For Cindy Luken, building a successful enterprise was a long-held ambition. Showing a keen eye for opportunity, she did just that, then she sold, took a break and did it all over again. She shared her insights with Ingrid Green.
Pick the odd one out: cookies, ice cream, lipstick.
You don’t eat lipstick, right? Wrong.
When food scientist/nutritionist/health guru-turned-businesswoman Cindy Luken was searching for her next product to market, she Googled lipstick ingredients. And there was her answer.
The chemical cocktail that appeared on screen was so astounding, she knew instantly she was onto something.
“I could not read the ingredients statements.
“I thought: ‘Why is it so different from food? What goes on our lips, we eat.’ I just went: ‘Why can’t I make lipstick from food?”
And that’s exactly what she did.
Cindy knew from the start that corporate life was not for her.
While she was developing ice cream and sticky date pudding ranges for food and beverage company Sara Lee, her self-employed husband was also putting in the hard yards – but only for nine months of the year.
“For the other three months he’d do sailing regattas, climb mountains. He was so in control of his life. In a corporation you’re controlled by that business – it’s what most of us think life is.”
A long-desired offer to join a high calibre team at a major food manufacturer coincided with the sudden realisation that it wasn’t what she wanted.
"I knew that I wanted another business. I loved that energy."
“My husband said: ‘What would you want to do that for? You’ll be on call 24/7.”
Opting to stay instead with Sarah Lee, she went instead into marketing, meeting future business partner Sally May. The pair formed Luken and May, caterers-turned premier biscuit manufacturer. Cindy bought out her partner and brought in investors, increased revenue to $7m, then sold to Stewart Alexander.
A break was in order after the pressure of heading a fast-growing start-up; babies ensued.
In the midst of stay-at-home mum life, the buzz of company creation again beckoned.
“I knew that I wanted another business. I loved that energy, I loved the spontaneity, I loved the people that I met, I loved growing a team. I really enjoyed it and I wanted that back again.”
Second time round, she was all about strategy. She lacked a product and a business model, but what she did have was a list. The item had to be small and cheap to distribute, be a premium ($20-plus price point) product and something she loved, have serious marketing opportunities, not have a shelf life, and most importantly have a low cost of goods. Sound ambitious? Enter: lipstick.
“Back in 2006 a girlfriend of mine asked me to do some due diligence on a body care business and I saw how lip tint was made. I knew that that product sold for $19.95.”
On learning how much they cost to produce, the light bulb moment arrived. Cindy had found her product, and named it Lip Nourish.
So her home became a “beauty kitchen”. Sourcing natural versions of all the ingredients, she set about creating a modern version of a traditional product.
Vegetable pigments couldn’t deliver the desired intensity or longevity, so the palette is of mineral-based nudes and neutrals, but the shades are all natural "and all universally flattering”.
They also taste amazing.
“I used my culinary chef skills, and I gave every lippy on the menu a flavour.
“That gave it a real ‘foodie’ positioning, and it also re-defined lipstick ¬– it tastes amazing, it feels amazing, it’s good for you and it’s just about a healthy natural glow, it’s a really pretty look.
"My whole philosophy is on harnessing the beauty of food. If you nourish your body from the inside out – and now with clean beauty products, from the outside in – then you start to feel really good about yourself.”
“That’s why my tagline is ‘Be delicious from the inside out’. That’s what the essence of Luk Beautifood is all about.”
The manufacturing went to a company in Melbourne and after some tweaking, the product became a reality.
Meanwhile, Cindy backed up her philosophy with her blog, followed by Beautifood Bites, where she brought women into her kitchen and showed them what it was all about.
Online retailing was in its formative years, and hosting lunches for other women in start-ups and early stage businesses also proved invaluable.
“I got all these women around and we all learned together, we all brought different skills to the table. It was fabulous.”
Cindy built the business from home to a $200,000 turnover with the Lip Nourish shades, all direct to consumers. Then in 2016 she did a $2m capital raise to further tap into the online market, with support from strategic retailers. The plan was to test the product on the Australian market, then start scaling the business opportunity via the US. The money was to invest in people and marketing.
She put a team together and moved the business out of home. After a bump or two, they were on their way.
"It’s not just about having a product that meets a consumer need, it’s about having all the pieces of the business model right. It’s that helicopter view – what is happening in the space that you’re looking at?"
Cindy visited a trade fair in New York, meeting with delegates from Sephora, Walgreens, Boots, Target, Loft and Anthropologie, along with talks with investment bankers and venture capital businesses.
“We knew we were in New York with the product range at the right time.”
And the right time it was. The trip resulted in a trial with US department store Neiman Marcus – online and as pop-ups in their Dallas and Newport Beach stores.
She’s now focused on her sales strategy, not trying to do too much, get what they’re doing right – and to hit the $5m mark.
“It’s not easy, it’s not perfect, but it’s on track.”
She encountered the expected challenges for a start-up. Moving up from a home business was a big one – Cindy hadn’t worked for 10 years and now dealt with a board, investors and a brand new team. Scaling was delayed by a packaging mechanism issue.
They also pivoted to channel a larger proportion of sales into stockists, taking advantage of larger existing customer bases.
But she says, it’s been really exciting. There’s now a name for the category, beauty wellness, part of a $400bn global market in the health and wellness products.
“Pioneering that space is pretty exciting.”
The philosophy of the company is all about balance, honesty and simplicity, the philosophy of natural beauty.
Cindy’s advice to anyone looking to start their own business?
Figure out what you want to make money from, product or service, and just get that right.
“It’s not just about having a product that meets a consumer need, it’s about having all the pieces of the business model right.
“It’s that helicopter view – what is happening in the space that you’re looking at? Where is that category going? What are the challenges in there?
And then, when it comes down to your product – is there a consumer need for it?
What are the benefits of it? What will differentiate your brand from other brands that are in the marketplace?
Identify the stages of business growth.
How do you validate it? How and where do you scale it?
And make sure you always look at your business simply. Identify targets and tick the boxes as you go.
The digital age has made the market far more agile and volatile than we ever thought it would be. The information you can get and use, the transparency of what everybody basically does, means that everyone is competing with each other.
“It’s so important to set your business up, so that you can respond to have a culture where people are comfortable that you might be heading in that direction, then suddenly you have to change.”
The business is agile. That way, when opportunity comes knocking, everything will be ready. With a little lead time, her manufacturer has the ability to boost production significantly.
And with a new stockist every day, new products, interest from US and UK retailers, investment bankers, venture capital businesses, and more recently a 2100-strong beauty service chain, it looks like that boost could happen very soon.