April 01, 2017
Nature’s Sunshine: Serious About Health for 45 Years
by Angela E. Soper
Headquarters: Lehi, Utah
Top Executive: Chairman and CEO Gregory L. Probert
Products: Nutritional and Personal Care Products
2016 Revenue: $341 million
|Gregory L. Probert|
Chances are Kristine and Gene Hughes never dreamed that a stomach issue would lead to a brilliant disruption in the dietary supplement industry. Nor would they have envisioned creating a $341 million global business from the steps they took to make it easier for people to add beneficial herbs to their diets.
Today, the company they created along with Gene’s brother, Dick (who passed away in 1987), and his wife, Pauline, is celebrating its 45th anniversary on April 10. Nature’s Sunshine Products Inc. now spans the world with over 2,000 individual SKUs globally and serves as a leader in cutting-edge natural health.
Touchstone’s creative and marketing teams are led by Jennifer Hulett (left) and Sonia O’Farrell, respectively.
Like many successful businesses, Nature’s Sunshine is the result of an innovative idea sparked by a compelling need. It’s one of those “Wow—why didn’t I think of that?” stories that can touch an inspiring chord within each of us.
“My husband, Gene, had a nagging stomach condition, and on the recommendation of a friend, he started taking cayenne pepper by the spoonful,” explains Kristine, who still serves on the company’s board of directors as Vice Chairman. “Gene’s condition improved and he felt so much better that he tried to get me to take it as well. The raw cayenne pepper was too much, and I asked to take it in capsules. We found out then that no one offered encapsulated herbs.”
After some family meetings to discuss potential business ideas, they decided to put cayenne pepper into gelatin capsules themselves. So that’s what they did—they bought large bags of ground pepper and empty capsules, then sat around the Hughes’ kitchen table and filled the capsules. Soon they were encapsulating a variety of herbs and enjoying moderate success selling them to health food stores. When someone suggested they try distributing their products via direct selling, they made the switch and the business took off. After creating their business in 1972, the founders soon realized they needed to find a way to handle the company’s rapid growth. This led to taking the company public in 1978 (the Hughes still own approximately 10 percent of the corporate stock).
Nature’s Sunshine Products Inc. headquarters in Lehi, Utah.
The First Company in U.S. to Encapsulate Herbs
According to Nature’s Sunshine, it was the first company in the United States to encapsulate herbs. However, creating a new way to help people consume herbs was only part of its allure; from the start, the company’s emphasis has been on maintaining its strong core values of innovation, quality, service, integrity and community. These values guided the company in its early years, and they remain strong building blocks today. Nature’s Sunshine Products Inc. includes Nature’s Sunshine and Synergy Worldwide, the brand it acquired in 2000, and serves over 500,000 active independent Managers and Distributors in over 40 countries who work with countless customers across the globe.
For the Hughes family, and for those who manage day-to-day operations today, the commitment to these core values isn’t something they take lightly. Chairman and CEO Gregory L. Probert actually came out of semi-retirement—after a career spanning the financial services, entertainment and direct selling industries—to get involved with Nature’s Sunshine. He eventually took over the reins of running the company in 2013 because he “fell in love with it.”
“There was something very unique about Nature’s Sunshine… . I think it was the multibrand, multichannel approach that no one else was really doing,” he explains. “I just saw a very diversified go-to-market strategy in terms of direct selling, retail and a wholesale business across two different brands, and it really appealed to me.” The company’s stability also impressed Probert. “Quite frankly, I never saw a [direct selling] company with as strong a foundation as Nature’s Sunshine,” he adds. He also liked the fact the Nature’s Sunshine brand has a dedicated following among highly knowledgeable professionals such as naturopathic doctors, osteopaths, chiropractors, master herbalists and medical professionals—people who take great care in finding the right supplements for their customers and working with them over time. And the icing on the cake was the company’s focus on quality, service and integrity—something he feels is part of Nature’s Sunshine’s DNA.
|Prompted by the benefits of cayenne pepper for a stomach condition, Gene and Kristine Hughes started Nature’s Sunshine Products Inc. to offer encapsulated herbs. In the early days, here they sit at their kitchen table filling empty capsules with ground cayenne.|
Dedicated to Discovery and Improving Metabolic Health
Nature’s Sunshine’s mission, to transform lives around the world by providing the most innovative and highest quality health solutions, is setting the stage for the company’s continued growth. Through its new Hughes Center for Research and Innovation, a cutting-edge research facility focused on scientific discovery and advancement, Nature’s Sunshine is “advancing the science of feeling better.” Opened in February 2015 and located at corporate headquarters in Lehi, the Hughes Center is a 5,400-square-foot facility that includes chemistry, tissue culture and molecular biology labs, as well as a small clinic. Heading this groundbreaking facility is Matthew Tripp, Ph.D., the company’s Chief Scientific Officer.
