Sustainable growth. A manufacturer of fresh natural cosmetics and dietary supplements from the Austrian province is conquering the bathrooms and kitchens of Europe. Ulla Wannenmacher and Andreas Wilfinger have fulfilled their dream of independence with Ringana - now their company is on a steep expansion path.
Never before have Ulla Wannenmacher and Andreas Wilfinger taken so much money into their hands at once. "We are currently investing 35 million euros in a new plant in the neighbouring village," says Andreas Wilfinger. Only two years ago, the two Austrians had built a modern production, packaging and logistics building with seven million euros in their home town of Hartberg, between Vienna and Graz. "At that time the 2000 square metre building was still too big for us, today it is already much too small", Wilfinger gives an indication of the incredible speed at which the growth of her company Ringana has recently started.
Ringana produces natural cosmetics and dietary supplements. Mainly with biologically produced ingredients and basically without synthetic additives or animal products - vegan. Turnover in 2018 was 80 million euros, in the previous year it was 60 million euros, this year it is expected to be 110 million euros. A good 48 percent of sales are accounted for by dietary supplements. The entrepreneurs employ 270 people, making them the largest employer in their region and the largest cosmetics manufacturer in the country.
Natural cosmetics and dietary supplements are en vogue, ten percent of the total cosmetics market is achieved with natural cosmetics. Tendency rising. According to Statista, in 2018 this sector generated around 1.26 billion euros in Germany alone, twice as much as in 2007. Ringana occupies an interesting niche in this booming market.
"We started from scratch in 1996 and over the past 23 years have built up both a product class and expertise that the competition doesn't have. This 'otherness' was not always the result of intensive planning, but often simply the logical consequence of the circumstances. The fact that we were able to use them for ourselves was perhaps our greatest quality as entrepreneurs," the two analyse in retrospect.
The circumstances were not easy when the company was founded: Ulla Wannenmacher, then 19 years old, took care of their son Michael and lived in Hartberg. Andreas Wilfinger studies business administration in Vienna - the trip to the provincial capital takes 1.5 hours.
When his three-year-old son comes out of kindergarten with a toothpaste tube, Wilfinger looks at the ingredients and is horrified. Even the son of a biopioneer from the hotel industry, the synthetic ingredients annoy him - and give him an idea: "I wanted to develop a toothpaste that wouldn't do any harm, and make myself self-employed with it."
In the kitchen at home the two of them start to do research: What herbal active ingredients are there? How can a durable consistency be achieved without preservatives? It takes them four years to bring their first facial care products to market. The tooth oil takes even longer. "In between were endless disappointments and very many discarded variants." However, intensive discussions with the Bank also took place in between. Because capital is a scarce commodity right from the start. Only thanks to a guarantee of the father for a 290000 euro loan the start into the independence succeeds.
The sale takes place first in the circle of acquaintances and the hotels of the father, the turnover is minimal. "There wasn't a big market for organic cosmetics back then. We were just too early," says Ulla Wannenmacher. Another challenge is the consistent avoidance of synthetic substances. It limits the shelf life and makes long storage impossible. This eliminates the need to sell through drugstores, pharmacies or your own shops.
"At the time, this was our biggest problem. Today, it is one of our key competitive differentiators. No other major cosmetics producer offers fresh products," explains Wannenmacher.
Because the shelf life, depending on the product, is around six months unopened, production and sales have to be brought into close proximity - ideally they only produce shortly before orders are received. This must be the focus of the sale. The two entrepreneurs therefore opt for direct sales. Mostly part-time women, and more rarely men, organise presentations of Ringana products in their private surroundings. 19 to 39 percent commission is paid to the "fresh partner" saleswomen.
Further products for facial and body care are developed - but the leitmotif remains the same. "They had to be uncompromising in their composition and maximum effect." At this time, the first organic cosmetic products are coming onto the market everywhere - although these too do not contain any chemical additives, their effectiveness is not the main focus. "We didn't see it that way from the beginning." Andreas Wilfinger goes deep into the research on the positive effects of plant substances, learns a lot about the effect of antioxidants and ensures that his natural cosmetics are not only caring, but also regenerative.
The couple also agree that nothing should come onto the market that they would not use themselves. It takes almost 17 years for Ringana to offer an aluminium-free deodorant that is also suitable for men. "I can't take the usual active ingredients," says Wilfinger. Only last year, his colleagues unearthed a study from the 1940s in which a Harvard professor successfully tested the odour-inhibiting effect of a plant substance on his students. "I've tested it, tolerated it and now I've developed a unisex deodorant."
Although the products are vegan, sustainable and effective, their economic success is long overdue. The costs of preliminary services are high, plant materials of the best quality, and also in small quantities, expensive. Ecologically compatible glass packaging also costs money and sales via fresh partners are growing only slowly.
