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Demand for lip products isn't anything new, especially when they come from legacy brands like Kiehl's or Clarins. (After Lupita Nyong'o pulled a tube of the latter from her purse at last year's Oscars, it sold out.) But EOS has only been on the market since 2009, so their explosive success is rather surprising, especially since they've become the best-selling lip balm in the country in such a short amount of time, flying off shelves faster than competing brands like Chapstick, Burt's Bees, and Blistex, all of which have been around for far longer.
The small, New York City-based company even scored fourth on a list of brands millennial influencers love that was put together by Teen Vogue and Goldman Sachs. The recipe to their success, it appears, is a one part unusual packaging and one part relationships with stars like Miley Cyrus.
EOS was founded by former commodity trader Craig Dubitsky, who now runs oral hygiene company Hello and declined to speak to Racked because he is no longer affiliated with the company. Dubitsky has been revered by many as a start-up mastermind, and when Ad Age spoke to him about Hello, they noted that his visionary products are able to challenge the dominance of giant corporations because of their agility and representation in the marketplace. Dubitsky's EOS lip balms are able to battle Burt's Bees, which was bought by corporate giant The Clorox Company in 2007, because the company's small size allows them to change up the product quickly. "Smaller companies have less invested and can incubate [a product] longer," Ad Age noted.
EOS lip balms are instantly recognizable. Round and colorful, the pods sell for $3.29 and come in a rainbow assortment of flavors. The product itself is 95 percent organic, paraben-free, and made with vitamins, jojoba oil and shea butter. And fans can't get enough, as demonstrated by pages and pages of positive reviews on sites like Drugstore.com and Walgreens.com, where you'll find sentiments like "I love this lip balm. It's amazing. I am going to collect as many as I possibly can. They are the only lip balms I use now! LOVE THEM."
An Instagram photo of a pink lip balm on a plate next to macarons can earn 44,000 likes.
EOS has a remarkable social media presence too, cashing in with over two million Facebook Likes and 161,000 Twitter followers. On Instagram, their follower count numbers 700,000, and a photo of a pink lip balm on a plate next to macarons can earn 44,000 likes. You'll frequently find fans gushing over their favorite flavors in Instagram comments and shouting out requests for future ones.
While EOS might have an impressive presence on social media, they don't have the same representation in traditional media—a simple Google search will reveal the business press has yet to write a brand story about them. After initially declining an interview request from Racked, the company would only answer questions via email and carefully chose which parts of their story they wished to share.
Marketing Vice President Sherry Jhawar would not reveal any sales numbers or stats about the lip balms, but says she believes the company's prosperity comes from the pricing and cheeky packaging. "The round idea came from consumer research—hearing women talk about how they could never find their lip balms in their bags or complaining about lip balm tubes rolling off a dresser. So we decided to make something that was easier to find and the roundness naturally flowed from thinking about shapes that women appreciate instinctively," Jhawar writes. "We've always believed that most mass companies didn't work as hard on packaging as they did on formulations. It's a great product—functionally useful, organic, easy to find in your bag, moisturizing, efficient, two lips in one swipe, no need to use fingers—and it's delightful: great flavors, gorgeous colors, cute shape and great texture and feel."
EOS does dabble in standard advertising. You'll find their clever, fruit-associated ads in fashion magazines and they've had one TV ad (also with a fruit theme) that's been rolling since late last year. But one unusual marketing tactic EOS seems to be a particular fan of is product placement in music videos. Last year, it was hard to miss the sea of EOS pods in Miley Cyrus's "We Can't Stop" video. And in Jennifer Lopez's "Booty" video featuring Iggy Azalea, which came out in September, a goop-covered J.Lo rubs a pod seductively on her lips while making awkward eye contact with the camera.
Jhawar attributes the company's decision to work with the music video industry to their love for music. "We're big fans of music—we were sponsors of the 2013 Jingle Ball tour and even produced our own music tour in 2013. Currently, we're a sponsor of Demi Lovato's world tour, which ends this week. When we made our first TV commercial, the most fun we had was arguing about the music that would be featured in the TV spot," she writes.
In Jennifer Lopez's 'Booty' video, a goop-covered J.Lo rubs a pod seductively on her lips while making awkward eye contact with the camera.
A closer look at this tactic reveals the demographic EOS is after: millennials, the group of people poring over music videos and dashing to stores for the products being featured. This is a new age of advertising, after all; teens are no longer visitingmakeup counters to find the best products but are instead turning to bloggers,YouTube stars, and Instagram for their shopping recommendations.
Raphael Aflalo, the co-founder of music video product placement agency My Love Affair, noted EOS certainly has its heart set on winning consumers with their music videos angle. A product placement could cost a company some $100,000 for as little as six seconds. Aflalo, whose company works with artists like Alicia Keys, Justin Bieber, and David Guetta, says producers partner with agencies to place the right product with an audience—and there's a specific reason why EOS is working with celebrities like Miley, Iggy, and Kim Kardashian.
"It's about price point. EOS is cheaper and so they go after what will work for them," Aflalo says. "When we propose an artist to a brand, and the other way around, we have to pull fan base, age, and gender so we can link really closely to what they each want. Of course you are not going to put a luxury brand in a Miley Cyrus video. It works best for beauty because it's easy to imagine how you can integrate it and you can see it in action."
Cardellino, the Cosmo digital beauty editor, agrees. "If you have celebrities like Miley Cyrus within 10 feet of a product, it is going to reach that millennial generation," she says. "The [millennial shoppers] are loyal to the products they use."