While many people have visited Israel’s Dead Sea, few have seen it as a business opportunity. However the founders of Ahava saw a cosmetics company in the making. Once a tourist stand, the company has now spread out to a global market and is finding unbelievable success in the highly competitive cosmetics industry.
The Dead Sea is appropriately named; no fish or aquatic plants can survive the warm, hyper-salinated water. The surroundings are similarly bare except for the occasional tourist. However, there are two things that the Dead Sea has in quantity: mud and salt.
Ziva Gilad, a local, noticed that many tourists brought home a bottle of mud. She found a business partner in fellow local businessman Yacov Gilad. They hired locals to bottle the area’s abundant salts and mud and opened a stand selling them to visitors under the brand name Ahava, which is Hebrew for ‘love’. Several stores throughout Israel began selling the brand as well, helping the company achieve over one million dollars in sales its first year. However, the owners had already set their sights higher: on a global market fascinated with the ancient.
The Dead Sea has a constant flow of tourists who claim the native mud and salts have healing and rejuvenating qualities. The owners were confident that people all around the world would be interested in the product as well—if they even knew about it. Ahava began selling in the United States and Europe, but needed capital for marketing their product. With just seven million people in Israel, many of whom have access to native mud and salt, the company knew that success meant exposing a global audience to their unique, high value brand. An American company owned by Disney offered money to launch a global marketing campaign in exchange for a twenty percent holding in the relatively young company.
The company now is sold in high end department stores with success that few tourist stands could even hope for, and even opened flagship stores in major global cities. They have branched out from muds and salts to a new line of mineral makeup that is set to debut in a few months. Ahava’s profits are expected to double or triple in the next few years. However, there have been a few bumps in the road.
First, there are many all natural cosmetics on the market, giving customers a wide range of choices besides this one company. They are not the only company claiming to have a natural and ancient product. Second, with Israel a politically polarized topic, some people may be turned off by the brand’s main selling point, its geographical origin. Last, many women prefer to trust their skin to proven, well known products—that is, this small brand’s competitors.
Another challenge is the geographical challenges facing the Dead Sea. Much of its water comes from the Jordan River, which is being diverted for agricultural needs. With the annual temperatures rising every year, increased evaporation also threatens the body of water. The Dead Sea’s levels have dropped eight feet in the last three decades; if this continues, there soon may be no mud to harvest. In response, Ahava has become increasingly involved in ecological efforts to save the Dead Sea, adding to the value of their brand.
Are you looking to start a small business? Ahava’s success shows that a small, local industry can become a global competitor if the marketing and the brand are right.