Entrepreneur Creates Pain Ointment from Emu Oil

Oct. 25, 2002 -- "I told them to go jump in a lake!" Jack Hugh McClung fumes, moments after ending a testy telephone exchange with Federal Trade Commission lawyers.

The regulators have been hounding McClung about cure-all claims he made (until recently) in infomercials for Super Blue Stuff.

The skin cream, he vowed, repeatedly and preacher-like, was "guaranteed to relieve all kinds of chronic pain in five minutes."

Bald-headed and plainspoken, McClung, 68, apparently flew under the FTC's radar for almost two years even though he spent as much as $1.7 million some weeks — $46 million, or a spine-tingling 60 percent of sales, through the third quarter of this year — to air the hard-to-miss advertorials, which also starred semi-celebs such as former Major League Baseballer Jim Lefebvre.

"This is the most amazing product you are going to try," McClung raved.

Grandiose claims and testimonials from users helped make Super Blue Stuff an amazing success, with sales that McClung says totaled $77 million through the third quarter, more than triple full-year 2001 revenue.

Although Super Blue Stuff is sold in 365 small independent stores and through a 200-person direct-sales force, a majority of its sales come over the toll-free line McClung broadcasts on his infomercials.

‘Results May Vary’

But now this modern-day P.T. Barnum must dramatically modify his promises of Super Blue Stuff's wizardry as he pushes for even more growth.

After telling the FTC lawyers to take a swim, McClung says, he recently caved and agreed to pay $3 million to atone for past grandiloquence. The FTC refuses to comment.

Now McClung is redoing his infomercials, in which he says only that Super Blue Stuff provides temporary relief of arthritis, muscle strains and bruises.

He's also adding disclaimers, including "individual results may vary," to packaging. "We're just country folks," he sighs. "We didn't know no better."

Super Blue Stuff is made from a witches' brew of ingredients: emu oil, aloe vera and methyl sulfonyl methane (MSM).

Aloe vera and emu oil, extracted from the fat on the backs of the ostrich-like birds, have been used as soothing anti-inflammatory agents for years. But MSM's effectiveness and safety as a pain reliever in humans haven't been scientifically determined.

It's derived from dimethyl sulfoxide (DMSO), which was promoted as a pain reliever in the 1960s and 1970s until scientists discovered in animal tests that it caused eye damage in high doses.

These days DMSO is most often used by veterinarians for horses and dogs with sore joints.

Consumers Feeling Blue

A muzzle doesn't suit McClung, but he's willing to ratchet down his claims since Super Blue Stuff is about to go mainstream.

As of next month his gel, which costs $30 per 4-ounce jar, will be sold in 4,100 CVS drugstores. It will be placed alongside more established and less expensive pain ointments, such as Ben-Gay ($8.59 for a 4-ounce tube).

CVS plans to make Blue Stuff stand out — jump out, even — with cardboard cutouts of McClung's face alongside its display.

The drugstore chain locked up exclusive rights to Super Blue Stuff for three months, after which McClung can sell it to other retailers. "We're catching a huge wave of consumer enthusiasm building around Blue Stuff," says a CVS spokesman.

That enthusiasm is spawning some pretenders, something McClung fears will eat into his franchise. He counts 23 imitators, such as RiteAid's BlueGel. "We're the most knocked-off product in infomercial history," McClung says, part boast, part gripe.

Trouble-Shooting On The Emu Farm

But copycats aren't his only worry. McClung is trying to boost the size of his emu herd, which now totals 5,000 birds, each good for two gallons of oil.

He hopes to bolster his supply with emu oil from other sources, but it's getting more expensive as demand increases.

LB Processors of Chapmansboro, Tenn., an emu oil processor, says the wholesale price for emu fat in the U.S. has recently doubled to $6 to $8 a pound in part because of Blue Stuff's popularity.

Rising costs will cut into profit. McClung, whose privately held company, Blue Stuff Inc., is based in Oklahoma City, is uncharacteristically cagey when it comes to talking about green stuff.

But he lets slip that he pulled in $6 million in profit in the first quarter on sales of its namesake goo.

He sold 325,000 jars in March alone. All but 10 percent of his revenue comes from Super Blue Stuff, although he offers other products made with emu oil, meat and leather, including shampoo, jerky and handbags on his Web site, www.bluestuff.com.

From Tough Meat to Essential Oil

McClung got the idea for Blue Stuff in 1996 when he met an emu breeder who was selling an emu-oil product as a pain reliever.

At the time, McClung, a farmer-turned-restaurateur, was serving emu burgers at his then-restaurant, AJ's BBQ & Catfish.

He was also starting to figure out, along with a number of other emu ranchers in the mid-1990s, that meat of the flightless animal, despite being low in fat and cholesterol, doesn't fly with diners.

McClung asked a cosmetics lab to whip up a rub made from the oil and aloe vera, which he started selling to his aging, aching restaurant customers in sterilized ketchup bottles in 1998.

Sales were so brisk McClung then opened a so-called pain clinic to demonstrate and sell the blue-tinted cream.

Unknowingly subscribing to Dr. Samuel Johnson's famous definition of advertising: "promise, large promise," McClung hung a sign outside that said "Pain Relief in 5 Minutes!"

McClung says as many as 100 people a day came in for relief of everything from shingles to spider bites.

He confides that he sticks the cream in his ear to reduce altitude-related popping on airplane flights. There is no claim that it will cure problems in your stock portfolio.

A stubborn fellow, McClung has commissioned clinical tests that he hopes will prove his belief that Super Blue Stuff is good for a variety of aches and pains.

If that happens, he'd like to resurrect his old claims for traditional TV commercials and print ads next year. "There's almost nothing you can't use it for," he says, forgetting his muzzle.

Old habits die hard.

For more, go to Forbes.com..