Indie beauty gets backing from community banks

By Deanna Utroske

- Last updated on GMT

Related tags Business

Udder Delight owner, Kristine Shoberg (center) with employees, Charlotte Ruth (left) and Daniel Morales (right) in the new manufacturing facility
Udder Delight owner, Kristine Shoberg (center) with employees, Charlotte Ruth (left) and Daniel Morales (right) in the new manufacturing facility
Privately owned cosmetics and personal care brands garner a lot of attention when it comes to M&A activity, but local financial institutions are backing local brands and helping independent beauty grow too.

Udder Delight, a natural products skin care company that’s been in business for nearly 10 years, recently began expanding production thanks to Economic Development Program grants available to small businesses in the Southwest US.

Indie economics

Privately owned beauty brands are fundamental to the industry as consumers turn to clean, green, and artisanal products. These companies offer effective products that mesh well with the consumer wellness trend, and they often have brand stories that let shoppers feel connected to the community of people behind the brand.

"Western Bank takes pride in being a financial partner with small businesses in our communities,"​ says Leslie Bush, vice president and a loan officer at Western Bank, in a media release about Udder Delight’s expansion.

"We understand the needs facing small businesses and strive to create customizedapproaches and solutions that work for them," ​Bush notes.

Scaling and hiring

The natural skin care company received 2 EDP grants recently that expedited renovations to improve the company’s existing infrastructure.

Owner Kristine Shoberg, who bought the business from the founder several years back, is using the funds to refurbish a building that stands adjacent to the current manufacturing and retail site in Glenwood, New Mexico.

The additional 2,500-square-foot building will grow manufacturing operations and house components like a three-phase converter and an air compressor with a sound-proof room all its own.

Regional grants and loans are commonly intended to benefit the economics of the area not only the business in question. Accordingly the Federal Home Loan Bank of Dallas and Western Bank of New Mexico, which were involved with the grants Udder Delight received, are swift to point out that “the expansion of the Udder Delight manufacturing facilities has already created two jobs, and is estimated to create at least four more.”

"It is our honor to partner with community banks such as Western Bank in helping local businesses like Udder Delight not only reach their full potential, but also create jobs in the area,"​ adds Gustavo Molina, chief banking operations officer at FHLB Dallas, in the media release.

Small and wide

Indie brands resonate with consumer and with financial professionals in part because they can often be held up as examples of the sort of individual upward progress that typifies the American Dream.

The Udder Delight story that the banks highlight is indeed one that suggests hard work pays off. Shoberg, previously an interior designer at an architecture firm, bid on the business but wasn’t the clear choice.

"Mine was one of three offers and the owner told me it was not the highest," ​says Shoberg in the release.

"But, she ultimately sold me the business because she said that when she shook my hand, I had callouses, which proved to her that I was a hard worker and was capable of moving the business forward."

Udder Delight is the sort of company that is reshaping the beauty business landscape from the ground up. Local brands with strict ethical standards are scalable to an extent. But going forward there will be more and more mico-markets in the industry.

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