"Again and again there were talks with the bank, we signed blank bills, had debts and no turnover. There were many sleepless nights," says Wilfinger. When the two entrepreneurs, who are now going their separate ways privately, talk about the time before their success, you can feel how exhausting it was. "It's nice to be an entrepreneur when there's success. Then you get so much back as an employer. All greet and wave and rejoice when they see one. But we also got to know the other side. The pressure. The risks. Liability. The negative public, if that's not how it goes. If you go bankrupt in Austria, you can forget about your future career," says Ulla Wannenmacher.
In 2000, the two dietary supplements were added to the programme. They also want to set standards in this segment. "I would never use a synthetic vitamin C or a monopreparation with beta-carotene for my own nutrient supply", Wilfinger makes his claim clear.
Basically, however, he considers additional nutrients important for two reasons: "I eat a healthy diet. But working life requires a lot of flexibility, I don't get freshly prepared food every day. There's always some junk food." In addition, eating habits had changed. Who today still eats fermented sauerkraut that has traditionally supplied the German and Austrian population with vitamins B and C? Salad is thin, apples from the supermarket are characterized by great sweetness and thin skin - the bitter substances that belong to a healthy apple are bred away. "There's a lot of food culture left behind, we have to make up for that."
In 2007, the two entrepreneurs pull the rip cord. The turnover is 3.5 million euros. Too much to give up, too little to survive. You can't do it without an investor. The household appliance manufacturer Vorwerk joins the company. The makers of Vorwerk understand direct sales, work with the same approach with their flagship product Thermomix and see the perspectives of natural cosmetics. In this way, Wannenmacher and Wilfinger secure capital and creditworthiness. And finally, sales are climbing, too.
The company professionalizes its processes, buys filling machines, hires more staff and strengthens sales. New technologies also help. All products are equipped with a code, a display shows to the minute which products have sold the most and how many packages have been packed. The code also allows all suppliers for a batch to be identified at any time - quality defects can thus be clearly assigned.
"Our quality and the effectiveness of our products have been getting around. Almost every private presentation event led to orders and new fresh partners," says Wilfinger. In the meantime, his service center is seven languages - those who want to order can often communicate in their native language. The core markets are Austria, Germany, Switzerland, Spain, Italy, France, Poland and Great Britain. We are already working on opening up further markets.
With a new product they hit the mainstream: The Chi Shot, a spicy mixture of ginger, pineapple, acerola, maca root, caffeine and rosemary, is a coffee substitute that really makes you awake. He is the top seller at Ringana, "the healthy alternative to another Austrian energy drink," smiles Ulla Wannenmacher.
What was ultimately responsible for the success cannot be said by the entrepreneurs today. It was probably a combination of many details. Product value, controllability, sustainability, design, impact, public relations. That the entire value chain remains in-house and that no compromises are made in terms of quality, freshness and sustainability.
"We've only had real success for six or seven years. For a long time we were a small family business. Today we have a really cool growth curve and are perceived differently. Of course, we also benefited from the zeitgeist," laughs Wannenmacher. The analysis of new customers, existing customers and lost customers speaks a clear language. "We are building up a delta there every year, currently it is 44 percent compared to the previous year. That's gigantic."
Despite all the expansion opportunities, the two of them pay meticulous attention not to overstretch the brand. "We've also had dog supplements on the market. That was a flop. We have learned from it."
The fact that this learning did not always take place without conflict is noticeable. He's obviously a head person, she's more emotional. "In the discussion, we gave ourselves nothing, but always had the well-being of the company as our top priority - that made us a really good team," both explain.
They agree to keep their hands off online advertising. Some search engine providers and social media channels earn billions and move their money to foreign countries across the Great Pond or across a channel in a tax-saving way. "We don't want to support this."
Direct selling is the better alternative: your conversion rate is almost 100 percent, online advertising doesn't work. The commission is also collected by part-time fresh produce partners who earn an additional income - and not by a large corporation that avoids tax. Even today, they are still responsible for 100 percent of sales.
In 2014, the couple buys back their shares from Vorwerk. "The exit has brought the investor a good double-digit return and we have full control over our company - looking back, entry and exit came at the right time," says Wilfinger, drawing a positive balance. "An investor may be a co-entrepreneur, but he has a different access to the company. We are driving sustainability forward at an intensity that costs returns. That's okay with us, because it's the highest criterion besides the effect. We are convinced that this will benefit us in the long term. The investor thinks more short-term."
There it is again, this "otherness". "Cosmetic manufacturers usually produce huge quantities very rarely. We very often produce small quantities. From our dental oil, we make eight or nine batches a month. Other manufacturers drive annual batches. Of course, that's absurd in terms of cost accounting. But it's the only way we can offer the quality we have now."
Ringana is currently building a distribution warehouse in Munich. "It'll be our first hub, we'll try this to gain speed."
His son Michael is already an authorized signatory in the company and is responsible for logistics. Whether he, his younger brother or both together will take over the company, Wannenmacher and Wilfinger still leave the question open. That's a dream of the future. Over the next few years, they intend to maintain their high double-digit growth and increase their market share in Europe. "We are in the right market with the right idea. Now we really want to be big." ®
Author: Yvonne Döbler