May 31, 2016
News in Brief, June 2016
IN THIS ISSUE:
- 2016 DSN Global 100 List
- The 2nd Annual North America 50 List
- 2016 DSN North America 50 List
- 2016 Profiles
- Growth Comes in All Shapes and Sizes for the Global 100
- DSN Honors the Global 100 with a Special Celebration
- Frequently Asked Questions about the Global 100 Ranking
- By The Numbers
- Bravo Leadership Award: Dream Builder: Magnus Brännström Defines Oriflame’s Path with Consistent Leadership
- Bravo Growth Award: Thriving Community: Technology Brings Le-Vel’s Growth Story to Life
- DSN Lifetime Achievement Award: A Legacy of Firsts: John Fleming
Natura Launches Wider Retail Strategy
At the end of April, Natura Cosméticos launched a retail store in São Paulo, Brazil, also home to its global headquarters. The new venture marks a departure from Natura’s direct selling and e-commerce model as the company aims to expose more consumers to its beauty and household products.
The retail strategy produces important synergies for Natura, according to João Paulo Ferreira, Vice President of Sales, especially as the lines between channels become increasingly blurred. Currently, the $2.4-billion company has 1.4 million consultants in Brazil and about 500,000 across its international operations in Argentina, Chile, Colombia, France, Mexico and Peru. Natura sees physical stores as points of connection to introduce the brand to a new and wider audience.
“We noticed that we were losing shoppers who still admire the brand, but are not willing to buy through direct sales on certain occasions, because their shopping habits drive them to the retail experience,” Ferreira told DSN. “That was becoming more pronounced in bigger cities with younger consumers.”
Before launching the retail concept in Brazil, where Natura claims more market share than any other cosmetics brand, the company spent more than two years in development, even going so far as to build life-size mockups of two different stores, in order to collect feedback from stakeholders.
Natura’s sole other brick-and-mortar location opened eight years ago in Paris. The beauty brand has long taken a multi-channel approach in the French market, making it a laboratory of sorts for the company. The Paris store provided opportunity for trial-and-error, but the real education began in December 2012, when Natura took a majority stake in Australia-based Aesop, a natural beauty company with 147 stores in 18 countries.
“We learned from Aesop that the experience offered in a store—more than the products, the consulting experience that a well-trained crew can offer—creates loyalty and confidence in the consumer,” said Ferreira.
With that in mind, Natura sought to create an in-store experience that aligns with the ideal direct selling experience, right down to the “retail consultant” title given to salespeople. The design reflects Natura’s connection to nature, beauty and sophistication, but does so in an inviting manner. The end goal, said Ferreira, is to show consumers what a good consulting experience—i.e., direct selling experience—can be.
Lights, Camera, Ackman: Herbalife Responds to ‘Betting on Zero’ Documentary
The three-year battle between Herbalife and hedge-fund manager Bill Ackman, who is famously short $1 billion in the company’s stock, has made its way to the big screen in Betting on Zero, a new documentary by filmmaker Ted Braun (Darfur Now). The film premiered at April’s Tribeca Film Festival and, like its source material, has stirred up a fair amount of controversy.
The global nutrition company, whose executives declined to participate in the project, responded to the documentary by snapping up the website www.bettingonzero.com. On the site, Herbalife calls into question the objectivity of Betting on Zero and the motive of its anonymous financiers, hinting at a relationship between Ackman and the film’s producer, who were on the same crew team in college. According to the company, the film comes across one-sided, featuring Herbalife detractors but leaving out its many satisfied members.
Astronauts to Keynote Shaklee’s Annual Conference
Strengthening its longstanding ties to NASA, Shaklee has tapped astronauts and aviators Captain Mark Kelly, formerly Commander of the space shuttle Endeavor, and Captain Scott Kelly to deliver the keynote speech at Shaklee Live, the company’s annual salesforce conference slated for August 3–7. The twin brothers are currently undergoing NASA’s first “twin study” to show the effects of space on the human body. Shaklee products have been on every NASA mission since 1993, when the agency’s scientists partnered with Shaklee to develop a rehydration product, designed to help astronauts re-entering Earth’s atmosphere.
