Reading Eagle Business Weekly - June 2018

Reading Eagle: Lauren A. Little | Radius CEO Saskia Foley stands in their new space in Kutztown. The factory moved and production is currently being done in a newer part of the building. This portion of the historic former Kutztown Silk Mill will be used for office space.

TUESDAY JUNE 12, 2018 12:01 AM

Environmentally minded oral care company in Berks outgrows its digs

Kutztown's Radius Corp. is in the midst of $3.4 million move to a new, bigger facility to meet demand for its products.

WRITTEN BY JEFF MCGAW

KUTZTOWN, PA — 

As few as 20 years ago, organic and natural food was the weird stuff that your hippie aunt kept in her cupboard.

Store sales of such products tallied a mere $3.4 billion in 1997, and shelf space was limited.

Last year, however, Americans filled their reusable, cloth shopping bags with a record $49.4 billion of organic products, including $45.2 billion in antibiotic-and-hormone-free organic foods ranging from ice cream to steak, chicken and eggs, according to the Organic Trade Association.

Organic and natural products were everywhere.

When those organic-craving, environmentally friendly shoppers brush their teeth at night, more and more are doing it with toothbrushes and toothpaste made by Radius Corp., an environmentally minded Kutztown-based toothbrush and oral care product company.

Radius products, including its toothbrushes, are available at Wegmans and Whole Foods, to name a few places. Its adult-sized, original toothbrush sells for about $10, while most drug store toothbrushes top out at about $1.50 or $2.

The growth in sales of natural food and organic products is at least partly responsible for growth in recent years at Radius.

In the three years beginning in 2012, gross sales increased 62, 51 and 42 percent, respectively, according to President and CEO Saskia Foley.

For nearly 30 years, Radius worked out of a roughly 16,000-square-foot building at 207 Railroad St. About half of that building was dedicated to production and shipping, Foley said.

Thanks partly to the growth of the organic and natural food and product market, and partly to the maturity of its brand, Radius hit a production wall in 2015, Saskia Foley said.

Orders for its toothbrushes and other products were outstripping the company's ability to manufacture the product.

"We saw it coming in 2014," Foley said. "We needed more space."

With that, the company sought a larger space and eventually bought the roughly 40,000-square-foot former Kutztown Silk Corp. building less than a mile away at 40 Willow St. Last summer, it began a $3.4 million renovation. It received approval for a $1.4 million loan from the Greater Berks Development Fund to assist with the work.

In December 2017, it began moving its production and distribution operations to the main floor of the 40 Willow St. property.

Scanning the floor of the new place, with the bristling machines at one end of the building and the packaging operations at the other, Justen Scholl, director of operations at Radius, said, "This is roughly around 15,000 square feet, but when you look at the overall of what we do, we put this all together in less than 8,000 square feet," marveling at how it all fit in the old building.

 

Growth spurt

Radius was founded by Kevin Foley (Saskia's father) and James O'Halloran in 1980. The architects believed that everyday products like the toothbrush could be improved.

With that, the two set about designing an ergonomically correct, longer-lasting toothbrush, one for lefties, one for righties, that had a flat spot for the thumb, an oversized bristle head that was cocked at an angle and about 300 percent more bristles than the average drug store toothbrush.

The net effect of these design features was a toothbrush that was easy to hold and highly effective, and that brushed both teeth and gums without hurting them, according to Saskia Foley, who took over as president and CEO in 2014.

In 1983, few outsiders seemed interested risking startup funds on a funky-looking toothbrush, so Foley and O'Halloran cobbled together funds from friends and family and launched the product on their own. Manufactured in the Flatiron neighborhood in New York, the original Radius toothbrush caught the attention of well-known SoHo retailer Turpan Sanders, and soon the items were jumping off the shelves.

Like the toddler after a sudden growth spurt, Radius needed more room, so in 1988, the company moved from New York to the former feed mill at 207 Railroad St.

Radius was dedicated to the proposition that all toothbrushes were not created equal.

Just as a Porsche 911 and a Nissan Sentra are not created equal, neither are a Radius toothbrush and the toothbrush your dentist gave you.

The original Radius toothbrush for adults costs about $10, which is about $8.50 more than the one your dentist probably gave you.

However, the increase in gross sales of the Radius toothbrush, and other products made by the company, seems to suggest that those who brush their teeth with a Porsche may be reluctant to go back into the Nissan.

Radius products, which are sold online and in some stores, gained a following.

