February 01, 2014
Nature’s Sunshine Products: Transforming Business to Transform Lives
by Barbara Seale
Photo above: Jessica Braithwaite, Executive Vice President of Sunshine Heroes Foundation, spends time with children who are benefiting from the foundation’s support.
Achieving potential. That’s what Nature’s Sunshine Products is all about—optimal health for the consumers of its products and robust businesses for its distributors. Now it aims to power up its growth.
|Gregory L. Probert|
Nature’s Sunshine Products (NSP) has shown steady growth throughout its history, but its executives strongly believe in its potential to grow faster, and they’re investing in the company’s future.
Many elements are new in the 42-year-old company, beginning with several members of the management team. Gregory L. Probert was named Chairman in January 2013 and CEO in October 2013, after holding consulting and executive positions there since late 2010. Within the last few months the company has also hired a new chief scientific officer, a new EVP of worldwide operations and manufacturing, new VPs of Asia Pacific and Russian markets, and new heads of IT and human resources. They join Wynne Roberts, the company’s President and Chief Operating Officer, who became part of the NSP team in February 2012.
“We have spent a lot of time building one of the best management teams in the industry, including Wynne,” Probert says. “He and I worked together in a couple of other companies, Herbalife and DMX Music. We’ve been a team before, and that works well for the top two guys. We know each other’s work style, and we work together as a team very well.”
Roberts adds, “With the level of change that we’re driving in this business to realize our growth potential, the fact that Greg and I know each other well means that we can move quicker because we listen well, challenge each other’s ideas and trust each other. When you try to drive significant change, building on a strong foundation, that’s very valuable.”
It Started With a Stomachache
When Utah schoolteacher Gene Hughes developed a nagging stomach condition, a neighbor suggested a surprising treatment—cayenne pepper. It worked!
But swallowing that spoonful of cayenne pepper was almost as painful as the stomach condition. That’s when his wife Kristine suggested putting the spicy seasoning into easy-to-swallow gelatin capsules. Problem solved. Her brainstorm led the couple to start Nature’s Sunshine Products, which became one of the first companies to encapsulate herbs. Gene and Kristine soon enlisted the support of family—Dick and Pauline Hughes and Jay and Arva Hughes—to begin a small family business that sold encapsulated cayenne and other herbs and supplements to health food stores.
The little business soon became a mission as the family realized that they wanted to touch more lives with their products. They found the perfect vehicle to make it happen: direct selling. The model allowed them to educate consumers about the vitamin supplement products and provided their salesforce an opportunity to share in the success of the company.
Strength in Size
NSP’s strong foundation has been built on the high-quality products that it offers through its two distinct brands—Nature’s Sunshine and Synergy Worldwide. Today the company sells these products in more than 40 countries and has some 340,000 active independent managers, distributors and customers. Probert and Roberts believe that having global presence and more than 600 products presents a strong platform and opportunity for growth, but they also know focus is key. Creating that focus to leverage that strength is their goal.
“We have a large geographic footprint, and we have to make sure we’re focused on those countries that have the greatest growth opportunity,” Probert explains.
For example, in the third quarter of 2013, the company saw sales growth in NSP Mexico, South America, Russia, Central and Eastern Europe, as well as Synergy Europe and Asia, while sales in the U.S. grew in two of the first three quarters of 2013. Probert also sees huge opportunity in China, a market it has not yet entered.
“We’re also investing heavily in research and development to further strengthen our product catalog and are developing a three-year product strategy,” Probert adds. “We’re focused on launching innovative, science-based products that are aligned with the opportunities driven by consumer health megatrends such as obesity, inflammation, insulin resistance and diabetes, joint, cardio-vascular and anti-aging.”
NSP is developing differentiated product strategies for each of its operating businesses and is overlaying those strategies with history and sales figures. In Nature’s Sunshine Products, many customers initially came to the company because they were seeking a natural way to address a health condition. But when the condition improved, they believed that they had no reason to continue to buy. So the company has developed products and programs that support everyday wellness, as well as targeted health concerns.
