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Winter 2005 Sailing the Dead Sea

He speaks clearly and with authority, not unlike the captain of a ship. He’s focused, determined, rarely without a plan. Ronen Tregerman, CEO of RST, Inc.—better known as Sea Spa Skin Care—set sail for the Dead Sea. And it’s proving to be a very profitable voyage.

Tregerman’s life could have gone in many other directions. He was a soldier in Israel’s army for a three-year stint. He marketed exhibit space for conventions. And he traveled half the world—England, France, Greece, Bulgaria, Sweden and the United States—all before age 27. “You learn a lot. You see a lot. It definitely lets your mind work,” he says.

Change of course

Back in Israel, Tregerman decided to get a BA in education, but just after enrolling, he received the phone call that changed his life. Friends in the US running a jewelry business needed an additional partner, and Tregerman came to mind. “They said, ‘This is the opportunity. This is what we expect. You have to tell us yes or no before we hang up. And you need to be here in a week if you say yes,’” he recalls. He packed his bags, said goodbye and in no time flat arrived in Baltimore where he soon found himself running a jewelry store with the help of the two friends who had made the call, and an army acquaintance.

Then came the glitch: the two who recruited him decided to leave the business—but failed to mention it. Tregerman and the remaining partner then discovered that the license agreement on their store space was about to expire, and mall management had no plans to extend it. So Tregerman met with the mall management team. “I told them we may look young but we’re both strong in management. We have a great plan, and we know we could be successful. I asked for a temporary time period to prove it. And if we met expectations, we wanted a permanent lease,” he says. The mall manager agreed to the deal, and the partners exceeded goals, renovated the store, and signed a permanent lease. This was just the beginning of where his determination and hard work would take him.

Tregerman switched to a permanent lease, but the specialty retail world beckoned. “It was intriguing to see other specialty retailers do well with certain concepts,” he says. And the idea of having one of those concepts began to work on him. “The majority of the time, retailers are coming in [to the mall] for the holidays. I was thinking, what could work year round?” he says. And, more importantly, what product would bring the customer back time and time again?

During the search for that product, Tregerman sold the jewelry business to his partner and moved to Las Vegas. “Las Vegas was very interesting to me. It has been the fastest-growing city for the last twelve years, and a tax-friendly state for businesses,” he says.

It was in Nevada, with a climate similar to his homeland’s, that the idea came to him. The answer was in Israel—specifically, in the Dead Sea. To Tregerman, Dead Sea products were nothing new, but to millions of Americans, they presented a fresh and unique opportunity. “A lot of Europeans fly to Israel to enjoy the benefits of the Dead Sea,” he says. “Our vision was to bring it to the United States [for people] to enjoy through our products.”

Salt, mud and more

imageAccording to the Israel Ministry of Foreign Affairs, tens of thousands of people from all over the world visit the Dead Sea to rejuvenate, recover, rest and relax. Some seek relief from incurable skin diseases, others from conditions like arthritis. What’s so special about this large body of water that measures about 50 miles long and 10 miles wide? For starters, and perhaps the best-known fact about it: the water is more than ten times saltier than the oceans (it’s said even non-swimmers can’t sink in it). In addition, the hot springs that feed the Dead Sea have high concentrations of salt and hydrogen sulfide. And then there’s the mud. Dead Sea mud is mineral-rich in sulfide compounds that cleanse the skin in a truly unique way. All of these elements—and their benefits—add up to Sea Spa. From half a world away, a product line like no other, available right in the local mall. But it would take a bold plan to make it work.

Sea Spa started small in 2000, with just one cart in Las Vegas, but the plan was to make it big. “We started our own [cart] but with the vision of creating it for wholesale,” Tregerman says. “We were pretty much the pilots for our brand.” That original cart still exists. “We still own carts to test new products, and for advertising purposes. Vegas gets 40 million tourists a year. They see [our product] here, go back to their hometown and see it [there], and they already see [us] as a national brand.”

As the business expanded—from the beginning, when creating the product took center stage, to today, when logistics are equally important—so did Tregerman’s role in the company. All Sea Spa products are made in Israel (unlike most of their competitors), so making sure the product moves from their Israel warehouse to their US warehouse is critical. It takes about 60 days from the time the machines start in Israel until the product reaches the US warehouse—and that’s only if everything runs smoothly. One possible hang-up: labor strikes. “We face labor strikes from time to time in Israel, [so] we prepare in advance. We have a lot of reserves to keep us on schedule,” he says.

