July 01, 2013
Young Living Essential Oils: Growing by Returning to its Roots
by Jennifer Workman Pitcock
Photo above: Young Living’s lavender fields at the Mona, Utah, farm
Headquarters: Lehi, Utah
Founder: Gary and Mary Young
Products: Essential oils for nutrition, wellness, personal care and home care.
With 250,000 distributors worldwide and an even bigger consumer base, Young Living Essential Oils is a well-established and respected global direct sales company. The company has grown in the double digits each year since its founding. Recently, though, this 20-year-old company has seen an uptick in revenues—more than 27 percent growth in 2013. What’s behind this sudden surge?
“I don’t think you can pin our recent growth on any one thing,” says Young Living’s Chief Operating Officer Travis Ogden. And he’s quick to point out that the company has lways grown 10 to 12 percent, even in a weak economy. “It’s really a testament to our consumer base. They’re very loyal to our products. They’re effective, so customers continue buying them.”
Several changes have worked together to energize the company. One change is new and improved products. Most notable is a top seller—the company’s NingXia Red. Reformulated in the fall of 2012, this antioxidant-rich drink is based on the wolfberry, grown in Ningxia, China. “The new formulation has seven times more essential oils. And you can add additional oils to the NingXia Red based on what you need for your health,” Ogden says. “So it’s a fun and easy way to consume the oils.”
The executive team expects two new products, introduced at the International Grand Convention in Salt Lake City this June, to add to the momentum: NingXia Red Nitro and healthy chocolate. “NingXia Red Nitro is an energy shot,” says Chief Global Sales Officer Jared Turner. “It gives you an extra energy boost in a healthy way. It’s got some naturally occurring caffeine in it.”
The source for the chocolate is the company’s farm in Guayaquil, Ecuador. “It’s infused with essential oils,” Turner says.
The executive team believes some tweaks they’ve made to the compensation plan are also fueling growth. The addition of fast-start bonuses has both galvanized existing distributors and brought in new people. Another draw is the Rising Star Team Bonus Pool, a new aspect of the bonus plan. How much a distributor makes depends on the number of shares he or she earns. “As the global pool grows, everyone benefits,” Turner says.
|Mary and Gary Young
Perhaps the most significant change has been an overhaul of the executive team. The company’s founders, Gary and Mary Young, moved to Ecuador in 2005 to establish the company’s farm there. When they returned in 2011, as Mary says, “We discovered that not everyone had the same interest in the company or shared the same vision that Gary and I did.” Over the course of the next year, they replaced the entire executive team. The new executives’ drive, dedication and fresh ideas have energized the company. Mary believes that dedication filters down through all the employees to the distributors. And the new team members genuinely like one another. “We laugh, we joke and we enjoy growing Young Living together,” she says.
The importance of having Gary and Mary back at the helm cannot be overstated. “No one can replicate Gary’s knowledge of the oils,” Ogden says. “To have him available and speaking to the distributors has been a big factor in our increased growth.”
“No one can replicate [Founder Gary Young’s] knowledge of the oils. To have him available and speaking to the distributors has been a big factor in our increased growth.”
—Travis Ogden, Chief Operating Officer
Young Living’s DNA
For Chief Marketing Officer Craig Aramaki, Founder Gary Young and his story are at the core of the company. He believes that, for much of its history, the company has done well on the strength of its products, not a strong, coherent brand or message. His goal is not to change the company’s direction, but rather to get back to the company’s core DNA and to market Young Living in a much better way. “We have so many great stories about why we are who we are and the success we’ve had, but we haven’t done a great job of telling them,” he says.
The most important story is Gary’s. As a young man 40 years ago, Gary suffered a crippling injury in a logging accident. For two years he couldn’t walk, and it was more than a decade before he regained full health and mobility. Unhappy with traditional treatments, he began studying alternative medicine. This led him to essential oils, which aided in his recovery. Gary spent the next several years traveling to three continents and a dozen countries to study essential oils. During that time, he also received a doctorate in naturopathy. He has since published several books and scholarly articles on essential oils.
In 1989 he began cultivating plants on a small plot in Spokane, Wash. He built his own distiller by welding two pressure cookers together with copper. Soon he was producing essential oils of the highest quality.
In 1993 Gary and Mary launched their own company, Young Living Essential Oils. “Gary’s overarching goal is to make a positive difference in the world,” Aramaki says. “He’s done that by building Young Living and making sure that all of the processes, from the planting to the cultivation to the bottling, were all done to create the purest product available. That’s the core of Young Living and it always has been.”
|Young Living Essential Oils products.||Young Living’s quality control laboratory in Spanish Fork, Utah.||Celebration at Young Living’s 2012 convention.|
A Vision and a Mission
Young Living’s stated vision is “to bring Young Living Essential Oils into every home in the world.” The founders consider the oils a gift from nature. “I would like to see people become more independent in researching their healthcare choices,” Mary says. “My greatest reward is when a new user has an ‘aha’ moment using our products.”
Gary and Mary Young believe so strongly in their mission that they have literally devoted their lives to it. For Gary, it’s this belief that sets Young Living apart. “We have invested millions of dollars into the research of essential oils, our farms and testing labs,” he says. “We thoroughly research the products and plants. From the depths of Ecuador to the island of Tasmania, we scour the world in search of plants with healing qualities and share them with the world.”
