In August 2016, the Clayton Fire burned 3,929 acres in northern California and destroyed 300 buildings. The Aloha Bay Candle Company of Lower Lake lost one-third of its production space, and a warehouse containing all its glassware from Bali and a recent salt lamp shipment. (No one was injured.)
The company was able to not only keep everyone employed and to build back, but to build back even bigger than before. New Hope Network asked founder Tom Closser if Aloha Bay learned any lessons from that experience that could be relevant for navigating the current COVID-19 crisis.
Aloha Bay lost so much in that fire. Did anything come out of that that was helpful for the company over the long term?
Tom Closser: Through all these challenges we’ve stayed true to our core values. I feel the soul of any brand exists in those core values that they hold to even under the most stressful situations,independent of the business environment, competitive pressures or consumer fads. These core values are so inherent in our company that if they disappeared, Aloha Bay would cease to exist.
With every loss, we put more resources into making a stronger foundation. At the factory, we doubled our production and warehouse space. During the sheltering-in-place order (and other challenges), we dramatically improved our website and increased our direct consumer sales. We hired more staff in Lower Lake and at our sister candle factory in Java, Indonesia.
How did you afford to do this when you had suffered such significant losses?
TC: Bart and I have always paid everyone else first, and if cash gets tight, we reduce our salaries or just live on our dividends. This time with the COVID-19 crisis, I went on unemployment. After Sabina, our newest hire as director of branding, gets trained, I might retire. Bringing in younger, smarter, passionate folks has really helped. It is a new world, which requires different business models and skills to grow.
How did you have the financial resources to fund the factory expansion, after losing so much? And how did you feel so confident that the demand would be there to support that investment over time?
TC: We realized if the fire had got into the factory where we stored the wax, it would have been unbelievably bad for us as well as for all our neighbors. We decided to change our business model to producing the candles in Java and increasing our inventory here in Lower Lake. Bart created a more efficient inventory system. Staff switched from candle production to faster shipping. We were already known for turning around an order within a week; now we’re down to three days. And with more inventory in larger buildings with better ways to access pallets, we are almost never back ordering.
The new space is much more efficient, designed to enhance production, and is more comfortable for the staff. We were well insured thanks to our local agent and good friend. In a small community like ours, local businesspeople advise on what is best for our company, and not their own company’s earnings.
What were you using to project demand that would support your staff increase?
TC: Twenty-five years in the industry helps. We are data driven. I use Business Model Canvas to launch and test new ideas and products. It only takes me a week of research to come up with a new product, Bart a week to design it and a week to produce it. If a product flops, we do not have much of a loss. We can try something else.
Our distributors gave us a list of all the accounts they ship to (I agreed not to show them to anyone else). It was easy to collect the data in one document and seeing what and why retailers were buying. It helped me create a different marketing stratagem.
When the Aloha Bay factory caught fire and someone put the story out on PR Newswire, it was very uplifting that so many people from the industry came forward to offer to help us. When someone helps, you naturally want to pass that forward by helping others. If a chain or distributor says to me, “In order for us to support your brand you need to partner up (meaning pay thousands of dollars in ads and promos)” or if a chain demands, “Free fill, ads, quarterly promos, scan backs, and take back holiday product,” I just laugh; we cannot afford to do that. Aloha Bay uses the best and often most costly raw materials, pure essential oils, coconut wax, and non-aniline, non-toxic candle dyes. We keep the price down, because our forever-mission is to provide genuine aromatherapy at a price that consumers can try.
When Alana, our category manager for UNFI (doing one of the most demanding jobs in the industry and working for the largest distributor), reached out when she heard about the fire and asked if she could help us in any way, my beef with the corporate companies that dominate the industry just washed away. One good-hearted person can have a huge impact.
Has the improved website and increased direct consumer sales benefitted you now, during the pandemic?
TC: Our direct orders on our website have tripled. Because of the backing-up at online retailer sites, consumers are coming directly to our mobile-friendly site.
Is there anything else you learned from the devastation from the fire that is helping you now?
TC: When one door closes, another opens. I have had to look for other opportunities and distribution channels. I cannot give details, but we were able to find other retailers to sell to.
We are going back to where it all began: helping independents, co-ops and community markets stay in business. Sabina is calling each of them asking, “How can we help?” She knows the challenges of buyers and is willing to help. It’s the people I meet after each crisis or challenge that has inspired and taught me. It is the story behind the Aloha Bay brand that is important.