Carol Teter spent 27 years commanding supply chain efforts for multiple brands at Cincinnati-based consumer goods giant Procter & Gamble. She’s now leading the helm of just one: a recently launched hair care line that she’s hoping to grow into a seven-figure business.
LatinUS Beauty, maker of Lu, a line of shampoos, conditioners and styling creams, debuted earlier this year at Walmart, following a deliberately slow rollout as an e-commerce brand.
The team, which includes others with P&G roots, is using a unique sales pitch to stand out in a crowded space – promoting itself via novellas, or soap operas, versus more traditional TV ads and setting up Sephora-like, hands-on displays at stores rather than simply filling up shelf space.
The startup is in the midst of a $10 million fundraise that it expects to close this month – funds it will use to continue to expand its brick-and-mortar footprint. The goal is to reach 5,000 doors, or stores, in 2025. LatinUS is currently in about 1,400 locations.
The end game is to build a billion-dollar firm and exit to a larger outfit. Teter said LatinUS Beauty’s current pre-money valuation stands at $40 million based on its previous rounds.
“Everything we've done from the beginning is creating this to be a big brand,” Teter told me.
LatinUS co-founder Cesar Jaramillo, another 20-year P&G vet now based in Mexico City, opted to launch the hair care line – named Lu. The goal was to understand and meet the pain points and needs of the modern Latina. Teter said big companies – P&G included – tend to tailor their advertising to this demographic, rather than building a brand for them from the ground up.
“Their idea of reaching Latinas is just putting (actor) Sophia Vergara in the advertising,” Teter said.
Teter, a Hyde Park resident, joined LatinUS first as a consultant in 2017 – not long after her retirement from P&G that same year – then as its full-time CEO in 2018. Kevin McKenna, who lives in Mason and serves as chief financial officer for LatinUS, also hails from P&G.
Lu hit the market in 2020 following three years of research and development. The product set is all mood based: There’s a control line (featuring a blue color scheme); rescue line (red); and freedom (green) for natural, curly days. The collection features the company's propriety Impossible Keratin as an ingredient – it's vegan-based, which has advantages over animal-based products, she said – and each has a signature ingredient and scent.
The goal is for consumers to use all three. It's an approach that resonated with her, she said.
“This group of consumers is very sophisticated. They're really becoming the lighthouse of beauty for everybody,” she said.
Lu uses star power in novellas to target consumers
Perhaps the most unique is the company’s approach to building brand awareness: LatinUS uses in-store demonstrators to stand out. It also relies on novellas, or soap operas, to target potential customers.
Jaramillo, after exiting P&G, went to work at Televisa, the largest advertiser in Mexico (fun fact, P&G essentially invented the soap opera and gave the genre its name). LatinUS on YouTube teased a novella series, “Lu: The Power Of Us,” which features a young Latina woman, and UCLA grad, who develops a hair care line.
Teter said LatinUS has the storyline and script for 60 episodes. It will look to jump into production once it has expanded its national footprint – likely by next summer.
“The hair care line is almost like a character in the story. It's not product placement. It's not an ad. It’s part of the story,” she said. “Instead of a $40 million ad campaign on TV, we can do this for say $6 million. And there's love interests and scandal and espionage like in any good novella.”
Landing Lu in Walmart a big next step
Lu's debut in Walmart built on its early success.
The brand made its first e-commerce sales via its website and on Amazon in Mexico and the U.S. It then added Hispanic grocery retailers Fiesta Mart and El Super in Texas in 2022. The in-store launch was intentionally slow – just six Fiesta Marts to start, even though Lu was offered many more.
“We made it really easy for the retailers,” Teter said. “We didn't ask for shelf space. We brought in a display, and over the year, we perfected and refined.”
The approach caught Walmart’s eye – the retailer saw the brand at a Fiesta Mart and requested a meeting last summer.
Lu launched in roughly 1,000 Walmart stores this February – Teter again throttled a push for a much faster roll out. LatinUS is part of the Walmart Start program, a beauty brand accelerator for emerging companies.
“Walmart can be the kiss of death to startups. I didn’t want our first national retailer to squash us,” she said. “But this is an important demographic for them. We'll expand from there.”
LatinUS raised its first $2 million from friends and family. It followed with a $10 million round, adding a few family offices, largely in Colombia and Mexico. Teter hopes to close the current raise at or above the latest $10 million objective. It will include a broad set of investors, she said.
The team continues to have conversations with large retail players. While created for Latinas, Teter said “anybody who has tried it loves it.” The brand has many male customers, for example, who also use it on their beards and hair.
“We’re trying to demonstrate we’ve got product-market fit and a consumer who’s largely been ignored for a long time,” she said. “We’re showing (that this is) how you reach her, how you talk to her and then, by the way, you also get the whole rest of the general market coming along because it’s an amazing formula.”
As for a potential acquirer, Teter said a P&G, Unilever or Johnson & Johnson would fit. But given its TV and entertainment focus, it could be anyone, she said.
“We'll see how that plays out,” she said.
