The household chemicals market accounts for over 150 trademarks. But the Russian company Synergetic has found its own niche, having developed a recognizable brand and raised production and profits four times over the last five years. The company’s founder and CEO, Alexei Zyuzin, is telling how it happened.
Alexei Zyuzin believes that in a few years, environmentally friendly products will prevail over cheap synthetic materials. The media often report the advantages of ECO-marked goods. So Synergetic took an empty niche at the right time and began growing fast, moving in the right direction.
Zyuzin began his entrepreneurial career at 18 by organizing a firm that delivered concrete. In 2008, he became the owner of a concrete plant, which he acquired during the crisis. When he had an idea to develop environmentally friendly products, he invited Dmitry Sheidin as a partner. Sheidin is a professional chemist, which helped accelerate the development of formulas and the start of commercial production.
Synergetic was founded in 2011. The company produces green household detergents. Buying prepared products under their own logo was not economically sound. The partners decided to build a plant in Russia to produce detergents based on their own composition from imported ingredients. In 2012, they built a workshop with equipment from the Czech Republic and Germany. In 2013, they produced their first batch. The plant and the headquarters are located in Nizhny Novgorod. Ingredients are bought from leaders of the European market for safe household chemicals. Formulas are developed under the supervision of Dmitry Sheidin and involving the best technologists from German companies. All the ingredients used disintegrate naturally within 3 to 10 days of disposal, which preserves the natural resources.
The company’s first clients were its founders’ families. They used the products evaluating their advantages and drawbacks. When the turnover increased the company paid special attention to customer feedback.
Branding has changed several times. The company targeted married couples using images of happy parents and children resembling children’s drawings. It was their winning card. The person behind the design is Alexei Zyuzin who also suggested putting a German flag on the label to symbolize the high quality of the products.
A total of RUR 155 mio ($2,340,000) spent for creating the brand and launching the production, the major part of the finances being the money that the founders got as a business credit and the remaining part received as grants from the regional Ministry of Economy and Nizhny Novgorod Innovation Business Incubator (RUR 0.5 mio and RUR 4.7 mio, respectively). In 2014, the company reached the monthly production volume of 200 tons and was manufacturing 16 types of products; its annual revenues grew to RUR 70 mio ($1.06 mio) including RUR 1 mio as net profit and the rest going for marketing and purchases of raw materials. in 2015, the profit increased threefold. By 2018, Synergetic’s investments fully paid off.
The company aims at manufacturing safe inexpensive products that can be bought at convenient stores. They cost about 15-20% higher than household chemicals sold in mainstream markets; similar European-made products with identical composition cost about 6-10 times higher. This was achieved due to locating the production facilities on Russia’s territory.
An essential condition for products that claim to be labeled as environmentally friendly is testing at research institute; each product has a quality standards compliance certificate, issued by the Russian Ministry of Natural Resources and Environment and available on the official site.
Today, Synergetic products are sold through 38 distributing chains; the company cooperates with online shops that sell environmentally friendly products, and has its own website. The brand assortment includes 70 products of various categories – washing detergents for utensils, floor and windows, as well as for kitchen appliances and bathroom equipment, and a children’s product line. The company’s plans include manufacturing beauty products, professional detergents for the Horeca segment (hotels, cafes and restaurants). Monitoring of the global market has revealed that the cost of foreign household detergents is three times higher than in Russia, and a decision was made to register the company in China. The business abroad has not yet to bring net profit as it does in Russia, but Alexei is actively promoting the brand on foreign online platforms.