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February 01, 2016

News in Brief

News in Brief, February 2016



Click here to order the February 2016 issue in which this article appeared or click here to download it to your mobile device.


Jeunesse Reports Annual Sales of $1 Billion in 2015

JeunesseJeunesse corporate headquarters in Heathrow, Florida.

Jeunesse has set a new benchmark for direct selling companies looking to achieve billion-dollar revenue. The skincare and nutrition company reports that annual sales surpassed $1 billion in 2015, its sixth year of business.

“Our success is the direct result of the hard work, professionalism and dedication of our amazing network of Jeunesse Distributors around the world,” Wendy Lewis, Founder and COO, said in a statement. “I congratulate each and every one of them for helping Jeunesse reach this important milestone.”

Wendy and her husband, Randy Ray, CEO, founded Jeunesse in 2009 with flagship products that remain top sellers, including the brand’s Reserve antioxidant supplement and Luminesce skincare line. Since inception the company has averaged 100 percent growth year-over-year, but in 2015 revenue skyrocketed 162 percent to $1.1 billion. In the same year, Jeunesse doubled its corporate staff to about 700 and relocated to a 130,000-square-foot headquarters in Heathrow, Florida. The company also opened “Jeunesse West,” a logistics hub in Draper, Utah, with 150 staff.

Jeunesse is one of several young companies powering through the ranks of the DSN Global 100, an annual list of the top revenue-generating direct selling companies in the world. In 2015, Jeunesse shared the No. 38 spot with home fragrance brand Scentsy, both companies having posted revenue of $419 million in 2014. Just 16 companies on the list have topped $1 billion in revenue, half of them U.S. firms.

Thanks to an early emphasis on building an international infrastructure, Jeunesse sells its anti-aging products—collectively dubbed the Youth Enhancement System (Y.E.S.)—through independent distributors in 121 countries. The company’s strategy of growing widely rather than deeply has proven to be one of its greatest strengths, and greatest challenges, according to Chief Visionary Officer Scott Lewis.

“In adapting to a variety of local cultures, keeping our message tight from a marketing standpoint has been key,” Scott notes. “Since every culture is so different, having one consistent message out there in the field that aligns with our brand promise is essential to create the company culture we have.”

Greater China, comprising Taiwan, China and Hong Kong, is the company’s top region. Scott also singled out Thailand and the U.S. as leading markets, but stressed that the company sees plenty of untapped potential around the world. In Japan and Korea, for example, revenue is hovering at roughly $2 million per month. The company also reports healthy growth in Europe and Latin America, where Jeunesse is gearing up to launch in Brazil this April.

Management points to the company’s technology prowess as another critical driver of growth. Founders Randy and Wendy have brought to bear their own expertise in the technology sector, including the fields of medical software and computer hardware. Jeunesse distributors use tailor-made technology centered on the “J-World” marketing system, comprised of back office, social and mobile components.

“Investing in the right technological infrastructure from the beginning while expanding globally has allowed us to reach this level and positions us to continue to grow from $1 billion and beyond,” said Randy.

Moving into 2016, leadership is taking steps to establish Jeunesse as a mainstream brand. “I feel like we’ve done a great job in attracting network marketing professionals and people who have been doing this 30-plus years. They have great leadership, but a big initiative for any company is to get your brand into the mainstream,” said Scott. “We’ve got a brand and products that we’re very proud of, and we’ve put several different strategic initiatives in place.”


Mary Kay Patent Count Exceeds 1,200 after Prolific 2015

Mary KayMary Kay corporate headquarters in Addison, Texas.

Mary Kay logged a banner year in product innovation, having secured 130 new patents in 2015. The manufacturer of makeup and skincare products now lays claim to more than 1,200 utility and design patents.

A number of anti-aging technologies and product formulations were among this year’s patents, including Mary Kay’s TimeWise Repair Volu-Firm Lifting Serum and Volu-Firm Eye Renewal Cream, as well as TimeWise Body Targeted-Action Toning Lotion. The beauty brand also was awarded design patents for its Cityscape his and her fragrance bottles and Lash Intensity Mascara, among others.

More than formalities or safeguards, new patents serve as catalysts for further discovery, according to Mary Kay’s John Wiseman, Vice President and Associate General Counsel for Intellectual Property and Innovation. “The patent process spurs innovation. Because we can protect our inventions, we have an incentive to continue inventing great things.”

Mary Kay’s extensive patent library is the result of more than 500,000 research and consumer tests conducted by the company each year. The beauty brand is laying the foundation for future advances with the construction of a new global manufacturing and R&D complex near its corporate headquarters in North Texas. Completion of the facility is projected for the first quarter of 2018.


Young Living Foundation Tops $1 Million in 2015 Giving

Looking back on 2015, the Young Living Foundation reports more than $1 million in cash and products donated throughout the year.

