One day in 2005, nearly half the business of the last major soap factory in Los Angeles suddenly went down the drain.
Shugar Soapworks Inc. made private-label soaps for hotels and retailers at its South Los Angeles plant. If you stayed in a high-end hotel in Las Vegas, odds were that the individually wrapped soaps in the bathroom were made there.
"We had hotels with 4,000 rooms and 95% occupancy," owner Dan Shugar said. "That's a lot of soap."
But then the middleman who contracted with him for the Vegas hotels uttered the word perhaps most dreaded by stateside manufacturers: China. Shugar couldn't meet the price quoted by a Chinese manufacturer and he lost the contract key to his operation.
It's the kind of blow that many companies never get over. But Shugar kept the family business alive through drastic cost cuts and mechanical innovation.
"I said to myself that I would live to see another day."
Currently, the company makes private-label soaps sold at the specialty Trader Joe's markets and the discount 99 Cents Only Stores.
Cleaning up in the bar soap field isn't easy these days. "Bar soaps are mature and considered increasingly mundane by many U.S. consumers," research company Euromonitor International said in a 2006 report.
It's not that people are less clean, they're just turning to different kinds of hygiene products.
Three years ago, liquid body washes started outselling bars for tub and shower use, Euromonitor found. This phenomenon was mostly due to women preferring body washes, but men are catching up.
"Products like Axe body wash have really strong marketing that is sex-based," Euromonitor analyst Roman Shuster said. "They are saying to men, 'If you use this product, you will have lots of women coming after you.' "
U.S. bathers spent about $1.6 billion on body washes and $1.2 billion on bar soap last year. Liquid hand soaps, also on the rise, took in $672 million.
The Los Angeles area used to be awash in bar-soap manufacturing. Procter & Gamble made Ivory in Long Beach, Lever Bros. produced Dove in the City of Commerce, Los Angeles Soap Co. made White King downtown and Jergens turned out products in Burbank.
Dan Shugar's father, Arnold, got into the business 38 years ago, specializing in ball-shaped, fruit-scented soaps sold at Akron and other local discount chains of the era.
Dan Shugar joined the business at age 19. He helped get the company into licensing deals in the early 1990s tied to popular movies, television shows and sports.
