Why Airborne's Founder Paid A $23 Million 'Fine' To Buy Back Her Company

Victoria Knight-McDowell opens up about the company's dramatic highs and lows.

As a second-grade teacher in the late '90s, Victoria Knight-McDowell found herself constantly catching colds from her sick students. But after one cold cycle too many, the determined educator decided to do something about it. 

In her spare time, Knight-McDowell took to her kitchen to wage war on the common cold. Within six months, she created the prototype for the cold-preventer that would change her life: Airborne.

It was a hit. Airborne soon became the number-one natural cold-fighting remedy in the US -- and business was about to grow even more.

In 2004, Knight-McDowell was a guest on "The Oprah Winfrey Show." Prior to that appearance, Knight-McDowell says Airborne was forecasted to make $20 million. But sales skyrocketed almost instantly.

"When I was flying home from being on 'The Oprah Show,' I checked in with my husband, and the chaos in the office was unbelievable," Knight-McDowell tells "Oprah: Where Are They Now?" in the above clip. "The phones were ringing off the hooks. The computer, Internet, everything was just going nuts."

The company brought in $67 million that year, according to Knight-McDowell, more than tripling its original forecast. A year after that, Airborne did $150 million in business. Then, Knight-McDowell sold the company.

However, unwelcome drama lay ahead.

In 2006, a class action lawsuit was brought against Airborne, citing there was no credible evidence that it prevented colds. The company settled the lawsuit without admitting any wrongdoing and agreed to pay $23.3 million to consumers. That year, Knight-McDowell decided to buy the company back.

"We worked a deal with them that we would take the company back and pay the fine ... that they agreed on," she says. "We did that because Airborne was like our firstborn. We wanted to protect it and kind of take it back to our original vision."

So that's what she did. A few years later, feeling that her company was back on track, Knight-McDowell once again sold Airborne.

Today, Knight-McDowell and her husband are focused on another herbal supplement company, which they purchased in 2005. Pine Brothers sells throat lozenges, and in recent years, the company has gotten some attention for its marketing -- particularly its commercials, which have featured Waka Flocka and Martha Stewart.

"She doesn't advertise anybody else's products. She loves Pine Brothers," Knight-McDowell says of Stewart. "She was very happy to do it."

Knight-McDowell says she has enjoyed putting her efforts into another consumer product company, especially one in which the marketing has been so creative.

"We are having a lot of fun," she says.

Another update with an "Oprah Show" entrepreneur:



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