The philanthropic arm of Young Living Essential Oils LLC advances the company’s mission to bring its essential oils to every home in the world. In doing so, the foundation supports numerous local projects and partnerships across the U.S., as well as five large-scale initiatives in other regions of the globe. Young Living ensures that 100 percent of incoming donations directly support those projects by covering all of the foundation’s administrative costs.

Among the foundation’s major initiatives is the Young Living Academy in Chongon, Ecuador, near one of the company’s farms. Young Living built the school in 2009 and continues to support it, partly through an ongoing “Sponsor a Child” program. Over the past 18 months, Young Living members also donated more than $250,000 to build a high school at Young Living Academy, complete with classrooms, a library, a teacher workroom, a science lab and bathrooms.

Several ongoing efforts are focused on Uganda, where the Young Living Foundation supports three nonprofit organizations. A partnership with Sole Hope helps to address the sanitation needs of children by providing durable shoes and health education. Young Living also partners with African Hearts to rescue children living in the slums and streets of Kampala, Uganda, and with Healing Faith Uganda to fight malaria in rural villages.


Private Equity Calling: Avon Sells Majority Stake in North American Business

AvonAvon CEO Sheri McCoy

After years of declining sales, Avon Products Inc. (AVP—NYSE) announced in December 2015 that it will sell its North American business in a $605 million deal with private-equity firm Cerberus Capital Management LP.

The beauty company said it will sell off an 80.1 percent stake in Avon North America for $170 million, with Avon holding the remaining 19.9 percent in the resulting privately held company. Cerberus also will make a $435 million preferred-stock investment for a 16.6 percent stake in Avon Products.

The deal aims to spur the North America business and enhance focus on international markets, the companies said. In the first three quarters of 2015, Avon’s international business accounted for 86 percent of consolidated revenue.

Avon also announced plans to suspend its dividend, opting to use it and proceeds from the sale to pay down debt and reinvest in the business.

According to the agreement, Cerberus will appoint a CEO to lead Avon North America when the current President, Pablo Muñoz, steps down in early 2016. The company will be governed by a board of managers, with seven seats held by Cerberus and two filled by Avon Products CEO Sheri McCoy and former President and COO Susan Kropf.

“Importantly, Cerberus has both the conviction and resources to support our Representatives,” McCoy said in a statement. “We are confident that relief from the short-term pressures of a public company reporting cycle, the substantial investment that Cerberus is making to support and reinvigorate the business, and the operational excellence and discipline that define Cerberus’ reputation will return Avon North America to health.”

The new partnership extends to the board of Avon Products, which will gain three Cerberus directors and two more jointly appointed by the companies. The departure of six current directors will reduce the final headcount to 11. Cerberus appointee Chan Galbato has been tapped to serve as non-Executive Chairman, and longtime director W. Don Cornwell will be Lead Independent Director.


Viridian Kicks Off 2016 with New Solar Partner, Key Tax Credit

Viridian

After rolling out a solar partnership with Sungevity in September 2015, Viridian parent Crius Energy LLC is marking a milestone in the business. The company’s solar energy sales have topped 50 megawatts in the past two years, supplying clean solar power to nearly 7,000 customers.

Crius closed out the third quarter of 2015 with a 90 percent year-over-year increase in megawatts of generating capacity sold, driven primarily by direct selling subsidiary Viridian Energy. The Stamford, Connecticut-based company is looking to accelerate that growth through its partnership with Sungevity, a solar provider with operations in the U.S. and Europe. The contract secures more favorable terms and a higher profile for Crius than a prior agreement with SolarCity.

“The solar energy market represents a high-margin opportunity for Crius, having contributed 10 percent to our EBITDA last year,” Crius CEO Michael Fallquist said in a statement. “We look forward to continuing to deliver on the extensive potential of this business with our well-capitalized partner, Sungevity, with optimism after having achieved our 50 megawatt sales milestone in just two years.”

The company’s outlook improved further with the recent extension of a key tax credit. Christmas came a week early for Crius and other industry players when the U.S. government voted to extend for five years the solar Investment Tax Credit (ITC), one of the most significant policy incentives in place to advance the industry. The ITC provides a dollar-for-dollar reduction in federal income taxes to companies or individuals investing in solar.


Beachbody Launches Workout Streaming App for Apple TV

Beachbody

Following the July 2015 rollout of its Beachbody On Demand streaming service, Beachbody LLC is making the extensive library of health and fitness programs available for Apple TV.

The Santa Monica, California-based company has positioned itself at the intersection of technology and fitness with its new digital offering. A Beachbody On Demand subscription provides instant access to the brand’s popular in-home workouts, including offerings like P90X  with celebrity trainer Tony Horton and Insanity with Shaun T. The service also rewards users with programs created exclusively for Beachbody On Demand.

