Tom Chappell Grows Tom's of Maine Into a National Company

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Fair-trade coffee, tropical-flavored lip gloss, natural cotton clothing, organic grapes, whitening gel toothpaste ... each year, the list of products created by companies with socially conscious policies or using sustainable-growth methods grows.

KENNEBUNK, Maine — Fair-trade coffee, tropical-flavored lip gloss, natural cotton clothing, organic grapes, whitening gel toothpaste ... each year, the list of products created by companies with socially conscious policies or using sustainable-growth methods grows.


For progressive companies selling environmentally friendly products, the issue is no longer one of acceptance among U.S. consumers, but one of separating themselves from the pack.


That, and fighting the major corporations that dominate mainstream store shelves.


Among these fighters is Tom's of Maine, the Kennebunk-based company, trying to grow beyond its image as a feel-good, taste-fresh toothpaste maker to one as a personal-care products company with national reach.


"There's a real reason to present ourselves no longer as a niche toothpaste brand," says Tom Chappell, who founded the company together with his wife, Kate Chappell.


The company that bears his name produces mouthwash, dental floss, deodorant, shaving cream and other health-care products that are sold in more than 35,000 stores around the world, but he is pushing it into more stores and new markets.


At the same time, however, the Chappells remain committed to the ideal that businesses can turn a profit and benefit society at the same time.


Their company doesn't use any animal ingredients in its products, it doesn't test formulas on animals, and it uses no artificial ingredients. Tom's of Maine donates 10 percent of its profits to environmental groups, social-service agencies, and educational and arts organizations.


Over lunch at a Cambridge, Mass., restaurant, Tom Chappell took a breather between events marking donations to public dental clinics around the country to talk about where the company is headed as it turns 35 this summer.


He is gray-haired and square-jawed. Given that the restaurant is within walking distance of Harvard Yard, when he takes off his tortoise-shell and wire-rimmed glasses, the soft-spoken entrepreneur could be mistaken for U.S. Sen. John Kerry.


In February, Tom's of Maine launched a television ad campaign, the company's first, to put the company on the minds of 13 percent of American househoulds that consider natural products important to them.


"Deciding to become a television advertiser was a big step for the company," Chappell says. "(TV) reinforces our point that we're a brand, and not just a toothpaste."


The set of four, 15-second TV commercials debuted on public TV stations and cable channels in the Providence, Boston and Portland, Maine, markets.


With "Naturally, it works" as their theme, the commercials show Chappell among peppermint plants in an "organic garden" set, or actors portraying a morning tooth-brushing ritual.


They were shot in California, including outdoor locations in the San Bernardino Mountains.


"We didn't have very exciting results in Boston and Providence," Chappell says of the new ads. "We didn't have the right vehicles."


Unhappy with the results, the company added network TV to the mix as it rolled out the campaign to Portland, Ore., and Seattle. The number of people who bought Tom's products more than doubled in those two markets, after the ads started running on network television.


"We're still wrestling with the new reality that television has affected our lives," Chappell says of the company's workers.


He spends a lot of time thinking about things like that -- how business fits into everyday life, where he came from, where he's headed.


Chappell traces his family history back to Colonial America. "I've broken through walls," he said of his genealogical research.


He was born in Rhode Island, in the Wakefield section of South Kingstown. His roots in the region go back to Caleb Chappell, who arrived in South Kingstown in 1735.


By the time Tom Chappell had entered high school, at Moses Brown, in Providence, he had moved with his family to Uxbridge, Mass. He graduated from Moses Brown in 1961, and attended Trinity College, in Hartford, Conn., where he majored in English.


After graduating from Trinity in 1966, he went to work for Aetna Life Insurance -- but he quit two years later.


He headed to Maine, to work for his father's detergent business.


In 1970, Tom and Kate started their own business, making natural products.


They borrowed $5,000 from a friend to develop a phosphate-free laundry detergent. It was a modest sales success -- except it didn't work.


From that stumbling start, their business grew to be the largest manufacturer of natural personal-care products.


