Steuart Laboratories: What's good for Bessie can be good for humans, too

MABEL, MINN. - Got dry, cracked skin that's driving you nuts? Gary Steuart manufactures a product that fights your infection and stimulates healing, providing what he claims are "dramatic results."

Bessie the cow agrees. So do Trigger and Silver.

Steuart, 63, is the founder of Steuart Laboratories, a Mabel, Minn., company that manufactures plant-based creams and lotions that alleviate pain or heal tissue damage and fight infection in dairy cows, horses -- and you and me.

The company, started in 1982, produces upwards of 35 products for humans and animals, with most of the human items based on the same or similar formulas as the veterinary line.

The human side represents a third of the product line. But it generates 45 percent of revenue, which totaled $294,000 in 2009 and is on track to grow more than 30 percent in 2010, to nearly $390,000.

It's a product line based on plant extracts and -- I'm not making this up -- a glue-like substance that bees extract from trees and use to seal their hives, all of which are known to promote tissue healing and reduce infection or relieve pain.

There's comfrey, a wide-leafed perennial used in ancient Rome and Greece to heal wounds; Steuart grows it on a small plot he rents near Zumbrota. And propolis, the bee glue that he describes as a potent healing stimulant and antiseptic. And arnica, a flower with anti-inflammatory and pain-relieving properties.

Steuart can thank an angry farm wife for the addition of the products for humans. It seems her dairy farmer husband was using Udder Heal, one of Steuart's early products, for reasons other than treating tissue damage on his cows' udders caused by milking machines, frostbite and edemas, among a variety of ailments.

Specifically, he'd discovered that it was the only treatment that reliably healed the dry, cracked skin on his heels. Trouble was, the cream was an oily, sticky product that left yellow stains and an unpleasant odor on the bedsheets, his wife complained.

Do something about it, she commanded.

Steuart, a 1969 graduate in animal science from the University of Minnesota, responded with a formula that used natural rather than petroleum-based oils to better penetrate the skin and eliminate the greasiness, aroma and stains. It was the foundation for his fastest-growing product category.

Horsing around

The rapid revenue growth cited above for 2009-10 turns out to be an anomaly for Steuart's manufactured products, sales of which have grown at a frustratingly slow pace for most of the 28 years he's been in business.

Consider: From 2000 to 2007, sales of the creams and lotions (plus a line of electrolytes for calves, pigs and horses that Steuart calls "Gatorade" for animals) grew at a compound annual rate of 5.7 percent; in the past two years they've grown nearly 70 percent.

The reason behind both the sluggish growth and the recent resurgence is the same: a decision Steuart made in 1984 to begin distributing imaging ultrasound equipment used on dairy cattle. He worked for several manufacturers over the years.

"I'd started Steuart Laboratories with limited capital and I was starving those first two years," he said. The distributorship, which grew to annual sales of $2 million by 2007, kept him in business. However, he was so focused on the ultrasound side that the human and animal products languished.

Then, late in 2008, the Scottish manufacturer he was working for at the time decided to end the distributor arrangement and market its equipment directly to veterinarians. Steuart was forced to sell the business back to the Scottish firm for about $80,000, significantly less than it was worth.

"I started getting out and selling my product," Steuart said, first with farm-to-farm visits across Minnesota, Iowa and western Wisconsin, then meetings with veterinarians in the region and more recently by adding distributors for the animal products line.

Nonetheless, survival remained a question mark as the recession intruded to add a splash of red ink to the P&L statement even as sales were climbing. But in February, as profits began to accumulate, it appeared he'd won the race.

"When I started, I had two problems: I had no money and a lot of ignorance," Steuart said. "But every once in a while I'd have a brief flash of brilliance."

That kept him going, he said.