Manufacturer and marketer of private label and branded feminine care products 

Fempro is a manufacturer and marketer of private label and branded external feminine care products in North America. Its core products include ultra-thin pads, maxis, and panty-liners. The Company provides private label products to some of the top retailers in North America, and its Incognito brand represents one of the largest feminine care brands in Canada.

The Value Creation Opportunity

As retailers continue to focus on developing and promoting their store brands to drive consumer loyalty and increase profits, the Kainos team developed an investment thesis around increasing consumer acceptance of private label products within the personal care category. We also identified attractive dynamics around private label feminine care, including the nondiscretionary nature of feminine care products, the rational competitive landscape in the category driven by healthy, profitable national brands, and the low occurrence of retailers changing private label suppliers. With strong positioning in both private label and branded programs, we believed Fempro would continue to benefit from the combination of stability and growth inherent to the feminine care category.

Through a longstanding industry relationship, Kainos was introduced to the owner of Fempro in 2014.   As a result of Kainos’ sector knowledge, Fempro’s owner felt that Kainos was the right team to partner with to pursue the Company’s next phase of growth.

Change Capital At Work

While Fempro operated in a healthy and stable category, we wanted to accelerate growth through leveraging our network of retailer relationships to generate new private label opportunities.  We also helped the management team determine the best strategic approach to submit new customer bids to gain incremental business and improve earnings performance. These efforts led to new sales with some of the largest grocery retailers in Canada and an overall 20%+ increase in sales during the first year of our partnership, as compared to the category growth rate of approximately 1%.

Working with the Fempro team, we also executed on various operational improvements in production efficiency and working capital management, and engaged manufacturing experts to conduct a thorough operational review, including implementing lean manufacturing processes.  As a result, line speeds increased significantly and changeover times between product runs were reduced.

Our R&D efforts resulted in strong category innovation, and the team successfully launched the first private label version of the Always Infinity product line, which was positively received by retailers and consumers.   Finally, we developed sourcing partnerships which enabled Fempro to expand into incontinence products and tampons without making any capital investment.

The Kainos Effect

After just one year of partnership, Kainos was approached by First Quality and sold the business to the leading global manufacturer of feminine care and household towel and tissue products in 2015.