How Three Ships Beauty navigates global supply chain challenges

Laura Burget, left, and Connie Lo are the co-founders of Three Ships Beauty.

Laura Burget and Connie Lo started their natural skin-care product line about five years ago with an evenly split $4,000 investment to buy ingredients they mixed by hand in Ms. Lo’s condo kitchen.

Three Ships Beauty generated sales just shy of $4-million in Canada and the United States last year, and it forecasts $7-million in revenue for 2022. What started as a side hustle has bloomed into a company with nine full-time employees and five summer interns.

“I launched it out of my own frustrations as a consumer,” Ms. Burget says.

She was looking for natural beauty products for herself in her final year studying chemical engineering at the University of Toronto. “I realized … there was a ton of greenwashing going on in the space. A lot of brands were claiming and marketing themselves as natural or better for you but didn’t have anything to back it up, and oftentimes were actually making really misleading claims.”

The products she did find were wildly expensive. “Like $120 for one cream or $400 for a full routine,” Ms. Burget says.

She saw opportunity. A mutual friend introduced her to Ms. Lo and they launched as Niu Body, selling more affordable all-natural products initially at farmers’ markets.

The company continued to grow and rebranded a year and a half ago as Three Ships (from the folkloric tale of the fountain of youth). Today their products are sold online and in hundreds of retailers throughout North America, including Target, Whole Foods, Holt Renfrew, Indigo and the Hudson’s Bay Co.

Ms. Burget and Ms. Lo knew tapping the much larger U.S. market would be key to their success and that hinged largely on finding the right retail partners south of the border. “We moved into exporting pretty much right away,” Ms. Burget says. “It was a very obvious move for us to start selling into the States.”

Revenues are split about 50/50 between Canada and the United States, but online – the fastest-growing sales channel for Three Ships – the U.S. market is accelerating. Ms. Burget expects most of the company’s growth in future will come from online sales south of the border.

“We’ve seen a shift in consumer behaviour from shopping only in-store for personal care and skin-care products to now being more comfortable with buying online, and we’ve been able to take advantage of that,” she says.

Three Ships is exploring export markets outside of North America as well. The company has a trademark application filed for Britain, and it gets a good amount of website traffic from England and Ireland, as well as from Australia. There are hurdles, though, including different regulatory and labelling standards.

“We’re already compliant, but you still have to register all those products … you have to make changes to your labels; you need to set up a distribution and fulfillment network,” Ms. Burget says. “We just want to make sure that we have a great handle on the U.S. and Canada and that our business is solid before looking overseas.”

There are continuing supply chain challenges as a result of the pandemic, she adds. “I don’t think we would want to launch into an overseas market until the supply chain at least normalizes a little more.”

Like Three Ships, small and medium-sized businesses should set their sights on exporting right away, says Allison Boulton,  founder of international trade advisory Aslin Consulting.

”It’s never too soon,” Ms. Boulton says. “If your goal is to grow a company, I think that, in your sales forecast, when you write that business plan, selling outside your home market needs to be in your trajectory. I believe having that in your mindset from the get-go is really going to open your eyes to opportunities that you might have missed if you didn’t have that export mindset from the beginning.”

Ms. Boulton advises companies to do market research to find the right export market and seek suitable financing. She adds there are many options, including federal and provincial governments, business organizations, financial institutions, Community Futures, and specialty programs that may be accessible depending on the owners or the sector.

“I encourage people to shop around and start looking before you’re in a desperate panic to need it.”

Ms. Burget and Ms. Lo were fortunate to take part early on in a business accelerator program offered by the Lazaridis Institute at Wilfrid Laurier University in Waterloo, where they were paired with many mentors who helped them scale.

In October, 2020, they appeared on the CBC pitch program Dragons’ Den and, shortly after that, raised $1.4-million in pre-seed funding from angel investors and secured a line of credit from RBC. It’s been a journey full of highs and lows for Three Ships, including a brain cancer diagnosis for Ms. Burget that required a craniotomy a week before COVID-19 arrived in Canada.

Last fall, flooding and mudslides in B.C. held up the packaging they sourced from China right before the December holidays. “My dad and uncle had to rent a U-Haul truck and drive our packaging that was stuck in Vancouver across the country for us to be able to make our Christmas orders,” Ms. Burget says.

You have to be resilient, she adds.

“It takes a lot of gumption. I think the reason a lot of businesses don’t succeed is because, unfortunately, the founders decide to throw in the towel before they’ve actually given it enough time. There are no overnight successes anywhere within business.”