Beachbody’s new app for Apple TV comes on the heels of a fall product release by the technology giant. In September 2015, Apple unveiled the first refresh of its big-screen offering in more than three years. The latest Apple TV features the company’s all-new tvOS operating system and a redesigned interface using the Siri Remote.

“Through the Beachbody On Demand app for Apple TV, users are able to access and participate in the most premium, at-home fitness experience ever available,” Beachbody’s Chief Digital Officer, Bill Bradford, said in a statement. “Over the years, Beachbody has developed fitness and weight-loss products that consistently deliver results, and with the new Apple TV and its powerful new tvOS, our ability to reach new customers with the best on-screen navigation increases exponentially.”

Beachbody is offering all consumers an introductory 30-day free trial of its fitness library—which the company values at more than $3,000—while the service is in its beta phase. Existing Beachbody On Demand users can install the Apple TV app and link their account to their new device.


Thousands Attend Primerica Events Marking 30 Years in Canada

Primerica ushered in its 30th year of business in Canada, the company’s sole international market, with six events across the country on Saturday, Jan. 9.

About 10,000 representatives attended the meetings, which featured an address by chief executive Glenn Williams, who brings firsthand knowledge of the Canadian side of the business. Williams was part of the team that launched operations in the country in 1986, and went on to serve as President and CEO of Primerica Canada from 1996 to 2000. His live address to an audience in Toronto was simulcast to crowds in Calgary, Halifax, Montreal, Vancouver and Winnipeg.

Like the company’s U.S. business, Primerica Canada is in the midst of unprecedented growth. The Canadian segment has paid out more than $1 billion in Term Life Insurance claims, and currently insures more than 400,000 lives. Salesforce compensation in 2015 amounted to a record $124 million, up 15 percent year-over-year.

“2015 proved to be another record-shattering year for Primerica Canada,” Williams said in a statement. “Life insurance face amount in force exceeded $100 billion, and client asset values surpassed $10.5 billion, both as of December 31, 2015. Most importantly, we paid more than $102 million in claims to our Canadian policy beneficiaries during 2015. These families experienced a tragic loss of life and we were able to prevent further emotional devastation by helping them meet their financial needs.”


Youngevity Be the Change Foundation to Fight Hunger with Caterina’s Club

Food Delivery TruckThe Caterina’s Club food delivery truck featuring Chef Bruno Serato.

Youngevity is expanding the reach of its charitable arm, Youngevity Be the Change Foundation, through a new partnership with Caterina’s Club, a Los Angeles area nonprofit that serves hot meals to local children.

The 2-year-old foundation supports a roster of hand-picked charities, among them American Red Cross, Make-A-Wish Foundation and Wounded Warrior Project. Funding comes from the sale of designated Youngevity products, with the company donating 100 percent of proceeds to Youngevity Be the Change.

California-based Youngevity has found a local partner in Caterina’s Club, a nonprofit founded by Italian Chef Bruno Serato, who presides over the kitchen at the famed White House restaurant in Anaheim, California. Each week, Caterina’s Club serves a nutritious meal of freshly made pasta and vegetables to more than 1,800 children, many of them poor and living in motels with their families. Serato is an advocate of “the power of pasta” as a sustainable and affordable source of energy.

Since its founding in 2005, Caterina’s Club has provided more than 1 million meals to children in need. The charity also has helped to relocate hundreds of people from motels to Section 8 housing. In 2011, CNN recognized the work of Caterina’s Club by including Serato among its Top 10 Heroes of the year.


Elken Gears Up for Opening of Philippines Market

Leading Malaysian direct selling company Elken is tapping into growth in the Asia Pacific region with its forthcoming entry into the Philippines.

The company coordinated a soft launch in the Philippines in December 2015, hosting public events to introduce its business model and extensive range of products, which number more than 500 across the categories of cosmetics, personal care, wellness, food and beverage, and home care. An organic spirulina supplement and water purification system are among the company’s top-selling products.

The Philippines is one of the fastest-growing direct selling markets in the world, according to research by the World Federation of Direct Selling Associations. From 2011 to 2014, constant dollar revenue from direct sales increased at a compound annual growth rate (CAGR) of 17.6 percent, outpaced only by growth in China and Vietnam.

With the official opening of the Philippines, Elken’s operations will extend to 11 markets, including Malaysia, Singapore, Indonesia, Thailand, Brunei, Hong Kong, India, Vietnam, Cambodia and Taiwan. The company, which has been in business for 20 years, has offices in 30 cities. Elken reported revenue of $233 million in 2013, earning the No. 50 spot on the 2014 DSN Global 100, but declined to participate in the 2015 ranking.