September 30, 2016
USANA Founder Receives Lifetime Achievement Honor from Children’s Hunger Fund
Photo: USANA Founder Dr. Myron Wentz (left) with CHF Founder David Phillips.
The man who founded USANA Health Sciences nearly 25 years ago, Dr. Myron Wentz, recently became the first ever to receive a Lifetime Achievement Award from the Children’s Hunger Fund.
Wentz is a longtime friend and supporter of the charity, which distributes food to children and families in need. At distribution centers in Dallas, Chicago, San Antonio, and Los Angeles, CHF volunteers pack bulk food into 20-pound boxes known as Food Paks, which are then distributed around the world.
Over the years CHF also has branched into disaster relief, orphan care, farming and other areas of need. USANA’s Wentz has funded a number of such projects, including Cargo of Hope, a feeding program that has supplied 11.7 million meals; Beds for Ukraine Orphans, which built and outfitted 2,400 beds; and Wentz Medical Centers in Uganda, Cambodia and Malawi. Two more centers are in development.
In addition to personal contributions made by Wentz, the USANA True Health Foundation has donated more than $21.3 million in cash and nutritional supplements to CHF.
“Honoring Dr. Wentz with this award is just a small reflection of our gratitude for the unwavering support he has provided to us over the past 15 years,” said Dave Phillips, Founder and President of CHF. “The work he has helped us accomplish, and the lives we’ve been able to improve around the world, is unmeasurable and we couldn’t be more grateful for his generosity.”
The Lifetime Achievement Award was presented to Wentz during CHF’s 25th anniversary celebration, held Sept. 24 at the Ronald Reagan Presidential Library in Simi Valley, California.
September 29, 2016
Do This, Not That: Amway Social Selling Research Provides Consumer Insights
Photo: Ricardo and Claudia Zermeno, Amway Independent Business Owners.
The in-person, social media hybrid known as “social selling” is now commonplace across the direct sales channel, but hard data on the model remains scarce.
New research commissioned by Amway Corp. sheds light on consumer preferences when it comes to making the social sale. According to the State of Social Selling Survey, conducted by Wakefield Research, 60 percent of Americans have been contacted by a social seller. Of those, one third have made a purchase, and a staggering 85 percent are repeat customers.
What drives that repeat business? A few factors, according to consumers, who emphasized the importance of building trust, particularly by exhibiting knowledge of the product and the customer’s needs. Of respondents, 87 percent said it is important for a seller to use the product themselves. Three-fifths indicated they would not trust a seller who does not know the product well.
“Amway Independent Business Owners are often frequent users and walking testimonials of the products they sell,” said Jim Ayres, Managing Director for Amway North America. “When a seller can effectively communicate the premium quality of the products, particularly through using the products themselves, they will always be seen as more trustworthy.”
Of course, persistence is also key—in moderation. The survey found that, on average, those who have made a purchase did so after the seller reached out at least three times. Equally important is knowing when to desist. About half of consumers felt that social sellers are more aggressive than face-to-face salespeople, while 64 percent said they have made a purchase as a result of peer pressure.
Another finding—the importance of cultivating relationships with customers—speaks to a strength of both the channel and the up-and-coming Millennial generation. “…Young people in particular are proving to be a huge driver of the social selling industry,” noted Jackie Nickel, Amway’s Chief Marketing Officer for North America. “The relationship-driven industry appeals to their generation, particularly when they are contacted on social media by a friend.”
Having a trusting and friendly relationship with the customer helps to seal the deal, according to 83 percent of those who have purchased from a social seller. This will come as no surprise to veterans of the direct sales channel, who, with or without the aid of technology, are in the business of building social networks.
September 28, 2016
Herbalife Fitness Experts to Support Special Olympics Community
Photo by © Adam Nurkiewicz / Mediasport
Herbalife is renewing its partnership with the Special Olympics through a multi-faceted, $1 million sponsorship of the global movement.
The collaboration centers on fitness programming available to the Special Olympics community, including more than 4.5 million athletes in about 170 countries. Though it uses sport to empower people with intellectual disabilities, the organization is about more than athletic competition, said Kyle Washburn, Director of Fitness for Special Olympics. “We surround our athletes with a community that supports them through sport, health and the expansion of fitness.”
Through the new sponsorship, Herbalife’s team of staff scientists will supply nutrition expertise and educational content to Special Olympics athletes, coaches and caregivers. Additionally, the company’s Senior Manager of Sports Performance and Education, Dana Ryan, Ph.D., is joining the Special Olympics Global Fitness Task Force, whose subject-matter experts and athletes advise the organization on its ongoing fitness programming.
The nutrition firm also said it will add the Special Olympics logo to select protein products to help raise awareness of the movement.
“Our mission is to bring nutrition to people around the world and to provide support for those seeking to embrace a healthy, active lifestyle,” said Michael Johnson, Herbalife Chairman and CEO. “Our global Herbalife community is inspired by Special Olympics and its amazing athletes, and we are proud to provide them with nutrition and fitness resources.”
The California company was heavily involved with Special Olympics during the 2015 Summer World Games in Los Angeles. Herbalife members and employees sponsored approximately 10 percent of the World Games athletes, and company facilities served as a registration hub for thousands of athletes, coaches and volunteers. The company also made a donation of more than 280,000 nutrition bars.
September 28, 2016
Beautycounter Advocates Safe Beauty as Senate Weighs Cosmetics Reform
Photo: Gregg Renfrew, Founder and CEO of Beautycounter.
Beautycounter took its campaign for safer beauty products to Washington, D.C. for a recent congressional hearing on cosmetic development and safety.
The brand’s founder and CEO, Gregg Renfrew, attended a Sept. 22 oversight hearing of the Senate Committee on Health, Education, Labor and Pensions and penned a letter to members outlining the need for greater oversight of the beauty industry. Renfrew launched Beautycounter in 2013 with the express mission to create safe and innovative beauty and skincare products.
“The average American woman’s life expectancy is roughly 80 years,” Renfrew wrote in a Tuesday op-ed for Washington political journal The Hill. “That is approximately how long it has been since the United States has passed a major law ensuring the safety of the cosmetic and personal care products we use every single day.”
In the U.S., beauty products are regulated largely by legislation passed in 1938, and in 2016 the contrast to other countries is stark. European Union officials have banned nearly 1,400 ingredients from personal-care products, while the U.S. Food and Drug Administration (FDA) has partially restricted just 11.
Beautycounter has addressed this disparity by compiling its own list of known or suspected toxins banned from its formulas. This Never List includes about 1,500 questionable or harmful ingredients prohibited or restricted by the E.U. and Health Canada, as well as additional chemicals screened by the company itself. However, enforcing rigorous standards across an entire supply chain is no small task, particularly without regulations in place to ensure transparency.
“While businesses can sometimes move faster than government action, there is still a need for a new regulatory structure,” states Renfrew’s letter to committee members. “Without key improvements to our government’s existing regulatory system, many companies will not have the tools necessary to make the safest products possible.”
According to recommendations put forth by Beautycounter, those improvements include empowering the FDA to review and restrict ingredients, with a set standard in place. Renfrew also calls for increasing supply chain transparency and authorizing states to take action on harmful ingredients, as well as introducing a mandatory recall authority and adverse event reporting.
September 27, 2016
Tupperware Announces Leadership Changes, New Position
Tupperware Brands Corp. is promoting its longtime President and Chief Operating Officer, Simon Hemus, to Vice Chairman and naming Patricia Stitzel as his successor.
Stitzel is a Tupperware veteran whose promotion is in line with the company’s management succession process. Since 2014, she has served as Group President, Americas, for the kitchen, home and beauty products maker.
The incoming President and COO began her Tupperware career nearly 20 years ago as part of the human resources department. Before transitioning to the Americas, she held a series of senior executive positions with Tupperware Europe.
“Tricia has done an exemplary job in every position she has held within the company,” said Rick Goings, Chairman and CEO. “Most recently, she has led the Americas region to tremendous growth, leveraging the Vision 20/20 strategic initiatives she has helped design and execute.”
Stitzel’s promotion will go into effect Oct. 1, as Hemus takes on the newly created role of Vice Chairman. In this new capacity, Hemus will lead the company’s Horizons project, a strategic plan for geographic expansion and market penetration.
“Simon has done a terrific job of improving our strategic focus at Tupperware,” said Goings. “As he works on the execution of the Horizons project, Simon will continue to position the company for future growth and leave a strong legacy.”
Hemus joined the company in 2005, when it acquired the direct sales divisions of Sara Lee Corp., his former employer. He was named President and COO in 2007.
September 27, 2016
U.S. Direct Selling Association Joins West Coast Small Business Summit
The U.S. Direct Selling Association will address the current regulatory environment during this week’s 2016 West Coast Small Business Summit.
The DSA is a sponsor of Thursday’s summit, hosted by The Latino Coalition and the Los Angeles Latino Chamber of Commerce. The day’s agenda will focus on “The Rising Latino American Electorate and the 2016 Elections,” with speakers including Congresswoman Loretta Sanchez (D-CA) and the Consul General of Mexico in Los Angeles, Carlos Eugenio Garcia de Alba Zepeda.
According to the DSA’s 2016 Growth & Outlook Survey, Latinos make up a sizable segment—about 20 percent—of direct selling entrepreneurs in the U.S. Targeted initiatives such as the West Coast Small Business Summit provide an opportunity to advance the conversation about policy issues that impact Latinos and their fellow direct selling entrepreneurs.
“These partnerships give us credible platforms to talk more deliberately about the issues we want to discuss, and that ultimately helps us when we need to present our case to policymakers and others about the value of direct selling, and why we continue to support this business—and the millions of people involved in it,” said Paul Skowronek, DSA Senior Vice President, Public Affairs.
In addition to sponsoring the event, the DSA will be represented by Adolfo Franco, Executive Vice President and Chief Operating Officer, who will take part in a panel on the current regulatory climate at the federal level. The panel also will explore how new and proposed regulations could impact small business owners, like the independent contractors who participate in direct selling. Skowronek notes that, particularly in California, the “gig economy” and similar opportunities are causing regulators to take a closer look at the independent contractor model.
“Direct selling is a piece of that puzzle,” said Skowronek. “It’s only one piece of a much bigger puzzle, and our goal in participating in the summit is to help people understand some of the issues inherent in a discussion about the independent contractor—not only in California, but nationally as well.”
On the legislative front, priority number one for the DSA is H.R. 5230, an anti-pyramid bill introduced in the House earlier this year by Rep. Marsh Blackburn (R-TN). If passed into law, the bill would clearly define a pyramid scheme in federal statute for the first time. The measure has garnered bipartisan support from 30 members of the Congressional Hispanic Caucus, Congressional Black Caucus, Energy & Commerce Committee and Direct Selling Caucus.
September 26, 2016
Pure Haven Essentials Secures USDA Organic Certification
Pure Haven Essentials recently announced that its Rhode Island manufacturing facility has been certified through the USDA National Organic Program.
The enterprise known as Pure Haven Essentials was launched earlier this year by the management team behind Ava Anderson Non Toxic, which closed its doors in February. Pure Haven Essentials is carrying on the Ava Anderson mission to educate consumers about harmful ingredients and provide safe beauty and home products.
A group of investors with long experience in the direct sales channel—namely Rudy Revak, Mary Julich, Steve Kole and Bruce Jensen—have taken on ownership of Pure Haven Essentials through their company, Global Ventures Partners. The Andersons and their daughter, Ava, whose vision led to the founding of Ava Anderson in 2009, are not involved in the new venture. In a statement announcing the sale, the Andersons describe the new owners as “a team of experienced and caring direct sales veterans.”
Setbacks with third-party suppliers were among the factors that hurt the Ava Anderson business, according to management’s January closing announcement. In recent months a handful of suppliers had violated their agreements, adding ingredients banned by the company into several of its 80-plus products. Thus one of management’s goals in the transition to Pure Haven Essentials is to bring all production in house, under an internal Quality Control Department. The company’s new organic certification is key to that effort, according to Chief Product Officer Krupa Koestline, who oversees the department.
“To achieve this certification, we passed a stringent audit by Oregon Tilth Certified Organic,” said Koestline. “We had to qualify in all areas, including sourcing, formulation, production procedures, sanitizing and cleaning processes, quality control, and tracking of all incoming and outgoing products.”
The Rhode Island company is committed to providing products free from harmful chemicals, known carcinogens and endocrine disruptors. Current offerings include a wide range of personal-care products, cosmetics and a home cleaning line. The USDA organic certification brings an additional layer of oversight and accountability to the company’s manufacturing process, said CEO Joe Ochoa. “We know that this is important to both our consultants and our customers who depend on us to provide the very best for them and their families.”
September 23, 2016
USANA-Sponsored Paralympians Log Four Podium Finishes in Rio
Photo: Rio de Janeiro, Brazil, site of the 2016 Olympics and Paralympics.
Following a strong showing at the 2016 Olympics, USANA-sponsored athletes again took the podium during this month’s Paralympic Games.
In all, the nutrition company sponsors more than 1,000 elite athletes, collectively known as Team USANA. The group includes five para-athletes who made their Paralympic debut at the Summer Games, held Sept. 7–18. The event brought more than 4,300 athletes to Brazil.
“It has been an honor to team up with these exceptional athletes and watch them compete for their countries on the world’s largest athletic stage,” said Dan Macuga, USANA’s Chief Communications Officer.
The Utah company has partnered with athletes around the world, including Australian para-runner Deon Kenzie, who won Silver in the T38 1500m event. “USANA has been an essential part of my routine leading up to and during the Paralympic Games,” said Kenzie. “USANA products give me peace of mind that I can maintain good nutrition whilst traveling and competing.”
Team USANA’s Charles Moreau, a Canadian para-cyclist, won Bronze in both the men’s road race H3 and time trial H3 events. Para-canoeist Ian Marsden of Great Britain also made a podium appearance, taking Bronze in the inaugural kayak single KL1 200m contest. Two other Team USANA athletes, para-sailor Richard Dodson and para-cyclist Byron Raubenheimer of New Zealand, finished fourth and 11th in their respective events.
September 22, 2016
DreamTrips by WorldVentures Named North America’s Top Travel Club
DreamTrips by WorldVentures once again has captured the title of North America’s Leading Travel Club.
The vacation club was recognized in the 23rd annual World Travel Awards, which showcases travel and tourism industry leaders.
Texas-based WorldVentures describes its DreamTrips offering as a “travel club community.” After signing up, members have access to customized travel experiences, as well as discounts at select restaurants, hotels and entertainment venues.
“Our DreamTrips team works hard every day to create amazing experiences for our travelers and to deliver exceptional customer service,” said Wayne Nugent, WorldVentures Founder and Chief Visionary Officer. “We appreciate everyone who recognized us by voting.”
The World Travel Awards have named DreamTrips the top travel club in North America for three years running. Winners are determined both by members and by industry professionals. WorldVentures collected its award during a regional gala on Sept. 17 in Jamaica.
At a gala held earlier this month in Italy, DreamTrips also earned the designation of Europe’s Leading Travel Club.
September 22, 2016
Nerium COO Deborah K. Heisz Adds President to Title
Photo: Deborah K. Heisz, President and COO of Nerium.
Nerium International’s Deborah K. Heisz has been named company President, in addition to her current role as Chief Operating Officer.
For the past several months, Heisz also has chaired Nerium’s global steering committee, helping to position the skincare company for new growth. “Having more than 20 years of leadership experience in a variety of roles within the direct selling industry, Deborah is uniquely qualified to direct the company as it enters its next phase,” Jeff Olson, Founder and CEO, said in the company’s announcement.
In past leadership roles, Heisz has overseen new business development, product development, IT, creative services and publishing within the direct sales channel. She also remains CEO of Live Happy LLC, the positive lifestyle brand and movement behind Live Happy magazine. Next month, Heisz will be inducted into the Happiness Hall of Fame, which includes names such as Muhammad Ali and Deepak Chopra.
“It is my goal to lead our U.S. and international teams to move our global company forward and maintain our position as a unique model of positivity, diversity, innovation and integrity in the direct selling industry,” said Heisz.
As it marks five years in business, Texas-based Nerium is preparing to expand its international operations with the launch of Nerium Australia. Company officials said the anticipated fourth-quarter opening has been scheduled for next month.
September 21, 2016
Jamberry’s New Collection to Support American Cancer Society
Jamberry is using its signature nail wraps to raise awareness and support for those battling cancer.
The Utah company has launched a limited-edition collection through its Commitment to Charity initiative, meaning a portion of the proceeds are allocated to charity. The new #TellYourStory collection features pink designs for breast cancer awareness, and with each purchase Jamberry will donate $2.00 to the American Cancer Society (ACS).
Jamberry’s charitable efforts are focused on causes and organizations that align with its mission to empower women. For example, a #GoForGold campaign earlier this year supported women athletes headed to Rio de Janeiro for the 2016 Olympics. These athletes, who tend to get fewer sponsorships than their male counterparts, are responsible for covering traveling and other expenses associated with the games.
With its new campaign, Jamberry will help provide resources to women facing breast cancer. This year, about 246,660 women will be diagnosed with an invasive form of breast cancer, according to ACS data. The nonprofit is dedicated to cancer research, patient services, early detection, treatment and education.
“When someone is affected by cancer they are not alone,” said Padma Rao, Chief Marketing Officer at Jamberry. “As a family and as a community we support those who are facing cancer currently, who have faced cancer, and who will someday face it.”
The #TellYourStory collection also is available in select international markets. Alongside ACS, the company has pledged donations to the Cancer Council Australia and the Canadian Cancer Society.
September 20, 2016
Natura Retains Spot on Dow Jones Sustainability Index
For the third consecutive year, Natura Cosmeticos SA has been recognized as a leading sustainability-driven company with a spot on the Dow Jones Sustainability Indices.
The DJSI are published by S&P Dow Jones Indices and RobecoSAM, an investment firm focused exclusively on sustainability investing. According to David Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices, “The DJSI are comprehensive benchmarks of companies that meet RobecoSAM’s sustainability standards and give investors tools to develop global allocations that reflect sustainability factors.”
Brazil’s Natura once again appears on the Emerging Markets Index of the DJSI. From a pool of the 800 largest emerging market companies, listed on the S&P Global Broad Market Index, 10 percent are named to the Sustainability Emerging Market Index, based on RobecoSAM’s annual Corporate Sustainability Assessment (CSA).
“This not only is an important recognition, but also reaffirms our positioning among investors who seek to support the development of more sustainable businesses and comes to serve as a relevant source of information for improving our practices,” said Jose Roberto Lettiere, Natura’s Chief Financial and Investor Relations Officer.
According to RobecoSAM, the CSA explores economic, environmental and social factors that make for a sustainable business, but are not emphasized in conventional financial analysis. Natura’s ongoing sustainability initiatives are detailed in an extensive Annual Report. The $2.4 billion enterprise is the only Household & Personal Products company to appear on the 2016 Dow Jones Sustainability Emerging Markets Index.
September 20, 2016
Thirty-One Gifts Scholarship Pays Tribute to Company Roots
Thirty-One Gifts and its founder and CEO, Cindy Monroe, have not forgotten where they came from.
Now a $516 million business headquartered in Columbus, Ohio, Thirty-One got its start in the basement of Monroe’s Chattanooga, Tennessee, home. Through its philanthropic fund, Thirty-One Gives, the company gives back to Chattanooga and the wider community of Hamilton County with an annual academic scholarship for girls.
Thirty-One Gives is now accepting applications for the 2016 Cindy Monroe Values & Vision Scholarship, a $12,400 award distributed in $3,100 increments over four years. The scholarship goes to one local high school junior or senior who embodies Monroe’s core values of building relationships, leadership and community involvement.
“We offer the scholarship in Hamilton County because that’s the community where we got our start and spent our first five years, which for me was a critical time to test the survival of the new business,” Monroe told DSN. “We’re a company with a heart for giving back and sharing the many blessings we’ve received, and we have great gratitude for our hometown community.”
A Chattanooga native, Monroe graduated from the local Hixson High School and was inducted into its Alumni Hall of Fame in 2014. Thirty-One Gifts, known for its fashionable and functional accessories and home products, was based in the area from its inception in 2003 to 2008. The company established the Cindy Monroe Values & Vision Scholarship in 2013, to celebrate 10 years in business.
September 19, 2016
Wellness Firm Immunotec Reports Record Sales in Q3
Canada-based Immunotec logged revenue of $28.4 million—a company record—in its most recent fiscal quarter.
Overall revenue was up 29 percent, management reported, largely driven by growth in Mexico, where sales rose 55 percent from a year ago. Despite higher sales in the market, the recent devaluation of the Mexican peso hurt profitability. The company’s bottom line decreased 46 percent to $0.6 million in the quarter ended July 31.
“We maintain our guidance to exceed $100M in revenues for the full fiscal year, but are concerned that profitability will remain impacted during the fourth quarter from further deterioration in the Mexican peso,” Patrick Montpetit, CFO, said in the company’s release.
