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Product development is an ongoing process at Herbalife—one that often starts as a germ of an idea that may be driven by any number of factors, including trends in the marketplace, new scientific findings, and input from a team of scientific advisors and science staff. But valuable input from our distributor base counts, too. Herbalife has a scientific advisory board that guides our strategic direction, but product ideas are also reviewed with our distributors for their feedback on what they believe will sell. In October 2006, Herbalife opened its own product and science center to conduct research in-house and to fund research at leading universities, including UCLA and the University of Mississippi.
The seeds of a product idea are nurtured through a stepwise process to ensure its success in the marketplace. In the first step, ideas are generated, followed by the development of prototypes in the feasibility step. Once the product passes these two hurdles, it moves into development, and finally, the product is prepared for launch at one of the company’s Extravaganzas.
As product concepts and formulations are considered during the first stage of ideation, several processes take place simultaneously. Herbalife’s product development team and regulatory group jump in early, developing scientific substantiation for proposed ingredients. With varying regulations on product ingredients throughout the world, we start the process early to determine if formula variations might be required to enable products to be sold in the various markets worldwide.
At the same time, distributors weigh in. We might get their views on the suggested product price point or whether they believe the product will result in testimonials that are valuable in promoting sales.
Ideas are a start—but feasibility is where the rubber meets the road. During the next phase, representatives from product development, manufacturing and marketing begin to huddle. As we step up our investment, we develop product prototypes, but we also begin costing the product, developing package design and focusing on product positioning.
Distributors get their voices heard, too. They form an active product committee at Herbalife that is often brought in during the feasibility stage for a sensory evaluation of the prototype product, and their input is invaluable at this stage in the process.
At the end of this phase, a full feasibility report is prepared, with details on the product formula, including assembling specifications for manufacturing, positioning, packaging, cost and regulatory approvals.
Fine-tuning takes place during the third stage. During development, the final formula is determined, scientific substantiation for the ingredients is completed and the manufacturing team gets to work sourcing ingredients. A critical refinement takes place at this point, too—product taste evaluations in the Herbalife in-house sensory lab. In addition, the creative team works with marketing on the important touches—such as the name and creating packaging and artwork—to prepare the product for its big debut.
Just before we introduce new products, activity heats up. Distributors have been getting the product literature, so we need to be certain that our quality control is in place and that manufacturing can meet quantity demands once we launch. To keep things fresh, Herbalife introduces at least one new product per key market annually. We introduce new products in major markets worldwide at our Extravaganzas that draw tens of thousands of distributors—all of whom are eagerly awaiting the latest product to add to their line.
Depending on the product, it may take a year or more for it to progress from the germ of an idea to holding center stage at an Herbalife Extravaganza. With so many variables in the development, there is no set timeline for bringing products to market. But the carefully designed and deliberate stepwise process has been a winning strategy for us at Herbalife. Strong leadership and management, an exceptional research and development team, and input from the scientific community as well as from our top distributors have helped to position Herbalife as a leader in the development of nutrition products that support a healthy, active lifestyle.
Steve Henig is Chief Science Officer at Herbalife Ltd.
