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November 01, 2014

Industry with Heart

Social Entrepreneurship at Mannatech: Helping People Help the World

by Barbara Seale

Click here to order the November 2014 issue in which this article appeared or click here to download it to your mobile device.


Company Profile

Founded: 1993
Headquarters: Coppell, Texas
Executives: CEO and Chief Science Officer Robert Sinnott
Products: Naturally sourced nutritional supplements and skin care


Robert SinnottRobert Sinnott

For a company based on the science of nutrition, Mannatech’s decision to help improve the health of malnourished children around the world through its charitable programs just made sense.

The effort started with Mannatech Founder Sam Caster and his wife, Linda. They were in the process of expanding their personal philanthropic activities as they adopted five children from all over the world. During that time they became involved in supporting a Romanian orphanage. That’s when they learned that in that single organization, 35 to 40 of its children died every year from malnutrition. Their hearts broke, but Caster knew exactly what to do. Mannatech donated a year’s supply of a special blend of its Real Food Technology solutions for every child in the orphanage. At the end of the year the results were astounding. Not one child had died. All were healthy. Mannatech executives made the only possible decision. Get their nutritional powerhouse products, such as PhytoBlend™ powder, into the mouths of as many malnourished children as possible.

Since Mannatech was founded in late 1993 it has been actively involved in children’s philanthropic efforts, and as the company and its product line have matured, Mannatech has aligned its charitable outreach with one of its corporate strengths, the real-food technology at the core of its products. In 1999, the Casters opened MannaRelief, a 501(c)3 organization dedicated to providing life-giving nutrients to children in need around the world. MannaRelief is a separate entity from Mannatech but partners with the company to purchase, donate and deliver Mannatech invention PhytoBlend, a highly concentrated powder of vitamins, minerals and other nutrients that can be added to any food. The independent associates and employees of Mannatech and MannaRelief wholeheartedly supported the cause for the first 10 years, and with the help of charitable donations, were able to feed thousands of children in more than 80 countries.

By 2013 the process had allowed Mannatech to donate more than 16 million servings of PhytoBlend powder during that year. Since Mannatech began donating to nutritional feeding programs 11 years ago it has distributed more than 80 million servings of PhytoBlend to 252,468 malnourished children around the globe. As impressive as those numbers are, Mannatech executives know they’re just a dent in the staggering numbers of undernourished children. Consider this: According to the World Health Organization, every year some 5 million children die from malnutrition—one child every six seconds.


Through social entrepreneurship, a donation to nutritional feeding programs is made for each and every sale of a Mannatech product.


Reflecting this statistic, Mannatech’s mission to fight global malnutrition became expressed most recently in Mission 5 MillionSM, or M5M, a movement to nourish 5 million malnourished children through the sales of Mannatech products to 5 million people. Every time a Mannatech product is purchased on automatic order, a donation is made to MannaRelief, which distributes PhytoBlend powder to orphanages and relief organizations all over the world.

The effort isn’t simply a philanthropic sidebar for Mannatech. It’s at the company’s very foundation. Injecting its direct selling model with a big dose of social entrepreneurship made both the company and its philanthropy more robust.

 

Mannatech Inc. headquarters in Coppell, Texas

Social Entrepreneurship, Direct Selling Style

It would be easy to think that social entrepreneurship was just one more moniker adopted by a direct selling company. After all, the industry describes itself in a variety of ways: social sellers, social marketers, direct marketers, just to name three. All the names refer to the one-to-one or—with the advent of social media—one-to-many interactions that result in the sale of merchandise by a distributor to his or her warm market.

But because direct selling companies are also known for their philanthropy, combining that generosity with merchandise sales by an army of enthusiastic and mission-committed direct selling distributors gets you social entrepreneurship, direct selling style.

“Mannatech’s philanthropy through social entrepreneurship is part of our core values,” explains CEO and Chief Science Officer Robert Sinnott. “Our company was built around helping people; helping improve the quality of their lives and financial positions; and giving back to the community at the same time.”