Montpetit further noted that management has initiated a review of the company’s currency risk exposure and is working to mitigate economic uncertainties in its Mexico operations.
Immunotec sells its nutrition, skincare and wellness products in North America, the United Kingdom, Ireland and the Dominican Republic. In the most recent quarter, sponsoring of new customers and consultants across all markets was up 48 percent from a year earlier.
September 16, 2016
Vorwerk’s New Exchange Program Caters to Children of Employees
Germany-based Vorwerk is looking to foster relationships across its global employee base with the “One Family” cultural exchange program.
Since its beginnings in 1883—as a carpet factory—Vorwerk has grown into a diversified corporate group, deriving the bulk of its revenue from direct sales of household appliances, cosmetics and other products. Despite having a presence in more than 70 countries, Vorwerk remains a family-owned business, and that heritage is reflected in its new exchange program.
One Family opened in 2013 to the children of Vorwerk employees, who number more than 12,000 worldwide. Through the program, children aged 15–20 can sign up to spend a portion of their school holiday with the family of an employee in another country. In exchange, a child from the host family returns the visit at a later date.
“Because we regard ourselves as one big family at Vorwerk, the family is a defining element in our corporate culture,” said Sandra Krieger, PR-Manager Corporate Communications at Vorwerk. “We decided to set up the exchange program to let our children benefit from the international character and open approach of the company.”
Vorwerk not only coordinates the exchange, but also pays for each child’s travel expenses. The host family is responsible for planning the day-to-day activities of the visit, which lasts anywhere from two to four weeks. Krieger reports that early feedback from One Family participants has been overwhelmingly positive.
September 15, 2016
Beautycounter Announces Senior Leadership Appointments
A number of executive leadership changes are taking place at Beautycounter as the non-toxic beauty company enters its sixth year of business.
This summer has been a busy one for Beautycounter. In June, the California company acquired natural skincare line NUDE. The global brand was founded by social activist Ali Hewson, wife of U2 frontman Bono, who is now investing in Beautycounter’s parent company. Then, earlier this month, a selection of Beautycounter products hit Target stores through a limited-edition partnership with the retail giant. Beautycounter also operated a summer pop-up shop on Nantucket Island.
Now the safety-conscious company is bringing in additional talent to help lead its next phase of growth. “We are no longer a startup company,” said Gregg Renfrew, Founder and CEO. “As a fast-growth company, our past year has been focused on careful executive recruiting, and we are thrilled with the proven senior executives joining our team, and the addition of strategic business leaders supporting them.”
One new hire, Anthony Prudhomme, is taking on the role of Chief Financial Officer. Following an early stint with professional services firm Deloitte, Prudhomme has held executive roles with Dole Foods and Beyond Meat, as well as another beauty company in the direct sales channel. “Tony’s vision for enterprise value creation, technology transformation and customer-centric programs at Beautycounter has us very optimistic about the future,” said Renfrew.
Robert Steere has been named Head of Operations, a title he previously held at Red Bull. Most recently, Steere served as Vice President of Operations for skincare brand Dermalogica. A newly appointed Head of Product Development, Xavier Ormancey, hails from Paris, where he worked with L’Oréal Paris, Chanel Parfums & Beauté, and Yves Rocher Group. Ormancey is known as an innovator in the field of environmentally friendly personal-care products. Finally, Beautycounter has appointed Raj Chand as Sourcing Manager. Chand has worked with multiple direct selling companies in the areas of botanical and non-GMO sourcing.
September 15, 2016
Mary Kay Breaks Ground on $125M Manufacturing and R&D Facility
Photo: Mary Kay executives lead a groundbreaking ceremony at the company’s new manufacturing and R&D site in Lewisville, Texas.
Construction officially is underway on Mary Kay Inc.’s new global manufacturing and research and development facility.
Company executives, along with local government officials, broke ground at the Lewisville, Texas, location on Sept. 13, the very date Mary Kay Ash founded the beauty company 53 years ago. The $125 million project is slated for completion in the first quarter of 2018.
“We are committed to the latest in technological innovation, and Mary Kay’s new manufacturing and R&D operations will be on the leading edge of design and production,” David Holl, President and CEO of Mary Kay, said in the company’s announcement.
Mary Kay’s existing manufacturing and R&D facility opened in Dallas in 1969. The 420,000-square-foot plant pumps out up to 1.1 million beauty products per day. Currently, 57 percent of those products are exported to international markets. The brand’s skin care, cosmetics and fragrances are sold through more than 3.5 million Independent Beauty Consultants worldwide.
Like its predecessor, the new manufacturing site is in close proximity to Mary Kay’s other North Texas facilities, including its global headquarters in Addison, a distribution center in Carrollton and a warehouse in Dallas. The building will comprise 480,000 square feet.
September 14, 2016
AdvoCare Launches Preferred Customer Plan
AdvoCare on Wednesday launched a new Preferred Customer Program to better distinguish between their Distributors and loyal customers who want to buy products at a discount.
With more than 620,000 Distributorships, the Texas-based health and wellness company sees the Preferred Customer offering as a way to more easily interact with customers and as a tool that Independent Distributors can use to engage those solely interested in products.
From the corporate perspective, the program allows AdvoCare to “better serve those who are engaged with us,” says Allison Levy, Executive Vice President and Chief Legal Officer. “This will let us tailor our messaging for customers as well as for business-building Distributors and those who are intentional about wanting to share the products.”
Here’s how AdvoCare’s Preferred Customer plan works:
A Preferred Customer pays $19.95, signs an agreement and receives a promotional product kit, an online account and a 20 percent product discount. Over time, Preferred Customers can increase their discount to 30 percent. When Preferred Customers place orders, AdvoCare’s online systems will automatically populate a Distributor’s sales compliance forms.
An Independent Distributor pays $59.95, signs an agreement and receives a larger promotional product kit, a product catalogue, IMPACT magazine and online support. Distributors can earn up to a 40 percent discount.
Distributors also gain access to a wealth of online training in the Getting Started module, followed by additional digital and in-person trainings designed to help build their business.
AdvoCare also soon will launch new customer trainings (for those who want it) to more fully educate people about AdvoCare products.
A new Product Navigator application will support these trainings and give customers and Distributors a new online tool with which to discover, learn about and recommend products for specific customer needs.
Product Navigator aggregates many of AdvoCare’s best-selling products into a database that matches product bundles with customer needs and goals.
“This opens up AdvoCare to a whole new group of people who may not want to be Distributors but who enjoy the products, and want to buy them at a discount,” Levy says.
AdvoCare, which saw net sales of $719 million in 2015, shared news of the new program with its sales leaders yesterday and will conduct a conference call for interested Distributors today. A page on the AdvoCare website also explains the Preferred Customer program.
In two weeks, AdvoCare will roll out the conversion piece of Preferred Customer, to allow people already engaged with AdvoCare to choose a path that aligns with their individual needs. Levy expects the process to take a few months, but says she looks forward to seeing how people who join AdvoCare every day choose to sign up.
“This first year will be very educational and enlightening for us,” Levy says.
September 14, 2016
Icahn Seeks Approval to Up Herbalife Stake to 50%
Billionaire investor Carl Icahn is seeking authorization to up his stake in Herbalife Ltd. (HLF—NYSE) to 50 percent.
Shares in the nutrition company are trading slightly higher following Icahn’s comments, which were made late Tuesday at the Delivering Alpha conference hosted by CNBC and Institutional Investor. Icahn is a longtime supporter of Herbalife in its battle against short-seller Bill Ackman, an outspoken critic of the company whose claims prompted a Federal Trade Commission probe into Herbalife’s business practices.
In July, on the day a settlement was announced in the FTC case, Icahn said regulators had granted him permission to increase his Herbalife stake to as much as 35 percent, well below the 50 percent he is now contemplating. Onstage at Delivering Alpha, Icahn said he currently owns about 20 percent of Herbalife’s shares. The Icahn Enterprises investor also said he has not ruled out launching a tender offer to take the company private, stating that as a shareholder he thinks Herbalife would be “better off that way.”
September 14, 2016
Nerium Taps Rick Arnold to Lead Expansion into Australia
Photo: Rick Arnold, General Manager of Nerium Australia
Nerium International has appointed Rick Arnold to General Manager of Nerium Australia, as the skincare company prepares to launch operations in the market.
Arnold was introduced to Nerium Independent Brand Partners during Get Real Dallas, an annual conference that took place over the weekend. The four-day event featured salesforce training and recognition, as well as a look at what the future holds for the Texas company, which recorded sales of $516 million in 2015.
“One of our most exciting plans for the future is our expansion to Australia, a thriving market for both the global anti-aging skincare segment and the direct sales industry,” said Jeff Olson, Nerium Founder and CEO. “I know we will reach new heights as we welcome Rick Arnold, an accomplished professional who shares Nerium’s values and culture, as General Manager of Australia.”
In a direct sales career that has spanned more than two decades, Arnold has spent 13 years in corporate management, and another 10 years building his own direct selling business with one of the channel’s leading companies. Nerium Australia is slated to open in the fourth quarter, along with a new regional office in Adelaide, South Australia.
September 13, 2016
Organo Expands Portfolio with OGX Nutrition Line
Ganoderma products maker Organo is branching into weight management with its new OGX nutrition line.
Wellness is the largest direct sales category in the U.S., accounting for a third of all retail sales in the channel, according to research from the U.S. Direct Selling Association. In 2015, the category grew 16 percent year-over-year to $12.1 billion.
Thus far, Organo’s wellness portfolio has focused on coffees and teas, along with a handful of supplements—all featuring Ganoderma powder, which is sourced from a mushroom used in traditional Asian medicines. With the launch of OGX, the Canadian company is looking to build a community of health-conscious customers who incorporate its nutrition products into their daily routine.
“Meeting one’s nutritional needs in a convenient and economical manner, given today’s fast-paced lifestyle, is the goal of OGX and a natural evolution for Organo,” Bernardo Chua, Organo Founder and CEO, said in the company’s announcement.
The first product in the new line is OGX FENIX, a whey protein shake formulated with Ganoderma, electrolytes and a prebiotic fiber. Each OGX FENIX order comes with the OGX Nutritional Weight Management Guide, which includes meal plans, exercise options and other health tips to help users maximize the effects of the product.
September 12, 2016
Avon Foundation Releases New Data on Breast Cancer among Hispanics
A new study funded by the Avon Foundation for Women lays the groundwork for a better understanding of breast cancer diagnoses among Hispanics in the U.S.
The first-of-its-kind study, Breast Cancer among Hispanic Subgroups in the U.S., was conducted by the Sinai Urban Health Institute and released during the foundation’s biennial Breast Cancer Forum, held Sept. 7–9 in Miami. Furthering breast cancer research and access to quality care is one focus of the Avon Foundation for Women, alongside its efforts to reduce domestic and gender violence.
Drawing from multiple national data sources across multiple years, the new study explores breast cancer prevalence and mortality rates among Cuban, Mexican, Puerto Rican, and Central and South American women in the U.S. As a whole, Hispanics represent the largest racial/ethnic minority in the country, according to U.S. Census Bureau estimates. The American Cancer Society reports that breast cancer is the most commonly diagnosed cancer, and the leading cause of cancer deaths, in Hispanic women.
“As the company for women, Avon is committed to taking actions that matter most to women, and that is why the Avon Foundation is passionate about funding studies like this,” said Cheryl Heinonen, President of the Avon Foundation for Women. “We want to identify where the disparities lie so we can effectively shape and support programs that will have the greatest impact.”
The data shows that breast cancer mortality rates differ widely among the various groups that make up the Hispanic population. At the high end of the spectrum were Puerto Rican women (19.04 per 100,000 women) and Mexican women (18.78), while Central and South American women (10.15 per 100,000 women) were significantly less likely to die from breast cancer than other subgroups observed. According to Bijou Hunt of the Sinai Urban Health Institute, who authored the study, the findings have the potential to greatly improve individualization of care for Hispanic women diagnosed with the disease.
September 12, 2016
Federal Staffers Take On Herbalife Congressional Challenge, Nation’s Triathlon
Nutrition company Herbalife was a sponsor of this weekend’s Events DC Nation’s Triathlon, the only triathlon held in the nation’s capital.
This marks the third consecutive year Herbalife has sponsored the event, which took place Sunday, Sept. 11. The 11th annual Nation’s Triathlon benefited the Leukemia & Lymphoma Society, one of the largest voluntary health organizations dedicated to fighting blood cancer.
After completing the race, athletes received Herbalife recovery drinks and protein bars in the Official Herbalife24 Recovery Zone.
“We want to provide the best nutrition and hydration products for our athletes, both on the course and after the race,” Nick Lynch, The Nation’s Triathlon Event Director, said in the company’s announcement. “Herbalife will be there to support our participants throughout the competition. We are thrilled to have them as a partner again for 2016.”
Government employees taking part in the race also could compete against one another in the Herbalife Congressional Challenge. In the past two years, the Congressional Challenge has included senior staffers from Congress and the Departments of Education, Justice, Homeland Security and others. Awards were presented to the three top finishers in the race-within-a-race.
Nation’s Triathlon participants completed a 40-kilometer bike ride through the Downtown neighborhood of Washington, D.C., where the White House is located, and a 10-kilometer run past historical landmarks. The event also includes a 1,500-meter swim in the Potomac River; however, the swim portion of this year’s event was cancelled when water conditions fell short of the D.C. Department of Energy and Environment’s EPA-based safety standards.
September 09, 2016
Chloe + Isabel Launches ‘Modern Muses’ with Fashion Photographer Mark Seliger
Photo: Chantel Waterbury (center), Chloe + Isabel Founder and CEO, and brand Merchandisers are photographed by Mark Seliger.
To celebrate five years in business, jewelry company Chloe + Isabel is unveiling a new “Modern Muses” campaign with celebrity photographer Mark Seliger.
Seliger is well-known for his portraits and fashion work, which have graced the pages of Vanity Fair, Elle and Rolling Stone. His new collaboration with Chloe + Isabel features seven of the brand’s real-life independent sellers, known as Merchandisers, modeling its new fall collection.
“In a world where everyone is so focused on celebrity, I felt it was important to highlight these real, extraordinary and passionate women who represent our incredible Merchandisers,” said Chantel Waterbury, Founder and CEO of Chloe + Isabel. “These ladies have made a positive impact on their families and communities, and in my eyes, that is the true definition of what it means to be a modern muse in today’s society.”
The company’s fall jewelry collection was inspired by four women in history and the traits that set them apart. Photographer and war correspondent Lee Miller represents The Hero; author Anais Nin is The Rebel; painter Tamara de Lempicka is The Maven; and artist and author Leonor Fini is The Artisan. Seliger took a similar approach to styling the brand’s “Modern Muses,” highlighting a distinctive quality in each woman.
“It was such an honor working with Chantel and this inspiring group of women,” said Seliger. “From the very beginning, the process was unique and creatively a delight.”
One Merchandiser who posed for Seliger is Mitra, who represents The Philanthropist. Mitra signed on with Chloe + Isabel to hone her business skills while pursuing a career in the male-dominated field of software engineering. Along the way, she has opted to donate 100 percent of her Chloe + Isabel earnings. Mitra is one of nearly 10,000 Chloe + Isabel Merchandisers nationwide.
September 09, 2016
Avon Products Names Former McDonald’s Exec to Board of Directors
Photo: Jose Armario, new member of Avon’s board of directors
Amid continued turnaround efforts, Avon Products Inc. has elected Jose Armario, a former senior executive with McDonald’s Corp., to its board of directors.
Armario is one of two independent directors jointly appointed by Avon and Cerberus Capital Management LP, the private-equity firm that purchased Avon’s North America business nine months ago. For an investment of $605 million, Cerberus acquired an 80.1 percent stake in Avon North America, which it subsequently took private, as well as a 16.6 percent stake in Avon Products Inc.
The changes extend to Avon’s board, which now consists of six Avon directors, three from Cerberus and two independent directors. An activist investor, Barington Capital Group LP, also had a say in Armario’s appointment, after agreeing to withdraw its opposing board bids in a March deal with Avon.
“I’m delighted that Jose is joining the Avon Board,” Sheri McCoy, CEO of Avon Products, said in the company’s announcement. “He has firsthand consumer experience in many of Avon’s most important markets, and his insights will be valuable as we continue to execute our transformation plan.”
Before retiring from McDonald’s in 2015, Armario served as Executive Vice President, Worldwide Supply Chain, Development and Franchising. In that capacity he oversaw annual supply chain purchases of $25 billion, as well as $1 billion in new store capital. Armario spent nearly two decades with McDonald’s, in roles that included Group President of Latin America and Canada as well as President and International Relationship Partner of Latin America, where he is credited with leading the company’s turnaround in the region.
“I am pleased to join the board of this global, iconic brand, and look forward to working with my fellow board members as well as the executive team during such a dynamic time,” said Armario. “Avon’s rich history is particularly important to me personally, as my own mother spent several years as an Avon Representative upon immigrating to the United States from Cuba.”
Armario began his career at Burger King Corp., followed by a stint at LensCrafters Inc. Currently, he serves on the President’s Council of the University of Miami and the board of building materials manufacturer USG Corp., where he sits on the Audit Committee and the Compensation and Organization Committee. As a member of the Avon board, Armario will serve on the Compensation and Management Development Committee.
September 09, 2016
SimplyFun to Release New Games in Popular STEM Category
SimplyFun, a maker of educational board games, believes in the power of play—especially when shared.
That is why the Washington company teaches skills through board games, which bring players face to face across the table. The concept of shared play is at the heart of each SimplyFun game, including two forthcoming releases, Watch My Wings and Don’t Mix It! “Shared play connects you socially and emotionally with the learning, and adding those aspects enhances the longevity of the memory and what is learned while playing,” said Patty Pearcy, President and CEO.
SimplyFun’s new releases, available Oct. 1, fall under the Math & STEM category, which is the company’s most popular, followed by Reading & Language Arts. Other games focus on Life & Thinking Skills or Social Sciences & Studies. The company’s STEM (science, technology, engineering and mathematics) games explore how things work, said Pearcy, or how they can be put together or modified to serve a different purpose.
For example, Watch My Wings uses butterfly wings to teach sorting and comparing skills to young learners, ages 4 and up. The setting of Don’t Mix It!, for ages 7 and up, is a recycling center where players learn planning and spatial reasoning skills as they sort materials. As Pearcy told DSN, “These games help to bring academics to life. They take the dryness out of it and add some fun and playfulness, to engage kids and interest them in learning more.”
With busy families in mind, SimplyFun ensures that each of its games can be played in 30 minutes or less. The company works with well-regarded international designers such as Reiner Knizia and Martin Nedergaard Andersen to identify new concepts, which are then brought in house for development. SimplyFun games are sold through Playologists, or independent consultants, across the U.S.
September 08, 2016
Jeunesse Helps Transform Kenyan Community through We Village Program
Photo: Jeunesse founders, executives and top distributors visit the village they have adopted in Irkaat, Kenya. (Business Wire)
Distributors with Jeunesse Global witnessed the company’s charitable impact firsthand during a recent service trip to Kenya.
About 100 of the company’s top sellers traveled to Irkaat, Kenya, for Bringing Hope 2016, a cultural immersion experience focused on serving the local community. Through its Jeunesse Kids nonprofit arm, the skincare and nutrition company has partnered with We Charity, formerly Free The Children, to support Irkaat through the We Village program.
Craig Kielburger, Co-Founder of We Charity, took part in the trip, along with Jeunesse Founders Randy Ray, CEO, and Wendy Lewis, COO, and Chief Visionary Officer Scott Lewis.
“It is a tremendous honor to be aligned with Craig Kielburger and We Charity, and we are deeply grateful for the entire Jeunesse family around the world who have contributed to this important, life-changing cause,” said Scott Lewis. “We were humbled and honored by the incredibly warm welcome and time we were able to spend with the beautiful people of Irkaat.”
The We Village program is designed to address the primary causes of poverty—education, water, health, food and opportunity—with holistic, sustainable solutions.
Since Jeunesse began supporting the villagers in 2015, the company has funded the construction of a new school building and a clean water source. Previously, school rooms were temporary structures made from wood or clay, which would crumble with each rainfall, and water was carried from a silt-filled river about 12 miles from the village.
In addition to Irkaat, Jeunesse employees and Distributors support a village in Dao Lazui, China, where the company traveled for last year’s Bringing Hope trip.
September 07, 2016
Youngevity Holds Company-Wide Service Project on ‘Be The Change Day’
Everyone has a story, and Youngevity International is helping children tell theirs during the company’s Be The Change Day on Wednesday.
The day-long affair is taking place ahead of Youngevity’s 2016 Convention this week in Salt Lake City. Distributors and employees in town for the event have the opportunity to participate in a company-wide service project through the Youngevity Be The Change Foundation.
