Innovation, manufacturing, jobs, sex.
Not the usual mix in business, but then, the 30 workers in this Auburn factory are not making the usual product. They are making condoms.
Yet the issues a condom-maker face are familiar to many entrepreneurs and startups: how to produce a commodity at low cost while standing out from the crowd; how to push a new product into national distribution on a shoestring budget; and, not least, how to break into a market dominated by just a few big players.
In this case, Trojan has about 75 percent of all sales, followed by Durex and Lifestyle, said Josh Glick, chief operating officer for Sensis Condoms. “It does not leave much.”
But it’s a large market, so if a new player can snare just a bit of it, that would go a long way, he said. “The U.S. retail market is $400 million to $500 million a year.”
The rate of condom use in the United States is at an all-time high, said Atlanta native Michael Reece, associate professor in the School of Health at Indiana University.
“The biggest driver is that we are living in the shadow of a devastating epidemic,” he said, referring to AIDS and sexually transmitted diseases. “At the end of the day, people are reacting to this: STDs are real, HIV is real, and kids are still getting pregnant.”
Whatever the potential, Sensis is not profitable yet. But Sensis got a big break at the start of this year when Walgreens put its condoms on shelves in several hundred stores. They also have deals with several other chains, including Navarro Discount in Florida and Kinney Drug in the Northeast.
Sensis had been online, while promoting sales with a series of events in bars and on college campuses, as well as some “adult” stores.
But that was just not enough, Glick said. “It’s easy to get online but the volume just isn’t there.”
Just two other companies make their condoms in the United States, according to William L. Howe, president of PolyTech Synergies, an Ohio-based company that specializes in dip molding, the technique used in making condoms.
Most future growth is likely to be overseas, he said, “primarily in China and India where there is a growing middle class. The U.S. growth curve for condoms is ... only on par with population growth.”
In general, U.S. manufacturing has been in decline — in Georgia and pretty much everywhere else. According to the state Labor Department, there are 345,191 manufacturing jobs in the state, 9.2 percent of the total. They pay 13 percent more than the overall average job.
Nationally, the number of employees in manufacturing has plunged since 1998 from more than 17 million to fewer than 12 million.
Recent months have a modest pick-up in hiring, much of it pegged to increased exports, which are especially valuable as job creators.
If Sensis takes off in the United States, the company would like to exploit the much larger world market, Glick said. “We believe that success in the United States is important because U.S. brands are appreciated overseas.”
Sensis was founded by R. Beau Thompson, an architect and builder who — knowing the erratic nature of real estate — was looking for a backup occupation. He designed two straps that, like application tabs on a band-aid, make the condom easier to use.
And different from every other condom.
He put in $100,000 of his own money, plus a similar amount from a business partner, then got investors to kick in $1.3 million.
Sensis found a factory in Alabama, which was making most of its money making other kinds of products for the government. The arrangement lasted almost two years, then the factory lost its big contract and couldn’t keep the workers needed to produce the condoms.
Because condoms are regulated as a “class II medical device” by the Food and Drug Administration, Sensis needed a factory that was prepared to do the kind of testing required by the government. The company started working in November with Durden Enterprises in Auburn.
Durden Enterprises is a contract manufacturer, making condoms for Sensis and a range of molded plastic products for other companies, said Bill Durden of Woodstock, vice president and general manager. “We think of ourselves as two operations.”
Durden’s employment fluctuates — it’s been as high as a hundred. Same with sales — now about $2 million a year, but it’s been triple that.
It is an arrangement with a maximum of flexibility for both sides.
The company that orders the product doesn’t need to hire and fire workers as business ebbs and swells. Durden, meanwhile, doesn’t have to market, distribute and sell.
That model in recent years has frequently linked American companies to factories in Asia. “The world of manufacturing is moving offshore,” Durden said. “If you want to make 50 million of something and make a few cents on each, go to China.”
But if the volumes are smaller, if the company wants to keep a close eye on production, if the product must meet government standards and is also going to be sold in the United States, then a local factory can make sense.
To cut costs and reduce risks, Sensis contracted out not just production, but Web design, video work, marketing and the public relations — pretty much everything.
And while that strategy is applied to many kinds of products, selling condoms is, well, a little different.
Some people are embarrassed to talk about the product, some are offended.
It could seem that a condom-maker is simply selling sex. But Thompson said he doesn’t see it that way. If used correctly, the product prevents pregnancy and protects against disease.
“I like to look at it as, we are selling responsibility,” he said.
Yet in its marketing, Sensis emphasizes pleasure and fun.
Sensis wants a marketing campaign that doesn’t alienate women: Research says they make 40 percent of condom purchases.
The product itself bothers some who feel the availability of condoms encourages sex among people who should abstain, such as teenagers.
Yet to the company, such resistance has waned. America is more accepting of condoms as part of life, Glick said.
Of course, he’s also heard pretty much every bad pun and seen every kind of smirking response to his work. But he says that a lot has changed in the past few decades. “My mother asked for one so she could show her friends. I don’t think the stigma is quite what it was.”
If there is any embarrassment among the workers making Sensis Condoms, it isn’t apparent.
In the “clean room” at Durden one weekday morning, a group of women — and all the workers are women — are running a series of specially designed machines that make the condoms and test the condoms and package the condoms.
The company won’t talk about the failure rate. But any condom that doesn’t make the cut gets tossed. And there are several places along the way for each product to be examined and judged.
Sue McCavitt of Winder, who, in 11 years at the company, has worked her way up to medical department manager, laughs off any attempt to embarrass her.
“I have heard it all,” she said. “At first people think it’s funny, but it’s just a job.”
Nearby, Nora Torres of Bethlehem stands at a station where random condoms are pumped full of water to test for leaks.
She’s only been on the job about a month. She remembers finding out what she would be making. “I thought it was funny,” she said. “I am not bothered by it.”
That doesn’t mean that she tells friends and family, she said, smiling. “I tell them I work with medical equipment.”
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