August 01, 2017
USANA: A Personal Quest Gives Rise to a Billion-Dollar Company
by Courtney Roush
USANA Health Sciences
Headquarters: Salt Lake City, Utah
Top Executive: CEO Kevin Guest
2016 Revenue: $1.01 billion
Global 100 Ranking: 20
Products: Health and wellness, skin care, foods
Reaching the milestone of $1 billion in annual revenue is arguably the best way to kick off your 25th year in business. USANA Health Sciences did just that at the close of 2016, around the same time the company celebrated the grand opening of its manufacturing facility in China. Those achievements were testimony to the vision established by USANA Founder Dr. Myron Wentz, a microbiologist and immunologist; and the leadership provided by his son, former Co-CEO Dave Wentz, who stepped down in November and is currently serving as Chairman at the Direct Selling Education Foundation.
Co-CEO Kevin Guest, who had been with USANA since 2003, became the sole CEO and has been with USANA from its founding. Initially, his media company partnered with USANA to create the health and wellness brand’s sales and marketing tools and to produce special events, a period during which Guest also was a USANA distributor. USANA later acquired his company and brought him on as a full-time executive. Consistency, he believes, is what has led USANA to the billion-dollar mark.
Throughout his tenure, Guest says the company has stayed true to its vision. “You can tell the story of USANA today or the story of USANA 25 years ago, and those stories would be very consistent,” he says. “We’re not jumping to things that might look shiny in the moment. We’ve stayed really true and consistent to who we are.”
His strategy for the future is to continue to stay true to those values of health, family, integrity and community while innovating and expanding in the company’s areas of core competency, which are nutrition and healthy living. He goes on to describe Dr. Wentz’s legacy as one of “excellence, never settling for anything but the best, and then simply working hard to find answers to some of our world’s greatest problems. We are building upon the great foundation that already exists.”
A Foundation of Innovation
Central to the USANA story is its founder and Chairman of the Board, Dr. Wentz, a highly respected scientist lauded for his work in the development of human cell culture technology and infectious disease diagnoses. Wentz founded Gull Laboratories in 1974 and is perhaps best known for his development of the first commercially viable diagnostic test for the Epstein-Barr virus.
Behind these accolades is a compelling reason for Wentz’s passion for science: His father, Adam, died of heart disease when Myron was 17 years old. The loss, he says, was one of the most traumatic experiences of his life. In the years that followed, Wentz would watch several of his aunts and uncles pass away from cancer and heart disease. His mother, Bertha, was diagnosed with breast cancer at age 60, and his older brother, Charles, lost his own battle with cancer at age 66.
From a young age, Wentz was driven to understand what was causing these degenerative diseases and what, if anything, could be done to help people live longer, healthier lives. After earning his Ph.D. in microbiology at the University of Utah, and investing years of research in the study of cell culture, Wentz came to the conclusion that cellular nutrition was of utmost importance in determining the outcome of an individual’s life. The modern diet, he argued, was deficient in key nutrients, therefore creating the need for supplements. In fact, Wentz’s research revealed that proper nutrition had the power to restore health to damaged cells.
|The USANA True Health Foundation’s Annual “Champions For Change” 5K Run/Walk helps support families all across the world.|
After selling Gull Laboratories to a German medical products firm, in 1992 Wentz launched USANA: a manufacturer and distributor of nutritional supplements designed to provide cellular nutrition and effectively reverse the damage caused by free radicals to the body’s antioxidant reserves. Those free radicals, Wentz firmly believed, were the root cause of the degenerative diseases cutting short so many lives. His vision for USANA was simple, yet daunting at the same time: “to create the healthiest family in the world.”
Twenty-five years later, that family has grown to represent some 574,000 independent distributors and customers in 20 markets. Fifty percent of the company’s business comes from Greater China, including mainland China, Hong Kong and Taiwan. USANA originally entered mainland China in 2010, purchasing a nutritional company named BabyCare Ltd. Seven years later, BabyCare has grown to nearly $500 million in sales.
Given this kind of demand, the company’s decision last year to open its second manufacturing hub—a $40 million facility in Beijing—was timely, and inevitable given BabyCare’s growth. “In China, we were approaching capacity in our existing leased facility in Beijing, with no room for expansion,” says Jim Brown, President and COO. “We put the new facility in place to both meet existing demand and stay ahead of the curve. And I’m glad we did it when we did.”
A publicly traded company since its inception in 1992, USANA self-manufactures nearly two-thirds of what it sells in its own facilities—one of the company’s chief points of difference—with the aim of controlling the entire process, from raw ingredient to finished product, as much as possible. The facility in Beijing serves greater China exclusively, while USANA’s Salt Lake City manufacturing facility sources the rest of the company’s markets around the world.
