A Healthier Future for ‘the Watkins Man’
J.R. Watkins began selling red liniment from a horse-drawn wagon 129 years ago, bringing home remedies to rural areas where doctors were scarce and too expensive for many farm folks.
Watkins Inc. is now returning to those wellness roots, aligning its marketing with the popular themes of healthy living and environmental protection.
The full catalog--with nearly 400 items--will remain largely unchanged. But Watkins now has a second catalog that advertises “healthier living since 1868” on the cover and stresses wellness throughout.
The main catalog still includes dessert mixes, snack and dip mixes, imitation butter-flavored spray and beverage concentrates.
But the 32-page health-oriented catalog offers products such as grape-seed oil and boasts: “With half the saturated fat of olive oil and a powerhouse of natural antioxidants, your cardiologist will give it the green light. And because it’s ‘recycled’ from wine grapes, it doesn’t use up precious farmland or water.”
Customers are also invited to “attain inner peace” with aloe vera juice and gel capsules, “enhancing protein digestion and assimilation and decreasing elimination time while helping to regulate bacteria growth.”
Mark Jacobs, Watkins’ president and chief operating officer, says the company isn’t trying to peddle snake oil.
“We promote common sense health and wellness,” he said. “There is no quick pill that’s going to get you on the road to health and wellness. You have to look at everything that goes into your body and your environment.”
The company knows all too well that the road back can be a long one.
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Watkins was approaching its 100th anniversary when it took ill. The company had moved into a fourth generation of family management and was placing more of its emphasis on drink and dessert mixes. It also attempted to launch a line called J. Zachary for sale in retail stores that failed.
In 1977, Watkins sought bankruptcy protection.
It was purchased a year later for $4.1 million by Minneapolis businessman Irwin Jacobs, who pumped another $7 million into Watkins in the first two years and slowly returned the company to profitability by aggressively developing new products and rebuilding the sales force.
Then, in the early 1990s, there was another setback. The company tried to develop a more upscale image by downplaying the Watkins name, hiring other companies to make more of its products and raising prices. Fewer people signed on to sell Watkins products and profits began dropping.
That’s when Irwin Jacobs’ son, Mark, began taking notice. He was 14 when his father bought Watkins and had been captivated by the company from the beginning. He even sold Watkins products during his high school summers.
After college, he got into show business but eventually signed on as a Watkins sales representative while working in New York. It was then he realized the company had strayed from its roots.
Jacobs said his career had been going well--he acted in “Biloxi Blues” and “GoodFellas” and produced and acted in “Trusting Beatrice” and “Bleeding Hearts”--but he was getting married and wanted a more secure lifestyle.
So he told his father he’d like to become involved in running Watkins. In December 1995, he moved to this city 120 miles south of Minneapolis where most Watkins products are produced or processed.
“I saw this as a diamond in the rough,” Jacobs said. “I decided it needed somebody living here and caring for it.”
The nurturing has paid off. Last year, North American sales of Watkins products totaled more than $100 million. It will expand into New Zealand this fall, Japan next year, and hopes to add two new countries each year after that.
There have been no second thoughts for Jacobs, who brings his 18-month-old German shepherd, Charlie, to the office and enjoys fixing up the 100-year-old farmhouse he bought near Winona.
“This blends my business side and my creative side,” said Jacobs, 33, who was named chief operating officer in April and president in July. Irwin Jacobs remains chief executive.
“Dad is still pretty involved. We talk almost every day, but he doesn’t intrude on it,” Jacobs said. “I believe he’s learned more about this company in the last year and a half than in the last 18 years.”
Irwin Jacobs is pleased with the changes at Watkins.
“Mark has a passion for what he’s doing,” he said, adding that his son is the best executive the company has had since emerging from bankruptcy protection.
“Mark has created and promoted a mission statement for the company,” Irwin Jacobs said of his son’s efforts to link Watkins products with healthy lifestyles. “It is the next generation’s view, but none of it extinguishes the past. It promotes the past in going into the future.”
Watkins continues to sell its products through representatives who were once collectively known as “the Watkins man,” and Mark Jacobs has made it again a very affordable business to get into, cutting the cost of a sample kit for new reps to less than $30 from $125.
The number of sales representatives has doubled to about 80,000 since Mark Jacobs took over. That’s important for both the company, which is selling more products, and the salespeople, who make money not only from their own sales but from those of other sales representatives they recruit.
About half of the distributors join Watkins so they can buy products at a discount of at least 28%, Jacobs said. But their purchases still add to the income of the sales representative who sponsored them.
It can be a very good living, said Ed Williams, who started selling Watkins products full-time with his wife 16 years ago and is one of the company’s top representatives. Williams said he and his wife made more than $260,000 last year--about $35,000 on products they sold and nearly $227,000 on commissions they received on the sales of other representatives.
Bar owners Todd and Kimberly Milner of Vail, Colo., began selling Watkins a year ago during down time and expect to clear about $65,000 this year.
The company was named one of the top five home-based businesses for women in 1996 by Executive Female magazine. The magazine cited low start-up costs, flexible hours and good profit potential.
Health food stores, grocery stores and other direct sales companies offer some competing products, but Jacobs said Watkins has some unique products, including its petro-carbo salve for drawing out infections and drug-free HerbaFlu beverage for colds and flu.
It also still has the blend of camphor, red peppers and oil of spruce used to make the red liniment--used to relieve muscle aches and pains--from the same formula J.R. Watkins mixed by hand in a vat in his basement.