From Seed to Seal
The Youngs’ vision informs the way they live their lives. “The Youngs are 100 percent in this business to help people by bringing the products to them. They’re not in it for the money,” Ogden says. “Even though we’re a company with several hundred million dollars in sales every year, they drive cars that are not as nice as those driven by many of their employees.” Instead, they plow nearly 100 percent of the profits back into the company.
So what is Young Living using the profits to accomplish? The Youngs believe that to ensure the highest-quality products, as much as possible the company should grow its own plants. The result spans several continents and adds up to more than 4,500 acres. Young Living has six farms: three in the United States and one each in France, Ecuador and Oman. Young Living has plans to expand even further this year with two more farms, one in Israel and another in Peru.
“Our newest farm in Salalah, Oman, will include the planting of more than 400,000 frankincense trees over the next 10 years,” Gary says.
Impressively, all of this growth and expansion has been entirely self-funded. Even so, because of high demand, the company partners with other farms to provide ingredients for Young Living products. Young Living ensures the quality of these outside materials by holding outside farms to the same stringent testing standards Young Living applies to its own products.
The company recently completed a major upgrade of its quality control laboratory in Spanish Fork, Utah. The lab doubled its staff, which includes Ph.D.’s, chemists, scientists and microbiologists. The lab has also added some new high-tech equipment: a gas chromatograph and a gas chromatograph-mass spectrometer. This equipment breaks down the components of the oils, allowing the company to identify the oils’ purity and strength. It also identifies any contaminants. As an added precaution, Young Living uses third-party audits to ensure the oils’ quality.
Overseeing the entire growth and bottling process—from planting the seed, to cultivating, distilling, testing and sealing the product—is the hallmark of Young Living. “The ‘seed to seal’ story definitely sets us apart,” Ogden says. “And it helps us to stay at the forefront of essential oil products because we own distilleries in different climates throughout the world. Gary is able to grow a wide variety of crops and distill them and analyze their properties. It helps us to stay fresh.”
Overseeing the entire growth and bottling process—from planting the seed, to cultivating, distilling, testing and sealing the product—is the hallmark of Young Living.
Making a Difference
The Youngs run a 503 (c)(3) nonprofit organization, the D. Gary Young Foundation. Its mission is “to Educate, Awaken, and Inspire individuals to love, honor, and live a healthy lifestyle.” The foundation has donated products and money to various altruistic causes, such as Hurricane Katrina, tuberculosis prevention and medical mission trips.
The foundation’s current project is building and supporting a school near the company’s farm in Guayaquil, Ecuador. “The Youngs would drive past this little school every day,” says Public Relations Specialist Robyn Valentine. “It was dilapidated and falling apart.” With the foundation’s support, the school has nearly quadrupled enrollment, and the foundation is currently raising money to build a new high school for the students. With this educational support, the children in this area will experience a far different future for themselves.
According to Public Relations Specialist Robyn Valentine, one of the biggest launches of the year for Young Living is designed to support the field: an improved website and a proprietary program designed to help distributors expand their social media presence.
“We’re going to take a giant leap forward in the next few months. We’re creating the technical infrastructure and optimizing it for digital context with different digital devices like tablets and smartphones,” Aramaki says. Additionally, Young Living is developing a relational database for their products, which will make them much easier to search. Individual products will be accessible by ingredients, benefit and other categories.
While the company has a strong corporate social media presence, the company also wants to better support their distributors as they share Young Living using social media. “A lot of our distributors didn’t grow up with social media, so they’re not experienced in that space,” Aramaki says. “They will be able to go online and sign up. We take them through a process where they can create their own Facebook page.”
The page will then be sent automatic updates that appear in the distributor’s news feed. The content will be different from the corporate posts, specially geared toward that particular audience. Eventually distributors will have the option to customize the content, picking and choosing what they share in their feed.
At 20, Young Living is beginning to see a second generation of distributors who have grown up using the products. These legacies, along with other young distributors, are contributing to a younger demographic. “As we’re getting more young distributors coming on board, social media is becoming increasingly important to us. And its importance will continue to grow,” Aramaki says.
While the United States is still Young Living’s biggest market, the company’s global expansion is a key factor in its growth. The company’s fully open foreign markets include Ecuador, Peru, Mexico, Canada, Europe, Australia, Singapore, and Japan. And these markets are growing rapidly. When Canada opened in March, it exploded. “That month, it became our second-biggest single company market,” Turner says. “Grand openings translate into big revenue gains.”
In May, Young Living opened in Germany. They will open in Hong Kong in September, and they plan to open in Malaysia this year too.
A Promising Future
So what’s next for Young Living? If you ask Gary, he’ll tell you he’s never been more excited about Young Living Essential Oils. “The company is experiencing unprecedented growth, and with each passing year, new goals for increased wellness and abundance are set and surpassed,” he says. In turn, he believes it is the responsibility of Young Living to ensure that this increase in prosperity is met with increased commitment to spreading the company’s message and products across the globe. “I have spent most of my life researching the powerful effects of essential oils,” Gary says. “The strict product standards Young Living follows have helped ensure both continued growth and production of the highest-quality, therapeutic-grade essential oils in the world.”