Through social entrepreneurship, a donation to nutritional feeding programs is made for each and every sale of a Mannatech product. That donation purchases PhytoBlend, which has a neutral flavor that allows it to be consumed in the wide variety of foods traditionally eaten in cultures around the world. That’s important. The problem with malnutrition isn’t simply that kids don’t get enough calories. It’s because the foods they eat are nutritionally poor. That nutritional neediness can lead to blindness, mental retardation or even death. For example, in many cultures throughout the world, rice is the staple food. It fills bellies but provides little nutrition. Fresh vegetables and fruits—along with the vitamins and minerals they contain—are scarce. PhytoBlend, Mannatech and social entrepreneurship turn those staple foods into mouthfuls of life-supporting nutrition.


Since Mannatech began donating to nutritional feeding programs 11 years ago it has distributed more than 80 million servings of PhytoBlend to 252,468 malnourished children around the globe.


Creating Consistency

Sinnott believes that social entrepreneurship is probably the most written-about subject in the last five years. He may be right. A quick Google search turns up 1.74 million hits. Mannatech became interested in it in 2008 when the world’s economic downturn created a philanthropic crisis at the same time it created even more people in need. In fact, 501(c)3 organizations everywhere saw their donations shrink along with the economy. At the same time, joblessness grew, homelessness increased, and hunger hurt more than ever.

One of the 501(c)3 organizations feeling the pinch was MannaRelief. Mannatech’s already-slumping profits were also affected. It was a tough time for both. From 2007 to 2012 Mannatech wasn’t profitable. But helping others was so embedded in the company’s culture that it never stopped its philanthropic programs.

“During that time we always continued our charitable giving because we had faith that through giving, you bring goodwill and blessings on the company,” Sinnott explains. “We stuck to our core values, knowing that it was important and nonnegotiable.”

Searching for a solution to the company’s struggle, Founder Sam Caster came across several articles published by Harvard Business Review that introduced him to a business concept he thought just might work to turn things around. According to the articles, social entrepreneurship combines the resourcefulness of traditional entrepreneurship with a mission to change society. To Caster, the description captured Mannatech perfectly.

Caster did his homework, and the more he studied social entrepreneurship, the more sense it made. He saw that he was sitting on the perfect opportunity to blend the powerful results of his product with a way to make a difference globally, all without relying on the charity of individuals and organizations. He learned that there are four key factors to this kind of approach:

  • Find a problem that has not been solved
  • Create an innovative solution to the problem
  • Tap into the passion the public feels for the cause
  • Find ways to compensate those who do the mission work

Many of the elements were already in place. It was a matter of establishing an amount—off the top—of the sale of each product and directing that to provide nutrition to children who desperately needed it.

“Before you take out company expenses, you set aside a certain amount that comes from top-line sales, and that goes to your cause,” Sinnott explains. “It’s really a great way of handling it because it’s very sustainable. For every sale we make, our associates know they’re contributing to this cause, regardless of how the company is doing or how profitable we are, or of even the global economy.”

Mannatech first introduced the concept to sales leaders in 2010. They embraced the vision, and Mannatech went all in. The model, blended with the company’s powerful direct selling foundation, enabled Mannatech to return to profitability in 2013 and to continue providing nutritional supplements to malnourished children even during the worst of times. From 2010 through 2013 the company donated $1,478,280 to MannaRelief, to distribute nutritional supplements such as PhytoBlend to malnourished children.

