April 01, 2012
USANA: 20 Record-Breaking Years
by Barbara Seale
- Founded: 1992
- Headquarters: Salt Lake City
- CEO: Dave Wentz
- Products: Nutritional, personal care and weight-management
From the time when Dr. Myron Wentz founded USANA Health Sciences two decades ago, the wellness company has been a rock in every area. It surpassed $100 million in annual sales in its first six years, its scientist-founder was awarded the Albert Einstein Award for Outstanding Achievement in the Life Sciences, and in 2005 BusinessWeek placed it third on its list of Hot Growth Companies and Forbes ranked it fifth among Best Small Companies.
For years the publicly traded (USNA—NYSE) company’s press releases tracked its consecutive quarters of record sales the way Moneyball’s baseball fans celebrated the winning streak of their beloved Oakland A’s. But USANA’s streak got so long that when the company issued its 2011 earnings release, it reported its sales record in years—nine of them.
USANA CEO Dave Wentz—who worked alongside his father to start the company and was named CEO in 2008—credits the company’s success to a conservative management philosophy and products based on science.
“Wellness products have been our focus and philosophy throughout the years,” he says. “We’re building for the long term, so we don’t chase fads.”
The approach has worked for USANA for 20 years. In 2011 it reported $581.9 million in sales—a 12.4 percent increase over 2010—and projected that impressive number to increase in 2012.
In 2011 USANA reported $581.9 million in sales—a 12.4 percent increase over 2010—and projected that impressive number to increase in 2012.
A panel of health experts, including Dave Wentz and Dr. Myron Wentz of USANA Health Sciences, joins Dr. Oz onstage at The Health and Happiness Summit, held on Feb. 25 at the Radio City Music Hall.
RESET ™ weight-management system
MyHealthPak™ includes core supplements such as the Essentials™ with a.m. and p.m. doses for each individual.
Athletes and the Wizard of ‘Oz’
USANA continues to enhance its global brand, which includes strengthening brand awareness in North America. Leading the way are product sponsorships for professional athletes, as well as advertising and partnering with credible organizations. USANA recently became a sponsor for the U.S. Ski and Snowboard Team and the official health supplement supplier to the Women’s Tennis Association. USANA sponsors or supplies several athletic teams and individual athletes in sports as diverse as ski jumping, track and field and boxing.
“Athletic sponsorships are a strategic move on our part,” USANA President of North America Kevin Guest says. “The credibility of having Olympic and professional athletes who trust their health to USANA helps our associates when they share products with others. We’ve conducted considerable market research, and from a credibility perspective, Olympic athletes score higher than even doctors when discussing nutrition. These athletes are competing at the highest levels. The perception is that they know how to have their bodies perform at the most optimal level.”
Athletes aren’t the only key relationships that support USANA’s credibility. The latest is with the man called “America’s Doctor”—Dr. Mehmet Oz. When Dr. Oz and Dr. Myron Wentz met, they discovered many common interests. Over time, they developed a mutual admiration. Dr. Oz read The Healthy Home: Simple Truths to Protect Your Family from Hidden Household Dangers, the national best-seller written by the Wentz father-son team. He was impressed, and he personally invited both to speak at “The Health and Happiness Summit with Dr. Oz” in New York City. On Feb. 25 the Wentzes appeared onstage in the company of such best-selling medical authors as Dr. Christiane Northrup, Dr. Nicholas Perricone and Dr. Oz himself.
USANA’s latest key relationship is with the man called “America’s Doctor”—Dr. Mehmet Oz.
“We launched our Healthy Home book as a service to the public to make them aware and provide education about removing toxins from the home and creating a healthy environment,” Dave Wentz explains. “Even with the best nutrition, if you’re poisoning the body, nutrition can’t overcome it. My father has always said onstage that he wishes he could reach more people with our message. The book was a tool to do that. The Dr. Oz event takes it further.”
Following its founder’s lead, USANA has long been involved with charitable efforts, particularly through the Children’s Hunger Fund. This year the company made it official with the launch of its new philanthropic foundation, the USANA True Health Foundation, at its annual Asia Pacific convention held in Sydney, Australia, in early March.
USANA plans to register the foundation in all its markets to unite its efforts.
“We want the full power of the USANA family pulling together,” company CEO Dave Wentz says. “We will continue to support the Children’s Hunger Fund, but we also want to have additional funds to be able to react to disasters in local markets.”
