Orange Glo International

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Orange Glo International

8765 East Orchard Road #703
Greenwood Village, Colorado 80111
U.S.A.
Telephone: (303) 740-1909
Fax: (303) 740-8622
Web site: http://www.greatcleaners.com

Private Company
Incorporated: 1992
Employees: 155
Sales: $330 million (2002 est.)
NAIC: 325611 Soap and Other Detergent Manufacturing; 325612 Polish and Other Sanitation Good Manufacturing

Orange Glo International manufactures and markets a variety of household cleaning products designed with natural, environmentally safe ingredients. Family owned and operated, the company offers cleaners, polishes, stain removers, and degreasers under the brand names Orange Glo, Orange Clean, OxiClean, and Kaboom. More than 35 products provide the natural cleaning power of orange oil or oxygen. Home care applications include carpets, upholstery, kitchen, bath, laundry and fabric, wood, and glass. Orange oil provides the base for hand and body soaps as well. In addition to offering cleaning accessories, such as mops, sponges, and reusable towels, Orange Glo packages its products into cleaning systems and value kits. Orange Glo products are available through response television infomercials on cable and network stations, via direct mail and the Internet, and at a major supermarkets, drug stores, hardware stores, and mass-market retailers. Top sellers in certain retail sectors include Orange Glo Wood Cleaner & Polish; Orange Clean Tough Acting Degreaser and Multi-Purpose Cleaner; OxiClean Multi-Purpose Stain Remover; and Kaboom Shower, Tub, and Tile Restorer. The company’s products are available in 15 countries worldwide and international distribution is promoted through offices in Tokyo, Shanghai, and London.

1980s: Husband and Wife Team Build a Business

Max Appel’s concern for human health and the environment motivated him to experiment with natural, non-toxic substances to create safe cleaning products. Not a chemist by training, Appel worked in his Littleton, Colorado, garage, experimenting with orange oil to reformulate a cleaning product he had bought from another company and repackaged to sell. A turpentine-like substance known to have cleansing properties, orange oil provided a base, along with silicone wood protectants. Through trial and error and damage to several kitchen cabinets, Appel created a wood cleaner and polish without harsh solvents or toxic petrochemicals. With each bottle containing oil from 78 Valencia oranges, the product emitted a pleasant aroma.

When development of Orange Glo Wood Cleaner and Polish came to completion, Appel applied his skills as a salesman and his love of networking to promoting the product. In addition to employment as a fundraiser for medical centers and environmental organizations, as a sideline Appel sold a variety of items, such as carpet sweepers and household cleansers, at home shows and state fairs. At first he sold the wood cleaner to friends and acquaintances. In 1986 he demonstrated the product to the general public for the first time at the Arizona State Fair.

Appel demonstrated Orange Glo Wood Cleaner and Polish at state fairs and home shows across the United States and Canada, developing a loyal base of customers through interpersonal selling. These interactions with customers provided the inspiration for product improvement, new product uses, as well as for the development of new products. Customer feedback led Appel to formulate a multipurpose, concentrated degreaser for hard surfaces. Based on an industrial product used to clean brewing vats, Orange Clean Tough Acting Degreaser and Multi-Purpose Cleaner launched in 1988. Sales increased through new and repeat business, coinciding with increased consumer interest in environmentally safe products.

Operating the business as Appel Mountain, Inc., Appel and his wife, Elaine, worked as a team. Purchasing orange oil and other ingredients from suppliers, Max mixed and sold the wood polish and Elaine managed all other operations. Her job in cluded filling and labeling bottles, processing orders, and handling all aspects of shipping. Elaine Appel’s experience in tax accounting and inventory management provided a foundation for establishing office and financial procedures. In addition to caring for their four children, the Appels maintained full time jobs until they felt certain that the company would succeed. They knew the business had reached a new level when Elaine, claiming to have a family emergency, left her regular job one day in order to fill customer orders at home.