“The Hughes Center is dedicated to discovery, looking at ingredients that have a history of safe use,” says Tripp. “We’re looking to identify what I like to call targeted nutrition or targeted nutritional therapeutics.”
One of the areas Tripp and his team of scientists are constantly focusing on is phytochemicals. He points out that once the world, especially the United States, started manufacturing processed foods in the 1950s—foods filled with cheap carbohydrates and hydrogenated fats to make them shelf stable—we lost the phytochemicals so necessary for good health in that process. Tripp says this lack of phytochemicals in the foods we consume contributes to metabolic dysfunction, which leads to chronic illness and many health problems. “In the Hughes Center, we are trying to identify phytochemicals and ratios of phytochemicals, which specifically can reverse metabolic dysfunction in a short span of time,” he says.
Another area Tripp is studying is the microbiome—or gut health—within each of us. He says the way people have been eating for over 60 years has changed the balance of bacteria in the gut and has had an incredible impact on human physiology. He is not alone in his research—scientists around the world are now studying the microbiome and how it affects human well-being. Michael Pollanmay, writing in the New York Times Magazine, states that disorders in the human internal ecosystem, such as the loss of diversity or the proliferation of the “wrong” kind of microbes, may lead to obesity and a wide range of chronic diseases and some infections.
A Multichannel Distribution System
This emphasis on science—the company has filed 12 patent applications in the past three years—is just one way Nature’s Sunshine and Synergy Worldwide are well positioned to continue global expansion. “I define ourselves less as a direct selling company, even though that’s one of our go-to-market strategies, and really think of ourselves as a health, wellness and lifestyle company,” says Probert. This approach, he believes, allows the company to have multiple brands, diversify its product portfolio, and find effective ways to distribute its products and best serve its salesforce and customers.
The corporate structure is unique in that Distributors may only represent Nature’s Sunshine or Synergy Worldwide; they cannot sell both companies’ products. Nature’s Sunshine has a strong presence in North and South America as well as in Russia, Central and Eastern Europe and plans to open soon in China through a joint venture with Fosun, a multibillion-dollar Chinese company with a strong brand already established in the market. Within North, Central and South America, Nature’s Sunshine is sold through retail settings as well as via the direct selling channel. The products are also available in other markets, such as Australia, New Zealand, Norway and the U.K., where they are sold via wholesale to contracted vendors who then handle distribution in those markets.
|Company founders Gene, Pauline and Kristine Hughes.|
Synergy Worldwide, on the other hand, has a robust presence in the Asia-Pacific region and the European Union and also is sold in the U.S., but is only available through the direct selling channel.
Probert believes the emphasis on herbs at Nature’s Sunshine will be a big plus for its launch in China. “I think our portfolio really resonates with the Chinese consumer,” says Probert. “We elected to enter China with a joint venture with [Fosun] because they bring tremendous brand recognition, they’re very strong in how to do business in China, they’re strong in terms of government relations.” He feels combining these factors with the company’s own powerful product portfolio gives Nature’s Sunshine a clear strategic advantage in China.
While emphasizing cutting-edge science and finding natural solutions to health issues is a key component to the overall growth and health of the company, it’s not surprising that it also pays close attention to another core value: community. The company has partnered with the Sunshine Heroes Foundation to help it improve the lives and opportunities of children throughout the world. Most recently, Nature’s Sunshine helped fund the construction of a Sunshine Children’s Center in the Dominican Republic.
Loyal Distributors and Employees Enhance Corporate Stability
As the company celebrates its 45th anniversary, Kristine Hughes praises its loyal distributor base, some of whom have been with the company for over 30 years; in fact, six of its Distributors have been with Nature’s Sunshine since it implemented direct sales in 1974. The company also has employees who have been with the company for 25 and 30 years. And a special memory for Kristine is the day the company opened in Russia. “To go into a country that had only known communism… to see pure entrepreneurship and capitalism at work,” she says. “The Russian people really took hold of that, and it had such a powerful impact on their lives. It still does.”
|Nature’s Sunshine distributors soak up the experience at the company’s recent convention.|
For Probert, the first 45 years are just the beginning; his plan is to take the company to $1 billion in revenue. China, of course, will play a big part in this growth strategy, along with tapping into what company leaders feel is “unrealized potential” in Europe. Nature’s Sunshine Products Inc. has invested in infrastructure and field leadership, and continues to implement and promote best practices from other successful markets as it pursues this financial goal.
“This is a great year for us to refocus our employees, our Distributors and our customers on that mission of values—it’s sort of the beginning of the next chapter in this company,” Probert says. “There is nothing we can’t accomplish.”