Wentz reports that 99 cents of every dollar donated to Children’s Hunger Fund provides food and other aid to children who are victims of hunger, malnutrition, poor medical care, abandonment or abuse. Since 2004 the USANA family has donated more than $8 million in nutritional products and monetary contributions to help this highly efficient charity care for children in need around the globe. But, he notes, heart-wrenching disasters have hit Japan, the Philippines and the United States, locales where CHF may not have direct ties.
“USANA True Health will give us more reach and flexibility, and every penny of every dollar will go to support its initiatives,” he says. “There will be no administrative costs.”
Funding for USANA True Health will come primarily from $10 contributions linked to associate auto-ships or commission checks.
“Ten dollars a month will feed a child in some of these countries,” he says. “Our goal is to get consistent contributions from a lot of people.” The charitable foundation is the most recent step in a history of helping others. USANA Founder and Chairman Dr. Myron Wentz was driven to action in 2004 when he visited impoverished refugee camps in northern Uganda. One camp was home to 33,000 children for whom disease and malnutrition were a way of life. Dr. Wentz couldn’t ignore their plight. He partnered with Children’s Hunger Fund to send food to the camp’s children and help families begin building homes and growing crops. In little more than a year, malnutrition was reduced by 90 percent and the refugee population was reduced by more than 60 percent.
Fueled by this success, Dr. Wentz went on to establish and fund state-of-the-art medical centers in Uganda and Cambodia. USANA also funded the building of a maternity wing in Malawi, and in 2011 the new Children’s Hunger Fund Malawi Medical Center opened and was named after Dr. Wentz.
USANA promoted the event to its field sales team, and they helped fill the event to capacity.
“There is great synergy between Dr. Oz’s philosophy of health and nutrition and the foundation that Dr. Wentz has set in USANA’s core values,” Guest notes. “I would guess that we had thousands of associates attending the event. We’re hoping that events like this will bring heightened exposure to what we stand for as a company.”
The synergy and the relationship will continue beyond Dr. Oz’s event. In January Dr. Oz appeared as a surprise guest on the USANA monthly leadership call, describing how excited he was about his relationship with USANA. The response from the USANA salesforce was overwhelming. They lit up Facebook and Twitter as the call was happening.
Preceeding The Health and Happiness Summit, USANA announced it would team up with Dr. and Lisa Oz’s nonprofit organization HealthCorps to help empower young people to live healthier lives. USANA has committed to further HealthCorps’ goals of combating childhood obesity and educating children about nutrition and fitness.
The two organizations kicked off their collaboration at a “Teen Battle Chef” cooking competition at Columbia University. High school students from the tri-state area each prepared a healthy dish to present to a panel of judges that included celebrity chef Rocco DiSpirito, Dr. Oz, Lisa Oz, Dave Wentz and Dr. Myron Wentz.
USANA’s relationship with Dr. Oz will include his participation on future leadership calls, and more important, his participation at USANA’s International Convention in August.
That convention will be a celebration of 20 years of success. USANA executives won’t disclose everything they’re planning, but Dave Wentz suggests that personalization will play a key role.
“We will launch a lot of things at the convention,” he hints. “We’re going to take it to the next level.”
International results, especially in the Asia Pacific region are currently driving the company’s growth. Dave Wentz says USANA is methodical in its approach to international expansion, nurturing each new market until it can stand on its own. He notes that distributors—which USANA calls associates—are the navigators that point the company toward new marketplaces. For example, by the end of the first quarter, responding to associates, the company opened markets in France and Belgium, giving eager associates the opportunity to expand their businesses internationally—assisted by USANA’s globally seamless compensation plan. And large numbers of USANA leaders had connections in Thailand before the company entered that market.
“Quebec is one of our large markets, and distributors there have been begging for France for years,” Dave Wentz explains. “We have pent-up demand for that market. We also have great leadership in Quebec, and they’re eager to open France.”
He notes that entering so many markets in quick succession is unusual for USANA. The company typically takes about 18 months to develop a firm foundation in one market before entering another.
“Opening three new markets in six months represents an unprecedented level of new market development, but it is consistent with our plan to be more aggressive in our international expansion efforts,” he reports. “Each of these new markets was chosen strategically and will play an important role as we expand USANA’s international presence.”
USANA operates in 18 markets including China, where through its BabyCare Ltd. subsidiary it is gradually introducing USANA-branded products.
