brand-logo
Subscribe

Q&A with Neora Co-CEO, Deb Heisz

by Leave a Comment

In a statement released on November 1, Neora fired a shot across the bow of the FTC. They filed suit challenging the FTC’s ability to retroactively change the law without proper authority from Congress or through formal FTC rulemaking.

I recently caught up with Deborah Heisz, Co-CEO of Neora, to get some added insight into their decision to sue the FTC as well as what their chances of success will be going forward. 

What was the deciding factor to sue the FTC? Was there one main reason you just said like hey we’ve got to do this.

HEISZ: The deciding factor was when we realized the FTC’s main goal was to take away the multi-level compensation plan of our company, despite the fact that we’re not a pyramid scheme under any current laws or FTC guidance. When the company was founded, it was structured specifically to have a strong customer base and remove any reason for a Brand Partner to purchase product they don’t use. Ultimately, we made the decision to sue because we weren’t going to take away the businesses of our Brand Partners who have spent eight years building with us. The FTC can’t come in, change the rules of the game and damage the income of hard-working American families.

You’ve spelled out the reasons why Neora needed to take this action, what would the fallout to our channel if you didn’t fight back? 

HEISZ: Not settling with the FTC allows us to bring to light the FTCs overreach when dealing with our industry. They cannot make up the law or create new interpretations of the law and apply them to the direct selling industry without being called out for doing so.

If we had settled with the FTC, rather than challenge what we believe is a new interpretation of the law through unpublished guidance the FTC is employing when looking at direct selling companies, then we would have had to accept a deal to abandon multi-level marketing.  Although the FTC has continually indicated that a settlement does not apply to other companies, we all look to settlements as a guideline for what the FTC is considering acceptable or unacceptable business practices.

“The FTC can’t come in, change the rules of the game and damage the income of hard-working American families.”

With AdvoCare abandoning multi-level through the FTCs “fencing in”, I believe that a second company agreeing to the same, especially one with numbers like ours, would have emboldened the FTC to further attack our industry using their new interpretation of the law through unpublished guidelines. Also, the FTC is aware companies in our industry are exceptionally vulnerable to significant business damage if they are even accused of being a pyramid scheme (regardless of the facts or law) because of the  nature of our independent sales forces.

You had a meeting with your field leadership the day the news broke of Neora suing the FTC. What was your advice to them?

HEISZ: After we let them know we were suing the FTC to protect their business and really the businesses of the more than 20 million Americans involved in direct selling, we let them know it was going to be business as usual. This is now a court case and will likely take years to move through the system. Our home office staff is going to focus on building the business with our Brand Partners.  We also launched a new product line that day, so we advised them to focus on it. Looking at our numbers this week, it looks like they did.

Why do you feel your case is strong and will win out in the end?

HEISZ: Ultimately, we are going to win because our case is based on the data and the existing law and guidance. The data shows that we are not a pyramid scheme according to the law. Pyramid schemes do not offer legitimate products. There is a high demand for our product. 80% of our compensation paid in 2017 was related to product sales to end-users. More than 60% of our sales in 2017 were to customers that do not participate in the compensation plan, and that percentage is higher now. Our Brand Partner monthly orders are largely for personal consumption. Our enrollment pack sales are less than 5% of our current business.  These are not the numbers of a pyramid scheme.

Any advice you could give to other companies in the channel of what you have learned so far in this process that would be of help or guidance to them?

HEISZ: Make sure you double down on educating your field and taking action around product and income claims. And if we are a pyramid scheme in their minds, I don’t see how any direct selling company wouldn’t be considered a pyramid scheme  by the FTC. So once they are in the door you can expect exactly what happened to us.

A much stronger investment has to be made in every compliance department. The guidance goalposts have moved significantly to what they will consider in their consent orders, as was made known with the AdvoCare consent order and now with us. You need to have tough love conversations with field leaders on the new consequences of income and product claims. The FTC will now inappropriately try to use any piece of video, social media posts, hashtags, as evidence of a pyramid scheme.