1992: Business Plan Guides Expansion

The Appels’ son Joel, a marketing executive for Quaker Oats in Chicago, provided the impetus for business expansion. Joel, Max, and Elaine each invested $10,000 and reincorporated the company as Orange Glo International in 1992. The three prepared a business plan to account for the production, order-processing, shipping, and financing that would be necessary as the company’s market expanded.

The first steps toward expansion were small but significant. In addition to offering cleaning products through direct mail and at home shows, the Appels introduced Orange Glo to the retail market in 1992, making products available through grocery stores. The company’s leap into large-scale operations occurred through access to television audiences. When the Home Shopping Network (HSN) featured Orange Glo Wood Cleaner and Polish in 1996, the 4,000 bottles available sold rapidly. Through its regular distribution channels, the company generated sales of $700,000 in 1995; after a few months on HSN sales increased to more than $300,000 per month.

Orange Glo next invested profits in its first infomercial. Long-playing infomercials provided the perfect venue for promoting Orange Glo products; the visual impact of product demonstration and detailed explanation mirrored Max Appel’s home show demonstrations. The investment paid off as sales increased to up to $2 million per month. In 1998 Orange Glo generated $12 million in revenues, primarily through response to television advertising.

While Orange Glo worked with talented producers, much credit for the success of the infomercials went to pitchman Billy Mays. Appel and Mays met at a Pittsburgh home show and became friends as their paths crossed at other shows. Mays brought sales experience, including hawking Washomatiks on Atlantic City’s boardwalk, to the infomercials. Trained by veteran salesmen along the boardwalk, Mays brought a high-energy, hard-sell style to the two-minute and 30-minute infomercials. Eventually, Mays wrote scripts and produced Orange Glo infomercials as well. Orange Glo spent $400,000 per week on response television advertising, which generated 15,000 orders per week.

In 1997 the company introduced a fabric stain and odor remover that had dramatic appeal in both home show and infomercial demonstrations. OxiClean Stain Remover was based on a commercial degreaser that contained oxygen in the form of a white powder. When warm water was added to the crystals, minuscule bubbles of oxygen traveled to the staining substance and chemically forced organic matter, such as wine, coffee, and dirt, to loosen its grip on fabrics. OxiClean’s oxidation process made dirt disappear from the demonstration carpet without scrubbing, as if by magic.

Infomercials supported sales of the company’s products at retail outlets through customer familiarity. Between 1997 and 1999 the company obtained shelf space for its products in many regional and national retail chains, including Target, Wal-Mart, Sam’s Club, Walgreens, Costco, and others. Orange Glo pursued sales opportunities through a variety of distribution channels, launching a website in 1998. A direct mail campaign in late 1999 sought to reestablish business relations with former customers from a database of 700,000 names.

By outsourcing operations Orange Glo accommodated growth with minimal capital investment. The company began to outsource production in late 1997; two years later five plants in the Midwest manufactured 20 cleaning products. Four call centers handled order processing. As the company outsourced Elaine Appel’s responsibilities, she became the human resource manager, developing staff positions as the company grew.

With $86 million in revenues in 1999, Orange Glo ranked number four on Inc. magazine’s October 2000 list of the 500 fastest-growing private companies. Between 1995 and 1999 revenues at Orange Glo had increased by over 11,000 percent. To celebrate this accomplishment, the Appels rewarded their 45 employees by giving each a 100 dollar bill along with a copy of the Inc. article.

New Directions in Early 2000s

As the family business expanded so did family participation in the business. The oldest Appel son, David, joined Orange Glo in 2000. Formerly a partner in Accenture, David’s experience in business strategy and international development complemented the skills of other family members. As chairman of Orange Glo, David Appel oversaw company operations, including finance, information technology, supply chain logistics, customer service, human resources, and international development. Though Orange Glo products had been available in overseas markets for several years, with David Appel’s involvement the company opened its first overseas offices, in Tokyo in early 2001, in London later that year, and in Shanghai in late 2002.

Company Perspectives:

At Orange Glo International, our mission is to delight people with magnificent new ways to clean that are innovativeand healthy.