In 1984, Woonsocket-based CVS -- now the nation's largest drugstore chain -- became the first mass-market chain to carry Tom's of Maine products.


About 2 percent of toothpaste sales at the chain now go to Tom's. At Brooks Pharmacy stores, Tom's gets 8 percent of toothpaste sales.


In 1991, Tom Chappell became the first sitting CEO to earn a master's degree in theology from Harvard Divinity School. He's the author of two books on management practices, The Soul of Business: Managing for Profit and the Common Good, and Managing Upside Down.


The time at Harvard confirmed his view that running a business didn't have to be all about making money. It could be about helping people and communities prosper, as well.


"It gave me the courage to believe we can think very differently about the way we do business," he says, "and I didn't have to apologize to anybody."


Befitting his commitment to tread lightly across the landscape, Chappell runs his company from a recycled mill building hard by the banks of the Mousam River, in Kennebunk.


Once home to the Kesslen Shoe Co., the mill building was converted to office space in the early 1980s. Tom's operates a factory store on the first floor; the company's offices and a testing lab are on the second floor.


Tom's employs 164 people -- 62 at its headquarters, 68 at its manufacturing plant in nearby Sanford, Maine, and 34 field workers around the country.


The Sanford plant is a no-nonsense structure -- a two-story metal-shed building tucked inside a small industrial park off windswept Route 109.


The lobby is about the size of a master bedroom.


On the left side is "The Historical Corner," devoted to tracing the company's short history. A pine curio cabinet holds company artifacts -- including a plastic bottle of Clearlake, the detergent that started the company.


Noted also is the July 2004 fire that damaged the railroad depot building where Tom's of Maine once housed its manufacturing operation.


Mark Dobrovolny , director of product supply for Tom's, greets visitors in the lobby. He talks matter-of-factly of the new plant's hurried birth.


"The only thing we had was a shell," Dobrovolny says. "We had six weeks to get back into business, because we had limited inventory."


Tom's of Maine is still growing into the 110,000-square-foot building. The Sanford plant producing 20 million units a year.


Two production lines, one devoted to toothpaste, the other to deodorants, mouthwash and other liquid products, take up part of the building. There's room in between for a third production line, if sales warrant. A bare-bones fitness center fills unneeded office space near a product-testing lab on the second floor.


"The toothpaste is still a big part of our business," Dobrovolny says, as machinery pumps toothpaste from stainless steel vats into aluminum tubes.


Toothpaste is still the company's leading product, accounting for 60 percent of its sales.


Cartons of spearmint-flavored dental floss, destined for the Trader Joe's grocery chain, sit on pallets alongside the production line.


Two or three tractor-trailer trucks arrive daily at the Sanford plant, delivering raw materials. Tom's doesn't use alcohol or preservatives in its products. A 3,000-gallon purifier filters the water it uses.


"We recycle just about everything," Dobrovolny says. "Anything that can be recycled, we recycle." That includes the plastic wrap used to keep pallet loads from shifting during delivery.


After every production run, workers squeegee out the pipes that connect the mixing vats to the production line.


But conservation and efficiency can get a business only so far.


Chappell set ambitious goals for the company in fiscal 2005, which ends June 30. Goals the company was unable to meet.


During the lunch in Cambridge, Chappell freely admitted: "We've fallen short."


He lays the blame on a sales plan that spread the company's efforts across too many channels -- from mass merchandisers to dental-trade professionals to bed--and-breakfasts.


"We're trying to employ too many methods," he says.


He's predicting annual sales growth of 14 percent -- rather than the 25-percent growth he envisioned. Sales won't reach the $50-million mark he forecast, but will finish instead at around $45 million. That's still up from sales of $39 million in fiscal 2004.


So the company will put more money into fewer marketing efforts -- including TV ads.


"It's only recently that we've had enough money to try (TV)," he says. "It drives significant share and profitability."


To see more of the The Providence Journal, or to subscribe to the newspaper, go to http://www.projo.com.


Source: Knight Ridder/Tribune Business News