To reach the local community, the foundation is teaming up with one of its charitable partners, My Story Matters, an organization that helps families facing difficult circumstances by creating customized storybooks for children. On Sept. 7, Youngevity volunteers visited two locations in Salt Lake City to interview children about their lives and hopes for the future, which will be recorded in a personalized book for each child.
“I don’t think there is a better legacy to give a child than hope for their future and strength for their life’s journey, and I’m so proud that so many of our distributors have volunteered for a 12-hour experience with My Story Matters that will certainly remain in the memory of their hearts for years to come,” said Lisa “Sunshine” Briskie, Director of Youngevity Be The Change Foundation.
In the first half of the day, volunteers visited a local high school, where refugees from more than 70 countries were among the children interviewed. The afternoon session was held at a local homeless shelter that, on any given day, houses about 200 children.
September 07, 2016
Mary Kay Canada Donation Helps Cancer Patients ‘Look Good, Feel Better’
A $100,000 donation from the Mary Kay Ash Charitable Foundation in Canada will help to lift the spirits of women undergoing cancer treatments.
Like its counterparts in other countries, the charitable arm of Mary Kay Canada is dedicated to ending domestic violence and supporting women living with cancer. It accomplishes the latter through a partnership with Look Good Feel Better, a program that teaches beauty techniques—think skin care, wigs, accessories and styling—to people with cancer, helping them manage the side effects of chemotherapy and radiation treatments.
For the fourth consecutive year, the foundation is contributing $100,000 to the program. Jane Wilson, Development Officer of Look Good Feel Better, accepted the donation during the foundation’s recent MK5K—Diane Tsialtas Memorial Run. “No woman should ever have to face cancer alone,” said Wilson, herself a breast cancer survivor. “Thanks to our longstanding relationship with Mary Kay and the support of their foundation, it’s in part because of generous donations like these that they don’t have to.”
In addition to providing financial backing, Mary Kay Independent Beauty Consultants put in volunteer hours with Look Good Feel Better, conducting cosmetic workshops in hospitals and cancer treatment centers across Canada. Currently, more than 65 percent of the program’s volunteer beauty professionals are Mary Kay Consultants. Look Good Feel Better is a collaboration of the Personal Care Products Council Foundation, the American Cancer Society, and the Professional Beauty Association.
September 06, 2016
Former Head of PartyLite Europe Named Company President
Photo: Martin Köhler
Candle company PartyLite, now under the Luminex umbrella, is promoting its Europe President, Martin Köhler, to President of its worldwide operations.
Last year, PartyLite parent Blyth Inc. was acquired by The Carlyle Group, a New York-based private-equity firm. Carlyle announced in May that it was teaming with another asset manager, Centre Lane Partners, to create Luminex Home Décor & Fragrance, which now owns PartyLite and the Centre Lane-backed Candle-lite Company.
The arrangement is intended to leverage product development efforts and broaden consumer reach for both companies, which have different target groups and markets. As President, Köhler will help to build PartyLite’s business from this new platform. “I am certain that Martin will lead PartyLite to continued global success and open new avenues for the company,” Calvin Johnston, CEO of Luminex, said in the company’s announcement.
Köhler began his career at PartyLite on the communications side of the business, as head of marketing for PartyLite Germany. He also served as General Manager in Switzerland, and later in Germany, before becoming President of European operations in 2010. Under his leadership, Europe has become the top sales region for the company, which has 45,000 active consultants in 23 countries.
September 02, 2016
WorldVentures, Nancy Lieberman Bring Dream Court to South Carolina
Photo: Nancy Lieberman leads the ribbon-cutting ceremony.
The latest Dream Court provided by the WorldVentures Foundation and Nancy Lieberman Charities is part of a larger vision for one South Carolina community.
The charitable arm of group travel club WorldVentures has teamed with Lieberman to build 29 of the multipurpose play spaces, known as Dream Courts, in underprivileged communities across the country. This week, the first indoor Dream Court was dedicated in Camden, South Carolina, at the local Jackson Teen Center, where the Boys & Girls Clubs of the Midlands runs an extended-care youth development program.
Lieberman is a WNBA legend who joined the Sacramento Kings last summer as the second-ever female assistant coach in the NBA. She created Nancy Lieberman Charities to provide healthy physical, emotional and mental environments where children can build their self-esteem and confidence. “You must love you. You must believe in you,” Lieberman told local youth on hand for the ribbon-cutting ceremony. “And as you move forward in life, you must lift as you rise.”
An existing gym in the Jackson Teen Center, located at the former Jackson High School, was renovated for the first time in 30 years to construct the new Dream Court. The update is the first step toward converting the center into a world-class facility for young people, a project advocated by the leadership of Boys & Girls Clubs of the Midlands.
September 02, 2016
Scentsy Launches Cause Product with Shriners Hospitals for Children
Photo: The Love Heals Warmer from Scentsy.
Home fragrance brand Scentsy Inc. on Thursday unveiled its new Charitable Cause Warmer, a product supporting Shriners Hospitals for Children.
Between now and the end of February, Scentsy has pledged to donate $8 from the sale of every “Love Heals” warmer to Shriners Hospitals, a nonprofit that provides expert pediatric specialty care for children, regardless of a family’s ability to pay. At its 22 locations across North America and Mexico, Shriners Hospitals will serve more than 120,000 children this year.
“We are touched that Scentsy has partnered with us to help continue our mission of providing life-changing care to children,” said Chris Smith, Chairman of the Board for Shriners Hospitals. “It’s partnerships like these that help us send ‘love to the rescue’ to our patients every day.”
Charitable Cause Warmers, which have supported causes such as autism awareness and breast cancer research, are one way Scentsy gives back through the Scentsy Family Foundation. The charity also provides academic scholarships and direct donations to organizations that support families.
“Scentsy was founded on the core values of simplicity, authenticity and generosity,” Orville Thompson, Scentsy Co-Owner and CEO, said in the company’s announcement. “We believe that love can heal, and we are excited about this opportunity to support Shriners Hospitals for Children.”
The Love Heals warmer is now available through consultants in the U.S. and Canada. Scentsy has set a goal to raise $500,000 for the cause.
September 01, 2016
Direct Sellers Collect Top Honors in International Business Awards
Direct selling companies earned numerous accolades in this year’s International Business Awards, including seven Gold Awards for best in class.
The International Business Awards (IBAs) is one of seven competitions that fall under the Stevie Awards umbrella. Unlike the others, which are limited by region, category, or gender, IBAs are open to all organizations worldwide, and are billed as the only all-encompassing, international business awards.
Each year, the panel of judges—made up of executives, entrepreneurs and business educators—evaluates more than 3,300 entries from organizations in 60-plus countries.
At the IBAs gala event in Rome next month, Stevie Awards will be presented to five direct selling companies, among them Jeunesse Global, which collected five Gold, four Silver and three Bronze Stevies in this year’s International Business Awards.
To win Gold, the skincare and nutrition company outscored all other entrants in the categories of Company of the Year—Consumer Products; Fastest-Growing Company of the Year in the U.S. and Canada; Marketing Department of the Year; and Marketing Executive of the Year, awarded to CMO Mark Patterson. Randy Ray, CEO, also earned Gold for Executive of the Year.
“We are honored to receive widespread recognition in the international business community and are grateful to the worldwide Jeunesse family of Distributors, executives and corporate employees who have made our growth and achievements over the past year possible,” Jeunesse Chief Visionary Officer Scott Lewis said in the company’s announcement.
Brand-new Canadian company Nutracelle came away a big winner this year, collecting several Stevie awards, starting with Gold for Best New Product of the Year and Gold for Startup of the Year, both in the Consumer Products category. The health and wellness company’s founder and CEO, Melanie Wildman, also brought home two awards of her own, Gold for Woman of the Year and Silver for Innovator of the Year.
Another Gold Stevie went to wellness firm Isagenix International, which led the Best Tradeshow or Convention category with its annual salesforce meeting, Celebration 2015. The three-day Celebration also garnered a Silver for Best Brand Experience Event and a Bronze for Best Internal Recognition/Motivational Event.
In the same Internal Recognition Event category, Nu Skin Greater China took the Gold for one of its Success Trips, offered as rewards for qualifying independent sellers. The winning entry was a cruise to the ports of Busan and Incheon, popular destinations on the coast of South Korea. Nu Skin’s Greater China subsidiary also earned Silver for Human Resources Department of the Year.
The final direct selling honoree is USANA Health Sciences, which collected two Silver Stevies: one for Company of the Year—Health Products & Services and Pharmaceuticals and the second for Corporate Social Responsibility Program of the Year in the Americas region.
September 01, 2016
Mary Kay: Legacy Brand Wins Over Millennials
by Emily Reagan
Headquarters: Addison, Texas
Top Executive: President and CEO David Holl
2015 Revenue: $3.70 billion
Products: Cosmetics, personal care
Like the pink Cadillacs it awards to top sellers, today’s Mary Kay retains a classic feel while embracing innovative thinking and design. The 53-year-old beauty company has built a widely recognized and respected brand by staying in tune with the evolving needs of its customers and consultants. On the product side, Mary Kay has expanded its portfolio to serve women at all stages of life. The company’s marketing strategies introduce clients to the cosmetics and the business opportunity in fresh ways, such as sponsorships of the reality television show Project Runway and the Academy of Country Music Awards. And of course, no entity can remain cutting edge without engaging the ever-changing world of technology.
The latest phase in the beauty company’s technology evolution is the myCustomers+ app, described as a “virtual assistant” for the Mary Kay Independent Beauty Consultant. With such capabilities as creating sales tickets and managing inventory, myCustomers+ helps consultants streamline their businesses in an increasingly mobile and connected world. Recent research by digital advertising firm Criteo found that in the fourth quarter of 2015, mobile devices accounted for 30 percent of all e-commerce transactions, edging up from 27 percent a year earlier. The trend toward mobile is not surprising considering that, back in 2013, United Nations research found that more people on Earth had access to cellphones than to toilets.
Direct selling is by nature a mobile business, and uniquely positioned to leverage mobile technology, because the channel itself is made up of people rather than a brick-and-mortar store or a web page. Nevertheless, the oldest and largest companies find themselves facing the greatest barriers to entry when it comes to rolling out new technologies. Take an established company like Mary Kay, which has operated since 1963, the year the cassette tape and the push-button telephone were making their debut. At this institution, paper is integrated into nearly every aspect of operations, including the paper sales tickets consultants fill out with each order. It’s “the way it’s always been,” and when a new way is introduced, it disrupts not a sales team of 35 or even 350, but 3.5 million consultants worldwide.
A Mobile-First Mentality
Timing, then, is key to launching any new tool or process, and in the case of myCustomers+ the stage has been set for Mary Kay. Widespread use of mobile tools means the company is not pushing its sellers to a new platform but meeting them where they already are, as high early adoption rates of the app confirm. “We’re looking at everything with a mobile-first mentality, because that’s where our salesforce is today. Our consultants are very adaptable, and I think anyone in today’s world knows digital is where it’s happening in the future,” says Jill Wedding, Director of U.S. Consultant Marketing, Mary Kay.
While mobile technology is increasingly appealing to today’s consumer, it is virtually nonnegotiable for Gen Y—the largest segment of the American workforce, according to U.S. Census Bureau data, and the fastest-growing segment of Mary Kay’s salesforce. Women ages 18-34 accounted for 47 percent of new U.S. Mary Kay consultants in 2015. “These young women are tech-savvy and digitally connected. They’re looking for flexibility and not a 9-to-5, one-size-fits-all position,” says Mary Kay’s Vice President of U.S. Marketing, Sara Friedman. “A Mary Kay business can be customized to each person’s individual goals, and our company’s established social media presence and leading-edge digital technology have also proven to be attractive business-building tools.”
Mary Kay has actively courted Gen Y, sponsoring programs with a younger-skewing audience and even opening a skincare class to late night TV host Conan O’Brien. The company also has partnered with young faces to advance its philanthropic initiatives. Disney star Debby Ryan lent her voice to Mary Kay’s dating abuse prevention campaign, and Kelsea Ballerini, a rising country music artist, joined the company’s 2016 Global Day of Beauty initiative. The brand’s digital tools and targeted outreach have built a growing base of Gen Y consultants, and they are not a group to keep their enthusiasm to themselves. According to a 2015 Brand Passion Report by social analytics firm NetBase, Mary Kay was one of the top 30 brands talked about in beauty and skincare conversations on social media.
Expanding its digital toolbox to include a range of apps also has been part of Mary Kay’s Gen Y approach. Prior to launching myCustomers+, the company already offered a handful of apps to help consultants share the products and business opportunity. Mary Kay’s Virtual Makeover allows users to upload a photo and try out any combination of Mary Kay eye makeup and lip color, along with a variety of hairstyles and accessories. Through the eCatalog, users can browse all Mary Kay products and stay abreast of beauty trends and special offers. Another app, Mary Kay’s Digital Showcase, is tailored to consultants and features a library of mobile presentation tools.
Faster than Paper
With its newest digital offering, the company wanted to create a custom sales tool that would enable the consultant to run a business from the palm of her hand. A cross-departmental team of six was tasked with driving the project, which spanned three and a half years from ideation to launch. The team understood, says Wedding, that the Mary Kay business will always center on personal relationships, but efficiencies in other areas could free up the consultant to focus on those relationships. That meant identifying specific functions the app could carry out “faster than paper”—that mainstay of traditional direct selling businesses. According to Hope Elston, Manager of U.S. Consultant Marketing at Mary Kay, “When we started working with that motto and going out to our salesforce and talking to them, we narrowed down some key areas we felt could affect their business.”
To bring the concept to life, Mary Kay turned to another company based in the Dallas area, app development firm Bottle Rocket, whose clientele list includes such brands as Coca-Cola, Starwood Hotels & Resorts, and NBCUniversal. Bottle Rocket’s approach to development is a blend of collaboration and rapid iteration, using the Lean user experience development cycle: think, make, check. Each project begins with a discovery session, consisting of one to two days face to face with the client, getting to know the company, the customer and the competition. Coming out of this session, the team crafts a mission statement and roadmap, and then dives into the development process, rapidly experimenting with design ideas, validating them with real users, and continually making adjustments based on the results.
One of the most significant challenges the team faced was the sheer scope of myCustomers+. The app was in development for three years, in comparison to Bottle Rocket’s average timeline of four to six months. Nearly 400 feature requests were floated; 187 were incorporated into the design. “There are a lot of tools, utility and great stuff packed into this app, and it takes a lot of effort to find that simplicity on the other side of complexity,” says Renee McKeon, Bottle Rocket’s Senior Director of Strategy and Creative Director.
One of the app’s primary features is the point of sale, where the consultant can pull up the customer’s profile, place a new order and email a receipt. Using a scanning tool, the consultant can scan any product to automatically add it to the order. The scanning feature also assists in managing inventory, another focus of the app. Historically, as a consultant’s business grew, inventory management became an increasingly time-consuming process. She might enlist the help of an assistant or spouse, or purchase software to expedite the process. Now, when the consultant receives a new shipment, she can scan the Mary Kay shipping label to instantly update her inventory. The app also notifies her when product levels fall below set minimums.
Additional features support the daily activities of building a business. Consultants who have been with Mary Kay for any amount of time will recognize “My 6 Things,” a task list appearing on the screen in interactive bubbles, which pop when the task is marked complete. The list is based on a practice taught by Mary Kay Ash, the company’s founder, who trained consultants to start each day with a “6 Most Important Things to Do” list. Another feature allows the consultant to tag specific groups of customers for targeted messages or promotions. She also receives a notification when a customer places an order on her personal Mary Kay website or has an anniversary or birthday.
Despite the app’s numerous capabilities, the goal was to provide a tool that anyone—tech savvy or not—could navigate with ease. One example of usability is what the team calls the “magic button,” a fixed button at the bottom of the screen. On any page of the app, a press of the button pulls up the functionality most commonly associated with that page. “We wanted an app so easy to use that no matter who you are, when you open it up, it is intuitive and you can figure out where to find things and how to do things,” says Elston.
Since the technology went live in July, the response from consultants has exceeded expectations. On launch day, the beauty company sent text notifications to consultants at the National Sales Director and Sales Director levels, alerting them to the availability of the app. Within the first week, Mary Kay was halfway to its Oct. 1 goal for subscribers, who pay $4.99 a month to use myCustomers+. The official launch took place between July 24 and Aug. 6, when 30,000 Mary Kay consultants traveled to Dallas for Seminar, the company’s annual salesforce training and recognition event. Mary Kay promoted myCustomers+ throughout the event with special expo areas, social media promotions and giveaways, and giant iTab touchscreens featuring the technology. When the final wave of Seminar came to a close, subscriptions had surpassed 8,600.
At Bottle Rocket, the desks are on wheels, and each client is assigned a cross-disciplinary team that literally comes together by relocating workspaces and carrying the project to completion.
The Age of the Customer
All those subscribers represent an unprecedented opportunity for Mary Kay to glean insights into its business. According to Brian Hopkins, a Vice President and Principal Analyst covering data management for Forrester Research, the goal of such technology is not simply to collect sales and inventory data, but to deliver it in a way that helps consultants develop and maintain the personal relationships that ultimately drive sales. “What Mary Kay and every direct selling business has to do is adapt the uniqueness of the way they do business to that idea of humans and algorithms working together to support and drive those loyal customer relationships,” Hopkins says.
The ability to collect data and extract insights, which are then used to personalize the customer experience, has given rise to what Forrester calls “The Age of the Customer.” In this new paradigm, customers—and in Mary Kay’s case, consultants—are looking not just to one platform or another, but how they work together to provide a seamless experience. As a result, the companies successfully leveraging customer data are those that have shifted their focus from cold hard sales to digital relationships software. “The result of that software-enhanced relationship is the fact that you’re moving product,” says Hopkins.
As in any good relationship, Mary Kay is paying close attention to the needs of the consultant, who inspired the creation of myCustomers+ and will determine its next phase. “We were looking for a customized solution for our salesforce,” says Wedding. “They do so much every day in the field, and we wanted to make it something that allowed them to easily track their inventory in real time and simplify how they run a Mary Kay business.” In September, the company will introduce a suggested wholesale order based on recent business activity; however, the next big feature will be based on feedback from built-in surveys. Whatever may appear in future iterations, myCustomers+ is already mobilizing the Mary Kay salesforce, and to quote one top consultant who tested the app, “This is a game changer.”
That focus on the consultant will drive not just new iterations of myCustomers+ but Mary Kay’s overall business strategy. In this way, the company can continue to reinvent itself to appeal to new generations through innovative technology and fresh marketing and sales strategies. As Forrester’s Hopkins says: “The best analytics and insight engine that we have is what’s in between the sales consultant’s ears.”
September 01, 2016
Zurvita: A Business on the Rise
by J.M. Emmert
Headquarters: Houston, Texas
Top Executives: Founders Mark and Tracy Jarvis
2015 Revenue: $81 million
Products: Health and wellness
|Mark and Tracy Jarvis|
When husband and wife team Mark and Tracy Jarvis set out to launch their own company, they had listened to numerous suggestions for the name until “zurvita” was proposed and immediately touched and won them over.
Its Latin roots mean “the risen life,” and this meaning behind the name embodied hope, the promise of a new life, and what they desired to bring to others. With their extensive experience in direct selling as field leaders, the Jarvises understood how the business model afforded financial opportunities to people from all walks of life.
The company name also embraced their faith. They had been involved in ministry for years, and as they considered their business venture, they realized they also could bring hope to those in need.
The Jarvises founded Houston-based Zurvita in 2008, fully committed to ministering hope to others and guided by three founding principles that they knew would serve them, and others, well.
Life is not without its trials and tribulations, and the Jarvises experienced both during the first few years of Zurvita. Starting a direct selling business is a daunting enough challenge even for those with network marketing backgrounds. But that did not deter the founders from their faith-based approach and first founding principle to build a company that honors and glorifies God, even if it could invite skepticism.
“We started the company because we felt it was a calling for us,” says Tracy Jarvis. “And to honor God in that comes natural to us.”
To the Jarvises, this means the act of serving others, of giving people hope no matter where they are in their lives. The Jarvises work to embody that principle in everything they do at Zurvita, whether it is making business decisions or interacting with employees, Independent Consultants and customers. “It starts at the top,” says Tracy. “It’s just who we are. The true spirit of the principle is about loving people where they are and not judging people. We have a lot of people who are not the same faith as us—or not believers at all—who feel very comfortable here. They feel loved and love the spirit and the culture we have created here.”
Part of that culture, notes Mark, is one of service and is firmly rooted in the second founding principle of developing a company with humble leadership. “Real leadership,” he says, “happens one person at a time.”
Hence, the principle has been fully embraced by leaders throughout the company who are devoted to spending countless hours with Independent Consultants, especially those new to the business, in order to better serve them. “Our Ambassadors support all ranks in the field and each other while setting amazing examples of a positive difference we can make in each other’s lives,” he says.
