Nick Kozak for the Toronto Star
Case Studies

Toronto flossing device maker suffers from sinking sales

Vital Stats
Name:
Sulcabrush Inc.
Owner:
Ira Florence
Address:
21 Bradwick Drive, Unit #12, Concord, Ontario, L4K 1K6
Contact:
sulcabrush.com, 800-387-8777, anyquestions@sulcabrush.com
Field:
Specialty dental floss manufacturer
Employees:
1
Active:
29 years
Revenue:
$1 million
Core customers:
Canadian dental offices, independent drug stores, discount department stores

It is every manufacturer’s nightmare: A long-time multi-store client unexpectedly de-lists your product and swipes it off the shelf.

It happened to Ira Florence. But the way he tells it, his situation is no run-of-the-mill nightmare — it is a full-blown horror story.

“My revenues timeline looks like the rise and fall of a roller coaster at Canada’s Wonderland,” says Florence, owner and president of Concord, Ontario-based Sulcabrush, the manufacturer of a toothbrush-like flossing device.

So far, Sulcabrush is hanging on to its smaller clients — a mix of dentists, independent drug stores and a discount department store. But Florence needs to find new growth opportunities to rebuild the company’s customer base.

Up until 2004, business was booming. Sulcabrush was in every Shoppers Drug Mart outlet, as well as 4,500 Walgreens and 4,500 CVS Pharmacy stores in the U.S. It was also supplying about 8,000 Canadian and U.S. dental offices and selling 1,000 units per month to small independent drug stores.

Then the drop began. CVS left in 2004, Walgreens in 2005 and Shoppers Drug Mart in 2011. In early 2014, a discount department chain (which he prefers not to name because they’re still a client) cut Sulcabrush from 120 of its 240 stores.

All three drug chains replaced Florence’s product with what he calls “cheap offshore knock-offs.”

As the business began unravelling, Florence downsized his staff of 17 to one loyal employee. (A $2 million manufacturing automation project, that was just wrapping up, made this possible.)

The losses sent Sulcabrush to the brink of bankruptcy, and it has only just steadied itself financially in the last two years.

The Sulcabrush was invented 29 years ago by Florence’s dentist father for his patients who found flossing messy and inconvenient. Florence took over the business in 1986 at age 24.

Using marketing skills honed while working in the retail clothing business and reaping the benefits of the then-weak Canadian dollar, Florence steadily built the business. Revenues grew by $250,000 per year from 1991 to 2003, peaked at $3 million in 2003 and have since levelled out to about $1 million in 2013.

The company’s biggest loss has undoubtedly been Shoppers Drug Mart. Florence says the mega chain pulled the plug on the 15-year relationship by, one month, simply not placing its regular $30,000 to $40,000 monthly order (though the buyer insisted she informed him of the de-listing by email, says Florence).

Having just finished paying a compulsory $18,000 marketing fee, Florence thought his future with his biggest client was solid. Not so.

“They squeezed us for every last drop of money they could,” Florence says. (Shoppers Drug Mart declined to comment on specifics, bus says, “Vendor negotiations are proprietary in nature. We are always reviewing the performance of brands and products within our stores to ensure we have the right selection for our customers.”)

Dental offices are now the lifeblood of his business, so Florence dropped the wholesale price for this group by 29 per cent to encourage new clients.

He also beefed up his annual marketing and advertising budget to $200,000. Over the years he has produced two television commercials, the latest which will air this spring on the Ontario TV listings channel.

Today, Florence has no interest in working with drugstore chain clients. “They get tired of older items and just want new, new, new,” he says.

Tricia Ryan, a Toronto marketing consultant who has specialized in the consumer package goods dental field for 15 years, says that competition for retail shelf space is increasingly fierce.

“If a retailer can obtain a $100,000 listing fee from a new product that is perceived as more innovative or cheaper, why wouldn’t they?” says Ryan. “Retailers are constantly looking for brands that will cost them less and make them more money while satisfying consumer needs and wants.”

As for hiring a marketing consultant or refreshing his product, Florence dismisses both strategies, though a minor package redesign is planned for 2015. “No one knows this business like I do, and the Sulcabrush design is perfection,” he says.

Instead, Florence is pinning his company’s future on two mass sampling campaigns directed at the huge American dental market. He is sending 5,400 American periodontal offices and 3,600 American dental hygienists each a box of samples (at a shipping cost of about $13 per package). Each campaign will wrap up just before two large American dental conferences where his company will be exhibiting at the trade shows.

Florence is counting on the dental professionals and their patients to follow-up with him to order.

“Will it work?” he asks. “I don’t know.”

He admits there are two major stumbling blocks to his marketing strategy: Many dentists strongly resist moving away from traditional dental products. As well, the majority of them dislike retailing and instead direct patients to drug stores, he says — but no U.S. retailers currently sell the Sulcabrush.

Yet he remains a zealous promoter of his father’s invention.

“My hope is to find more dentists who want to purchase the best product that will help their patients combat gum disease,” he says.

EXPERT VIEWS

As Interviewed by: Rosemary Westwood

Ira took over his father's business, grew it, and then the roof fell in. It seems that he was unaware of what was going on in the marketplace, particularly as it related to his potential competition. I question whether he did enough market research, or took the results seriously enough. Ira should have been able to adjust his strategy earlier after having lost a key US client in 2004 and then Shoppers Drug Mart in 2011. It also appears that there was a reluctance to include a qualified dental industry consultant in his strategic planning process. Now he’s burning bridges with his customers by calling the products they carry “cheap knockoffs” — on the contrary, it’s good business to look for the best products at the lowest price to meet customer needs. He could target companies such as Walmart and Costco as the supplier for their private label brand. Baring that he might still try diversifying into complementary products using his existing channels. However this would have been a better move in 2003 when he was still a preferred vendor for key U.S. and Canadian drugstore chains.

by Steve Tissenbaum Ryerson

Sulcabrush has been in business for 29 years — and that’s a pretty good run. Now, Ira is going to have to fight to beat his competition. If he’s saying they offer cheaper products, focus on the differentiation, point out what makes Sulcabrush better. Do the experiments, gather the data to prove your product is better, and get some credible voices behind that. Go through the organization of dental hygienist practitioners and have them champion your product. Then, go glossy with advertising and marketing. Target higher-end dental clinics, and be the premier product. Make your customers demand it. He’s done a few television ads, and has probably squandered big bucks without a strong enough focus and enough teeth to the messaging. That money could be better spent walking into to dental offices and showing them why his product is the best. If he can’t prove his is the better product, then he has to compete on price. Cut back on marketing claims and travel to the U.S., and make the product cheaper. Those are the choices.

by Deirdre Fitzpatrick - GBC

Ira has a useful product, longevity in the business, and experience using a two-pronged professional (e.g. dentists) and B2B (e.g. retailers) sales approach in the past. But retailer de-lists are hurting revenues and nothing is in place to supplant these losses. Florence should look closely at the changes that have taken place since 2004: What is Sulcabrush doing differently? How familiar are consumers with the product? Why are retailers delisting so rapidly? The truth is that if consumer demand were high for Sulcabrush, retailers would be stammering to stock it. Branding is the best way to combat private label and knock-off competitors. Continuing to focus on the professional market (e.g. dental offices/dentists) will increase product credibility, while instituting a formal marketing campaign to drive awareness will increase consumer familiarity and demand, both of which will be valuable toward increasing retailer demand and listings. Now is the time to focus on this pull marketing strategy to revive retailer interest and revenues for Sulcabrush.

by Brynn Winegard - Ryerson

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