January 04, 2016
Monat: Modern Nature Finds ‘Natural’ Fit in Direct Selling
by Lin Grensing-Pophal
Photo above: MONAT haircare products are made with high-quality botanical extracts, vitamins and essential oils including red clover (pictured here).
Headquarters: Miami, Florida
Top Executives: Co-Founders Luis and Rayner “Ray” Urdaneta; President Stuart A. MacMillan
Products: Anti-aging haircare
2015 Revenue: Tracking to $25 million
|Luis Urdaneta||Rayner Urdaneta||Stuart MacMillan|
MONAT is a company that has come on strong. Backed by a multimillion-dollar global operation focused on the Latin American markets and founded by a passionate entrepreneur, the company launched in 2014 in the United States and expanded into Canada in October 2015. MONAT is a wholly owned subsidiary of Alcora Corp. and a U.S.-based direct selling company in the haircare industry.
“Our growth objectives are ambitious, but we’re confident that our products’ botanical ingredients and properties never fail to garner initial interest among consumers,” says Stuart A. MacMillan, who assumed the role of President of MONAT Global in September 2014.
The rapid growth of MONAT is perhaps not so surprising when you consider its roots and the history of its parent organization, Alcora.
Alcora was founded by Luis Urdaneta, a first-generation direct sales entrepreneur who developed a passion for social marketing at the age of 15. Fourteen years ago he and his son, Rayner, then co-founded a company called L’eudine, a beauty and wellness direct-selling enterprise, which has grown to be a $200 million global organization operating in Latin America, Columbia, Venezuela, Ecuador and Mexico, as well as in Latin American markets in the United States.
L’eudine’s products are manufactured in Miami at a plant the Urdanetas acquired called B&R Enterprises. In addition to the plant, the acquisition included a laboratory and its Chief Science Officer, Jamie Ross. Now Senior Vice President of MONAT, Ross was the impetus behind the development of MONAT’s product line; he saw that while there was plenty of buzz and products in the anti-aging space for skincare, there wasn’t anything available in the haircare space. The Urdanetas were intrigued and launched MONAT in 2014, which joined L’eudine and B&R Enterprises under the same company umbrella.
Executives chose to launch MONAT as an individual company because they believed that one focused on naturally based haircare at a premium price point could stand alone. They also believe in diversifying their opportunities and expanding the brands within Alcora, and wanted to launch a North American sales company. This made MONAT’s method of operations, demographics, compensation and product lines very different from L’eudine.
MacMillan, who was brought on board initially as a consultant in early 2014, quickly saw the opportunities available and is excited about the growth the company already has seen as well as its potential for the future. The investment in the company has come entirely through private investment by the Urdaneta family, through its 100 percent ownership of Alcora. “We’ve seen some phenomenal success to be honest,” says MacMillan. “We just celebrated our first anniversary and have enrolled more than 12,000 market partners in that time and just launched into Canada.” In Canada, within the first month of business, the company added 2,000 market partners. “It’s going exceptionally well,” he says.
The chemistry behind the success is embedded in the company’s Rejuvenique oil, a proprietary and patented blend of 11 oils from around the world, which is contained in all but one of MONAT’s nine products. The product line targets the actual cause of hair loss and the aging of hair.
Being the first to market with a line of anti-aging products for haircare was definitely a factor in the company’s success to date, says MacMillan. More specifically the products are preventive by helping to keep the follicles healthy and viable and in the growth stage longer; restoring by helping to restore essential moisure and nutrients lost by years of neglect, heat appliances, and chemical treatments; and preserving, by helping maintain longer, fuller, stronger, younger-looking hair.
The name MONAT (pronounced maw·nāt) comes from “modern nature,” says Tanna Johnson, Senior Director of Marketing. “We are modern nature,” she says. MONAT products are “naturally based,” which means that they comprise ingredients that are close to their natural source. These ingredients include high-quality botanical extracts, essential oils and vitamins. They’re blended with cleansing products, called surfactants, and emulsifiers. The company points out on its website that its products are not “all-natural.” According to the website: “To fall into the all-natural category would mean that we either would be using natural preservatives whose safety has not been substantiated or have a complete lack of preservatives altogether. The absence of preservatives would also mean that our products would have a very limited shelf-life and would need to be refrigerated.”
Naturally based, according to MONAT, is better. “Naturally based means you get the best of both worlds: a product with ingredients that are as close to the source as possible and blended in effective and safe formulations. We will continue to use only high-quality botanicals, essential oils and vitamins in MONAT formulations so that you get the most benefit of what the earth has to offer.”
|The founding family of MONAT, led by Luis Urdaneta, strongly believes in nature, family and community.||Co-Founder Rayner Urdaneta also joined his father, Luis, in establishing beauty and wellness direct seller L’eudine.||President Stuart MacMillan has more than 20 years’ experience in the direct selling industry.|
The direct sales model was a natural fit for MONAT, given the Urdanetas’ longtime success in direct sales. Luis was a master distributor for a leading direct seller in his home country of Venezuela.
“A number of companies have a great product and then look around for a distribution strategy,” MacMillan says. “This was different because it was never a choice. The Urdanetas have grown up in the direct sales industry. L’eudine is a direct sales company.” In addition, MacMillan says that his own background includes a heavy emphasis on direct sales, having already had 20 years in direct sales when he joined MONAT. That focus is important for the company’s market partners, he notes. “It provides credibility and assurance to the field that we’re not going to compete with them through another distribution channel because the three of us—Ray, Luis and I—are so committed to this channel.”
