Case study
Airborne Case Study
In the Spring of 2009, Stockton Road Capital was presented with an opportunity to consider buying Airborne, the iconic brand of immune support products. At the time, Airborne was under-performing due to negative PR from an FTC action against the brand, and poorly executed line extensions that had been oversold into retail accounts. However at its core, Airborne was a strong brand equity with an excellent core product that was widely beloved by consumers. According to a representative at a major retailer, Airborne was the #1 selling item in their pharmacy section.
Stockton Road contacted its relationship, GF Capital Management, to see if they wanted to work in partnership on the investment. GF Capital has strong knowledge of consumer products and immediately understood the opportunity.
During the process of examination, it was discovered that Marti Morfitt, a very successful consumer executive, had become involved with the leadership of Airborne on a consulting basis. Marti had brought with her a number of past team members, and they felt there was an opportunity to turn Airborne around.
In October 2009, GF Capital, Stockton Road Capital and Management bought the business. Marti Morfitt officially became the CEO.
Marti and the management team simplified the company’s supply chain which increased profitability and freed time and resources to focus on sales and marketing. Underperforming line extensions were discontinued and the brand was brought back to its core product. Ineffective advertising execution was replaced with productive advertising, and marketing investment, which had been severely cut during the brand’s recent turmoil, was restored. New sales leadership re-established credibility with retail partners that the Company was a data driven partner that would follow through on execution.
Those basic building blocks in place, the group began to invest materially in consumer research to unlock insights to better reach consumers and what new products would appeal to consumers of the brand. A vision was created to become the retailer’s partner in building a comprehensive line of credible immune support products. A disciplined multi-year new product development program to support this vision was put into motion.
In early 2011, the ownership group was approached by the banker for Schiff Nutrition about buying the Brand. The transaction was closed in April 2011. The proceeds received in the transaction represented approximately 5.5x the ownership group’s original investment in approximately 2.5 years time.
Over that timeframe, Airborne had gone from an unprofitable, declining brand with credibility issues, to a brand that was very profitable and growing double digits with a multi-year pipeline of new products to support a broader vision for the brand. The employees of Airborne had nearly doubled and everyone felt great pride in the Company and its accomplishments.
Stockton Road played a key role in this success from the initial transaction sourcing and investment insight, supporting GF Capital's due diligence, strategic advice and participation in Board governance, and a significant role in the materialization of the exit to Schiff.