ForeverGreen Updates Investors on Cost-Cutting Measures in 2016
ForeverGreen Worldwide Corp. management recently discussed the company’s push to return to profitability, saying thus far in 2016 it has cut more than $500,000 in monthly costs, primarily by trimming operations and restructuring staff in various markets.
“With these efforts, including staff and region reorganization, and anticipating the launch of several new products in the next few weeks, we anticipate second-quarter revenues to be stable and then accelerating and moving forward into the third quarter and thereafter,” said Chief Financial Officer Jack Eldridge.
The seller of nutrition, weight-management, and pain-relief products experienced a rocky 2015, despite boosting revenue 15 percent to $67.1 million. The company (FVRG—OTC.BB) reported a loss of $2.6 million, after turning a profit of $1.0 million in 2014. In its full-year earnings report, management said major challenges in 2016 would include responding to real-time economic conditions and tailoring systems and logistics to meet global demand.
Revenue in the first quarter was approximately $12 million, Eldridge said, putting the Utah-based company on track to meet its previously stated guidance. For the full year, management expects revenue in the range of $55 million to $60 million, with 2 percent to 4 percent net profit margins.
Direct Selling Brands Take the Field with Professional Sports Sponsorships
Three of the world’s largest direct selling companies have recently expanded their sports marketing efforts. California-based Herbalife sealed a five-year deal with the Vietnam Sports Administration; Utah-based USANA signed on as the official nutrition brand for three top Colombian soccer clubs; and Texas-based AdvoCare continued its commitment to NASCAR with a special tribute to renowned driver Mark Martin. While none of the companies disclosed the dollar value of their marketing campaigns, they demonstrate the continued interest direct selling companies see in promoting their brands through sports.
“Sponsorships breathe fresh life into brands by engaging fans in real time at each event, compared to repeat after repeat of the same broadcast advertisements,” said Kirk Wakefield, Professor of Marketing and Executive Director, Center for Sports Sponsorship and Sales at Baylor University. “Traditional forms of marketing all suffer from quick wear-out rates, but clearly-defined sponsorship activation strategies rely on the spontaneity and excitement of sports and entertainment to remain fresh.”
In its deal, Herbalife is extending its sponsorship as the Official Nutrition Sponsor of Vietnam Sports through 2021, meaning its products, sports-nutrition consulting and training are at the disposal of all Vietnamese athletes competing internationally, including at the Rio de Janeiro 2016 Olympics. The nutrition company, which derives about 23 percent of its revenue from the Asia Pacific region, initially stepped into the role ahead of the London 2012 Olympics. For the first time in Rio, Herbalife will sponsor the country’s Paralympic athletes as well as Olympic competitors.
“With our renewed commitment as Vietnam Sports’ Official Nutrition Sponsor, we are looking to deepen our relationship further and help athletes and coaches maximize the benefits of sports nutrition to achieve maximum performance,” said Stephen Conchie, Vice President and General Manager of Herbalife Southeast Asia.
USANA is taking a similar approach with the latest additions to Team USANA: Atlético Nacional S.A. and América de Cali S.A., which both compete in the country’s Categoría Primera A league, as well as Jaguares Fútbol Club S.A., a Categoría Primera B team with 13 national championships. Holding 19 domestic titles, Atlético Nacional is Colombia’s top soccer club, as well as the country’s largest. Outside Colombia, USANA recently added England’s AFC Bournemouth and Mexico’s C.F. Pachuca to its roster of sponsored clubs.
Last year, AdvoCare secured a multi-year NASCAR Sprint Cup Series (NSCS) deal to be primary sponsor of the No. 6 Ford Fusion fielded by Roush Fenway Racing. In September, driver Trevor Bayne will head back to South Carolina for Darlington Raceway’s second throwback weekend, revolving around the Bojangles’ Southern 500 race on Sept. 4. As part of the track’s The Tradition Continues celebration, each car will sport a paint scheme harkening back to one of the NASCAR greats.
