were one percent hydrocortisone, Gold Bond Medicated Cream was formulated to provide immediate itch relief with a unique formula that then had clinical superiority in providing itch relief over the leading brands -- Cortizone 10, Benadryl, Lanacane and Cortaid.

Gold Bond Cream became the fastest growing cream in the medicated cream category.
Gold Bond in 1996 was then sold to Chattem Inc. for $40 million.

Whether we revitalize an existing brand, or build a new one, which we are eager to do, it all gets down to this.

We better be able to differentiate ourselves or we die. It’s that simple. The cornerstone of every brand is its point of difference. And that’s where most companies get in trouble. Their products fall down in the differentiation department.

This means having a unique selling proposition (USP), making sure your product stands out. And if it doesn’t have a USP, if the product is a commodity or “me-too” product, our mission is to find some strong creative hook…

…Like we did with Doan’s Pills, and:

  • Star-Kist did with ordinary tuna by creating Charlie the Tuna,

  • Oscar Meyer did with “I wish I were an Oscar Meyer Wiener,”

  • Wrigley’s did with “Double your pleasure, double your fun”

  • Eveready Battery sold batteries with the Energizer Bunny

  • Pillsbury sold assorted foods with the Pillsbury Doughboy

  • Pancake mixes and syrups were sold with Aunt Jemima

  • Kellogg’s sold sugar-frosted cereal flakes with Tony the Tiger

The examples are endless!

To build strong brand identity requires a single-minded vision and regular and consistent advertising…advertising that provides strong brand identification! To recall an ad is one thing, but the product, that’s another.

Our advertising needs multiple product mentions and a product shot! We have to make a meaningful promise, and we must repeat the key benefit. Our advertising has to strike a responsive chord with consumer. It has to answer for the consumer one key question:

“WHAT’S IN IT FOR ME?”

That’s how you strike a responsive chord with a consumer…talking to the consumers’ needs and wants!

And you have to answer this question easily and succinctly. This means conveying only one selling point, and doing it quickly, simply, and in a single-minded way. The key is to tell them, be brief and be gone.

And that was always our mission…to communicate messages which are meaningful to consumers, in the appropriate format (such as demonstration-type commercials, like the Topol handkerchief spot, which single-handedly built Topol into the market leader, and problem-solution commercials, like the Compoz, Doan’s Pills, and Gold Bond spots, with testimonials, like the Gold Bond spots, and comparative advertising, like we have with Ovaltine, Gold Bond Medicated Cream, and most of our brands.

Advertising

And we are passionate about what we do.

To us, the only thing more beautiful than a good ad is an excited consumer passionate about our products. And we spend a lot of time with our consumers so we can learn about their wants and needs, their likes and dislikes, why, when and how they use our products, and what they want to see from us. Our consumers guide us and lead the way to the future. Our philosophy is living proof of the old adage, “If you want to know how to sell a consumer, ask him!

What’s a good ad? It’s one with the facts. Facts, facts, facts!

It’s its most persuasive when it informs, not when it entertains. It’s an ad that is long on salesmanship, not entertainment!

I am not out to have our consumers say, “That's a hell of an ad!” I want them to say “that's a hell of a product, I want one of those!”

We’re not out to win awards for the most beautiful or glitzy commercial. It’s an ad that makes the cash register ring! So we develop commercials that are believable, and in that regard, no advertising format is more credible to a consumer than the testimony of another consumer. We don’t use actors and actresses in our commercials. They may not be the most beautiful people in the world from Madison Avenue’s point of view. But they tell it like it is!

And that’s how you develop personality for your brand.

When you have something important to say, you just say it! You don’t try to be subtle or clever. If your competitor has a weak spot, you hammer it…once, a second time, a third time, over and over and over.

To do that the ad must offer a promise of a believable benefit. It must be memorable. And it must grab the attention of the viewer right up front! You see, you have only 2-3 seconds to bond with your viewer or listener. Otherwise, they’re gone!

I am sure you have all seen bad ads. What’s a bad ad? It’s one that so abstract, you’d think the advertiser is trying to conceal what they’re advertising. Over last 20 years, ads have dispensed with the sales pitch, and rather than talking to product quality, they offer a 15 or 30 second comedy routine. Why? Usually, it’s because they have very little to say about the product!

Our view is simple. If you have something to say, SAY IT!

If you have an important point to make, don’t be subtle, clever or funny!

Another problem with advertising is that more dollars are wasted in advertising by under spending than by overspending.

Our whole philosophy is about investing heavily in advertising so that we are always, everyday, top of mind with our consumer.

In order to do this, technically we need to have a dominant share of advertising voice. This means outspending the competition in advertising. It also means having frequency of advertising messages so that our messages are heard all of the time. We believe in frequency of advertising messages (more than reach). Ideally for a brand of ours with an advertising budget of $3-$4 million, which for most companies would be the equivalent to a $15-$20 million budget, we aim for a frequency of advertising messages of 10-15 times per month against our target audience. This frequency, however, must be coupled with a dominant share of advertising voice, or else the advertising messages may not be significant enough to be heard and stand out. For example, when we took over Ovaltine, we had an 11% SOM, but we were outspending Nestle, the market leader with a 66% SOM, 2:1.