Linda Appel joined the family business in 2000 as president of European operations. Like all of the Appel children, Linda had helped her parents demonstrate company products at fairs and home shows. After college she worked at Overseas Development Corporation, a think tank, as well as an advertising account manager for Young & Rubicam in New York. From the London office Linda Appel pursued international distribution opportunities throughout Europe.

As president and CEO, Joel Appel continued to direct daily operations and North American sales and marketing and to maintain important customer relationships. As vice-president, Elaine Appel handled finances and taxes and nourished staff with sound advice and the occasional batch of fresh-baked cookies. Another daughter, Amy Appel, monitored product placement at retail stores in Florida.

Max Appel continued to develop cleaning products, but more often he worked with consultants. New products included Orange Foam for cleaning greasy dirt, Power Paste, Bar of Oranges hand and body soap, Orange Grove Air Freshener, and Orange for Hands, a heavy-duty liquid soap. The company began to offer cleaning tools, such as terrycloth mops, magnetized brooms, and squeegee cloths. Orange Glo introduced the Kaboom brand of household cleaning products in 2000. Products included Kaboom Shower, Tub and Tile Cleaner, an ammonia-free alternative to harsh bathroom cleaners, and Kaboom All-Purpose Stain Remover. Orange Glo sold the Kaboom line through retail stores and infomercials.

While Inc. magazine ranked Orange Glo at number ten on its list of the 500 Fastest Growing Private Companies in 2001, the success of Orange Glo could also be measured in the number of new competitors. Major producers of cleaning products introduced known products with the addition of orange scent or a less potent form of orange oil than that used by Orange Glo. Such products included Pledge Furniture Polish with Orange Oil and Fantastik with Orange. Not necessarily environmentally friendly, these products nevertheless appealed to consumer preferences for pleasant fragrance. As Orange Glo’s OxiClean products proved even more popular than orange-based products, national competitors produced versions of oxygen-based products as well.

Moreover, as infomercials continued to play an important role in demonstrating and promoting Orange Glo products, national competitors began to use the infomercial format to promote their retail products, too. Orange Glo responded with a new promotional strategy. In May 2002 Orange Glo began to advertise Orange Clean and OxiClean products on prime-time television. In one commercial, football players wearing pink prom dresses practiced by rolling in blueberry pies; the tagline said, “Millions believe for a reason.” The commercials aired during “Will & Grace,” “Late Show With David Letterman,” and other popular shows.

A second set of television advertisements, released in early 2003, featured Mays, working under an exclusive contract. Bringing his enthusiasm to network television, Mays compared OxiClean as a laundry additive with detergent alone and asked robustly, “You call that clean?” The company initiated billboard and magazine advertising as well, the latter involving placements in Good Housekeeping, Rosie, Ebony, and Better Homes and Gardens.

In addition to promoting its products through international distribution, response television, and mainstream advertising, Orange Glo developed less visible business opportunities through two new divisions. The Specialty Retailer Division provided support for small retailers, such as in stimulating store traffic. The International Professional Products Division offered Orange Glo products in large industrial sizes to suit those markets. The division provided technical support and training, as well as distributor support.

Principal Divisions

Specialty Retailer Division; International Professional Products Division.

Principal Competitors

The Clorox Company; Earth Friendly Products; The Procter & Gamble Company; S.C. Johnson & Son, Inc.; Seventh Generation, Inc.; Turtle Wax Inc.

Key Dates:

1986:: Orange Glo Wood Cleaner and Polish is demonstrated to the general public for the first time at the Arizona State Fair.
1988:: Orange Clean Multi-Purpose Degreaser is introduced.
1992:: Son Joel joins the company and a long-term business plan is developed.
1995:: Home show demonstrations and repeat customers produce $700,000 in sales.
1996:: Sales soar with product debut on Home Shopping Network.
1997:: Orange Glo launches OxiClean Multi-Purpose Stain Remover.
1998:: Sales reach $ 12 million through product demonstrations on late night infomercials.
2000:: Daughter Linda and eldest son David join the family business; the Kaboom line of household cleaning products is introduced.
2002:: Advertising strategy includes primetime television, magazines, and billboards.