That support for each other was critical during the early stages of Zurvita when the company was trying to establish its identity. As the Jarvises’ earlier experience in direct selling had mostly been with service offerings, they naturally gravitated toward the same for Zurvita. Electricity, gas, and tech support were among the company’s first offerings, but consistent losses of hundreds of thousands of dollars a month forced them to reconsider their plans.
What saved the company and helped it to rise from the proverbial ashes was honesty, authenticity and, not surprisingly, faith.
“From a leadership standpoint, we have always been authentic,” says Mark. “Early in the business we let people know that we had never run a company. As we made mistakes, we were very quick to not try to justify them. We were honest and said, ‘We made a mistake. You know our hearts. It was never intentional. We are going to try to make it right.’ We were always truthful with our leaders about where we were at, even when it was uncomfortable.”
When the Jarvises made the decision to discontinue the staple product offerings in 2011 and turn their attention to nutritional products in the functional foods category, there was understandably some concern. However, many people in the company had been with the couple since their earlier days as field leaders for other direct sellers, and they knew that the decision to radically change gears had been carefully considered and thought through.
“They stayed with us even though they were skeptical,” says Mark. “I think people just knew our hearts. ... Because our core people had a long relationship with us, they knew that, no matter what, they were not going to get blindsided. I think that was the biggest difference.”
Tracy admits that those dark days were a scary time for all. “When you radically change, it can be quite scary,” she says. “You don’t know how your field is going to react. When we first rolled it out, we lost a few people. But our main people, those who had been with us for 15 years, now love it and can’t imagine representing anything else but a nutritional product that gives such great results.”
Creating a Winning Culture
The love for the new product, Zeal Wellness Blend, soon revitalized excitement among the company. Independent Consultants were quick to see the nutritional benefits associated with the blend of vitamins, minerals and antioxidants, and customer interest in the product grew substantially.
With the new focus on nutrition and improving health, company leaders worked on creating an environment where people could win at every level. Previous experience left a strong impression on Mark and Tracy about the vital importance that recognition plays in direct selling and building a company culture that is second to none.
“What we learned was how to celebrate the small successes,” Mark says. “I believe that was the reason we were so successful in the field. We never got away from the small successes. We have built a culture of customer support inside the company today that gets excited about the small successes, which is aligned with our third principle—create an environment where people can win at every level. We vowed to never get away from what is really important, and that is very important to us.”
|Zurvita headquarters in Houston, Texas.|
It is that concept, that every person matters, that also sets Zurvita apart today and shines bright in the thousands of people who make up its culture. “It boiled down to this,” says Co-CEO Jay Shafer, who has been with the company since its inception. “When it was all said and done, we concluded that Zurvita and the people within Zurvita are in business because we feel that every single person needs to believe that they matter. It wasn’t a tagline; it wasn’t some marketing ploy we came up with. It was simply that each person needs to believe that they matter. And it resonated so well with all of us. That’s exactly who we are. Everybody is important to us.”
And this is expressed in its branding, too. Two conventions ago, the company rolled out a new brand campaign to further enhance the personality of Zurvita and its products. “From a marketing standpoint, we did a total rebrand on the company,” says Mark. “We introduced a whole new look, a whole new feel, that reflected more of who we are as a company and culture.”
The Zurvita logo now consists of brighter colors representing the different Zeal flavors. Where a Z once stood solitary in the logo, now there is the Z image that represents moving forward. “It just seems to be working better,” Mark says. “Simplicity and excitement is what really works. So we repackaged the bottles to tell you exactly what to expect: focus, energy and health. Now, when somebody is presenting it, it is more of a confirmation that the bottle says what the product does.”
In addition to the rebranding initiatives, the company also recently presented the results of a clinical trial from independent third-party research firm KGK Synergize, which confirmed the positive benefits of Zeal, including improved mood, stronger vigor and vitality, and less anxiety and fatigue.
“That is big news, because our marketing campaign going forward will include the clinical trial results of this product affecting somebody’s mood,” says Mark. “We’ve produced some amazing-tasting drinks, and our marketing message says that getting valuable nutrition and vitality in your life is as simple as reaching for your favorite beverage.”
Connecting with New Markets
The Zurvita brand is currently in 16 markets, including Canada, Hong Kong, Singapore, Australia and the U.K. While there are no plans for further expansion, perhaps the next success will be in Mexico.
The phenomenal growth of the Hispanic market has often led other direct selling executives to ask the secret to the company’s success. The answer is surprising to many. “I get this question asked a lot,” says Mark. “ ‘How are you attracting leaders in the Hispanic market?’ The truth is, we’re not in the way you might imagine. What has made that market thrive is that we share family and culture values that transcend business strategies. The family aspect is what has contributed to that success.”
Shafer agrees. “And our way of business and founding principles translate to this growing audience in many of the areas that remain the most important in their hearts and minds.”
“I think on the Hispanic side we had some people, some families, that grabbed hold of the product, loved it, and then it was another situation where it was word-of-mouth,” says Shafer. “And, because we treat each person like they are the most important thing on Earth, I think they felt at home, where they could build a business. Some people on the Hispanic side do have some network marketing experience, but one of the things I heard from them in the beginning was, ‘Wow, you guys pay attention to us.’ I think the reason we have done so well is that we have carried over our culture in the Hispanic market.”
Seeing New Patterns of Life
Paying attention to people and staying focused on who they are as a company has helped Zurvita experience tremendous revenue growth over the past few years. In 2011, the company reported just $3 million in sales. In 2015, that number had jumped to $81 million, landing Zurvita on the DSN Global 100 list of top direct selling companies in the world.
Mark Jarvis attributes the success to staying true to the principles that he and Tracy first discussed six months before the company was actually incorporated along with the culture it fosters today. “We really committed to staying true to who we are, staying true to our principles and building from a grassroots standpoint,” he says. “Most of our Independent Consultants have never been in other network marketing companies, so the steady growth is people come in here and they become part of a family. Our retention of consultants is very good.”
|Zurvita has been sending teams to build water wells in Nicaragua since 2014, an effort now at the core of the company’s social responsibility program.|
The company also has been able to build a strong customer base. “That is an important thing in our industry today,” Mark adds. “About 57 percent of our business is to customers who just love the product. And because it is customer-driven, it has been successful for our leaders—their income has been pretty solid because customers stay.”
Mark projects that in 2016 the company will reach another milestone: the $100 million mark. And while that may not seem like much in these days of billion-dollar direct selling companies, it is a milestone that makes him smile when thinking of how the company struggled in its early years. “We’re growing at a rate that, we believe, gives our leaders the opportunity to grow with us. A comfortable pace.”
And as Zurvita continues to grow, both Mark and Tracy look to expand their corporate responsibility initiatives here in the States and abroad. Since 2014, the company has sent teams to build water wells in Nicaragua. “2017 will be our fourth year in a row to go back to Nicaragua,” says Tracy.
Back home, the Jarvises will launch Z-TV, a live broadcast that will allow them to expand both the business and their ministry. “Among the field, we do a lot of counseling for marriage, based on what we’ve been through,” says Mark. “We minister the pattern of marriage a lot, and we relate the pattern of marriage to the pattern of leadership. I think that goes back to the culture of who we are as a company. We are not just building a business to make money, we are truly here because we care about the people and we want them to live fulfilled lives.”
Yet, even as he seeks to inspire others to live more meaningful and purpose-filled lives, Mark Jarvis is quick to remind that the first founding principle is ever-present in his life. “I always tell people, don’t ever follow me,” he says. “If you’re going to follow us, follow who we’re following.”
September 01, 2016
Steeped Tea: Organic Focus and Innovative Product Ideas Spur Growth
by Lin Grensing-Pophal
Headquarters: Ancaster, Ontario, Canada
Top Executives: Founders Tonia and Hatem Jahshan
Products: Loose-leaf tea, food items and accessories
2015 Revenue: CAN$20 million
Take an online stroll through Steeped Tea’s vibrant website and it soon becomes readily apparent that the company is about more than tea—a lot more. The “Recipes” tab is particularly revealing. There visitors will find a wide array of recipes including salad dressing, protein balls, shakes, sodas, pancakes, quinoa and much, much more. What do all of these food items have to do with tea? Plenty. Each recipe incorporates Steeped Tea’s signature loose leaf tea offerings.
The seemingly never-ending stream of recipes is reflective of the creativity and marketing wizardry of Tonia Jahshan who, along with her husband, Hatem, founded the company in 2006 after discovering the delight of loose leaf tea during a vacation getaway. With a background in direct selling that funded her college education, Tonia immediately recognized the potential and possibility in sharing her discovery with others.
Based in Canada, Steeped Tea recently expanded into the United States. The company has been widely recognized both for its rapid growth and for Tonia’s stewardship. Also serving as President of Steeped Tea, she has been recognized as one of Canada’s top female entrepreneurs by Chatelaine since 2013, achieving the No. 1 spot in 2016. The company has been listed on Canada’s Profit 500 (akin to the Fortune 500) since 2013 as well, reaching the No. 20 spot in 2015. In 2015, North American revenue was CAN$20 million. U.S. growth, says Hatem, has been much faster than they experienced in Canada. “The growth we achieved in the U.S. in the past three years took us over six years to accomplish in Canada,” he says.
|Founders Tonia and Hatem Jahshan and their children.|
A great contributor to the company’s success was its partnership in 2012 with David Chilton and Jim Treliving, investors from the Canadian Broadcasting Corp. show Dragon’s Den (the Canadian version of Shark Tank). They Jahshans auditioned, were selected to appear on and ultimately gained funding from their appearance.
Hatem admits that he was initially against the idea. While there was obviously a potential upside in terms of infusing additional capital into the company, allowing it to expand into the United States, there was a downside as well. Generally, outside investors don’t have a strong understanding of the direct selling channel. These investors were different, though, he recalls.
“We were fortunate when we did the pitch that both Jim Treliving and David Chilton were very familiar with direct sales. They actually started a bidding war on that show and we accepted them as the investors.”
Tonia had a different perspective about the experience. “I had a really good gut feeling that we could do very well on the show,” she says. She also had another motive. “I knew that that exposure to 2 million people would be great for our consultants,” she says. And it was.
“Dave Chilton brings a wealth of knowledge from his finance background,” says Hatem. “He understands the direct selling world and has learned from other ventures in the industry. He is a trusted name in Canada as the author of The Wealthy Barber, one of the top best sellers in the country.” Having Chilton as an investor, says Hatem, “gives us tremendous credibility.”
Jim Treliving also brings some big benefits to the relationship. Treliving is a business mogul and the owner of the Boston Pizza franchise restaurant chain in North America and Mr. Lube chain in Canada. “His experience and reputation paved the way for us to navigate our way into the U.S. and continue our stellar growth,” says Hatem. “He too understands the direct sales model.”
Chilton and Treliving each own 10 percent of the company. “They continue to support Steeped Tea with their official stamp of legitimacy as stellar investments in their portfolios. They both sit on the Steeped Tea board of directors and help mentor and support Tonia and me,” Hatem says.
From Personal Tragedy
But, as much as it all sounds like a dream come true, the impetus behind the Jahshans’ loose leaf tea discovery was personal tragedy. As a young married couple, both Hatem and Tonia were extremely busy—she running a sales agency that required a great deal of travel and he as a restaurant franchisee with three locations. Despite their busy lives, they wanted to start a family. “We thought we were successful, but my wife miscarried and it was traumatic,” recalls Hatem.
It was while on a little getaway to Nova Scotia, where they were hoping to wind down from the demands and stress they had been facing, that they were served loose leaf tea at a bed and breakfast. It was Cream of Earl Grey tea, and it was heavenly. “It just touched every sense,” says Hatem. “It looked beautiful, it smelled amazing, it tasted incredible and, once you drank it, it inspired chattiness. We fell in love with it.”
Like many people, having only experienced the tea bag variety of tea in the past, the Jahshans didn’t realize how delightful the tea drinking experience could be. They went on a hunt to visit all of the tea houses on the island to figure out where the loose leaf tea came from. “My wife has always enjoyed sales and likes that aspect of work,” he says. “She said, ‘you know what, I’m going to start selling this stuff!’ ”
Enjoying a cup of tea lends itself to socialization. It’s a fact that Tonia immediately recognized and that drove her to start sharing her discovery with friends and family. Initially, says Hatem, Tonia sold her tea through baskets at open houses, fairs and shows. “It wasn’t very successful at first and then, all of a sudden, about a year and a half in she did a tea party—and almost everyone at the tea party wanted to have a tea party.” Soon she was hosting 15 parties a month, recognizing the fact that tea parties still held appeal, even in a fast-paced world where coffee often seems to be the go-to hot beverage.
When you think about it, what could be a better match for the direct selling channel than a product whose tradition is steeped (pun intended) in the concept of holding a party—in this case, a tea party—or Par-tea as Steeped Tea’s events are known?
There was another natural connection as well. Tonia’s background in direct sales as a young person helped her understand very well how the system works. She had put herself through college by selling candles and was very familiar with direct sales and its power. And, she adds: “Even before I sold candles, I was always going to parties.” She was drawn to the model from an early age. “I loved it. I was the friend who always had the [direct sales] parties. Every party I was asked to have, I would have. I was so attracted to that.”
‘The popularity of the tea party concept was immediate. But they came to a turning point, says Hatem. Some tough decisions needed to be made about whether to ramp up, or shut down, their burgeoning operations. “It just evolved into something that was literally keeping her out all night,” says Hatem. “We had to make a decision about what path to take—whether to hire people, or whether to add a salesforce that was on commission or payroll.”
An Ultimatum—and a Steep Trajectory
So, says Hatem, he issued an ultimatum and they made a deal. If Tonia could grow the company to about $500,000 in sales by the end of the year, he would sell his franchises and join her in the business. If not, they were going to “have to shut the company down and get back to our normal lives.”
She met the goal. So, in 2010 Hatem joined her in the business as CEO and began selling off his restaurants. Tonia’s strength was sales, not the financial or administrative elements of the business—that became Hatem’s focus.
In 2011 the couple decided to make an appearance on Dragon’s Den. The episode aired in 2012 and they struck a deal. They walked into the audition, he says, with about 300 percent growth for the year. “The day after it aired we were on a trajectory of about 600 percent growth,” he says. “Our growth has been so dramatic.” Steeped Tea entered the United States market in 2014, and the company has been seeing dramatic growth there as well, he says.
But, while the Dragon’s Den experience certainly can be pointed to as a significant impact on the company’s success, Hatem says that there’s more to it than that. Most notably, he says, is Tonia’s ability to connect with the field. “She’s literally one of them,” he says. “She started as a consultant. She did all of the trade shows in Canada. She’s the face of the company. We have an ear to the ground with Tonia so that’s a huge success factor for us.” Steeped Tea has a consultant base of 9,000 and is rapidly approaching the 10,000 mark, he says.
In addition, he says, “we do everything in-house; the complete business is under one room,” and “our supply chain pretty much goes down to the growers.” More specifically, Hatem says, “We source our own tea, blend and flavor in-house and store and distribute to all of North America from our single head office location. Our head office team does everything from blending, packaging and shipping products, to photography, marketing and customer support.” Maintaining this level of control, he adds, means they are “able to quickly respond to any new trends.” Most recently, that response was to the increased interest in matcha, a ground powder of green tea from Japan that is said to have the nutritional equivalent of 10 cups of traditional brewed green tea. “We can quickly change our production cycles and our marketing and just about anything about the company to hone in on a product line like matcha,” says Hatem. And, the company is also debt-free, he says. They want to keep it that way.
“We’ve been very careful with how we borrow and build; we’re very much against building it big in the hope that they will come. We prefer to grow with the sales.” That’s why, he says, they have no immediate plans to expand beyond their presence in Canada and the United States. “Right now the U.S. market is massive and we’ve just scratched the surface,” he says.
In a few years, though, he predicts, “we’ll start looking at Europe and Australia.”
A Product in Demand
Statistics back up Hatem’s sense of the high volume of unfulfilled demand for tea. According to the Tea Association of the U.S.A., “tea is the most widely consumed beverage in the world next to water, and can be found in 80 percent of all U.S. households.” On any given day, the association’s fact sheet says “over 158 million Americans are drinking tea.”
Perhaps most interesting, and clearly in line with the opportunities that Steeped Tea has seen, only 1 percent of the tea consumed is loose leaf tea, but “loose leaf tea continues to grow in both dollars and units.” In Canada, the situation is much the same. There, though, the loose tea market represents 61 percent of tea consumed, according to the Tea Association of Canada. There would appear to be ample opportunity to educate the American public and introduce them to Steeped Tea products.
In addition to being loose leaf and unconfined by a bag that may alter the flavor of the tea, Steeped Tea’s products are all natural, says Hatem. “We don’t believe in putting any kind of artificial flavor or color in the tea.” They also sell organic, herbal teas. “We’re trying to grow the organic line; that’s becoming more popular, especially in North America.”
They also believe in taking an approach, driven through Tonia’s marketing creativity, that is far flung from what you may recall of your grandmother’s tea-time experience. “She hates those doilies,” he says. “Tonia is very modern, very personable and upbeat. She always wanted to stay away from her grandmother’s tea sets—the prim and proper party.” Par-teas, he says, are “more modern, more hip and more cool.”
That has led to the introduction of products like sangria teas, and concepts like “virtual” Par-teas held through Facebook. “The home tea party isn’t the only kind of party,” says Hatem. “We’re always looking at tools to help consultants sell the product, to help them build their teams, and to help them reach whatever audiences they feel most comfortable with whether it’s online, or their neighbors, or friends and family.”
Steeped Tea does offer an autoship option, says Hatem, “however, we only autoship to customers.” The “Tea-Zer” subscription program sends two surprise teas from Tonia’s favorites each month.
A lot has changed for the Jahshans since their memorable trip to the bed and breakfast in Nova Scotia, and not just from a business standpoint. Since that time, the Jahshans have grown from a family of two to a family of five. The couple’s experience building a family, as well as Tonia’s own experience in direct sales, has driven a consultant-focused philosophy that puts family first.
“Our business really revolves around the way we like being in touch with our family,” says Hatem. It’s an approach that appears to be working well.
September 01, 2016
Learning and Building on Collective Experience
by Joseph N. Mariano
The role of the U.S. Direct Selling Association (DSA) has never been more clear: to serve as a “listening post,” a place to collect, analyze and address the aspirations and concerns of the direct selling channel. As we march into direct selling’s future, my role as President of the DSA is to ensure that there is a future, that our business model is promoted and protected—for direct selling companies, for the millions of independent representatives who are the lifeblood of our businesses, and for the millions more consumers who turn to our products and services every day.
I have no doubt that every leader of every DSA member company aspires to conduct business with the utmost integrity, with steadfast commitment to rigorous standards as set forth in the DSA Code of Ethics. But no matter how diligently we apply ourselves to our salesforce and customers, there will occasionally come—as within any industry—pitfalls and minefields we must traverse. On July 15 of this year, the Federal Trade Commission (FTC) concluded its two-year-long inquiry into Herbalife International, a prominent and longtime DSA member company. Although the settlement is only applicable to Herbalife and does not establish industry standards, it nevertheless provides insights into the FTC’s perspective and views of the direct selling model.
The strength of our Association lies in collaborative relationships—when we get out of our own bubble to support and learn from each other. In facing and surmounting obstacles together, we have the opportunity to analyze our business practices so that we might collectively emerge as more ethical, more transparent and more in tune with the expectations of those who rely on us. Aspects of the FTC settlement speak to these principles, and to how we operate as an industry. It behooves us all to take away what we can from this experience; to apply lessons to ensure our continued success in the future.
Earnings Claims. The perennial direct selling question: Are we selling products, or selling a business opportunity? The answer, of course, is both. However, we need to start focusing more on the consumer and on the marketplace value we create, not on the earnings opportunity we offer. There is no doubt that direct selling is a legitimate avenue for entrepreneurs to grow their own business. But we must increase our efforts to ensure prospective distributors are fully aware—clearly and unashamedly—that for most, direct selling can provide supplemental income. Most distributors will not realize a replacement income, let alone a lavish lifestyle. The DSA Code of Ethics, indeed, prohibits statements or promises that mislead prospective distributors and sets stringent guidelines for earnings representations.
Segmentation of Consumers. Retail customer? Preferred customer? Distributor? Does someone join your program to sell products, obtain products at a discount or a blend of the two? Are they switching from one to the other? Who, precisely, is buying your product, and why—and to what degree are they incentivized to do so? In a meeting I once had with the FTC, I asked what we could do to create better general understanding of direct selling companies. “Tell them to figure out who their customers are,” they said. Our programs and compensation plans can be confusing to the public and to those who have the power to affect our businesses. We need to do a better job of defining “consumer” and “consumption” if we want to further demonstrate the legitimacy of our sales.
