Go West, Old Hippie The founder of Tom's of Maine sees a golden opportunity in the remaining 49 states.
(FORTUNE Small Business) – Tom Chappell had an epiphany when he was 26 years old. He was working for the grand old Aetna insurance company in Philadelphia, having a "great time achieving," until it hit him one day that a well-ordered hierarchy was not his gig. "I told my boss that I no longer wanted to work there because I didn't want to run Aetna someday." His boss said, All right, go. Chappell moved back home to Maine to join the family textile firm but soon clashed with his dad: "His diminishing career and my expanding career were just not working." At which point, finally grasping who he was and what he must do, Chappell launched his own company, Tom's of Maine. Now 61, Chappell is gangly, gray-haired, long-jawed, and patrician. If you saw him in an airport, you might mistake him for John Kerry. On the other hand, if certain shoppers passed Kerry in the aisles at Whole Foods or Wild Oats, they might easily make the opposite mistake. The Chappells--Tom and his wife, Kate--are the first family of socially responsible capitalism. In some aging-hippie circles, they're virtually rock stars. They started in 1970, selling nonphosphate laundry detergent in recyclable jugs (with postage-paid mailers, so you could return your empties), made it big a few years later with an all-natural toothpaste (available without fluoride, if that's what you want), and recently blew out the product line to encompass soaps, deodorants, mouthwashes, shampoos, shaving creams, immune boosters, a sleeping aid, and a muscle balm. Along the way Chappell became the first sitting CEO to earn a master's degree at Harvard Divinity School. ("I keep telling people my ministry is the marketplace.") While there, he honed a management philosophy that's all about promoting health, protecting the environment, and being a good boss, as opposed to simply making money, yet it does that too. "I don't have to apologize to anybody because I'm taking market share away from established companies," he says. And to hear the excitement in his voice, he's just getting started. "This is really the opening of the gates," he insists, leaning over a veggie omelet at Cherie's, on High Street in Kennebunk; Tom's corporate headquarters is around the corner in what used to be a shoe factory. "It's just extraordinary what's happening to the company, and it's wonderful, and it's amazing!" What has Chappell so juiced right now is the prospect of 25% sales growth--from $40 million this year to $50 million in the new fiscal year beginning July 1. That would be an audacious goal for any company, much less a decades-old, family-owned niche business with a lot on its mind besides pure growth. But Chappell says that years of patient listening to his customers have convinced him there is a vast, as yet untapped market in America, defined not by age, sex, or income but by values--Tom's values. "A good 13% of the country fits our profile," Chappell says, "and we're only doing business with a fraction. There's a very clear opportunity here, and no one is filling it." To that end, he's closing the factory in Kennebunk and shifting production to a twice-as-big facility in neighboring Sanford. He's putting Tom's kiosks in mainstream retailers such as Rite Aid, CVS, and Wal-Mart, and supporting the line for the first time with TV ads. He's talking about expanding the company's longtime compliance with kosher dietary standards to meet Muslim standards too. ("If I allow Tom's of Maine to think of itself as a white Christian organization ... we're in deep trouble.") And one more thing. Tom lowers his voice: "My wife and I are moving to Denver." Say what? "My partner [and COO] Tom O'Brien is moving to Cincinnati. We're both getting out of Maine." For two reasons, he says: To strengthen personal relationships with retailers outside the Northeast, and to make Tom's a truly national company, albeit with headquarters in Maine. An IPO is on the horizon. "Growth is a defensive strategy as well as an offense," says Chappell. "I've seen so many companies come and go at 1% or 2% market share. We can take it a lot further." |
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