How can people help your cause?

HEISZ: We have already heard from a lot of people in our industry that we will have their support. In the interim, letters or statements of support for our lawsuit against the FTC would be very helpful. We are a mid-size company, and it’s very expensive to fight the FTC—so we’re going to set up a defense fund. We’re hoping all of our colleagues in the channel will contribute, because we’ve taken a risk and filed an important case to protect the entire industry.

Chris O’Leary Appointed Tupperware Brands Interim CEO

by Leave a Comment

Tupperware Brands Corporation announced that its Board of Directors has appointed Christopher D. O’Leary, an independent director of Tupperware, as interim chief executive officer, effective immediately.

This appointment follows Tricia Stitzel’s decision to step down as chairman and CEO of Tupperware, and as a director of the company. Susan M. Cameron, lead director of the Board, was named non-executive chairman. Tupperware’s Board has commenced a search for a permanent CEO, and has engaged Heidrick & Struggles, a leading executive search firm, to identify and evaluate qualified candidates.

“Chris has been an incisive and thoughtful contributor to the Board, and we are grateful that he has agreed to step into this role at an important time in Tupperware’s transformation,” said Cameron. “With more than 37 years of operational and leadership experience at global consumer product companies, we are confident Chris has the right depth of experience, proven track record and sense of urgency to be an impactful interim CEO as we continue to work to improve the trajectory of our business.”

O’Leary has served as an independent director of the Tupperware Board since January 2019. He is the former executive vice president and chief operating officer, International, for General Mills, Inc. He previously spent 16 years at PepsiCo, Inc., where he held numerous roles, culminating in serving as chief executive officer and president of Hostess, Frito-Lay, Inc.

“I approach this interim role with a true sense of purpose,” said O’Leary. “I recognize that this is a crucial time for the company and its ongoing transformation efforts and am committed to working closely with the Board and strong management team to create a more efficient and profitable Tupperware.”

Cameron thanked Stitzel for her contributions to Tupperware as CEO, including her passion and drive in developing and launching the global growth strategy to transform the business through digital change and consumer focus, her successful efforts to recruit experienced global leaders and her strong commitment to empowering women through economic opportunities.

“It has been an honor to lead a company known around the world for helping women gain the confidence they need to enrich their lives,” said Stitzel. “I have been fortunate to be part of the Tupperware community for the past 22 years, and am confident that Tupperware will be a beloved brand for many years to come.”

Plexus Donates $25,000 to Our Military Kids

by Leave a Comment

Plexus Worldwide made a $25,000 donation to Our Military Kids (OMK) in honor of Veterans Day.

The donation will support the nonprofit’s grants fund, which helps military families afford activities to help children cope with stress and anxiety while their parents are recovering from injuries or deployed.

“Plexus is proud to once again support Our Military Kids with a donation to their grants fund,” said Tarl Robinson, founder and CEO of Plexus Worldwide. “When a parent’s deployment or battle injury brings stress to a child, it’s amazing what simple activities—like ballet or baseball—can do. We know this donation will help more children better cope with life as part of a military family.”

Plexus has regularly supported veterans-related causes in the past by making donations and by organizing activities for military families, including an outing to an Arizona Diamondbacks game.

“Plexus has been a long-time supporter of Our Military Kids and we are so thankful for their involvement in helping us assist families by removing the cost burden of extra-curricular program fees for children’s activities so that kids have a safe place to simply be kids,” said Chelly Criqui of Our Military Kids.

Mary Kay Foundation Awards Over $3 Million in Grants

by Leave a Comment

The Mary Kay FoundationSM recently awarded over $3 million in cancer research and domestic violence shelter grants around the country.

The Foundation was established in 1996 with the overarching purpose of eliminating cancers affecting women. In 2000, The Foundation expanded to include ending domestic violence as part of its mission.