In an April 26 appearance on the NBC Sports Network program NASCAR America, Bayne and team founder Jack Roush unveiled this year’s throwback scheme—a red, white and blue design carried by Mark Martin’s No. 6 Ford during the 1996 and 1997 NSCS seasons. During a successful career, Martin spent 19 seasons with Roush Fenway, winning 35 NSCS races and finishing second in the Cup Series point standings four times.
Fast Company Conference to Showcase Beautycounter Story
Natural beauty brand Beautycounter was in the spotlight May 24–25 at FC/LA, Fast Company’s second annual Creativity Counter-Conference in Los Angeles. The retreat brings together creative movers and shakers in business, technology, design and entertainment. It also pays tribute to the “Most Creative People in Business,” an annual list published in the June issue of Fast Company.
Day One of this year’s event, hosted on the L.A. campus of ad agency 72andSunny, took participants to businesses across the region in a series of Fast Tracks. One stop along the way was the Santa Monica headquarters of Beautycounter, where Founder and CEO Gregg Renfrew discussed the brand’s approach to cleaning up the beauty industry, helped along by collaborations with the likes of J.Crew and Goop.
On Day Two, participants heard from a lineup of speakers that included Sean Rad, CEO of the popular dating app Tinder, which reported nearly 10 million daily users earlier this year. Also featured were Academy Award-winning actress Geena Davis, Founder of the Geena Davis Institute on Gender in Media and The Bentonville Film Festival; WWE superstar John Cena; and Henk Rogers, co-creator of the iconic Tetris video game.
Stream Appoints Two New Execs amid Push to Diversify Offerings
Following the February appointment of President and CEO Larry Mondry, Stream has brought on two additional executives to help diversify its energy-centric business.
The Texas-based company recently announced that Dan O’Malley, a consumer products and services veteran, is stepping into the roles of Executive Vice President and Chief Products and Services Officer, a new position within the company. O’Malley has held similar roles with Viamericas, an international payment services provider, and mobile payments platform Mozido Inc.
For a number of years, he served as Executive Vice President and President of the Americas and Emerging Markets for MoneyGram International, helping the financial services provider achieve multibillion-dollar revenue. Stream is looking to tap O’Malley’s expertise as it pursues a national growth plan, according to Mondry.
“Stream is an already successful company on the edge of significant expansion,” O’Malley said in a statement. “I’m looking forward to being part of the company’s strong executive team and applying my expertise to help Stream reach its growth goals.”
On the technology side of the business, Stream recently named Kelly Habbas as its Chief Information Officer. Habbas hails from the energy industry, where he has held leadership roles across various U.S. and Canadian energy markets. He will oversee Stream’s IT strategy as the company expands its existing energy, mobile, protective and home services.
“With his impressive technology expertise, specifically in various energy markets, Kelly is a fantastic addition to our team, and we’re fortunate to have him on our executive team,” said Mondry. “I know that Kelly will help advance our mission of propelling Stream to the next level of growth.”
Seldia Now Registering for 2016 European Direct Selling Conference
Seldia, the European Direct Selling Association, has commenced registration for its annual gathering of key players in the European direct selling community. Now in its sixth year, the European Direct Selling Conference is coming to Brussels, Belgium, on Oct. 5–6.
The membership of Seldia includes 28 national Direct Selling Associations and 16 Corporate Member companies, all of whom are signatories of the European Direct Selling Codes of Conduct, a formal set of consumer protection practices. The association promotes the benefits of the direct selling channel, both to the public and to EU and national policy makers.
This year’s European Direct Selling Conference will feature speakers, panelists and workshops focused on the theme of “Direct Selling: Retail without Boundaries.” Keynote speakers will include Magnus Brännström, current Chairman of Seldia and CEO and President of Oriflame, and Doug DeVos, President of Amway and Chairman of the World Federation of Direct Selling Associations.