The FTC and Herbalife settlement reinforces the importance of the principles and requirements of DSA’s Code of Ethics for all DSA members—to strengthen business practices and standards that protect entrepreneurs and consumers. Your collective commitment in the past to these principles has been awe inspiring, and I am confident that the next steps we take together will be even more impressive and allow our businesses to prosper long into the future. Stand by what we do—the right thing—and continue to wear our direct selling identity as a badge of honor. Consumers, entrepreneurs, policymakers and the public demand nothing less.
Joseph N. Mariano is President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.
September 01, 2016
Event Branding 101: Why It Matters and How to Do It
by Afton Holfinger
It’s another year and you’re gearing up for your convention. You’ve established the nitty-gritties—who, what, when and where—and you’re ready to put your request for proposal (RFP) together and wait for the great ideas to come rolling in. But before that RFP gets the stamp of approval, make sure you ask your potential production partners this tough question: How will you incorporate the theme of our event?
The same way you or your marketing department has painstakingly branded your company, a great production partner can take your theme and create an event brand that can be used in multiple ways throughout your convention or incentive trip.
Three Reasons Why It’s Important
Branding Is the Backbone
The way your company brand distinguishes you from competitors and makes you recognizable, an event brand can do the same. Your event logo—the star of your brand—can incorporate your current company branding, including colors, taglines, shapes and imagery, and make the event special for attendees. When they see it on your company website and social media, they’ll instantly recognize the event and get excited about attending, and they’ll be more interested in sharing it and getting others excited too.
Attendees expect big takeaways from events—they are giving up their time and they want to be inspired. Your event brand will create the anticipation of attending, drive engagement during the convention and encourage the lasting excitement needed to carry your message through the next year.
Using It in Social Media Can Drive Engagement
Branding your event also gives you the opportunity to promote your event across platforms like Facebook, Twitter, LinkedIn and your company’s website to get attendees excited and engaged. Your event brand unites your message and your theme into one powerful tool. Think of it as the flowing thread that connects all of the parts of your event into one cohesive, recognizable convention. Once you have that, it can be incorporated into all sorts of event materials, including social media posts.
You can use it pre-convention in online invites and event cover pages. Don’t underestimate how impactful short sneak peeks on social media can be. Use it onsite during your convention to create fun things like step-and-repeats, way-finding signage, entrance signage and event décor. Take advantage of those onsite photo-ops and encourage attendees to post with your event hashtag. Those who couldn’t be there will get a taste of what they’re missing, and for incentive events, it gets the excitement going to earn that trip the next time around.
It’s an Opportunity to Carry Your Message Forward
Missing the opportunity to brand your event can make it hard to communicate your theme, make your messaging less impactful and make the event seem thrown together. A logo and brand translated creatively into presentation themes, set design, way-finding signage, animations, video production and swag make the event memorable and leave attendees with a coherent message they can take back with them, keeping them energized and inspired.
Additionally, the more meaningful you make your theme and the more consistent your message and brand, the more you can trust that what makes your company and people special will be shared accurately and often throughout the next year.
You might be thinking, “Great! I can just download a branding checklist and do this myself!” Well, that’s true, but branding is complex and it’s a service worthy of investment. Working with a professional will give you access to someone with training in design and brand identity. Someone who understands the intricacies of picking the right colors and patterns and how to include your current branding and logo into your event branding. And working with an event partner that can offer production support as well as design support will make integrating that brand throughout your event a seamless—and less stressful—affair.
Partnering with your production company on the creation of this brand will also make your event more impactful. Relying on your production partner will bring planning and execution into one full-service partnership, giving you professional staging and professional design from one trusted source. As design elements are created, they can be immediately integrated into your production, including unique ways of taking elements of your theme and brand and incorporating them into the design of your set.
Once you decide to seek full-service production services, don’t forget to start early so that you have time to utilize your logo and event materials to their fullest potential in invitations, social media posts, posters and event swag bags.
How to Make It Happen
So how does this process work? Just like for your company, your event brand will start with your theme and messaging and evolve from there. Usually the first step is to take your theme and turn it into a logo. Here’s the step-by-step process for how your production partner will make your logo a reality.
Step 1: Client Meeting
The process should always start with an initial meeting to discuss your theme, how you want to use your logo and to get information on must-have details. You could include this information in your RFP, provide a contact for answering questions, or allow meetings with potential partners to discuss the theme in further detail.
If you have a certain color-scheme or an image that you need included, your production company should be able to incorporate those elements into the logo.
Step 2: Research & Brainstorm
After you meet, your production partner should learn everything they can about your business and your theme—anything that might help that lightbulb moment. Then they should meet internally to share their ideas as a production team.
You’ll know when this process has been overlooked because the design or concept that’s delivered later won’t fit with your company’s current branding and it won’t resonate with the messaging of your event. A great production partner will put time and effort into this step.
Step 3: Concept, Sketch & Design
After your production company understands your business and your theme, they’ll take their ideas and create sketches of how they would look as a logo. The strongest sketches will get turned into your first round of logo designs.
Those designs will be scaled for use later and available to you in multiple formats so that the logo will look great on your website or in print.
Step 4: Present to Client
This is the most exciting step. Once the designs are finalized, you’ll meet again and see your first round of logo designs. At this stage, you’ll share feedback and either stop here or move back to Step 3 and start again. A great production partner will revise to your heart’s content and create a final logo that you love.
Things to consider when picking your final logo:
- How would it look in different formats? If there are intricate pieces that will only look good onstage versus printed on swag, it might not be right for the setting. You’ll want to apply this throughout your event, so make sure you understand the ways you’ll want to use it before you settle on the perfect one.
- Does it match or complement current branding colors? Most likely, there will be a scenario where your company logo and event logo are next to each other. If they aren’t complimentary or the event logo doesn’t adhere to brand standards—such as font size or that perfect shade of your company color—it will be distracting and less impactful.
- Does it accurately communicate the theme? While the translation into a brand doesn’t need to be literal, think about the feeling or implication of the logo you pick and whether it communicates the right message about the event, the theme and the purpose of your event.
Step 5: Integrate
The last thing to do is to integrate your new logo throughout your event and start using it to promote or announce your sure-to-wow convention or incentive trip.
So as you begin to compile that next RFP, don’t forget to ask your potential event partner to show you how they’d turn your theme into a brand for your event. Your event brand is the backbone holding your event up—as a must-attend event for your consultants and as a standout in your industry. Branding will also drive your engagement and carry the excitement into the year ahead.
A great event partner will research your current brand and what you stand for, help you incorporate that into a brand for your event and give you options so that it’s just right. Trusting this service to the professionals will free up your time to plan other things—like the tablescapes, menus, agendas, recognition presentations and all the other important touches that go into planning a flawless event.
Afton Holfinger is Assistant Controller at Bartha. Bartha is a leading provider of high-quality events, production and staging for the direct selling industry.
September 01, 2016
Herbalife & the FTC: 4 Points to Review
by DSN Staff
The speculation started immediately. As soon as the news—Herbalife Settles with FTC—began popping up on mobile alerts and news outlets early Friday morning, July 15, observers inside and outside the direct selling channel began scrambling to understand the bigger picture. The settlement was clearly good news for Herbalife. It put a huge cloud of uncertainty behind the company; investors responded positively, and billionaire investor and longtime supporter Carl Icahn signaled his plans to substantially increase his ownership stake. But what does it mean for the rest of the direct selling community?
What it doesn’t mean is that there is suddenly a specific set of new rules by which direct selling companies must operate. It also doesn’t mean that all direct selling companies should feel comfortable adopting a “business as usual” strategy. As a settlement, the Herbalife/FTC agreement doesn’t create a new body of case law along the lines of the seminal 1979 Amway ruling. But the more than 70 pages filed with the court and the corresponding public comments by the Federal Trade Commission do provide at least a modicum of transparency into the relatively opaque view federal law enforcement has on direct selling and, specifically, companies that promote a multi-level compensation plan.
In the days following the settlement announcement, the team at Direct Selling News carefully reviewed all of the public documents and solicited input from across the direct selling community. That outreach underscored our belief that this is a unique moment in the history of direct selling, a moment of reflection and evolution that is likely to continue for some time. And, while the full implications of the settlement may not be known for months or even years, our research also revealed four areas every direct selling company should examine if they haven’t done so already.
1. Focus on Retail Sales to Customers
All direct selling companies should have a strong focus on retail sales of their products and services to customers outside the compensation plan. While some level of personal consumption by independent contractors makes sense in a direct selling model, a business built primarily on self-consumption is not sustainable. It also does not appear to be acceptable to regulators. One of the positive details in the Herbalife settlement is that it does allow the company to pay some compensation to independent business owners (IBOs) on personal consumption, a key concept the direct selling community has been advocating for years. But the settlement stipulates strict limits to this commissionable personal consumption and also prohibits IBOs from enrolling in automatic shipment programs—two indications that the FTC recognizes the concept of valid personal consumption by consultants but doesn’t consider it a blanket explanation for all purchases made by the salesforce.
Tracking those retail sales and ensuring that they include large enough profit margins to support the independent business owners also is key. In its complaint, the FTC alleged that Herbalife had a business practice that purports to offer a viable business-building opportunity but in reality incentivizes recruiting. Retail sales of product, the complaint says, are “insufficiently profitable” and instead IBOs are incentivized to recruit a downline of people who make large, wholesale product purchases.
Many direct selling companies, including most of the newer entrants to the market, largely avoid the issue of tracking retail sales by having customers place the bulk of their orders and make payments through consultants’ websites, and then they ship the product directly from the company to the buyer. In this way, consultants carry minimal or no inventory, and there is a clear record of the price paid for the product and the profit that goes to the consultant. In Herbalife’s case, the company now is required to include specific thresholds for sales to customers as part of its compensation plan. If those thresholds aren’t met, commissions are reduced.
2. Segment Independent Contractors from Preferred Customers
As was the case in other recent FTC actions, the Herbalife settlement places a great deal of emphasis on customers being distinct from those individuals looking to build a business. In the past, Herbalife recognized that a large percentage of its salesforce were actually people who simply wanted to buy the products at a discount and had no intention of selling or reselling product. The FTC, as it has in other cases, viewed this concept with suspicion, arguing that such buyers are not preferred customers but rather failed consultants. Herbalife now must keep clear delineations between the two groups. There is a category for preferred customers who can buy at wholesale or discounted pricing, but those folks are not eligible to recruit or sell product. Individuals also cannot move from one classification to the other without making a written request; there is no allowance for someone to sign up as a business builder and if, say, he or she fails to recruit anyone or earn commission in a year be automatically reclassified as a preferred customer.
“It is clear, from this and the Vemma case, that companies are going to have to come up with a new build strategy, where you sign up people as customers and then go back and later on sign them up as distributors,” says Mark Rawlins, CEO of InfoTrax Systems, a Utah-based software supplier to direct selling companies that focuses on backend operations and commissions.
3. Beware of Income Claims
As it did in other recent enforcement actions, the FTC’s complaint against Herbalife included a number of allegations of misleading representations of how much money a participant was likely to earn with an Herbalife business. The complaint specifically calls out the company’s Statement of Average Gross Compensation as having been unclear, references video testimonials that included images of expensive houses and cars, and cites examples of things top leaders have said onstage at events.
This certainly is not the first time the FTC has gone after a direct selling company for its income claims, and the complaint should serve as a reminder to all companies to be especially wary of lifestyle claims, including lifestyle representations in the form of photography or video footage, that depict results only achieved by a few top-level earners. In an interview with Direct Selling News following the settlement announcement, U.S. Direct Selling Association President Joseph N. Mariano emphasized that the DSA’s Code of Ethics also places strict limits on income and earnings claims associated with direct selling business opportunities.
Staying on the right side of law enforcement and in compliance with the DSA Code is relatively straightforward on these points, Mariano says. “You don’t have somebody standing up and saying, ‘I make a million dollars a year,’ and you don’t create the impression that that is standard, easily done or commonly done. And you say… that we are very proud of the opportunity that we have as individual companies, that people can earn money, that they can make a career out of this, and it is going to take hard work,” he says. “We can sell what we do. We can sell our opportunity. We can sell the dream, but we also have to recognize that the dream isn’t standing in your mansion in the Bahamas. The dream is acquiring skills, of helping your family, of being able to sell product, of helping your community and having the potential to build this into a business that will help your family.” (For more on Mariano’s perspective on the Herbalife settlement, see this month’s Back Page.)
4. Be a Forceful Advocate
There is no doubt that this is a time of introspection for the direct selling channel. Companies are, and should be, carefully evaluating their business practices to ensure that they embody the best practices around customer service, marketing, product innovation and business ethics today.
This also should be a time for strong advocacy. The direct selling community—active companies as well as suppliers—must come together to share the positive stories about the channel. Direct selling is an effective go-to-market strategy for consumer goods and services companies, particularly those that benefit from a high level of personalized customer service. It also offers an effective path to entrepreneurship, one that is open to anyone regardless of background or circumstance, comes with low startup costs, offers a high degree of flexibility and provides meaningful support to those getting started in business for the first time. Yet neither of these foundational elements of the business model are widely understood, which leaves the very concept of direct selling vulnerable to misinterpretation and unfounded accusations. By supporting efforts such as the academic initiatives of the Direct Selling Education Foundation and by being vocal about the broad benefits of direct selling, active and supplier companies can work to shift public perception over time.
Strong advocacy also means pressing for more clarity and consistency from the regulatory community. Supporting a bipartisan bill introduced in the House of Representatives earlier this year, H.R. 5230, is one way members of the direct selling community can press for such change. The bill provides a clear definition of what constitutes a pyramid scheme and would go a long way toward minimizing confusion in the marketplace. It is this very lack of a clear federal definition of a pyramid scheme that leaves the direct selling community to attempt to decipher the intent of law enforcement by reading between the lines of an ever-changing body of case law, court settlements and statements by regulators. Which of the terms of the Herbalife settlement, for example, are prescriptive guidelines for all direct selling companies and which are intended as mitigation solely for Herbalife? No one outside the FTC really knows for sure.
Yet it is important that the direct selling community not wait for the regulatory community to take the lead. During her press conference the morning the settlement with Herbalife was announced, FTC Chairwoman Edith Ramirez said the FTC will be providing additional guidance to what she described as the multi-level marketing industry. “I think the protections that we have in place here are aimed to ensure that going forward Herbalife operates legitimately,” she said, “but I do think they provide important guidance to the rest of the MLM industry about what they need to focus on in order to ensure they are not engaging in unfair or deceptive practices.”
Several weeks later, as this edition of DSN went to press, there was still no word from the FTC on what this guidance might involve. A representative from the commission’s public affairs office told DSN that they have no information about the guidance that was mentioned or on when it might be. DSA staff report that they reached out to the FTC immediately following the settlement announcement and extended invitations to the FTC to meet with the DSA board and to address member companies.
Instead of waiting for additional guidance from the FTC, this is the time for even more direct selling company executives to join those within the channel who already are serving as forceful advocates for self-regulation. If as a channel we create an environment in which all companies exceed the expectations of consumers and of our independent salesforce, and we do this consistently and for the long haul, direct selling will continue to grow and prosper. LifeVantage CEO Darren Jensen put it this way: “The future of the industry is rooted in having a vibrant customer base coupled with effective and powerfully branded products.”
The Possibilities Ahead
The quote is more than 100 years old, but Avon Founder and direct selling pioneer David McConnell’s sentiment still rings true today: “If we stop and look over the past and then into the future, we can see that the possibilities are growing greater and greater every day; that we have scarcely begun to reach the proper results from the field we have before us.”
The principles underlying the FTC’s settlement with Herbalife are, by and large, concepts that can make the direct selling channel a stronger, more appealing way to sell high-quality products and services and to provide people an opportunity to earn financial rewards or even build their own business. Yet taking action today—to embrace those principles as well as to advocate for the long-term health of the channel—is critically important. There are four pillars that support direct selling: our customers, our distributors, our companies and our community. To set the firmest foundation, we must be equally strong advocates for all four.
September 01, 2016
Stock Watch, September 2016
September 01, 2016
Recognizing Great Work in Direct Selling
by Lauren Lawley Head
Celebrating success is a hallmark of direct selling, and we have two opportunities for you to recognize the great work being done by your corporate teams.
First up, nominations remain open for our inaugural Direct Selling News 40 Under 40 class. This special report will feature 40 of the up-and-coming direct selling company executives under the age of 40 and is designed to honor young professionals making an impact across all areas of the business, including information technology, marketing, finance, field engagement, operations, customer service and more. Nominations are open to all full-time professionals working in active direct selling companies who will turn 40 years old on or after Jan. 1, 2017. Nomination forms are available at 40under40.directsellingnews.com and must be completed by Sept. 15.
Our second award program is the 2017 Best Places to Work in Direct Selling. As its name suggests, the Best Places to Work program recognizes direct selling companies that have cultivated a corporate work environment that boasts high employee engagement. Research shows that companies with engaged team members enjoy higher retention rates, productivity and business performance, so this is definitely a key performance indicator your company should measure. Your participation in the program is confidential—unless you are among the winning companies—and all participating companies receive a free overview report indicating how their organization scored.
After last year’s successful launch, we are pleased to once again be working with human resources technology company Quantum Workplace as our research partner. Quantum Workplace has been conducting employee engagement surveys for Best Places to Work programs across the United States for more than a decade and currently has 47 contests underway. To participate, simply nominate your company on or before Oct. 28 by visiting www.directsellingnews.com/bestplacestowork and completing a simple form. Quantum Workplace will work with you to survey your employees between Oct. 31 and Dec. 9, and winners will be selected early in 2017 and featured in a special publication in April. The program is open to all direct selling companies with at least 50 corporate employees in North America.
As we wrap up the high season for salesforce conventions and head into fall, it’s also time to dig deep into business operations, close out the year strong and set the foundation for a successful 2017. In this edition of Direct Selling News, we’re launching a three-part series focusing on research into three of the driving forces behind successful direct selling companies: customer acquisition, recruiting and onboarding new distributors, and distributor retention. You’ll also find profiles on three companies experiencing success: the iconic Mary Kay, still going strong after more than 50 years, the 2008 upstart Zurvita, which reached $81 million in net sales last year, and the Canadian party plan Steeped Tea, which is making its foray into the U.S. We hope you’ll find new ideas and insights into best practices that will benefit your team and provide some additional fuel for a bountiful fall.
All the best,
Lauren Lawley Head
Publisher and Editor in Chief
September 01, 2016
The Pursuit of Sustainability: Viridian Goes Private in Split from Parent Company
by Emily Reagan
Photo: Viridian Associates install streetlights in Tufine, Albania, as part of the company’s ongoing sustainability initiative.
In July, the newly formed Viridian International Management acquired assets of the Viridian Energy business from parent Crius Energy for payments that will total $10 million over five years. The deal includes a mutually exclusive relationship with Crius, which will continue to serve Viridian’s U.S. energy customers. Michael Fallquist, who founded Viridian and has led it since 2009, will serve on the board of Viridian International Management. The move is intended to position the socially responsible energy company for accelerated growth and international expansion. To lead the company into the future, Viridian has tapped Paul Booth, a veteran of the direct selling channel and the founder of software firm Data Paradigm Inc. Cami Boehme, formerly Chief Strategy Officer for Crius, also is joining the new entity as Partner and Chief Operations Officer. DSN recently sat down with Booth and Boehme to talk about Viridian’s new structure and the future of the company, which ranked No. 53 on the 2016 DSN Global 100 list with $324 million.
DSN: When did leadership begin discussing a possible spinoff, and why is now the time for Viridian?
Boehme: Viridian was the first company started within what became the Crius umbrella. We had three years as our own company, and we saw some tremendous growth. We were focused on radically changing the direct selling energy market, offering something innovative: affordable green energy. Up to that point, people only had all-brown or all-green. We came in in the middle, and it created a fantastic option for consumers and sellers, and what we know of today as the Viridian brand.
With the growth of our parent company, through the launch of additional brands, mergers and acquisitions, and eventually going public, on one hand it was exciting to have the additional scale and support. On the other hand, it created for Viridian almost an identity crisis. ... If you think of what makes a network marketing company thrive, it’s the Associate-first employee culture, tools and releases. That created for several years the question: How much better could Viridian be if we were back to who we are at our core and always have been? That is, a company that changes lives by helping people make simple and affordable choices—and not within the umbrella of a publicly held energy company.
Booth: My roots are in network marketing, having built up a successful distributorship. I’ve always had an affinity for network marketing and being able to offer that excitement and enthusiasm from an IT perspective to the industry. At Data Paradigm, we’ve helped launch several billion-dollar clients that started with three guys sitting in a room around a whiteboard. I’ve been able to soak in wisdom, be a sponge, and offer up insight in some cases. Being a vendor to Viridian over the past several years gives me a unique perspective, as Data Paradigm has with all its clients. Those conversations started organically.