NSP’s 600 products address one or more of 17 broad health conditions. Six of those conditions—cardiovascular health, digestive health, immune system, general health, weight management, and mood and anxiety—generate about 80 percent of the company’s sales. To make those areas more manageable, the company groups products into one of three key areas that support what it calls the Transformational Habits of Health: nutrition that supports weight management, daily essential supplementation that supports everyday good health, and specifically targeted care. Nature’s Sunshine works hard to help distributors effectively communicate how products can help consumers support their health in each of those areas.
Synergy Worldwide had historically been focused primarily on products supporting cardiovascular health, and the company has broadened its market opportunity by launching an innovative weight-management system, SLMsmart, in 2013.
Nature’s Sunshine Products operates in more than 40 countries and has some 340,000 active independent managers, distributors and customers.
Add this to the challenge: Nature’s Sunshine distributors, which it calls members—or managers at higher levels—use a variety of methods to run their businesses. They may hold home gatherings, use traditional one-on-one network marketing methods, do Internet sales, partner with healthcare professionals or even have a retail business. Many Nature’s Sunshine Products distributors are natural healthcare consultants or practitioners. NSP supports that flexible approach to doing business, and it recognizes that each sales method has unique needs. It recently hired staff specialists to develop programs to help managers grow their business in all those areas.
“We have spent a good amount of time understanding the methods our distributors use to take products to market,” Roberts reports. “Then we identified where we had experience gaps in staffing. We set about hiring people who have expertise in practitioner consultant marketing, retail merchandising, and building networks. They have developed programs to support distributor needs in all those areas.”
For example, one of the specialists supports retail stores—some 750 NSP distributors run one—and focuses on merchandising in the stores to effectively communicate product strengths. Another works with NSP distributors who are natural health practitioners such as chiropractors, naturopaths and herbalists, and has developed a series of classes that practitioners use to help people improve daily nutrition and weight management. The programs were launched in October to the top 400 leaders, and a full national launch will take place at the company’s national convention in March. The number of groups being established is already increasing.
Those programs, along with the development of supporting products—especially daily nutritional supplements—are increasing sales and creating a stickier customer base.
“This has been a huge strategic shift in the company, in terms of building daily consumption,” Probert says. “Any successful business must have recurring sales. Add to that the targeted care that we’ve always done exceptionally well, and we have a robust formula for growth.”
Focus on Quality
Whether the product supports daily wellness, a targeted health condition or weight management, it’s probably produced in a Nature’s Sunshine 270,000-square-foot manufacturing and warehouse facility. More than 90 percent are. The advantages are numerous.
“There’s no question that we see self-manufacturing as key for speed-to-market and cost efficiency, but also for the high-quality standards we have,” Roberts explains. “All that would be hard to support if we didn’t self-manufacture.”
He notes that the company goes to extremes to build in quality throughout its process. They’re demanding when they choose raw materials, selecting only those that pass NSP’s own tests for potency and safety. Even though they are highly selective when they choose suppliers, about 2 percent of raw materials still don’t meet the high standards of Nature’s Sunshine. Once the raw product actually goes to manufacturing, scientists subject it to even more rigorous tests. For example, to detect contamination, NSP’s manufacturing facility uses an ICP mass spectrometer that can test for parts per trillion—the equivalent of one drop of water in five Olympic-size swimming pools. That’s just one of the 600 quality control tests it uses, including post-manufacture testing. Since 2009, the company’s manufacturing facility has been certified by NSF, an independent international certification company that inspects and audits the Nature’s Sunshine manufacturing facility, procedures and products twice a year.
“There’s no question that we see self-manufacturing as key for speed-to-market and cost efficiency, but also for the high-quality standards we have.”
—Wynne Roberts, President and Chief Operating Officer
“It all combines to deliver the highest quality,” Roberts says. “It means that we’re able to prove the quality of our products, not just say it.”
Probert adds, “People want to trust the products they’re putting in their body, and when they’re taking products to improve their health, there’s a high level of trust that we live up to. Our product quality supports our tagline: Pure, potent, proven.”
Keeping track of all those diverse elements that drive quality and sales growth is a herculean effort. To handle it, Nature’s Sunshine has invested $40 million in an Oracle Enterprise Resource Planning system.