Domestic Violence Shelters

A total of 100 domestic violence shelters across the country, including Puerto Rico and the Virgin Islands, have been awarded $20,000 each, totaling $2 million. The Foundation is committed to funding the life-saving work of women’s shelters, and the annual shelter grant program has helped finance critical needs including emergency shelter, transitional housing, counseling and legal aid. All of these resources support women and children as they seek refuge and relief on their journey to an abuse-free life.

While a majority of domestic violence shelter grant recipients use the unrestricted funds for necessary operating expenses, others will complete repairs and facility renovations or add programs and resources based on the unique needs of their shelter and the clients they serve. Nearly 400,000 women and their families will receive domestic violence support services and free resources through the 100 agencies awarded.

The Foundation also recently donated $25,000 to Hope’s Door New Beginning Center, an organization dedicated to offering intervention and prevention services to individuals and families affected by intimate partner and family violence. The organization also provides education programs that enhance the community’s capacity to respond to victims.

Last year, Hope’s Door New Beginning Center’s shelters housed 265 women and children—but their locations are in need of major renovations. With Mary Kay’s help, Hope’s Door aims to complete the renovations and continue to provide shelter services, including a 24-hour hotline answered in English and Spanish, emergency housing for up to 90 days, counseling, case management, safety planning, and essentials of daily living.

Cancer Research

After reviewing more than 70 applications, The Foundation Research Review Committee awarded $100,000 grants to 11 cancer research institutions across the country, totaling $1.1 million. This year’s grant recipients include the following leading research institutions:

  • Albert Einstein College of Medicine
  • Case Western Reserve University School of Medicine
  • Georgetown University
  • Michigan State University
  • University of California, San Francisco
  • University of Kansas Medical Center
  • University of Notre Dame
  • University of Utah
  • UT Southwestern Medical Center
  • Vanderbilt University Medical Center
  • Weill Cornell Medicine

The Foundation also recently donated $100,000 to Baylor Scott & White Dallas Foundation to help fund research conducted by Dr. Joyce O’Shaughnessy, breast oncologist with TEXAS Oncology and the Celebrating Women Chair in breast cancer research at Baylor University Medical Center. Dr. O’Shaughnessy’s deep portfolio of research includes the study of triggers that may cause heightened sensitivity of triple negative breast cancer (TNBC), a high-risk breast cancer with few effective options for patients that usually affects younger women, African American women and women with a BRCA1 genetic mutation.

Over the course of more than two decades, The Mary Kay Foundation has awarded more than $80 million to women’s shelters and domestic violence service providers, as well as cancer research programs and related causes throughout the United States.

Mannatech Q3 2019 Net Sales Down Nearly 8%

by Leave a Comment

Mannatech, Incorporated (NASDAQ: MTEX) announced net sales of $39.7 million for the third quarter of 2019.

The net sales reflected a decrease of $3.4 million, or 7.8 percent, as compared to $43.0 million in the third quarter of 2018. For the three months ended September 30, 2019, net sales declined 4.9 percent on a constant dollar basis as compared to the same period in 2018.

For the nine-month period ending September 30, 2019, net sales were $118.3 million, as compared to $129.5 million for the same period in 2018.

The company reported that the number of new independent associate and preferred customer positions held by individuals in the network for the three months ended September 30, 2019, was approximately 22,321, as compared to 25,802 for the same period in 2018. Recruitment of new independent associates and preferred customers decreased 13.5 percent during the three months ended September 30, 2019, as compared to the same period in 2018.

To read the full Mannatech Q3 2019 report, click here.

NewAge Appoints Julie Garlikov Chief Marketing Officer

by Leave a Comment

New Age Beverages Corporation announced that Julie Garlikov has joined the company as the newly appointed chief marketing officer effective November 4, 2019.

Garlikov began her career at the Procter and Gamble Company and held commercial leadership roles of increasing responsibility at Johnson & Johnson, Allergan, PepsiCo, and Torani. She brings over two decades of senior level marketing experience, most recently serving as chief marketing officer for a leading natural nutrition company. Prior to that she was the vice president and global head of Marketing for a leading global skincare company.