"When we get customers, they stay," Saskia Foley said. "That's a big thing with us.

"It's a niche product. We've probably accepted that we're not going to sell to every person in the world. We're not $2. We're just not. We know what we're good at."

Even a small slice of the oral care market could be pretty big. The global oral care market is anticipated to reach $40.92 billion by 2025, according to a new report by Grand View Research Inc.

And in 2014, another industry study showed the dollar sales of manual toothbrushes in the United States to be $811.4 million.

A recent customer survey explained a lot, Foley said.

"What was amazing to me was that our customers are really aware of why they are paying more," Foley said. "They are incredibly tuned in to design, form and function. The biggest thing is that people say 'I pay more for this because it works better. It makes my mouth really clean. My teeth feel great.' "

Ten years ago, grocery stores had just a few shelves of organic and natural items, Scholl noted.

"Today you go and there can be three rows of those items. And because we've been in this industry for a long time, when that sector took off, we were there already," Scholl said. "That is why our business has really developed."

With the addition of another bristling machine in 2016, now installed at the new building, Radius got back into growth mode. Gross sales notched up 10 percent in 2016, and 25 percent last year, Foley said.

A third bristling machine, which like the others can crank out a completed toothbrush as frequently as one every three seconds, is on order.

That's not all of the changes in store for Radius. Foley said the company is planning to change all of its packaging. The current packaging is beautiful, Foley said, but "highly inefficient and incredibly cost-ineffective."

The new system will package and seal on its own.

Clean, green, serene

Kevin Foley and Jim O'Halloran were environmentally ahead of their time. In addition to their superior design skills, they were instrumental in weaving a green mindset into the corporate DNA as it applies to the workplace and to products.

In March 2011, the company installed a 50,000-kilowatt solar power array on the roof of the Railroad Street building. It provides enough electricity to power roughly 15 homes, saves some 210 metric tons of carbon from being added to the atmosphere and accounts for more than 67 percent of electricity at the plant.

Its products are free of Bisphenol A, or BPA, a carbon-based synthetic compound that can damage health. Its toothpaste is certified organic by the United States Department of Agriculture, a difficult certification to acquire, but one that Saskia Foley believes will be a strong seller.

As part of the renovation of the new building, soundproofing tiles were installed in the ceilings so noise from the bristling machines at the far end of the floor doesn't overwhelm the rest of the building.

The injection molding machines that pump out the toothbrush handles are powered by electricity instead of hydraulics, Scholl said.

"They consume about 60 percent less power but can almost do the same output as a hydraulic machine," he said.

The company doesn't succeed if the workers aren't happy, Foley said. That's why every Wednesday is "healthy Wednesday," Foley said.

"We provide lunch for the employees: salad, soup," she said.

The new building will have a yoga studio and maybe a workout room, Foley said.

"I think it helps," she said. "I don't think it detracts from the quality of work at all. I actually think it adds to it."

Foley said she wants to create a garden area outside.

"And part of it I want to be like a conservatory, so that even in the winter, which are so dire here, you can at least sit somewhere where it's green and take a break and eat your lunch," she said.

Don't be surprised if a "think hub" turns up.

"Those are places you can go, but no computers are allowed," Foley said. "You can take a pad and paper and think about your plans and your projects. The problem is that we don't ever think about work in a calm setting."

Jeff McGaw | Reporter

 610-371-5071

 

Reading Eagle: Lauren A. Little | Toothbrushes are made at Radius Wednesday. Photo by Lauren A. Little 5/30/2018

 Reading Eagle: Lauren A. Little | Toothbrushes travel through a bristling machine that can turn out a new toothbrush every three seconds.

Reading Eagle: Lauren A. Little | Finished toothbrushes roll off the line at Radius. The company, which was located at 207 Railroad Street in Kutztown for nearly 30 years, is in the process of moving to a new location nearby at 40 Willow Street.

Reading Eagle: Lauren A. Little | Cody Kramer packages Radius toothbrushes at the Kutztown plant.

Reading Eagle: Lauren A. Little | Kids toothbrushes are packaged Wednesday in Radius' new factory on Willow Street in Kutztown.

Reading Eagle: Lauren A. Little | Finished and packaged kids' toothbrushes tumble off a belt into a bin.

Reading Eagle: Lauren A. Little | (L-R) Sharon Schantz and production manager Andrew Schoenly pack toothpaste for shipment Wednesday in Radius' new factory.

Reading Eagle: Lauren A. Little | Shipping clerk Carol Mikosz prepares a shipment.