Soothing scars: Paracelsus Labs’ creams target ‘cosmeceutical’ market
“Joshua had developed a basic formula for his friend who was scratched in the face by a cat,” Oosthuizen said. “I researched the industry and decided to go for it.”
The ‘go-for-it’ resulted in the launch of Paracelsus Labs Inc. and its product, Celsus Bio-Intelligent Scar Cream.
Since the cream isn’t certified by the Food and Drug Administration, it falls in the category of cosmetics, Oosthuizen said. “FDA categories are cosmetics, over-the-counter products and pharmaceutical drugs,” he added. “Scar creams are mostly sold as cosmetics.”
In place of FDA certification, Celsus carries anecdotal claims that tout its properties. The company’s website outlines clinical trials and studies related to the ingredients used in the cream as support of its ability to reduce the appearance of scars, stretch marks and the signs of aging.
“The key word is efficacy – meaning that this is something that works,” Oosthuizen said. “It has no petroleum, sulfates or synthetic preservatives, which means it’s revolutionizing the first aid and ‘cosmeceutical’ market.”
Cosmeceuticals combine the properties of cosmetics and pharmaceuticals.
The 22 active ingredients in Celsus, some of which are certified organic, include aloe vera, gotu kola, plantain leaves and shea butter.
Launched in 2010 with the product finished and available by 2011, Paracelsus Labs manufactures Celsus cream in Denver. Online orders are taken in Boulder through the company’s website.
Additional online outlets include Amazon.com, Drugstore.com and iHerb.com. Retail channels include Target, Whole Foods Market in the Rocky Mountain region, Pharmaca Integrative Pharmacy in Colorado and on the West Coast, Alfalfa’s and King Soopers.
United Natural Foods, Inc., an independent national distributor of natural and organic foods, has picked up Celsus.
The scar cream stretches wide into a variety of channels – from online and natural to mass appeal and grocery. Additionally, Oosthuizen has his sights set on stores such as REI, which caters to climbers who get scratched and scraped on a regular basis.
Celsus comes in a standard 0.7-ounce tube with a suggested retail price of $19.99 to $22.99, a price Oosthuizen said is on par with main mass-market competitors. “Our price point is in the middle of that market,” he said.
The company is running on an initial investment of $260,000 from friends and family.
“As we were launching, banks were crashing around us,” Oosthuizen said. “When you don’t have mounds of cash, you have to learn to totally bootstrap before you can get to the place where they’ll look at you.”
Profitability for Celsus looks good as long as it gets into and stays in the hands of its prime market, he said, adding that sales are on course to be 100 percent over last year.
The cosmeceutical industry is hovering at about $10 billion and has been growing steadily over the years – recession or not. Its growth is almost double the rate of the cosmetic industry because of the anti-aging emphasis, Oosthuizen said.
“There are over 50 million surgeries a year in America, and 60 million reported scarring incidents from people who showed up at their doctor’s office,” he said. “One-third of all births – about three million a year – are C-sections, which leave people with scars and stretch marks.
Oosthuizen was doing imports and exports before taking on the scar-cream industry and admits to being skeptical about it initially.
“As I did more and more research, I saw the need for this and the potential of these properties.”
His business plan aims to be in 20,000 locations over a six-year period.
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