With a global outreach—Mannatech does business in 23 countries—it has a unique view of the scope of malnutrition around the world. “There’s a lot more need than we can fulfill, but we try to spread our donations evenly across the globe,” Sinnott says. “To the extent possible, we try to aid areas with the greatest need that we have access to. For example, we have a strong business in South Africa, and we have good connections with relief organizations and feeding programs. But we’re also able to reach into Guatemala, even though we have no business there, because we have a strong presence in Mexico. Guatemala is the most malnourished country in the Western Hemisphere, so we reach across the border of Mexico and are heavily involved there. In Asia, MannaRelief has been able to get some contacts in North Korea, so we’ve sent some shipments to that country. That’s been very important to our Asian associates.”

Mannatech’s direct selling social entrepreneurship model also provided its associates the opportunity to help champion the company’s vision and be compensated for not only helping link consumers to the needs of the world’s vulnerable children, but for building their own teams who are willing to do the same.

Sinnott says that the social entrepreneurship model wasn’t intended as a sales or recruiting tool, but it has turned into one of the factors people consider when they decide who to do business with.

“We have seen that social entrepreneurship, especially when it relates to childhood malnutrition, is something people relate to,” he says. “It creates added value. It’s a win-win-win for the company, our associates and the children.”


Social entrepreneurship, blended with the company’s powerful direct selling foundation, enabled Mannatech to return to profitability in 2013.


Manna-Marathon

Associates can get involved in Mannatech’s most recent social entrepreneurship endeavor, M5M, in several ways. Their sales support it, of course, and they can also travel on Mannatech mission trips to visit children being served and to assist in their care.

Associates have also supported a high-profile initiative called the M5M China Run. M5M Ambassador and ultra-endurance athlete Jason Lester is running the Great Wall of China—some 2,500 miles of extremely challenging terrain—in 100 days. The feat has never been accomplished before. The Wall attracts 100 million visitors annually, so the opportunity is unique. Lester’s goal is to raise awareness of childhood malnutrition and the solutions being provided. By running almost the distance of a marathon each day for 100 days, he hopes to collect enough donations to supply 50,000 children with a one-year supply of PhytoBlend powder.

Mannatech used the M5M China Run to boost its business, and therefore, its social entrepreneurship platform. It issued a 100-Day Challenge to its associates to join Lester by taking their business performance to the next level. The company provided associates with what it called proven methods and steps that, when executed on a daily basis, could lead to business growth.

Lester started the M5M China run on Aug. 1 and should complete it around the time of Mannatech’s early-November sales convention. Sinnott says that at the convention, the company will honor the ways in which Lester and his singular feat have contributed to the fight against global malnutrition. Mission 5 Million has always been a key message at the convention, and this year Mannatech plans to introduce new aspects of it that will make it even more effective—new partnerships that will be meaningful to associates; new geographical areas that will be served in the near future; and of course, new goals for increasing the number of children who benefit.


“I believe that, within this generation, we can eliminate the major causes of malnutrition through fortification programs—ours and other similar approaches.”
—Robert Sinnott, CEO and Chief Science Officer


As a father of three boys, Sinnott is passionate about Mannatech’s fight against childhood malnutrition.

“Last year we had the opportunity as a family to visit multiple feeding centers and schools in South Africa that received PhytoBlend,” he recalls. “We got to see firsthand how our product is improving the lives of children living in some of the harshest conditions in South Africa. That has become a huge driver of me as a professional and father. I believe that, within this generation, we can eliminate the major causes of malnutrition through fortification programs—ours and other similar approaches. We have a cost-effective way of getting supplementation into children’s lives.”

Jason LesterM5M Ambassador and ultra-endurance athlete Jason Lester

He notes that Mannatech’s financial improvements are inextricably linked to its ability to expand the M5M program.

“Now that we’re seeing a turnaround in our business, we’re also seeing an increase in the number of children we can reach in the areas we serve,” Sinnott reports. “Five million sounds like a large number, but we’ve already done more than 12 million servings this year, so I believe it’s completely doable within my tenure to reach that 5 million goal. It’s no more difficult a journey than the one being taken by Jason Lester as he runs the Great Wall. He’ll finish that journey because he’s taking it step by step and day by day. So will we.”