USANA’s success in Asia isn’t limited to Greater China. The company’s Indonesian market has grown steadily since opening a few years ago, and Korea is growing rapidly.
Throughout all of its respective markets, USANA remains consistent with Wentz’s vision and prides itself on its family-oriented culture, which extends to its philanthropic endeavors. The company’s True Health Foundation, a nonprofit organization fully funded by USANA, donates 100 percent of its proceeds to families in need throughout the globe.
Personalization: The Key to USANA’s Future
The nutritional supplements market today bears little resemblance to the landscape 25 years ago. It’s a much more competitive environment, which poses a number of challenges for USANA.
“There are so many more companies who are doing this than there were 25 years ago,” says Chief Communications Officer Dan Macuga. “Today, we track over 1,500 supplement manufacturers. Twenty-five years ago, there were probably three or four that anyone even knew of. Trying to stand out far above the rest has been a challenge.”
The company’s product line has grown beyond nutritional supplements to include skin care and foods, although the lion’s share of USANA’s sales—83 percent—comes from its supplements line. One of the newest product innovations at USANA is the company’s patent-pending technology, InCelligenceTM, which is based on nutrients that target and instruct the body to perform certain health-promoting functions. Some call this cell signaling or cell communication. USANA’s current lineup of six InCelligence products is tailor-made to hone in on specific cellular processes, helping them to work better.
“Our goal is to also create products that are personalized to each individual’s needs. InCelligenceTM is the epitome of personalization,” says Macuga. That personalization extends beyond products, including the company’s approach to customer service and the flexibility of its business opportunity. “It comes down to this: If you’re going to do business with or be a customer of a company, you want to have the best possible experience,” he continues. “So what we’re trying to do is create things from a personalized perspective that allow you to feel like you’re engaged with the company. Personalization is really the cornerstone of everything that we do.”
Two USANA products – CellsentialsTM, currently the company’s best-selling product, and USANA Optimizers, allow shoppers to customize their selections based on their particular nutritional needs; while USANA MyHealthPak allows online shoppers to drag and drop their supplement preferences into one personalized package.
“We’ve done quite a bit of market research, and as we look at the trends in today’s world and where it’s heading, people want things that are relevant to them individually, not to the masses,” Guest says.
Another point of difference upon which USANA aims to capitalize in a crowded market is its status as a direct selling company, specifically, the personalized service offered by its independent distributors. That kind of service can be a competitive advantage, given that consumers are becoming increasingly confused by the barrage of product choices in the nutritional supplements market, not to mention the onslaught of scientific lingo. At the same time, shoppers are relying more heavily on the Internet to shop for supplements, which remains something of a Wild West of competing nutritional claims.
“So how do you know what to pick—the one on sale or the one with the nicest packaging?” Macuga asks. “What I find very unique and rewarding about direct selling is that it gives someone the opportunity to have that conversation with someone.” Despite USANA’s emphasis on science, “What people want to do is get right to the point, and you’ve got to do it quickly,” he adds. “People still want the information and the science, and we have a site (askthescientist.com) that has all of the technical information you could want. We’re really focusing on the opportunity to engage people in short, very targeted bursts, something that’s not only shareable but can be explained.”
The predominance of social media is creating a decline in face-to-face interaction, says Macuga. That interaction is being replaced by reliance on peer groups and social media spheres of influence to guide the decision-making process. He adds, “Having the flexibility to change and adapt your business model to those changing conditions without sacrificing the strength of the industry we’re in—that’s a challenge for any company. But it’s also a huge opportunity because it takes us places that, years ago, we never would have been in.”
Distributors Are ‘Business Partners’
|Distributors take part in USANA’s True Health Foundation Mexico service trip.|
USANA’s approach with its independent distributors is one of collaboration. The company maintains independent distributor councils around the world in order to have ongoing conversations. “Our goal is to have the conversations up front,” Macuga says. “You can go to a push mentality, which means that as a company you create all of the materials, you make the decisions and you push it out to the field; or you go to your salesforce and ask them ‘What’s going to help you build your business? What are you looking for from us?’ It’s more of a pull. That’s the difference. We’re working with them as true business partners. Every day they’re out building their businesses. Whatever we can give them that accelerates that process helps us all.”
Moving forward, you can expect to see USANA gaining a foothold in more markets, albeit at its own steady pace. With further expansion of its product line and a continued emphasis on personalization, along with company-led efforts to promote greater understanding of direct selling, the company is excited about planning for the future. “We’re trying to help those who determine the laws in lands all around the world to understand that this is a great business, and we’re benefitting millions of people around the world as an industry,” Guest says. “There’s so much good to talk about. Our desire—my desire—for this company is to be someone that people look to as an example of how to do things right.”