A Shower of Success : Rainwater Was the Key to a Hit Shampoo That Opened Nature’s Gate
Leo and Vladimir Weinstein never believed they could turn rain into gold. But the two brothers came close.
In 1972, Vladimir ran a small herb shop in Venice and was studying ancient medical treatments from a Chinese master who asked his apprentices to formulate various ointments and shampoos. So Vladimir collected some rainwater, figuring there was nothing softer than rain. With it he heated up some other ingredients on a small stove in the garage attached to his shop.
He called the shampoo Rainwater, and through word of mouth, people started coming in with empty soda bottles and paying him 25 cents to fill them with the homemade mixture. One day, the owner of a local health food store asked for three bottles of the shampoo. The next day, Leo, a Cal State Northridge business graduate who had joined the venture, was asked to deliver a dozen more bottles.
“I thought, Jesus, I’ve got to write all those labels by hand! We didn’t know what we were doing, but something clicked. I saw we could develop a cash business out of that,” he recalled.
It took the two Russian emigres a couple of years to realize they were on to a real business. They happened to catch the trend toward natural, organic products at its beginning and placidly rode it to success. Last year, their Chatsworth-based Levlad Laboratories topped $10 million in sales, making it one of top firms within the modest, $300-million-a-year natural cosmetics industry.
“They are definitely one of the best and they are trendsetters too because they use up-to-date chemical information and good herbal ingredients,” said Rebecca James, a Los Angeles cosmetics industry consultant.
The segment, which caters to health food stores, occupies a tiny niche--just 2%--of the $15-billion-a-year U.S. cosmetics industry that is dominated by the likes of Revlon, Estee Lauder and L’Oreal, said Suzanne Grayson, a cosmetics consultant in Santa Barbara.
In total, more than 100 different Levlad products, from shampoos to facial cosmetics and body lotions--costing from $4 to $10--are sold nationwide in stores such as Mrs. Gooch’s, Follow Your Heart and Whole Foods Markets, the Texas-based chain that is buying Mrs. Gooch’s. Among the Levlad brands are Nature’s Gate, Petal Fresh and Aloegen. They still sell Rainwater shampoo, although distilled water has replaced the rain.
Less visible--but accounting for 40% of sales--is Levlad’s manufacturing under contract for other cosmetics companies and well-known chains that market the products under their own names.
Delia Abadiano, chief chemist in Levlad’s research lab, prepares and tests formulas and juggles hundreds of ingredients, always looking for new angles. “There are fashions, just like for clothes. There was elastin, collagen and liposomes in the ‘80s. In the ‘90s it’s alpha hydroxy acids,” Abadiano said.
The creams, lotions and conditioners begin as soupy emulsions in 2,000-gallon vats lined up against a wall of the lab facility. The tanks are steam-heated so ingredients such as vegetable wax will blend with others. Plant extracts and oils give off fragrances so strong the whole building smells like a big bag of herbal tea.
The warehouse-size room holds shelf after shelf of extracts of geranium, coffee, wild pansy, chamomile, rosemary, sage, orange flowers, Hawaiian white ginger. On the concrete floor are drums of aloe vera gel, an ingredient in many Levlad products. In shampoos, the botanicals are laced with sodium laureth sulfate, a foaming cleanser commonly used in natural cosmetics and innocuously labeled “derivative of coconut oil.”
To the picky and well-informed consumers who frequent health food stores, ingredients are paramount. Kathleen Bransford of Santa Barbara is a strict vegetarian opposed to use of animal byproducts and chemicals in cosmetics. She said she uses a Nature’s Gate hair conditioner because of the good herbal ingredients. “However, I am not thrilled about the use of parabens (a preservative) and I won’t use the product on my hair. I use it to shave my legs,” she said.
Robin Rogosin, nutritional and body care buyer for Mrs. Gooch’s markets, said that of the dozens of natural cosmetics brands the chain carries, Levlad’s are among the most popular. According to cosmetic consultant Grayson, one of the problems in the natural cosmetics segment is lots of competition in a “business that is not growing because the number of health food stores is not increasing.”
But the Weinsteins seem comfortable as big fish in a small pond.
They arrived with their family in Los Angeles in 1961 from the former Soviet republic of Uzbekhistan. While Leo, now 50, studied business, Vladimir, 46, earned a bachelor’s degree in biochemistry from UCLA. Vladimir soon developed a keen interest in Chinese healing arts and ancient pharmacopoeias. After graduation, he borrowed $1,000 from their mother to open the herb shop.
Vladimir remembers dabbling with a shampoo formula for three or four months and being baffled by its success. “I had no idea about business. I might have just given the stuff away. In fact, the day we got the order for 12 bottles I felt put off, because I had planned a day at the beach.”
After a few years, Leo, currently company president, realized there was enough demand for natural cosmetics, so Vladimir, who is in charge of product development, started concocting more products as Leo looked for new customers.
By 1976, sales hit $500,000 and Levlad was on its way. “We started with no capital, and in the last 20 years we have been through all the transformations of this industry, which has grown from mom-and-pop to a sophisticated industry,” Leo said.
Buoyed by steady growth, Leo talks of new product lines or opening stores carrying only Levlad products, much like the British-based Body Shop chain. He also hints of taking the company public and of a role in the consolidation of the health food industry.