“Julie’s incredible track record and significant expertise in driving leading CPG brands across all channels will be an invaluable asset to our senior executive team,” commented Brent Willis, chief executive officer of New Age. “She brings with her a proven track record in leading the marketing function and transforming growth trajectories for several of the top CPG companies in the world. There are so few marketers with omni-channel experience and insight, with the mindset of how to connect with consumers across all touchpoints, and Julie is one of those unique few. We are tremendously excited for her to join the team.”

“I joined New Age because of what they stand for, inspiring and educating consumers to ‘live healthy,’” said Garlikov. “They have amassed a powerful global infrastructure and have developed an outstanding portfolio of healthy beverages, CBD, and other differentiated wellness products. I see a once-in-a-lifetime opportunity to drive those brands, lead innovation for the company across the globe, and make a difference for consumers with healthier and better for you alternatives while we are at it.”

Nature’s Sunshine Q3 Net Sales Consistent with 2018

by Leave a Comment

Nature’s Sunshine Products, Inc. (NASDAQ: NATR) reported relatively consistent sales for the third quarter ended September 30, 2019 compared with the third quarter of 2018.

Net sales of $88.5 million decreased 0.3 percent compared to $88.8 million in the third quarter of 2018.

Regionally, net sales were (in thousands):

  • Asia – $33,717, down 1.0% from $34,063 in Q3 2018
  • Europe – $14,640, up 12% from $13,076 in Q3 2018
  • North America – $34,161, down 4% from $35,578 in Q3 2018
  • Latin America and Other – $6,006, down 1.7% from $6,111 in Q3 2018

“We continue to make excellent progress implementing our global strategy, which focuses on strengthening our brand, improving field fundamentals, expanding digital capabilities, extending our manufacturing leadership and improving organizational capabilities,” said Terrence Moorehead, president and chief executive officer. “We have strategically restructured the business to both align our resources to our global strategy and improve profitability, which drove strong growth of adjusted net income and adjusted EBITDA during the third quarter. We have successfully launched our new global management structure, driving improved organizational effectiveness and execution. We have also worked diligently to build our next generation capabilities as we prepare for a brand relaunch, the launch of a new digital platform and our entry into the rapidly growing hemp-derived CBD market. Each of our strategic efforts are focused on accelerating growth, driving profitability and enhancing shareholder value.”

To read the full Nature’s Sunshine Q3 2019 report, click here.

Medifast Reports Record Revenue for Q3 2019

by Leave a Comment

Medifast, Inc. (NYSE: MED) reported record revenue of $190.1 million for the third quarter ended September 30, 2019.

Revenue was up 36.5 percent from $139.2 million for the third quarter of 2018.

The total number of active earning OPTAVIA Coaches increased to 32,200, compared to 22,600 for the third quarter of 2018, a 42.5 percent increase.

“Our focus on long-term, sustainable growth at Medifast continued during the third quarter as we achieved record revenues, rapid year over year growth in the number of active earning coaches and solid growth in gross profits and net income,” said Dan Chard, chief executive officer of Medifast. “Our mission to deliver lifelong transformation one healthy habit at a time is resonating with consumers, and we are well on our course to deliver $1 billion in revenue with operating margins greater than 15% by 2021 as we’ve projected.”

To read the full Medifast Q3 2019 report, click here.

Beautycounter Endorses Natural Cosmetics Act

by Leave a Comment

Counter Brands, LLC., parent company of Beautycounter announced it will endorse the Natural Cosmetics Act.

The bill, introduced by Congressman Sean Patrick Maloney (D-New York.), is the first legislation introduced in the U.S. that sets clear guidelines for the use of the word “natural” and “naturally derived” on personal care products. The bill sets a strong standard to protect consumers while holding companies and suppliers accountable for the information displayed on labels.

