Cosmetics Brand: Targeting Believers in New Markets

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The Czech brand Angry Beards no longer only sells cosmetics for beards. Today, it is targeting several new European markets and openly admits that it is not for everyone. In an interview, CEO Jan Trval talks about expansion, the harsh reality of the Polish market, financing growth and why their biggest customers are not men.

Angry Beards is no longer just a Czech brand. In recent years, you have expanded to Slovakia, Poland, Romania – so where are you heading next?

Now the closest are Hungary, Italy and Bulgaria. We will launch all three markets at once, probably in early January. We are also targeting Spain, France and the Netherlands.

Why did you choose these six countries?

It is a combination of several factors. We work with the scoring of foreign markets, where we look at the macroeconomic metrics of those markets. The most important for us is the share of retail in retail, the share of e-commerce in retail or in retail, and then primarily the growth of e-commerce. We sell directly from the manufacturer to the customer, this is how we realize about 80% of our sales. Because our communication is specific and quite distinct, we say openly that we don’t have to be a brand for everyone. We also look at one particular metric, which is the proportion of believers in a given country.

That’s an interesting metric, so the more believers, so…?

The more believers, the worse for us. This is evident, for example, in the Polish market, where we entered in 2019. That market is not fundamentally important to us, but we still maintain it and want it to grow. But we know that this is perhaps one of the limitations in that given market. With our communication combined with a strong belief in the market, we know we can’t succeed with everyone and that’s perfectly fine. However, we will succeed even less in Poland than in other markets.

In addition, Allegro plays a vital role in that market. We rely on the fact that we sell on our e-shop with our communication. But if we want to succeed in Poland, we have to become one of the regular sellers on Allegra.

There, the brand does not have as many opportunities to express itself in communication, but at the same time we see that now that we have taken active steps this year to adapt to that model, suddenly the growth is ranging from tens to hundreds of percent year-on-year, which we did not experience in the past when we tried to do it our way. Here we had to discover the way the market works – and adapt to it.

And how do you plan to finance those expansions?

We finance from our own resources. We don’t have external investor sources for this, of course we have operational financing from the bank, but that’s the kind of normal financing for the entire operation of the company. There is none of that purely allocated to foreign markets, so we drive from our own resources, where we stick to a two-year return.

At the same time, we expand by going to the market with minimum costs, doing the most necessary and basically waiting to see which one shows potential. Only then do we decide to invest more in it. We don’t follow the strategy of big brands that choose a market and say, let’s invest 20 million in this market next year and wait to see if it returns or not.

Do you produce all your products in the Czech Republic?

As for cosmetic products, we produce everything in the Czech Republic, and as for merch and the like, it’s abroad. But the core of our business lies in cosmetics, and we produce everything there in the Czech Republic, however, we do not have our own production. We took a significant step in this regard at the beginning of this year, when we bought a production company near Brno.

Do you mean Aromatica?

Exactly. It is a brand of natural and organic products and at the same time a manufacturer that also produces for Angry Beards.

And how do you deal with logistics abroad?

In the logistics of specific foreign markets, it is a combination where we go to Slovakia with our own distribution, Poland is a combination, we send something directly from us in Třebíč. Something is ensured by Allegro fullfilment, and Romania, on the other hand, is a combination of own distribution and fullfilment.

Have you figured out what the new markets will look like in this aspect?

As for Hungary and Bulgaria, it will very likely be the same model as Romania. Italy, Spain, France, the Netherlands are already markets that are relatively far away and could fundamentally influence the customer’s decision when they see that we will deliver it to them in a few days. However, our goal is to launch the market with a minimum of investment costs, so first we will distribute from Třebíč.

If we look at home, is the Czech Republic your biggest market?

Certainly. 80-85% of our sales happen here. Currently, 15% belong to Poland, Slovakia and Romania. We expect that next year, with the launch of other markets, it will shift to somewhere between eighty and twenty. The goal for us is to have approximately 50% Czech Republic and 50% foreign markets within three years.

So what is your approximate annual turnover?

We are around a quarter of a billion, next year we would like to move over 300 million and within five years a billion.

When we focus on products. You started as a brand purely for men and later started to develop for women as well. Why did you decide to expand production and how is the women’s line doing?

It started as a brand for men and mainly for bearded men, because the first product offering was only beard products. Now we’re looking at it like a guy from Angry Beards can have all the cosmetics in the bathroom. It doesn’t have to, but it can.

Our next steps in the direction of the women’s brand led through the wishes of our customers. Some of our products, specifically intimate, our ball lubrication, have also started to be used by women. They started to tell us that it fits under the breasts or between the thighs. And at the same time, men began to say that their wives were stealing from them and that we should do something about it. That’s how we caught on, and a whole line for women, BusyB, was created around one product.

How many products do you offer in total?

It will be somewhere around 250 products at the moment.

And which one is the most popular? Will it be the lubrication?

For the number of pieces, it is just lubrication on the balls or intimate parts. As far as sales are concerned, men’s perfumes dominate there to a large extent. But that’s because it’s just a fundamentally different product in price, so you only need to sell a few of them to beat the other products.

How is new product development going?

The first must be the idea for the product, the idea either arises between us or it is a customer’s wish. Then the brand manager writes down the specifications of the products, how they should look, how much they should cost, who they should target, what the packaging should be. The assignment goes to our development, we have three or four chemists, our own laboratory, and they start preparing recipes according to our assignment, more of them are created. We then test them and the winner goes into final production.

You’ve already hit it off a bit by saying you’d like to increase sales, but where would you like the brand to be in five years?

Currently, this is very poorly planned. Times and markets are changing extremely fast, whether it’s a generational shift in customers, a huge topic right now is Gen Z and how they shop. So it is very difficult to establish a long-term strategy. At the same time, we are guided by the data, which is why, for example, we postponed entering the German market.

However, if it were purely up to us, we want to be the flagship brand for the customer, the man. His bathroom can be cleanly equipped with our products and he doesn’t need anything else. We want to be this guy’s sidekick.