Organic Growth
(FORTUNE Small Business) – PBM PRODUCTS, based in Gordonsville, Va., made its name as a purveyor of low-cost baby formula. But in February it launched Parent's Choice Organic, the first nationally available organic baby formula. Thanks to an exclusive deal with Wal-Mart, CEO Paul Manning expects PBM's sales to grow around 25% this year, to close to $200 million. FORMULA FOR SUCCESS: PBM's first big break came in 1998, when the one-year-old company won the contract to create Wal-Mart's house-brand baby formula. But the company took a big risk to move into the organic market: purchasing a state-of-the-art plant in Georgia, Vt., that industry sources value at about $100 million. Ten months later Wal-Mart agreed to act as the exclusive distributor for Parent's Choice Organic products. BABY BOOM: Giant competitor Abbott introduced an organic version of Similac in October, but Parent's Choice has an edge. Thanks to a lean staff and its ability to piggyback on Wal-Mart's marketing, PBM says it can charge about 20% less than major brands can for even non-organic formula. |
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