Nurturing North America
USANA’s current challenge is its North American markets, where sales and distributor numbers have declined. Like many companies, USANA faces a key culprit: the sluggish economy. The company has gone to battle against that formidable adversary on multiple fronts. Guest says he already sees the first indicators of an upturn as he visits with associates.
“For us the most important thing that will cause people to take action is having a high level of trust, and trust is built by delivering, delivering, delivering,” Guest says.
“Strategically, that means building trust and relationships among leaders and our management team. I just got back from a large meeting in Texas where I saw faces I haven’t seen in years—people who are becoming re-engaged and leaders who are stepping up to a new level.”
“For us the most important thing that will cause people to take action is having a high level of trust, and trust is built by delivering, delivering, delivering.”
—Kevin Guest, President, USANA North America
Guest notes that a new key initiative is focused squarely on those top producers: leadership development. He notes that as leaders achieve personal growth, their business growth follows. Being able to productively propose the USANA opportunity and products is crucial for any associate, and since leaders mentor those in their downlines, it’s essential for them. USANA has already begun to spend a significant amount of time developing the leadership, communication and presentation abilities of its salesforce.
“I’m a believer that in direct selling when a person goes out and presents, the buyer is buying the person—not products or the opportunity being offered,” Guest asserts. “When people are better developed, have better skills and better belief in self, they have a more attractive product to sell.”
USANA will also provide unique support to those associates in the form of product personalization and brand-building activities.
With its focus on human health, USANA couldn’t ignore the environment’s impact on wellness.
Its answer: USANA Green.
Its approach to getting green has been the same one it uses for every other challenge: continuous improvement. It empowers employees to look for ways to get more and more environmentally friendly. So far, that has meant regularly adding solar panels; recycling paper, cardboard and electronics; Xeriscape landscaping its corporate campus, which so far has saved 2.5 million gallons of water; using wind-generated energy; and providing preferred parking spaces to employees who carpool or drive low-emissions vehicles to work. It also started using smaller shipping boxes, a simple change that saves an incredible 180 tons of cardboard annually. The business bonus: Saving the environment also produces operational savings.
“If we can find a way to not add toxins into the environment, then that fits for us,” says CEO Dave Wentz. “The collection of things we do to be green reduces the environmental burden our bodies are subjected to. We would be hypocritical if we weren’t doing everything possible to be green.”
The product personalization initiative is built around MyHealthPak™, which allows a customer to tailor an order of nutrient supplements to meet their own individual needs. Dave Wentz has wanted to offer product personalization for a decade, but technology had to catch up with his vision. The process includes a web-based personal health assessment that results in product recommendations for a.m. and p.m. packs. Literally thousands of combinations of USANA nutritionals are possible. The MyHealthPak Builder even keeps track of nutrient levels to ensure that customers do not receive unsafe dosages. Then a proprietary packaging machine assembles every individual MyHealthPak. The packaging machine’s server receives the order from the website and communicates with a high-speed packer that dispenses the appropriate tablets. And each of the 56 packs—a 28-day supply—and the box they come in are labeled with the customer’s name and corresponding bar codes to ensure that clients receive what they ordered. USANA hopes to eventually make MyHealthPak available in all its markets.
USANA leaders will tout the personalization initiative at every event this year.
The product personalization initiative is built around MyHealthPak™, which allows a customer to tailor an order of nutrient supplements to meet their own individual needs.
To further drive the development of new products and technologies, USANA expanded its research and development group, increased research and development investment, and expanded its collaborations with outside scientific experts such as the Linus Pauling Institute and The Orthopedic Specialty Hospital (TOSH), as well as academic institutions and nonprofit research organizations around the globe.
Innovation will also extend to associate incentives and promotions that will be introduced specifically for the North America region.
“We have to keep reinventing ourselves—not get comfortable and simply hold onto what we have.”
“We have seen that certain incentives work well in some markets and not as well in other markets,” Guest notes. “For example, our Matching Bonus program has driven considerable growth in our Asia Pacific region but has not been nearly as successful in North America. Working closely with our North American leaders, we are identifying the right incentives and promotions to excite our North American salesforce and drive sales.”
Looking forward, Dave Wentz sees a future filled with innovation and continual improvement, which he describes as “the same thing we’ve been doing for 20 years.
“We have to keep reinventing ourselves—not get comfortable and simply hold onto what we have,” he says. “We’ll have to keep innovating to create new growth. Even though change is hard, change is key. We can never be satisfied.”