Being present at the events, Michael and I began talking about what we could do to maintain all the good—the fantastic climate, culture, message, history and field leadership unity—and then take that out from under a publicly traded umbrella where, as Cami and Michael have said, we can spread our wings. Suddenly, additional offerings and market potential came into play, and it was unique in the sense that they couldn’t offer it up to a group of investors on Wall Street. What were investors going to do? They’d spin it, flip it, or whatever. It had to be a group that knew and understood network marketing, who could embrace it, not just treat it as an asset or acquisition, but carry it for years to come.
DSN: As you said, you’ve worked with numerous direct selling clients. What was it about Viridian that attracted you to this particular company?
Booth: This was the first company where the message went beyond the dollars. Of course, it’s all about creating something that survives us, but there is something about the culture and climate I’d never experienced before. There was a camaraderie in the leadership, the culture and climate. For example, the typical successful company will take its leaders on excursions and trips where it’s all about celebrating their success—which is well deserved. In Viridian’s case, they’d take them and put them to work in the jungles of Africa, and that was very unique to me. I had the privilege of catching the tail end of [a 7 Continents in 7 Years incentive trip] in Italy a few weeks ago, on the heels of their Albania trip, where they installed solar panels and made differences in lives well beyond any kind of success in a network marketing venture.
I was able to witness personally what I’ve been calling the cathartic debrief dinner Viridian held, where emotions and stories of that week were shared. At that point Michael and I had already been in several months of discussion, going back and forth about how we might make this work. As issues had arisen I’d realized each was solvable. What this company had—and it’s difficult to have—is a culture of unity, solidarity and single-mindedness of purpose, not just in front of the cameras but through the tears in that room especially. ... I texted Michael from across the room and said, “I’m all in. This is a done deal.” And I’ve never looked back. It was the correct move and timing from a number of perspectives, but that sealed the deal.
DSN: What has been the initial response from Associates?
Boehme: Fantastic. I don’t know that it could have been received any better…. I think it goes back to the fact we very quickly reassured people that everything they love about the company and that brought them here, is remaining unchanged. We are still a mission-based company. It’s changed in the sense that we’re now committed to rapid expansion, that we’re not OK with resting on our laurels and being a single-product company, that we’re going to add on the policies and practices that will drive a successful network marketing business.
DSN: What other product categories might be a good fit for Viridian?
Boehme: Energy was a great foray into sustainability, because it’s a huge part of how we impact the environment, but it’s really only 15 percent of our carbon footprint. When you think about the clothes we wear, the places we drive, the things we purchase, there are so many choices we make daily where we might not have the option to make sustainable choices. Viridian looks at how we can innovate and find product partners that help people make everyday choices in more sustainable ways. That framework will help define our product categories.
DSN: Viridian recently expanded into Australia, its first international market, through a partnership with Click Energy. Will you follow a similar model in other markets?
Boehme: I think a partner model will define much of what we launch. Our goal is to remain nimble, flexible and open to opportunities. We’re looking for what’s great and innovative in the market, what’s helping people lead more sustainable lives, and then we find the easiest way to bring that to our Associates and customers.
DSN: Cami, having observed Viridian for years, where do you see room for improvement?
Boehme: Ultimately it comes down to one thing: focus. Focus drives a company’s brand strategy, roadmap, what employees do on a day-to-day basis, and the understanding and consistency of vision among the field. When you’re one of a portfolio of companies, so many of the services that affect an Associate’s daily business are shared among multiple companies. That is a stark contrast to the world we have today, where everyone in the company has one goal: to build a world-class network marketing company that helps people make sustainable choices.
DSN: Where do you see Viridian in five years?
Booth: Viridian has so much potential, but it’s so small compared to what it could be, and what it’s going to be. I’ve been privileged to help companies achieve a scale that is magnitudes beyond where Viridian is today. The message is huge. The culture is huge. The future looks like the hockey stick on the chart, and I don’t see five years being the limit
Boehme: The beauty of this industry is that it changes lives. With Viridian, we’ve had the dual nature of that, where we’re helping our Associates change their lives and, through our philanthropic initiatives, making a genuine impact on the lives of entire communities who now have access to electrification. I think, as we grow, both our goals and measures of success will focus on the impact we’re making in terms of sustainability.
September 01, 2016
News in Brief, September 2016
Amway’s Head of Corporate Social Responsibility Presents at UN Ideagen Summit on Gender Equality
|Nutrilite Little Bits, a micronutrient supplement|
Amway collaborated with other private and public sector organizations at the recent Ideagen UN Empowering Women & Girls 2030 Summit, an annual event focused on advancing gender equality.
Ideagen was launched to drive collective societal impact through strategic partnerships. Those gathered at the United Nations in New York heard from Amway’s head of corporate social responsibility, Jeff Terry, who led a session highlighting the company’s work to improve the lives of women and girls. Other presenters included representatives from the European Union, USAID, the White House, Red Cross and Microsoft, among others.
“A summit like this is always an opportunity for us to see who is doing what, whether through the private sector, NGOs or other segments of civil society, because it’s about working together,” Terry told DSN. “The days of working by yourself to solve problems are over. It is critical to identify cross-sector and even in-sector partnership opportunities to help solve these problems.”
|Amway’s Jeff Terry presents at Ideagen.|
Achieving gender equality is one of the current U.N. Sustainable Development Goals, as is ending all forms of malnutrition by 2030. Amway, the largest direct selling company in the world, addresses both challenges through ongoing CSR initiatives, including the Nutrilite Power of 5 Campaign, which supports funding and distribution of Nutrilite Little Bits, a micronutrient supplement developed by Amway scientists. Little Bits supply 15 vitamins and nutrients critical to a child’s development in the first five years of life. During last year’s U.N. General Assembly, Amway committed to nearly doubling the reach of the program by the end of 2019.
In addition to nutrition science, Amway is leveraging another of its core competencies, entrepreneurship, to promote the welfare of women and girls. In this vein, the company is kicking off a pilot program in India that will train women to start their own businesses. The program is a partnership with Healing Fields Foundation, a nonprofit that educates women living in poverty to become community health facilitators. Amway is developing new elements of the program that will help these women apply their knowledge as entrepreneurs, selling locally sourced health goods.
Isagenix Introduces ‘Prime Time’ Community Focused on Healthy Aging
Health and wellness company Isagenix is taking a strategic approach to building relationships with Prime Time, a new online community focused on healthy aging.
By signing up at NowIsPrimeTime.com, members receive access to a Facebook group where they can communicate with other members and get health tips, as well as the chance to participate in healthy living contests. They also can opt to receive regular Prime Time newsletters.
The project was initiated by Patty Raphael, a Gen Xer and the company’s Vice President of Opportunity Solutions. “I spoke to a lot of Associates who felt Isagenix wasn’t quite hitting the mark when it came to the needs of my age group, and so we wanted to better support this community by building connections, having fun and providing tips on living life to the fullest,” Raphael said in the company’s announcement.
In many ways Prime Time is a counterpart to Isagenix’s START Your Life community, which aims to equip and inspire millennials—now the fastest-growing demographic among Isagenix Associates.
Youngevity Adds to Growing Direct Sales Platform
California-based Youngevity International has recently acquired two new companies under its growing umbrella of direct sales brands. The company’s first move was a deal with Renew Interests LLC, which includes the SOZO Global and Integris brands.
The Austin, Texas-based SOZO sells a range of wellness and personal-care products, while Integris is a maker of health supplements.
“I believe SOZO’s emphasis on the coffee berry as an ingredient will have particular appeal to our growing customer base,” said Steve Wallach, CEO of Youngevity.
The acquisition of Nature’s Pearl Corp., a grower, manufacturer and seller of Muscadine grape products for personal care and nutritional use, soon followed.
In a statement, Jerry Smith, Founder and CEO of Nature’s Pearl, called Youngevity “the clear choice” to help introduce Nature’s Pearl products to a wider customer base.
The additions of Renew Interests and Nature’s Pearl are part of an ongoing acquisition strategy that will expand both Youngevity’s salesforce and its product offerings across the nutrition, coffee, weight-loss, energy and skincare categories.
Next-Generation Skincare System Garners Design Award for Nu Skin
Wellness and personal-care company Nu Skin Enterprises has been awarded a 2016 Platinum A’ Design Award for ageLOC Me, a new beauty device that brings customization to the world of skin care.
The Utah company first introduced ageLOC, its flagship anti-aging brand, in 2008. According to Vice President of Opportunity Innovation and Team Lead for Global Research & Development Helen Knaggs, Nu Skin sought to fill a void in the marketplace with products that combat aging at its source, gene expression. “We saw that marketplace products were aimed at signs and symptoms of aging,” said Knaggs. “We felt there was really an opportunity to go behind the scenes of aging and understand it at its source.” By the time Nu Skin launched ageLOC Me in October 2015, the anti-aging line had generated more than $5 billion in global sales.
The ageLOC Me skincare system was built around some of the most significant trends in the personal-care market, including growing demand for anti-aging formulas, customization and at-home beauty devices, as well as the technology to make such devices effective. What truly sets it apart from the competition, though, is the ability to provide a custom formulation based on the user’s specific skin concerns and preferences. “That’s where the skincare industry hasn’t been able to deliver a product up till now,” Knaggs explained. “This is the first of its kind in a personal-care marketplace that has lots of choice, but not choice based on meeting individualized needs.”
The core of ageLOC Me is divided into five cartridges, with two containing moisturizers and three containing serums. Separating the ingredients in this way allowed Nu Skin’s product development team to maximize the number of possible formulations and their effects. The customer experience begins with the ageLOC Me Skin Assessment app, which gathers information about the individual and his or her preferences to determine which products are the best fit. The app then generates a personal skincare code that can be used to purchase an ageLOC Me Custom Set. In the A’ (pronounced A-Prime) International Design Awards, the device’s next-generation design put Nu Skin in the top 1 percentile, recipients of the Platinum Award, based on anonymous judging by a panel of academics, press members and industry professionals.
Newly Established AdvoCare Foundation Awards $150,000 in Grants
|AdvoCare and the Ragus family launch the AdvoCare Foundation.|
The AdvoCare Foundation recently announced that its first round of grant funding, totaling $150,000, will benefit eight organizations focused on child health and safety.
While AdvoCare has a long history of giving back, the newly established charity brings a formal framework and focus to its philanthropic efforts. The AdvoCare Foundation was initially funded by a $1.5 million gift from the company and the family of AdvoCare’s late founder, Charlie Ragus.
“We started the foundation to strengthen our 23-year legacy of giving back and focus our efforts on the next generation of champions,” said Alison Levy, AdvoCare Executive Vice President and AdvoCare Foundation President.
With the mission of investing in long-term solutions to child welfare, the foundation selected grant recipients across four major cities—Atlanta, Dallas, Los Angeles and Philadelphia. In Dallas, home to AdvoCare headquarters, grants of $20,000 were awarded to both YMCA Metropolitan Dallas and the local America SCORES, which runs an after-school program centered on soccer, poetry and community service.
Dreamworks Inspires Origami Owl Collection
|Products on display at an Origami Owl Jewelry Bar event.|
Though the designs are still under wraps, this fall customizable jewelry company Origami Owl will introduce character-inspired collections through a new licensing deal with Dreamworks Animation.
The collaboration is Origami Owl’s largest to date, and the first foray into social selling for Dreamworks, creators of Shrek, How to Train Your Dragon, Kung Fu Panda and other popular film franchises. Origami Owl will launch its first character-inspired offerings Oct. 1, in connection with the release of Trolls, a new animated comedy from Dreamworks. The Arizona-based company said the collection will include its signature Living Lockets, Charms, Dangles and even new product categories.
“It’s been wonderful to collaborate on the pieces,” said Chrissy Weems, Origami Owl President, who co-founded the company in 2010 with her then 14-year-old daughter, Bella. “The film’s themes parallel Origami Owl’s core values and mission ‘to love, inspire and motivate others.’ The feature’s vibrant colors and upbeat, happy music also reflect the sense of joy and energy evoked by the Origami Owl brand.”
Following the launch of the Trolls Collection, Origami Owl customers can expect to see additional collections inspired by favorite franchises and characters.
Thirty-One Gifts, Nationwide Children’s Hospital Launch ‘Girls Take Flight’
Bags, accessories and home décor company Thirty-One Gifts is partnering with Nationwide Children’s Hospital to launch Girls Take Flight, an initiative to support girls facing mental and behavioral health illnesses.
Through its charitable arm, Thirty-One Gives, the company will help to fund behavioral health research conducted by Nationwide Children’s, the nation’s largest not-for-profit freestanding pediatric healthcare system. Thirty-One said it already has collected $37,000 in personal contributions from its independent sales leaders. The company also pledged to donate all proceeds from its September “Gives Round Up!” program and make a contribution during its “Standing Strong for Her” initiative in October.
“Mental illness is a crisis for girls, and the statistics are staggering,” said Cindy Monroe, Founder, President and CEO of Thirty-One. “This initiative marks the first time Thirty-One Gifts will be supporting ground-breaking medical research, and we couldn’t be more excited about it.”
Thirty-One said it will equip its 70,000 consultants with resources to raise awareness and reduce the stigma of mental and behavioral health illnesses. The company also released a new thermal tote product printed with butterflies, which symbolizes the Girls Take Flight campaign and the hospital’s logo.
September 01, 2016
Second Quarter Results a Mixed Bag for Public Companies
by Andrea Tortora
The midyear economic outlook for 2016 is mixed for the largest publicly traded direct selling companies in the U.S., with some posting better-than-expected second quarter results while others saw decline. Second quarter and midyear financial data reported in July and August reveals continued pressures from the impact of foreign exchange rates. Yet despite the strong U.S. dollar, businesses are seeing sales growth in Asia, particularly in China.
Among the more interesting stories is that of Avon Products Inc. (AVP—NYSE), which saw sales decline in all markets but posted a profit of $33 million or 6 cents a share, compared to $28.8 million in the same period a year ago. The results beat analyst estimates, which predicted earnings of 2 cents a share.
The solid performance is a sign that the company’s cost-cutting plan is beginning to have an impact. Avon shed its North American business in March and is moving its headquarters to the United Kingdom. The plan is expected to save Avon $350 million a year before taxes after three years, including $70 million in savings in 2016.
Total revenue was $1.43 billion, down from $1.56 billion, but CEO Sheri McCoy says there is top-line growth in nine of the company’s top 10 markets.
“While we recognize that it’s still early in our transformation and much effort and work lay ahead, I remain confident. Avon is on a path to sustainable, profitable growth,” McCoy says.
Herbalife Ltd. (HLF—NYSE), which settled an investigation of its business practices in July, reported a loss in the second quarter of $22.9 million or 28 cents a share. That’s down from earnings of 97 cents a share for the prior-year quarter. The second quarter loss includes a $203 million regulatory fine that Herbalife agreed to pay in its settlement with the Federal Trade Commission.
Excluding these items, adjusted earnings were $1.29 a share, up 4 percent from $1.24 a share a year ago.
Sales rose 3 percent to $1.2 billion, with midyear sales totaling $2.3 billion.
“This is a fantastic and historic quarter for Herbalife,” says Michael Johnson, CEO of the Los Angeles-based company. “Our momentum and performance reflects the strength of our distributors’ businesses. And with the regulatory settlement behind us, we’ve never ever been more focused.”
Nu Skin Enterprises Inc. (NUS—NYSE) is making a positive turnaround with $600 million in second quarter sales, up 7 percent from $560.2 million in the same period a year ago.
The Utah skincare and nutritional products business reported earnings of 79 cents a share, up slightly from 75 cents a share a year ago.
Nu Skin saw growth in three markets: South Asia-Pacific, 36 percent; Greater China, 18 percent; and EMEA, 6 percent. It posted declines in two markets: North Asia, -4 percent, and Americas, -19 percent.
China is the company’s largest area, with 37 percent of Nu Skin’s sales. To better compete, Nu Skin will launch products specific to China, such as an air filter for home use.
“We remain optimistic about the future as we continue to introduce our latest ageLOC products,” says Truman Hunt, President and CEO.
USANA Health Sciences Inc. (USNA—NYSE) beat analyst estimates for the second quarter with record net sales of $258.5 million, up 10.8 percent from $233.2 million a year ago. (Analyst estimates predicted an EPS of $1.93 on $252 million in revenue.)
Earnings per share increased by 7.8 percent to $2.07 a share, up from $1.92 a year ago. The increase in EPS is mostly due to USANA’s stock buyback program during the past 12 months.
“USANA generated solid results during the second quarter, which were in line with our expectations,” says Dave Wentz, USANA’s Co-CEO.
The Salt Lake City company saw strong growth in Asia, despite a negative impact from a stronger U.S. dollar. Net sales in the Asia-Pacific region increased 15.1 percent to $194.2 million. Currency fluctuations delivered a negative $9.5 million impact.
Primerica Inc. (PRI—NYSE) beat analyst estimates with second quarter earnings growth of 8 percent on total revenue of $379.2 million, compared to the second quarter of 2015. Operating revenue jumped 7 percent to $375.8 million for the quarter.
Diluted earnings per share were $1.19. That’s an increase of 27 percent and 13 cents better than the analyst estimate of $1.06.
The Duluth, Georgia, company reported growth in its life insurance segment with a 14 percent boost in life insurance policies issued and an 11 percent increase in life insurance licensed representatives to 112,365.
CEO Glenn Williams says Primerica continues to see strong performance throughout the business.
“Our salesforce leaders delivered distribution growth and strong life insurance productivity in the second quarter,” Williams says.
Tupperware Brands Corp. (TUP—NYSE) saw sales continue to decline in the second quarter with revenue of $564.7 million, down 4 percent from $588.9 million in 2015.
The Florida company reported a profit of $52.4 million or $1.03 a share, down from $62 million and $1.23 a share a year ago.
The latest results follow a 10 percent revenue decline in the first quarter. For the year, sales are down 7 percent compared to the first half of 2015.
Sales were strong in South America, up a total of 8 percent for the region. Brazil showed an increase of 22 percent. Tupperware U.S. and Canada reported a 1 percent sales increase.
Rick Goings, Chairman and CEO, said the quarter’s results show the strength of Tupperware’s products and people. Even with a 4 percent decline and a 7-point hit from exchange rates, “we grew sales by 3 percent in local currency—the high end of our range, with significant contributions from Brazil, China, Malaysia/Singapore and Tupperware Mexico.”
Medifast Inc. (MED—NYSE), a Maryland healthy lifestyle company, posted second quarter earnings of $3.4 million or 29 cents a share, down from $6.2 million or 48 cents a share in the same period a year ago.
Adjusted income was $7.5 million or 63 cents a diluted share.
Overall revenue was $71.1 million, down from $72.2 million in the second quarter in 2015. A majority (80 percent) of Medifast’s revenue came from Take Shape For Life, the direct sales segment of the company. With revenue of $57.4 million, the division grew 10 percent. This is the sixth quarter of year-over-year growth for Take Shape For Life. Medifast is heavily investing in the business segment, which marked its highest level of year-over-year growth in three years.
“Our team’s efforts to better differentiate our business segments and highlight their respective value propositions helped to fuel solid financial performance in the quarter,” says Michael MacDonald, Chairman and CEO.
Natural Health Trends Corp. (NHTC—NASDAQ) manufactures personal-care and wellness products. The California firm saw total revenue increase 15 percent to $80.4 million, compared to $69.7 million in the second quarter of 2015.
Net income was $12.2 million, or $1.07 a diluted share, compared to $12.3 million, or 98 cents a diluted share, in the second quarter of 2015.
Revenue from NHT’s Hong Kong operations, which represent 91 percent of total revenue, increased 13 percent to $73.3 million, compared to $64.8 million in the second quarter of 2015.
Revenue outside of Hong Kong increased 43 percent to $7 million, compared to $4.9 million in the second quarter of 2015.
“Going forward, we will remain focused on expanding our global footprint, continuing to acquire members in new and existing markets, as well as our product development initiatives to drive sustainable, long-term growth,” says President Chris Sharng.
Mannatech Inc. (MTX—NASDAQ) a Texas-based health and wellness company, reported a loss in the second quarter of $1.3 million, or 49 cents a share, compared with a profit of $3.1 million, or $1.15 a share, in the second quarter of 2015.
But sales were the highest the company has seen in seven quarters. The results come after a company rebranding, in which Mannatech invested in a new brand, infrastructure technology and the release of 13 new products. Sales in the U.S. and Korea of a new fat-loss system called TruHealth positively impacted financial results.
TruHealth will rollout globally throughout 2016.
Recruiting of salespeople grew 11 percent, with new independent associates in the second quarter totaling 28,400 compared to 25,600 a year ago.
Mannatech’s overall revenue was $48.8 million, up 4.5 percent from a year earlier.
Nature’s Sunshine Products Inc. (NATR—NASDAQ) saw second quarter net sales revenue of $89.4 million, up 10 percent compared to sales of $81.2 million in the second quarter a year ago.
This marks the eighth consecutive quarter of net sales growth for the company’s operations in the U.S. and Canada.