How does a company like ours do this if we are dealing with small brands and relatively small advertising budgets?

We do it with in-house media buying to maximize cost efficiencies and controlling commercial production costs by producing our commercials ourselves.

In business, we live in state of paranoia. We are always look over shoulders and running our business as though the competition will hammer us hard in our weak spot…or that the competition will offer our consumer a similar product for a penny cheaper.

Ovaltine

In 1992, we entered into a long-term license with Sandoz Nutrition to market Ovaltine in the U.S. and have taken the brand from its then sales and market share of $11 mm and 11%, respectively, to $38 mm and 30% in 2006. Nestle’s share of market has decreased during this time frame from 66% to approximately 50%.

While Ovaltine was in a state of major decline in 1992 when we took it over, we were able to jump-start the brand by tapping into its equity and rekindling top of mind awareness. Ovaltine had a rich heritage since 1904 as a great-tasting nutritious milk flavoring. Plus it was in an under-advertised category. So we could have a dominant share of advertising voice.

By heavily investing in advertising, always being the largest advertiser not only in the category of milk powder additives, but spending more on a measured media basis than the sum total of all advertising spending in the three categories in which Ovaltine competes—milk powder additives, chocolate syrups and hot cocoas. In each year, we have outspent Nesquik, Hershey’s Syrup, Swiss Miss Hot Cocoa and Nestle Hot Cocoa combined!

Ovaltine had a point of difference versus the competition which was meaningful to moms, the gatekeepers for their children. Ovaltine tasted good, plus it had vitamins and minerals, Nesquik (formerly Nestle Quik) didn’t. All we had to do was to convince moms that Ovaltine tasted as good as Quik, that their kids would like the taste of Ovaltine as much as Quik, not more, plus we had vitamins and minerals, Quik didn’t, then we would hands down, every day of the week.

We were always committed to partnering with our retailers by offering trade and consumer promotion programs, increasing advertising spending, improving our creative advertising by making it as meaningful to the consumer as possible, continuously expanding and redefining new targets for Ovaltine to make our market larger, and making our packaging as dynamic as possible so that it stands out on the shelf.

On May 15, 2007, Himmel Nutrition sold its Ovaltine license to Novartis.

Joe Jimenez, the Chief Executive Officer of the Novartis Consumer Health Division, said,

    "Himmel Nutrition Inc. has been our partner for almost 15 years and has demonstrated its skill in building small brands. They have taken Ovaltine from the inception of the license from a small, struggling brand into an important brand in its category."

Ovaltine in the USA is currently owned by Nestle.

We outsource to stay focused on marketing and to keep fixed costs low

In order to keep fixed costs low, we contract out the manufacture of our products and other services such as our medical experts, research and development and other services. The only area where we are vertically-integrated is in the advertising area.

Our line extension philosophy

Our line extension strategy for Gold Bond, for all of our brands is extremely focused. We were always extremely thoughtful to insure that line extensions fit in with the core strategy and vision for the brand.

Oftentimes, when a company is so keen on growth, they desperately line extend in every which direction, and do so with marginal line extensions that tend to dilute rather than enhance brand equity. And then without the proper advertising and marketing support for each line extension, the brand identity becomes blurred. Rather than treating each line extension as a separate brand, companies engage in “line advertising,” that is, promoting the whole line as if it were one target consumer. And no individual product attributes are ever promoted. The product identity begins to fade. The advertising becomes invisible. And then the brand becomes managed as an annuity. The brand identity becomes confusing to the retailer and to the consumer. And then, the brand can sink into oblivion.

What we do is not novel

What we do is nothing more than sticking to the basics, in the same way that Harley Procter, the co-founder of Procter & Gamble, promoted Ivory Soap in 1881. With a hefty ad budget then of $11,000, excellent creative advertising and a slogan “Ivory Soap, the soap that floats, and is 99.44% pure,” Harley Procter pushed for scientific studies to validate Ivory’s purity, and when he ran out of ideas on how to sell consumers, he understood that the only way to figure out how to sell them, was to ask them, and he did. And that’s what we do.

Conclusion


We are always looking for brands which are unique, where we have a story
to tell, so we can use our marketing know-how to tell the story. If you
have such a brand, please let us know. Together we can build it, and tell
the story over and over until we are number one.

If you are looking for a partner to help build a new product, or an existing one, we can provide the strategic resources, the marketing know-how and financial resources to fund 100% of the capital required to build a successful franchise.

Thank you for taking the time to let me pour out my soul.

Thank you for visiting us at our website. If you want to learn more, please contact us.

Jeffrey Himmel
Chairman
The Himmel Group