Shipping to his wholesale customers—approximately 120 carts—also requires daily monitoring, and he takes great pride in this part of the process. “We teamed up with the best freight forwarders, to give the wholesale customer an ability to get shipments as fast as possible and as cost-effectively as possible,” he says. “We usually don’t use traditional shipping methods for the most part.”

It’s no surprise that Tregerman logs roughly 90 hours a week, sometimes more. “I finish work at 11 pm, but with the time difference, I’ll spend another hour and a half on the phone with overseas,” he says.

Right time, right line

imageYou could say Tregerman has the right product at the right time. “There is a huge, huge spa trend in the US,” he says. Spa products for people on the go—busy moms, executives, teachers, nurses and many other (mostly) women who love the benefits of spa treatments but typically don’t have time to indulge. Women who want to treat themselves, look good, care for their skin and fight the aging process. Women who love the results of their initial Sea Spa purchases and come back for more. Women who send rave reviews. “I get a lot of e-mail about how many wonderful things it does for them,” says Tregerman. “In Canada, they tell me they have to cross the border to get our product. That’s encouraging for me to see the product really affects the customer and does what it’s supposed to do. It’s an overwhelming response,” he says.

Currently, the Sea Spa line includes 17 products, with more on the way. The company recently finalized ten new products, which will arrive soon. In addition to the manufacturing side, the company’s R&D department is always at work to develop products that tap into emerging trends. “We look into trends in the cosmetic industry worldwide, and then look for Dead Sea products that could answer that trend,” he says. R&D includes professionals—chemists, dermatologists and others—with 25 years’ experience creating Dead Sea cosmetics: salt scrubs, black mud soaps and masks, eye gels, hand creams and shower gels, to name a few.

The Dead Sea plays a part in every Sea Spa product. “They are all rich in unique natural minerals, such as bromide and magnesium, that have soothing effects on the skin,” he says. Salt scrubs are among the company’s most popular products. “We have a very special technique to implement the natural benefits,” says Tregerman. This three-in-one product—which can be used as a bath soak, an exfoliator or, the newest feature, to create bubbles—comes in six colors and fragrances, such as lavender, apple and vanilla. Also popular is the hand cream. “It is a very, very rich formula that absorbs immediately into the skin and leaves no greasy residue,” he says. And then there’s the Black Mud Beauty Mask, a special formula of black-mud minerals, seals in moisture, promises to resist the effects of climate, fatigue and age, and stimulates circulation. Black mud minerals are also in the Black Mud Soap.

Quality ingredients make for repeat customers, but attractive packaging helps lure them in the first place. “A specialty retailer needs to compete in a mall against huge brand names,” Tregerman says, “[so] looking good is essential. This year we worked very hard to improve our packaging… We went to the most sophisticated packaging manufacturers to get the latest and most advanced packages for our products. For example, all of our facial products are in acrylic jars with metallic caps.”

As popular as the products are, the one “essential” ingredient retailers have to supply is effective demonstration. “If you can’t do that part of it, you’ll [only] sell half of what you normally sell,” says Kraig Gunwall, owner of three Sea Spa Skin Care carts in Wisconsin and North Dakota. Gunwall scrubs the back of a customer’s hand with the sea salt and then rinses it in a clear bowl to show how well it cleanses. “It’s not a long demonstration—it only takes 20 to 30 seconds,” says Gunwall. He also recommends that employees have a canned sales talk on the benefits of each product.

Tregerman agrees: “Knowledge is power, and it will bring the customer back,” he says. “Customers today are exposed to so many different brands; a lot are heavily advertised on TV. So for our brand to be sold successfully, you have to show what they really do, since we don’t yet have household recognition.”

New voyager

When Tregerman first embarked on his Dead Sea “voyage” into specialty retail, he had no competitors. “We penetrated specialty retail in 2002—we were the only full Dead Sea product line in specialty retail, and we’ve created a category, because now there are five or six companies,” he says. Competitors don’t keep him up nights, though. “We use the best ingredients to create products that really work, and we service the wholesale customer. We work around the clock: orders are shipped the same day from our warehouse here. We sit on a large inventory.” Obviously his customers are satisfied. “The interesting part is [that] to date, we haven’t made even one marketing phone call—it’s all word-of-mouth,” he says. “They come to us.”

Emily Lambert

Lambert, a senior writer for SRR, resides in Philadelphia. She can be reached at .

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