The natural health and wellness company said it recorded net income of $2.4 million for the quarter, or 14 cents per common diluted share. On a local currency basis, net sales revenue jumped 11.5 percent.
The Lehi, Utah-based company’s Synergy Asia division delivered 28.5 percent local currency growth in the second quarter.
‘For the first half of 2016, net sales revenue hit $171.8 million, up 4 percent from $165.1 million compared to the first six months of 2015. The growth is driven by an $8.9 million or 23.7 percent increase in Synergy Asia and an incremental net sales revenue increase of $4.4 million related to sales through Hong Kong
September 01, 2016
Keys to Success part 1: Customer Acquisition
by Andrea Tortora
Of all the misinformation about direct selling, perhaps the most often repeated—even by those who work most closely in the field—is the description of direct selling as an industry.
Most common dictionary definitions of the word “industry” refer to a collection of enterprises that deliver a common category of products or services, such as the skincare or nutritional supplement industries. Both of those industries include a number of direct selling companies, but they also include companies that sell products through wholesalers, in traditional retail stores, via e-commerce and direct to consumers. Direct selling, then, is a channel by which some companies opt to distribute products and services.
Why is this distinction important? By studying direct selling not as an industry but as a channel of distribution, it becomes easier to focus on the shared fundamentals of success. Over the next three months, Direct Selling News plans to use this lens to take a closer look at three of the drivers of direct selling as a distinct channel for distributing products and services: customer acquisition, recruiting and onboarding new consultants, and retaining those individuals as active members of an independent salesforce. By honing in on the factors that make direct selling effective when compared to other channels of distribution, we can accomplish two things: identify best practices that can both promote sustainable growth for companies and promote a broader understanding of the unique value proposition direct selling offers in the marketplace.
To begin the project, the DSN team conducted a review of the websites and key marketing materials for the direct selling companies experiencing the fastest growth in the U.S. market. This provided insight into the techniques leading direct selling companies are using today as well as served as a framework for conducting in-depth interviews with company executives, researchers and other thought leaders.
CUSTOMER ACQUISITION STRATEGY No. 1: DELIVER QUALITY
As with any channel of distribution, getting products and services into the hands of customers is the ultimate measure of success in direct selling. The direct selling companies that do it best are laser-focused on the quality of the products or services they offer.
Take for example Florida-based Team National, which sells two-year or lifetime shopping discount memberships for a variety of products and services from mobile phones to furniture. The company saw its net sales increase 38 percent from $399 million in 2014 to $549 million in 2015, ranking No. 36 on the 2016 Global 100 list and placing it among the fastest-growing direct selling companies operating primarily in the U.S. market. The company’s top priority, says Vice President of Membership Services Andres Forero, is to make sure its vendors deliver savings.
Team National tracks how members use their memberships and which vendors they purchase from most often. If no one is using a specific vendor, that relationship is severed and replaced with a new one that customers are more likely to find beneficial, Forero says. The company also is investing in system improvements that allow members to more easily access their discounts through mobile devices.
“We are always looking at the quality of products we are offering,” Forero says. “That is the glue that holds us together.”
CUSTOMER ACQUISITION STRATEGY No. 2: COMMUNICATE THE VALUE
Having a high-quality product or service is critical, but so too is communicating that value to potential customers. This is where the personal service of an independent salesforce adds so much to the value chain. “It’s about conveying the idea that the products available are as good as or better than what the consumer can get in a traditional retail channel,” says Michael Solomon, a marketing professor at St. Joseph’s University in Philadelphia and a consumer behavior consultant who also serves on the board of the Direct Selling Education Foundation. “When sellers dig deep and find the pain points for people, they can help them gravitate toward a solution that makes their life easier.”
How can companies accomplish this? It could be a product demonstration or strategic use of social media that puts the desired product into the hands of blogging opinion leaders or gatekeepers who are influential within consumer communities. Millennial customers especially pay attention to online networks. Fashion bloggers are one example; such writers are not part of a particular industry but have made themselves influential. Consumer products giant Procter & Gamble realized the pull of mommy bloggers and harnessed the voices of these women to help sell its Pampers brand of diapers. The strategy played a big part in making Pampers a billion-dollar brand.
A company’s website is often the first or second place (after talking with an independent business owner) that a customer may go to learn more about a product or the company itself. Given that fact, it is difficult to overemphasize the importance of establishing and maintaining a high-quality, consumer-centric website. “Transparency on the website is what most people look for in terms of answering the question, ‘Do I trust this company?’ ” says Dr. Brenda Cude, a professor in the College of Family and Consumer Sciences at the University of Georgia. “Being transparent is positive messaging.”
The homepage reveals much about a firm, its philosophy and what is driving the business, and the functionality of the site can promote a level of trust between the consumer and the brand. Simple, everyday language is appealing to consumers; websites that use jargon and make it hard to understand what the product is are not customer-friendly. Customer-centric websites should answer questions such as:
- How does the product work?
- Are there clinical studies to back up results claims?
- Is there proof that the stated product results are correct?
While customers are, by definition, most interested in the product information on a company website rather than the business opportunity, the language used to describe the business opportunity also can influence purchasing decisions. The key here, according to Cude, is to keep things simple. “The standard consumer advice is that if you don’t understand it, back away,” says Cude, who also serves on the Direct Selling Education Foundation’s board of directors.
Direct sellers should also let go of stale jargon, Cude says. For example, the average consumer may not understand the phrase “network marketing,” but certainly would “peer-to-peer.” “It is a best practice to fill in the blanks before others do it themselves,” Cude says. “Direct selling companies could be pushing people away just by the language they are using.”
CUSTOMER ACQUISITION STRATEGY No. 3: DEVELOP and REWARD BRAND LOYALTY
Once customers make that first purchase from a leading direct selling firm, how does the company keep them coming back for more? With loyalty programs, discounts and free shipping, to name a few techniques. When done well, repeat customers feel like VIPs.
To achieve this goal, anti-aging and beauty products company Nerium International zeroes in on a customer’s first 90 days and techniques that will make the company’s products part of his or her daily routine. “We want them to use the product and take their own before-and-after pictures to see the results, reinforce the product and give them reasons to stay,” says Chief Marketing Officer Amber Olson Rourke. Nerium loads in plenty of rewards and incentives in those first three months, including 10 percent off an order, free shipping and other perks for maintaining an order, such as welcome calls and frequent follow-up calls from a dedicated customer support team. These “happiness heroes” nurture the customer’s relationship with the company and between the customer and his or her Brand Ambassador. It has paid off for the Texas-based company, which saw net sales increase 28 percent from $403 million in 2014 to $516 million in 2015, ranking it No. 38 on the 2016 Global 100. “We treat our customers like gold,” Rourke says.
What companies like Nerium know is that it’s cheaper to keep a customer than get a new one. Loyalty programs and discounts that keep customers coming back or re-engage them in new ways are critical to maintaining the customer relationship. In some cases, customers receive better product deals than consultants. When that happens, watchers in the channel say, it’s clear the company is truly customer-centric.
CUSTOMER ACQUISITION STRATEGY No. 4: TRACK THE METRICS
Some companies having success with customer acquisition have found truth in the management maxim “that which is measured gets done.” One of the most fundamental metrics in the area of customer acquisition is the ratio of customers to consultants; the higher the number of customers per consultant, the more successful a direct selling company is at customer acquisition.
At health and wellness products maker Isagenix, the average customer-to-consultant ratio is above an 80:20 split, usually hovering around an 85:15 ratio, says President and Chief Operations Officer Travis Ogden. The Arizona-based company saw its net sales increase 23 percent from $725 million in 2014 to $890 million in 2015, ranking it No. 22 on the 2016 Global 100. To ensure its customer growth and loyalty remain strong, Isagenix also tracks such metrics as average monthly order size, retention rates and the success of various promotions.
This data gives Isagenix business intelligence that then informs strategies for enhancing customer loyalty. Ogden points to two programs that have been particularly beneficial:
- 60-day programs. These regimens guide customers through the use of specific Isagenix products to see transformations in their health and body image. Isagenix uses online programming and social media to connect customers so they can hold each other accountable, motivate each other and cheer each other on.
- IsaBody Challenge. This is a 16-week program that preferred customers can enter. Participants form a community of people trying to transform themselves and their bodies. The company offers $200 in Isagenix products to everyone who completes the challenge, plus the chance to win $200,000 in cash, prizes and trips.
“Once people see the results, then they become committed to incorporating our products into their daily habits and they become more long-time users for us,” Ogden says.
CUSTOMER ACQUISITION GROWS ALL ASPECTS OF THE BUSINESS
Customer acquisition is a critical component to successfully using the direct selling channel to bring products and services to market. And the four strategies outlined here—focusing on product quality, communicating value, developing brand loyalty and tracking metrics—are driving growth at many of the fastest-growing direct selling companies in the U.S. today. Taken as a whole, these strategies bring direct selling’s advantage as a source for products and services to the forefront for consumers while providing effective guidance for companies pursuing longevity in this channel.
Customer acquisition also is inextricably linked with the next driver of direct selling: recruiting and onboarding new salespeople. At Florida-based It Works!, for example, people lead with the product. Interactions usually begin with “Do you want to try the product?” followed by a demonstration of the company’s signature body contouring wrap. That gives a consultant the opportunity to make a sale to a new customer, and it introduces the new customer into a building block of business building: product demonstrations. At Le-Vel, the Thrive brand of supplements and shakes is actually bigger and better known than the company itself. The product is front and center, which means so are its customers. This can make it easier to sell the opportunity when the time is right. Both companies experienced strong growth in net sales from 2014 to 2015—254 percent for Le-Vel and 39 percent for It Works!—thanks in part to a product-first, customer-centric approach.
As first-time customers become loyal consumers, the opportunities to convert those buyers into sellers follow. The October issue of Direct Selling News will delve into this next concept more deeply, considering that while not every customer will want to pursue a business opportunity, when customers are treated well, making the leap into business can occur naturally and seamlessly.
September 01, 2016
Executive Announcements, September 2016
Nu Skin Adds Expert in China Growth Strategies to Board of Directors
Following its recent investment deal with Ping An ZQ China Growth Ltd., Nu Skin Enterprises announced that it is adding one of the group’s representatives, Simon Shen, to its board of directors.
The Provo, Utah, company said in June that it had inked a $210 million investment deal with the Chinese firm, which consists of a consortium of Chinese investors led by Ping An of China Securities Hong Kong, one of China’s largest insurers, and additional investors affiliated with ZQ Capital Ltd.
]Shen is the founding member of ZQ Capital Ltd., with a background in Asian capital markets and extensive experience in mainland China.
“We are excited for Simon to join our board as he brings valuable expertise in helping global companies realize their growth potential in China,” said Steven J. Lund, Executive Chairman of the Board. “Simon shares our excitement for the long-term prospects for Nu Skin globally, and particularly in China.”
Shen previously was Managing Director at Barclays Asia Investment Banking division and led its China Financial Institutions Business. He also spent six years with Goldman Sachs as an investment banker in its New York and Hong Kong offices.
Young Living Promotions Bring New Chief Financial Officer and Product Development Leadership
At Young Living Essential Oils, the search for the company’s next CFO has circled back to Young Living’s own Janay Standifird.
Standifird joined Young Living four years ago, in the role of controller. Most recently, she served as Senior Vice President, Global Controller and Finance, overseeing the company’s global accounting.
“Janay stands out among the most seasoned professionals and inspires everyone, especially women in the workforce, to reach their goals,” said Mary Young, CEO of Young Living. “We thank Kevin Pace (retiring CFO) for his diligent service to our members and the company and are pleased to have a professional of Janay’s caliber take over the company’s finances.”
Standifird brings extensive knowledge of global financial systems and internal controls, global business strategies, building teams and risk mitigation. Her nearly two-decade career has included 10 years in the direct selling channel.
Young Living also has promoted Michael Buch, Ph.D., to Senior Vice President, Research & Development and Product Management. Buch oversees scientific research and development on new and established products and leads the
company’s product strategy.
Buch joined Young Living in 2015 and has more than 25 years of experience in the health and wellness industry. He has led global organizations at some of the world’s leading companies, and holds more than a dozen patents in the health care field. He is personally responsible for developing health care products with annual sales of nearly $3 billion and marketed in more than 100 countries.
Mannatech Appoints Direct Sales Veteran as VP of EMEA
Like many leading supplement companies, Mannatech sees potential for big growth outside of the United States.
To help lead its global expansion efforts, the Coppell, Texas-based company has named David Ori as Vice President of EMEA, or Europe, the Middle East and Africa. Ori has more than 20 years of experience in direct sales and international marketing and was most recently Vice President of International Development for a leading cosmetics and wellness company.
“David’s experience in the direct sales industry and international markets will help us create effective strategies for rapid global expansion,” CEO Al Bala said. “He will be instrumental in helping us lead and grow our operations in those regions, and his valuable work experience will enable us to better serve our associates.”
Mannatech also has named Roger Hsueh as General Manager of its operations in Hong Kong and Taiwan, where he will support Mannatech’s rapid expansion in Asia.
With 30 years of successfully working in the Taiwan and China markets, Hsueh’s appointment will help support sales, marketing and logistics efforts around the company’s expansion into China as an e-commerce seller. He will play a key role in providing strategic and operational leadership and execution, as well as realignment of partnerships with leaders in Asia.
Nerium Names Rafael Avendano Santos as GM of Mexico
|Rafael Avendano Santos|
Rafael Avendano Santos, a 20-year direct sales veteran, has been appointed General Manager of Nerium’s Mexico business. Nerium’s third country opening in 2014, after the U.S. and Canada, the market has continued to break sales records for the skincare brand.
“I know we will see Mexico success and excitement surge as we welcome GM Rafael Avendano, an accomplished professional who shares the Nerium values and culture, to our Nerium Mexico family,” said Founder and CEO Jeff Olson.
Avendano is a sales team leader and training and technology expert with customer relationship management expertise. He specializes in content development and implementation of training programs for countries throughout Latin America.
“We are committed to supporting our Nerium entrepreneurs throughout Mexico and I will ensure that our Brand Partners continue to receive the best products, tools, support and training,” said Avendano.
Scentsy Hires New Executives to Fill VP Roles
Scentsy Inc. has brought in Annie Price, Janet Cronstedt, and Kari Homan to lead field and marketing initiatives.
As the wickless candle company’s Vice President of Field Touchpoints, Price will oversee consultant support, events, recognition and incentives, and overall field communication strategy. Since 1992, she has served in executive and leadership roles with increasing responsibility, most recently at Hewlett-Packard.
Cronstedt, who has more than 25 years of experience in direct selling, joins Scentsy as Vice President of Field Development, overseeing all sales management and training with her team providing analytics and coaching.
Nearly 10 years as a top recruiter for a leading beauty brand was a highlight of her career, before she joined one of the largest direct sellers in the world as Managing Director of the company’s U.S. division. She was later Senior Vice President of an established lifestyle brand and is a certified John Maxwell Coach and On-Purpose Mentor.
Homan is Vice President of Marketing Communications. She will oversee the integrated marketing strategy and social media teams. With a background in communications and organizational behavior, Homan began her career in traditional publishing before pursuing high-tech marketing. She has worked with Thomson Reuters, Hewlett-Packard, Wyndham Hotels and Resorts, and T-Mobile.
Regal Ware Names Dave Lenz Chief Operating Officer
Regal Ware Inc. has appointed Dave Lenz as Chief Operating Officer at Regal Ware. He will oversee day-to-day operations to effectively grow the organization.
Since joining Regal Ware in 2002, Lenz has served in numerous leadership roles with increasing responsibility. Most recently he held the position of Senior Vice President, Sales and Marketing with accountability for Regal Ware brands sales and marketing, executive leadership and management of new business development, and corporate benefits and salary administration at the senior level.
Prior to joining Regal Ware Dave held various leadership positions at The West Bend Company.
SISEL International Makes Top Sales Team Changes
SISEL International has promoted Aaron Rennert to General Manager and Vice President of Worldwide Sales and Marketing as part of a restructuring plan geared to help support and fuel growth in the field.
Rennert will continue his role in sales but will direct additional focus on worldwide activities and internal management, according to Tom Mower Sr., President and Co-Founder of SISEL. Mower said, “As acting GM, Aaron’s vast experience in corporate roles will allow SISEL to utilize his business acumen to create systems and processes aimed at accelerating our growth.”
In addition to the promotion of Rennert, SISEL has hired Mike Hagen as Vice President of International Sales. Hagen will drive sales and training with concentration on North American operations, while eventually expanding his efforts globally. Hagen has owned several successful private businesses, and most recently led his own sales team for 13 years in the industry, training and developing distributors.
“We are excited to have Mike on our team,” said Rennert. “He has a strong track record of success, and this allows me to focus on the initiatives that we have needed to address.”
Tom Mower and his son Tom Jr. founded SISEL International in 2006, offering personal-care products and dietary supplements. The term SISEL (pronounced “sizzle”) is an acronym for Science, Innovation, Success, Energy and Longevity.
August 31, 2016
ForeverGreen Acquires Rights to Proprietary Nutrisorb Technology
A new licensing agreement with Nutrisorb LLC grants ForeverGreen Worldwide exclusive rights to the company’s prioprietary nutrition technology.
Utah-based ForeverGreen, a seller of whole-food supplements and other health products, will bring Nutrisorb technology to market in Prodigy-5, a forthcoming addition to its Xpress product line. The company describes Nutrisorb as a process that improves and optimizes the body’s absorption of key nutrients such as phytoplankton, antioxidants and vitamins.
“The biggest challenge in supplementation is the inefficiency of absorption,” said Ron Williams, CEO of ForeverGreen. “Meaning we are only as healthy as what we absorb, not merely what we ingest.”
The company aims to make supplementation more effective with its newly acquired technology. Nutrisorb is the result of a collaboration between ForeverGreen medical advisor Adam Saucedo, M.D., and Balamurali Ambati, Ph.D., M.D., who recently joined ForeverGreen’s Scientific Advisory Board. As part of the agreement, the doctors will provide education on the technology and Prodigy-5 to ForeverGreen Members.
August 31, 2016
USANA Brand Ambassador Wins First-Ever Olympic Gold for Puerto Rico
Among those who took the podium at this month’s Olympic Summer Games was USANA Brand Ambassador Monica Puig, who became the first athlete ever to win a gold medal for U.S. territory Puerto Rico.
Puig, a singles tennis player, is one of more than 70 USANA-sponsored athletes who traveled to Brazil for the 2016 Olympics, including fellow Women’s Tennis Association competitor Madison Keys, who took fourth place in the women’s singles event.
Several other nutrition-focused direct selling companies had a presence in Rio de Janeiro as well, with some sponsoring individual athletes and others backing entire national delegations.
In the final match, No. 35-ranked Puig defeated the No. 2-ranked singles player in the world, Angelique Kerber of Germany, in three sets to capture the gold.
“I still can’t describe how it feels to be an Olympic champion and to have won the gold medal in Rio,” Piug said in the company’s announcement. “The last two weeks have been incredible, and the support I’ve received from USANA and fans around the world means a lot to me.”
Piug is the only Puerto Rican female to medal in the Summer Games since the Caribbean island sent its first delegation in 1948.
Utah-based USANA sponsors more than 1,000 world-class athletes, collectively known as Team USANA, who have signed on either as distributors or dedicated users of the company’s nutrition products.
Look for more coverage of direct selling companies at the 2016 Olympics in the October issue of DSN.
August 30, 2016
Viridian Report Earns Go Green Advertising Award
Viridian’s 2015 Sustainability Report earned the energy provider top honors in this year’s Go Green Advertising Awards.
The national competition recognizes excellence in marketing and promoting green-themed, eco-friendly products and services, such as Viridian’s responsible electricity and natural gas offerings. Gold, silver and bronze winners are selected on the basis of creativity, design, knowledge transfer and the overall quality of the work.
Viridian received a gold award for its 2015 Sustainability Report, which shows the company’s collective impact in helping customers avoid more than 7 billion pounds of carbon emissions. The energy provider has voluntarily published its report each year, going back to Viridian’s founding in 2009.
“Our Sustainability Report is a celebration of all we’ve accomplished and signifies who we are as a company,” Cami Boehme, Viridian COO, told DSN. “All species, big and small, are interconnected. This report allows us to see the big picture and helps demonstrate how we at Viridian are doing our part to make a difference.”
In the Go Green Advertising Awards, Viridian was recognized for providing substantive and complex information in a clear, engaging style. The report describes Viridian’s carbon emission impact, which equates to recycling 50.5 billion 2-liter plastic bottles, as well as service projects, such as planting 5,000 trees in five years. The company also discloses each Renewable Energy Certificate and carbon offset purchased.
August 30, 2016
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August 30, 2016
Young Living Opens Seventh Global Farm in British Columbia
Photo: Young Living’s global headquarters in Lehi, Utah.
In conjunction with its recent Canadian convention, Young Living Essential Oils celebrated the grand opening of Northern Lights Farm, its new farm and distillery in British Columbia.