“When you’re working in more than 40 countries, having easy access to information across the business—from manufacturing to sales and everything in between—easy, rapid access to information is critical,” Roberts observes. “The investment we’re making in this system ensures that we have access to data on the ground across the world so that we can grow our business. It helps us have effective manufacturing, drive costs out and create financial strategies efficiently. In sales, we can quickly identify areas where ideas, business methods and products are getting traction, so we can provide more effective support and achieve faster growth. It will really enable us to provide much more effective tools to our distributors to build their businesses.”
“People want to trust the products they’re putting in their body, and when they’re taking products to improve their health, there’s a high level of trust that we live up to.”
—Gregory L. Probert, Chairman and CEO
Nature’s Sunshine is also investing in creating brand awareness and affinity. In addition to ensuring that it and its sister company Synergy have distinct brands and messages, NSP wants to increase its overall name recognition.
“Historically, we’re one of the best kept secrets in the industry,” Probert says. “We’re a $400 million company with two distinct brands, great products and fabulous distributors, but we don’t have the brand awareness of a company our size.”
To shore up its brand foundation, the company’s chief marketing officer led it through a vigorous rebranding process, and the company is now rolling out the results both internally and to distributors.
“This company has such a great legacy of natural health and product quality and integrity in the way we do business,” Probert says. “Distributors gravitate to this company for that. We also have a culture of service to distributors and our communities. We didn’t want to change that, just clarify it. We will also do certain things to build awareness publicly, such as sports sponsorships, and we will need to activate distributors around that so we can spread the word of what NSP stands for.”
Roberts adds, “We already have a very good platform that has grown stronger in the last few years. If we do this well, five years from now we won’t have to explain to anybody what we do. They’ll know that Nature’s Sunshine is the business that improves wellness and transforms lives.”
With so much happening to fuel the company’s potential, both Probert and Roberts are enthusiastic about the company’s future. They see international expansion opportunities in countries such as China, India and Brazil, and they’re excited about the high-quality, innovative products on the horizon that address the megatrends they’ve already identified.
“If you look at the team we’ve been able to attract, we’re all here for one reason: We see such untapped potential in the company, and we’re passionate about helping people transform their lives,” Probert says. “We also see that $400 million can grow into multibillions. There’s a huge need for what we do, and we have a huge opportunity to transform people’s lives all over the world. Direct selling is an incredibly vibrant business model and the best way to take our type of products to market. Our challenge is to focus, focus, focus on doing the right things that will grow the company.”
“If you look at the team we’ve been able to attract, we’re all here for one reason: We see such untapped potential in the company, and we’re passionate about helping people transform their lives.”
—Gregory L. Probert
Nature’s Sunshine’s mission to transform lives reaches beyond its business and into its philanthropy. Many of its charitable projects have been in conjunction with the Sunshine Heroes Foundation, of which it is a founding partner. The foundation, formally Little Heroes Foundation, has reached out to the Utah community and across continents with products that have helped nearly 265,000 individuals. The foundation has also given out more than $540,000 since its inception in 2008 to support numerous organizations both domestically and internationally.
In conjunction with the Sunshine Heroes Foundation and Mali Rising, Nature’s Sunshine recently helped establish the Sunshine Heroes Academy in Mana, Mali. Mali is among the 25 poorest countries in the world, and its people have severely limited educational opportunities. The Sunshine Heroes Academy, which features three classrooms and two administrative offices, will provide a resource for up to 200 children each year to get an education.
Nature’s Sunshine has aided Sunshine Heroes in the renovation of baby hospitals in Russia; built a health clinic in Nepal that was estimated to treat 20,000 people in 2012 alone and a clean water project in Zhongwei, China, that provides safe drinking water to an estimated 30,000 children each year; and distributed health supplements to an estimated 1,000 individuals throughout Ghana.
Nature’s Sunshine donates a portion of the proceeds from the Sunshine Heroes vitamin line, supports projects and grants, provides the Sunshine Heroes Foundation with opportunities to fundraise and helps cover administrative costs so 100 percent of the individual donations will go directly to benefit children. Through their partnership, Nature’s Sunshine and the Sunshine Heroes Foundation together have impacted the lives of more than 160,000 children and 265,000 individuals in 15 different countries around the world.