That level of experience and commitment to direct sales also is found at other levels of the organization. “The executive team that we put together over the last year is equally well-steeped in direct sales,” MacMillan says. “Tanna comes to us with close to a dozen years in the industry—all of our regional sales managers have been in the industry for a number of years, and we continue to hire people with that background.” Currently, MONAT has 40 employees, including 15 who staff the call center. It also invested in hiring four regional sales managers across the United States.
“We believed in startup that having regional sales managers in the field would help inspire, grow and encourage people in those regions to be talking about the opportunity,” MacMillan says. It’s not where a startup would typically spend its money, he points out, but for MONAT it has paid off.
|Executives and marketing partners recently visited Magic Kingdom in Orlando, Florida.
The company also is investing in its market partners. Over Labor Day in 2015, about 50 of MONAT’s top leaders came together for two days of leadership training. Its first national convention will be held this month at Walt Disney World Resort.
Hiring to “stay ahead of the curve” has been one challenge that the young company has faced, MacMillan acknowledges. “We had a phenomenal September—the first month ever where we had to really batten down the hatches with respect to supply chain and make sure we didn’t have back orders.” Times like that can be tough, he adds, but the company is committed not just to bringing in warm bodies, but bringing in the right bodies who can help create the culture they are seeking.
“In hiring people we look at commitment, confidence, character and chemistry,” MacMillan says. Those people, whether internal staff or market partners, are focused on sharing the news about MONAT’s products; MacMillan believes their message is one that resonates.
Getting the word out has been done through a heavy focus on social selling, such as simple meetups in restaurants, bistros and wineries where the product can be presented and sampled. “Because we own our own manufacturing plant we can efficiently and cost-effectively create samples,” MacMillan says.
Market partners are provided with a replicated website on sign-up, along with a shopping cart, and receive support through a back office that processes and ships orders. Training videos and other materials also are made available through the website. Weekly conference calls ensure that everybody is kept up to date and has the opportunity to share their own experiences.
Communication and connections are important, says Tanna Johnson. A weekly newsletter serves as the company’s primary channel of communication and includes a regular feature story as well as business and sales tips and news about what’s happening with the company, such as its recent expansion into Canada. Once a month a recognition news blast highlights those who have been promoted. “We spend a lot of time really trying to develop that recognition piece,” Johnson says. That involves the newsletter as well as individual e-blasts that highlight successes.
“We also celebrate success through social media,” she says. Social media channels include public-facing sites as well as closed groups for market partners, leaders and professional development.
Successes also are recognized in tangible ways. “When someone promotes up, we send them a report and they receive a beauty box that’s branded and a certificate they can frame, along with a congratulatory note and the pin representing their level.” The pin is designed to incorporate the symbol of an oil drop, reflecting MONAT’s flagship product, Rejuveniqe.
MacMillan and Ray Urdaneta go a step further by adding their personal touch. “Ray and I set aside time every week to sit down and call anybody who reached a certain rank.” At the end of every month, MacMillan also writes handwritten notes that are sent out with portfolios that commemorate those who have achieved a certain rank. “The field truly appreciates the fact that Ray and I take the time to do this,” he says.
Rewards, recognition and celebration continue to be an important part of the MONAT culture. In its first year, the company had two incentive trips: a Miami cruise in February and a trip to Cabo San Lucas, where they took 37 of their top earners.
A Focus on Family and Giving Back
Founded by family, the company has a natural family feel and focus, in its daily work and through its giving to those less fortunate. In fact, one employee’s full-time job is specifically focused on giving back.
“Gratitude is a huge part of what we do,” Johnson says. For instance, Fridays are called “Celebration Friday.” “We spend the day making sure that we’re spreading the love,” she says. “When you get to do something from the ground up, without any baggage, you get to do it right—and we’ve done a lot of things.”
MONAT’s philosophy on gratitude is explained further on its website. “Gratitude has the power to transform our perception and allow our brain to focus on the positive. At MONAT, our focus is on making the world better by working with organizations that have a positive impact on society.”
Some of the organizations MONAT works with include the Salvation Army, Habitat for Humanity and the Sierra Club, which together focus on the causes closest to the hearts of the company’s people: nature, family and community. Employees and market partners provide help through monthly volunteer opportunities; donations of food, toys and clothes; and monetary contributions, of which MONAT has donated hundreds of thousands of dollars.
A quote on the page asks: “If all your prayers were answered, would they change the entire world or just yours?”
In support of this philosophy, MacMillan notes, even the compensation plan is designed to encourage a focus on others. A recent promotion, for instance, offered bonuses not for personal achievements but for helping someone else achieve something. “Luis’ major philosophy, which we sort of put on almost everything we do, is that in order to achieve success you have to help others achieve success,” MacMillan says. “In helping people to achieve success yours will come.”
A Look to the Future
MONAT recently launched two new products, a hairspray and a sculpting taffy, and the company has committed to introducing six to seven products over the next year. But, MacMillan says, “to be honest, in terms of other growth, we just want to do what we’re doing well. Apart from introducing new products, our focus is going to be on doing what we do better and just getting more and more efficient as we grow. We’ve had double-digit growth every month since we started, and I don’t see that changing. We have enough work to do in just keeping up.”
As it moves forward, MacMillan says, MONAT will be driven by three p’s: “a really good pay plan that gets money into people’s hands up front, amazing products and people. Ray and Luis are people of immense integrity, family integrity, and I don’t think you can replace that.”