The Utah company operates seven farms around the world, where it sources plants for its essential oil products. At these locations and at partner farms, Young Living oversees its signature Seed to Seal process, a series of quality control measures to ensure the purity of the oils.
Northern Lights Farm near Canada’s Rocky Mountains is rich in black spruce trees, which supply Young Living’s Northern Lights Black Spruce essential oil. The oil is a standalone product, as well as an ingredient in some of the company’s top-selling blends. Last year, the farm produced 6,300 liters of Northern Lights Black Spruce.
Young Living hosted its first Farm Day at Northern Lights on Aug. 24, ahead of the company’s Canadian national convention. Founder and Chairman Gary Young, who has led the global farm initiative, was on hand to welcome visitors. “As one of my greatest passions and achievements, I’m honored to share Northern Lights with our members and the local community, who have supported this endeavor from day one,” said Young.
The grand opening event included tours of the farm and distillery, as well as an on-site conference and education center. The company, which often brings members to its farms to take part in the harvest, also plans to install a visitor center, spa and lodge at Northern Lights.
August 29, 2016
Nerium Hits 5-Year Milestone Offering Science-Backed Skincare
Nerium International is celebrating its five-year anniversary.
The Texas-based skincare company has had one of the fastest entrances in the direct selling channel, joining the DSN Global 100 list of the world’s largest direct selling companies after completing its first full year in business. Last year, the company’s net sales reached $516 million, earning it the No. 38 spot on the list.
Yet Founder and CEO Jeff Olson prefers to celebrate other benchmarks, things such as the company’s growing photo gallery of customer testimonials showcasing their anti-aging results, the 2013 launch of Live Happy magazine and the company’s designation as the largest corporate donor to Big Brothers Big Sisters of America. Olson estimates that more than 70 percent of Nerium’s sales are to people who are not attached to the compensation system and that the majority of the company’s Brand Partners are newcomers to network marketing.
“I said on Day 1 when we set up the company, I didn’t care how fast we hit $1 billion, I just wanted to do it right,” Olson told DSN.
Much of the company’s growth has been domestic. In 2014, the company expanded into Canada and Mexico, and it first ventured outside North America in 2015, when it began operations in South Korea. This summer, Nerium launched operations in Japan, and it is in the process of launching into the Australia market before the end of the year. Olson said he expects the pace of international expansion to pick up, with Nerium growing to 15 to 20 total markets and $2 billion in sales within the next five years.
Watch for the complete interview with Olson in the October edition of Direct Selling News.
August 26, 2016
This Week: Amway’s Rebirth in China, Oriflame’s Expansion in India
Catch up on the latest direct selling chatter with these click-worthy links:
- The Economist features the resurgence of Amway’s business in China, where a 1998 ban halted direct selling activities in the country for several years. Despite adjusting its business model to comply with new regulations, Amway remains the biggest direct seller in the market, with sales exceeding $4 billion in recent years.
- Oriflame India has occupied a new, larger headquarters facility in the city of Chennai, as the Swedish cosmetics maker responds to growing demand in the market, according to a report from The Times of India. The new headquarters offers a variety of services to consultants, including the ability to directly place orders and attend trainings and opportunity meetings organized by the company. Oriflame officials also disclosed plans to establish 30 new service points, where customers can place orders and learn about the company, in India by the end of 2016.
- A report from The Wall Street Journal suggests that Carl Icahn, longtime supporter of Herbalife in its battle against activist investor Bill Ackman, has discussed selling his 18 percent stake in the company, which recently settled a Federal Trade Commission investigation into its business practices. Sources told the paper that one group in talks with Icahn includes Ackman himself, who presumably would be interested in cutting Icahn’s stake to diminish confidence in Herbalife’s stock.
- The Observer provides a window into J.Hilburn’s recent annual conference in Dallas, which included a runway show featuring the latest styles from the custom menswear brand. J.Hilburn is carving out a niche for itself by bringing high-quality, personalized garments to new audiences.
- What J.Hilburn is to custom apparel, Gardenuity is to gardening. Forbes spoke to Donna Letier, Co-Founder of the Dallas-based startup, about using social selling and technology to simplify gardening. Letier discusses her own background in big business and how Gardenuity is appealing to busy professionals.
August 26, 2016
USANA’s New InCelligence Technology Speaks Language of the Cells
USANA Health Sciences this week unveiled InCelligence technology, a scientific advance that harnesses the body’s natural ability to renew and protect itself.
Researchers at Utah-based USANA developed the cell-signaling technology by studying the natural intelligence of human cells, which carry out processes essential to health. The company’s patent-pending InCelligence Complex directly triggers these processes, rather than simply supporting them, as traditional multivitamin supplements do.
Cells generate energy to power bodily functions, right down to the heartbeat, said Dr. Kevin Spelman, USANA Executive Vice President of Research and Development. “But this process can also generate free radicals that can damage the mitochondria within the cell. Fortunately, our cells have a natural process that helps clean any damaged mitochondria out of the cell to help renew efficient cellular function.”
CellSentials, from the company’s new InCelligence line, helps to activate the renewal process and nourish the cells, allowing them to function at high capacity. At its 2016 International Convention, which runs through Saturday in Salt Lake City, USANA also has introduced Proglucamune, a supplement that helps immune cells respond and adapt to stress.
The new technology positions USANA at the cutting edge of nutritional supplement research, according to company Founder Dr. Myron Wentz. “USANA continues to build a reputation as an innovator in the science of cellular health and nutritional supplementation.”
In addition to CellSentials and Proglucamune, two existing USANA supplements—Hepasil DTX for liver detoxification and Procosa for joint support—will now incorporate InCelligence technology.
August 25, 2016
Gold Canyon Moves beyond Home Fragrance with GC Lifestyle
Photo: A selection of GC Lifestyle Scented Jewelry.
Candle maker Gold Canyon is diversifying its offerings with the launch of GC Lifestyle, a new imprint coming in September.
GC Lifestyle will include scented jewelry and home décor collections that take their cue from Gold Canyon’s existing designs. The Arizona company currently sells candles and other home fragrance products, as well as a limited range of home décor. In a statement announcing the launch, GC Lifestyle is described as a “more contemporized brand” that opens new avenues for Consultants to build their businesses.
“This launch represents a natural evolution of our strong heritage in candles and fragrance to become a premium brand that offers accessories for our customers’ personal fashion and for their homes,” said Thomas Kelly, CEO of Gold Canyon. “It’s a perfect fit for our brand and for our network of consultants.”
The company’s new scented jewelry line will feature trendy necklaces and bracelets, with pendants and charms that double as fragrance diffusers. Customers initially will have the choice of three fragrances exclusive to the line. The expanded home décor collection will include vases, trays and throw pillows that reflect Gold Canyon’s fresh, playful feel.
August 25, 2016
Total Life Changes Announces First Acquisition
Photo: TLC’s headquarters in Fair Haven, Michigan.
Total Life Changes recently announced the acquisition of Ryte Inc., a Utah-based benefit corporation with a portfolio of wellness products.
The acquisition, a first for Total Life Changes (TLC), signals a new approach for the Michigan company, as it actively seeks to acquire “smaller companies in need who share our ideals,” in the words of Founder and CEO Jack Fallon. In the case of Ryte, Fallon and his team saw an opportunity to expand TLC’s customer and distributor base—Ryte has just under 1,000 sellers—and introduce them to a wider portfolio of health, wellness and beauty products.
Ryte launched in December 2014 with three dietary supplements that target common needs such as energy, weight loss, mood, relaxation and sleep. The company has since discontinued operations, but founders Riley Shaugaard, Dave Stewart, and Jeff Wilson, have been seeking an organization that could take Ryte’s products and assets and expand upon its original vision.
“We were introduced to the good people of Total Life Changes a few months ago and have found that company,” said Wilson. “TLC is an organization led by people who share our values and understand the great and largely untapped potential of our products.”
TLC has been in business since 1999, but in recent years growth has accelerated, as company executives shared in the April issue of DSN. In 2015, as revenue rose to $76.8 million, TLC upsized its headquarters from a 1,600-square-foot facility to a 24,000-square-foot facility in Fair Haven, an hour outside Detroit. The company also has opened a new branch in Salt Lake City that will support its merger and acquisition strategy.
August 24, 2016
Nu Skin Supplies 500 Million Meals to Malnourished Children
Photo: Children in Malawi, Africa, receive VitaMeal.
Nu Skin Enterprises on Tuesday announced that it has reached a milestone in its Nourish the Children initiative, with 500 million meals donated to date.
The beauty and wellness company launched Nourish the Children in 2002 to combat poor nutrition, which causes nearly half of deaths in children under five, or about 3.1 million each year, according to the World Food Programme. The cornerstone of the initiative is VitaMeal, a nutrient-dense food formulated by Nu Skin nutrition scientists. The rice and lentil meal was crafted specifically for malnourished children, and combines essential vitamins and minerals with a balance of carbohydrates, protein, fat and fiber.
“I’ve seen firsthand the difference that VitaMeal has made in my country,” Malawi’s former first lady, Madam Callista Mutharika, said in the company’s announcement. “Its impact has been life-changing for thousands of kids. Children who were once hungry are now healthy, strong and able to go to school. Mothers who had no food can now provide their loved ones with a warm and nutritious meal.”
Nu Skin distributors, customers and employees support the cause by purchasing VitaMeal, and then opting to donate the product to Nourish the Children. The for-profit structure enables distributors to receive commissions on VitaMeal purchases. The price covers production and distribution costs, with a minimal profit margin for the company.
“It is heartwarming to think of the impact of providing 500 million meals to malnourished children,” said Steven Lund, Executive Chairman of Nu Skin’s board and Executive Director of Nourish the Children. “Reaching such a significant milestone is a testament to the compassion and generosity of Nu Skin’s sales leaders, customers and employees and to the collective good we can do.”
To distribute VitaMeal, Nu Skin partners with third-party nonprofits that specialize in supplying aid to those suffering from malnutrition and famine. The company’s aim is to provide consistent levels of food on a sustainable basis. Thus far, Nourish the Children has helped to feed children in 50 countries.
August 24, 2016
Oriflame Sees Gains on ‘Solid Performance’ in Asia and Turkey
Photo: Oriflame’s Ecobeauty range.
The latest financial report from Oriflame shows a solid first half of 2016 for the Swedish cosmetics maker.
The No. 14-ranked direct selling company in the world saw local currency sales increase 14 percent in the first two quarters. Reported revenue was up 1 percent to €615.4 million, versus €608.9 million in the same period last year.
“The solid performance in Asia & Turkey and Latin America continued and further improvements could be seen in Europe, while the situation in Africa was continuously challenging,” Magnus Brännström, Oriflame CEO and President, said of the company’s performance in the most recent quarter. “CIS experienced local currency growth in the quarter although margin improvement challenges remain.”
In the six months ended June 30, Switzerland-based Oriflame posted a profit of €28.8 million, or €0.51 a share, up from €20.4 million, or €0.37 a share, a year earlier. EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to €68.3 million, surpassing the prior year’s €52.6 million.
Moving into the second half of 2016, the company is preparing to implement a new outsourcing partnership with IBM. The seven-year contract enlists the tech firm to drive Oriflame’s digital business transformation in IT and Finance.
*At the time of this writing, €1.00 was equal to $1.13.
August 23, 2016
USANA Names New Chief Scientific Officer ahead of 2016 Convention
Photo: Robert Sinnott, USANA’s new Chief Scientific Officer.
Nutrition and personal-care products maker USANA Health Sciences has appointed Rob Sinnott, Ph.D., a veteran of the nutritional supplement industry, as its new Chief Scientific Officer.
The news comes as USANA is gearing up for 2016 International Convention, its annual salesforce meeting, which will kick off Wednesday in Salt Lake City. According to company officials, ongoing research efforts will be front and center during the event as the Utah company shares its latest scientific breakthrough with independent Associates.
Sinnott is coming on board to grow the research and development team and drive product innovation to the next level, said USANA Co-CEO Dave Wentz. “Rob gained our attention because of his exceptional leadership and experience in our industry.”
The company’s new Chief Scientific Officer brings 25 years of scientific experience, including more than 18 years in the nutritional supplement space. In undergraduate and post-graduate studies at Arizona State University, Sinnott’s focus was on applied sciences, including biotechnology and plant medicinal chemistry. He holds five patents issued in the U.S., Australia, New Zealand, South Africa and Singapore.
“USANA has a long-standing reputation in the industry for producing premium quality health products that improve lives,” Sinnott said in the company’s release. “I look forward to building on that legacy and leading this world-class R&D team into the future.
The latest innovation to come out of USANA’s research and development lab is MySmart Foods, the brand’s first-ever food product line. MySmart Foods protein shakes and bars allows customers to combine flavors and ingredients that fit their tastes and wellness goals, in alignment with the company’s growing “personalization” strategy.
August 23, 2016
Herbalife Announces First Casa Herbalife Partner in New Zealand
(Photo courtesy of Herbalife Family Foundation)
The charitable arm of nutrition company Herbalife is bringing its Casa Herbalife program to New Zealand, in partnership with the local Starship Foundation.
The Herbalife Family Foundation (HFF) aims to improve the lives of children in need, primarily by providing critical nutrition on a number of fronts. In 2005, HFF launched the Casa Herbalife program, which focuses on reaching those in need by partnering with charities already on the ground serving children.
The first partner identified by Casa Herbalife New Zealand is the Starship Foundation, the charity of New Zealand’s national children’s hospital. HFF donations will help fund Starship’s services to families caring for sick children, including supermarket vouchers to purchase groceries.
“Many Starship families from all over New Zealand will face some of the toughest challenges of their lives when caring for a critically ill or injured young patient,” said Brad Clark, Starship Foundation Chief Executive. “This aid will assist these families with their food and nutrition needs and help them through the hard times.”
Herbalife members and employees, as well as their friends and families, currently support more than 130 Casa Herbalife programs worldwide through recurring or one-time donations to the Herbalife Family Foundation.
August 22, 2016
ACN Targets Asia in First Market Expansion in Two Years
Essential services and health products firm ACN is expanding internationally for the first time in two years with the launch of operations in Japan.
Initially, the company is making its Benevita health and wellness line available to Japanese consumers. ACN introduced Benevita three years ago in select international markets, diversifying a longstanding portfolio of essential services such as wireless, Internet, and gas and electricity. ACN plans to roll out some of those services in Japan in the future.
The move into Japan puts the company in 26 markets worldwide. The island country is the first market ACN has added since July 2014, when operations commenced in Mexico. The North Carolina company branched into Asia in 2010 with the launch of its South Korea business.
“As the fifth-largest direct selling market worldwide, Japan was incredibly appealing to us,” said Greg Provenzano, President and Co-Founder of ACN. “But it was the people that sealed the deal when selecting Japan to continue our Asian expansion.”
The market will be served by a new regional headquarters located in Tokyo. In addition to corporate offices, the facility houses meeting spaces, a call center and a retail storefront. ACN’s Vice President of Sales, Danny Bae, will oversee operations in the country. Bae, who initially joined ACN as an Independent Business Owner, has been key to the company’s expansion into Asia.
August 19, 2016
Direct Selling Firms Are among Utah’s Growth Leaders
Utah has long been a hot spot for direct selling companies, and a new list from Utah Business magazine recognizes the fastest-growing of the bunch.
Four direct selling companies appear on this year’s Utah Business Fast 50, an annual ranking based on five-year compound growth as well as a revenue component. Financial data is submitted to an independent accountant for analysis.
Three of the honorees are established direct selling firms, perennially ranked on DSN’s own Global 100, a list of the top companies in the channel by revenue. The fourth, at No. 49 on the Fast 50, is Lehi-based Xyngular, a health and wellness company founded in 2009. Xyngular’s network of nearly 33,000 distributors generated revenue of $49.7 million in 2015.
Another health and wellness company hailing from the Salt Lake City area, LifeVantage, leads the direct selling contingent on this year’s list. LifeVantage came in at No. 6, despite 2015 sales that fell 11 percent to $190 million. In a recent Top Desk feature, CEO Darren Jensen explained how the company is implementing new technologies and training to expedite the process of bringing new products to market.
Salt Lake City’s USANA and Provo’s Nu Skin also lead the state in growth. USANA, No. 38, has broken its own revenue records for 13 straight years. In 2015, the nutrition company recorded sales of $918 million. Nu Skin’s wellness and beauty offerings brought in $2.2 billion last year. The 32-year-old company ranked No. 42 on the Fast 50.
August 19, 2016
Amway El Salvador Partners with Local NGO to Fight Malnutrition
Less than a year after bringing its Nutrilite Power of 5 Campaign to El Salvador, Amway is providing critical nourishment to hundreds of children in the country.
The campaign to raise awareness of global malnutrition, and in particular the need for proper nutrition in the first five years of life, is one of Amway’s largest corporate social responsibility initiatives. It supports funding and distribution of Nutrilite Little Bits, a daily micronutrient supplement containing 15 essential vitamins and nutrients.
Around the world, Amway often partners with established local organizations to distribute Nutrilite Little Bits to those who need it most. In El Salvador, the company has teamed up with the Gloria de Kriete Foundation (GKF), which provides complementary education and health services in impoverished communities across the region.
“As we were looking to launch the Nutrilite Power of 5 Campaign here, we looked for a strong local partner, one that had a solid reputation and was well known in the community. GKF had just that!” said Cameron Juarez, Marketing Manager for Amway Central America.
Amway launched the initiative in El Salvador last October, and the company’s participation has helped to fill a gap in the services available through GKF. “The concept of a private company joining forces with an established social organization that has experience working with the mother-child duo, further consolidates the overall process in the fight against poverty,” said Celina de Kriete, the foundation’s Executive Director.
At this time, Amway’s strategic partnership in the country is supplying critical daily nourishment to more than 700 children, including 1-year-old Axel, who weighed in at just 19 pounds when he entered the program six months ago. The company reports that today Axel is a happier and more active child, and at 24 pounds is no longer showing symptoms of malnourishment or anemia.
August 19, 2016
Natural Health Trends Celebrates 15th Anniversary in Hong Kong
Photo: Hong Kong skyline.
Natural Health Trends Corp. recently hosted more than 10,000 at a Hong Kong event celebrating the company’s 15th anniversary.
Over the past 15 years, California-based Natural Health Trends has logged a compound annual growth rate of 19 percent, but last year sales climbed 113 percent from the prior year, reaching a record $264.9 million. Hong Kong is the company’s primary market, accounting for about 90 percent of sales. Natural Health Trends sells beauty, personal-care and wellness products under the NHT Global brand.
During its anniversary celebration, held Aug. 13–14, the company unveiled three new additions to its wellness line, including OcuFocus, an eye health supplement; NaturalGlo, a vegan beverage promoting skin health; and FE Enzyme Toothpaste, a lysozyme-derived paste with anti-bacterial and anti-inflammatory properties.
“I would like to thank all of our members that attended the event to celebrate our 15th anniversary, as well as the thousands more who have spent the time and effort to enrich themselves and other members in their shared passion for wellness.” Chris Sharng, Natural Health Trends President, said in the company’s release.
The two-day event also included a charity auction to fund the company’s ongoing philanthropic projects. The fundraiser brought in more than $65,000 from members and guests in attendance.
August 18, 2016
Inc. 5000: Which Direct Selling Companies Made the Fastest-Growing List?
A number of direct selling companies made Inc. magazine’s newly released Inc. 5000, an annual list of the fastest-growing private companies in America.
To compile its ranking of U.S.-based, privately held companies, Inc. measures percentage revenue growth over the past three years, in this case 2012–2015. The list is published each September, and while a handful of direct selling companies consistently make the cut, results vary considerably from year to year as revenue ebbs and flows and new players enter the market.
Topping the 2016 list is Los Angeles-based Loot Crate, which sends a monthly themed mystery box of gadgets, art, apparel, and other items tailored to “geeks and gamers.” The company also produces supplemental content to foster the kind of community found at Comic Con and similar events.
Florida-based Jeunesse Global is the sole direct selling company on this year’s Inc. 500, a special ranking of companies in the top 10 percent. The maker of cosmetics and personal-care products recorded a whopping 791 percent revenue increase in the period, which was capped by 2015 sales of $1.09 billion. Also named one of the 2016 Best Places to Work in Direct Selling, Jeunesse expanded operations earlier this year with the opening of a second corporate office in the Salt Lake City area.
In all, the 2016 Inc. 5000 features eight direct selling companies, whose offerings span the categories of consumer products and services, travel and hospitality, health, and retail. As shown in the table below, with the exception of Jeunesse, three-year growth ranged from 48 percent at Pure Romance to 581 percent at WorldVentures. Arizona-based Isagenix has spent 10 consecutive years on the list, and is one of just 74 companies to make the list 10 times.
Consumer Products & Services
Travel & Hospitality
Consumer Products & Services
Consumer Products & Services
Consumer Products & Services