“Shopping for personal care products should be easy,” said Gregg Renfrew, Beautycounter founder and CEO. “While words like ‘natural’ can signal a safer product, there are currently no industry standards. For years, Beautycounter has been asking Congress to create clear standards for marketing terms and so we are thrilled to support the Natural Cosmetics Act. This landmark bill sets clear and reasonable standards for companies who want to claim an ingredient or product is natural, while instilling confidence for today’s savvy consumer.”

Despite rapid growth, the $70 billion beauty industry in the United States is largely unregulated with the Federal Food, Drug and Cosmetics Act of 1938 being the most recent major legislation governing the industry. At the same time, the cleaner, safer segment of the beauty marketplace is the fastest growing category, propelled by consumer demand. Public health depends on accurate information and legislation that combats greenwashing is essential for empowering consumers to make safer choices.

“Right now, the FDA doesn’t consider it misbranding for companies to label products as ‘natural,’ even if they contain harmful chemicals like coal tar dyes, formaldehyde, asbestos and parabens. That’s just not right,” said Rep. Sean Patrick Maloney. “We’re talking about consumer protection and company accountability here. It’s time Congress started paying attention, and my bill will set the standard for ‘natural’ products and do right by American consumers.”

Beautycounter is mobilizing its base in support of the bill, including its clients and network of more than 45,000 Independent Consultants across all 50 states. A certified B Corporation, Beautycounter has been active on Capitol Hill since its founding in 2013, and launched the Counteract Coalition in 2017, a group of more than 20 clean, high-performance beauty brands dedicated to advancing a safer cosmetics industry.

Herbalife Nutrition and Proactive Sports to Open Sports Performance Center

by Leave a Comment

Herbalife Nutrition and Proactive Sports Performance plan to extend their long-time partnership by opening Herbalife Nutrition’s first global performance center.

The new facility, currently under construction in Westlake Village, California, will open in the fourth quarter of 2020. It will combine the company’s expertise in sports nutrition with Proactive CEO and Founder Ryan Capretta’s knowledge and experience in sports performance.

“We are excited to partner with Ryan to build a state-of-the-art facility that demonstrates the power of integrating sports nutrition and athletic training best practices,” said Alex Amezquita, senior vice president of Finance and Strategic Planning, Herbalife Nutrition.

In addition to employing technology for physical training and recovery, Herbalife Nutrition sports nutritionists and exercise scientists will be on-site to develop and implement long-term programs to further analyze effects and benefits of hydration and micro and macro nutrients. As a comprehensive sports nutrition performance research facility, the center will be focused on analyzing the totality of an athlete’s lifestyle and how the utilization of an entire nutrition and training protocol can benefit their training, on-field performance and recovery.

“With more than a decade in the making, this facility will pair sports science and our best in class training environment. Nutrition, training, recovery and therapy will be seamlessly integrated in this performance center,” said Capretta. “We look forward to expanding our relationship with Herbalife Nutrition.”

Capretta founded Proactive Sports in 2006, and it is now one of the most sought-out training facilities in the world by professional athletes of all sports, as well as youth and adult athletes of all levels. Capretta holds a Master’s degree in Sports Science and worked seven years in the NFL and at Stanford University as a strength and conditioning coach.

Herbalife Nutrition has worked with Proactive Sports over the past eight years to help optimize its elite athlete program through sports nutrition, working closely with athletes planning to enter professional scouting combines by assessing each individual’s fitness goals and complementing their training with a targeted meal plan.

Herbalife Nutrition is the official nutrition provider to more than 190 professional athletes, sports teams and sporting events around the world.

Brazil’s Anti-Trust Authority Approves Natura’s Acquisition of Avon

by Leave a Comment

CADE, Brazil’s anti-trust authority, has approved without restrictions the acquisition by Natura &Co of Avon Products, Inc.

Approval by Brazil’s competition authorities is one of the key steps towards the completion of the transaction, which remains subject to the fulfillment of other conditions precedent, including antitrust approval in other applicable jurisdictions.

Announced on May 22, 2019, the transaction will create the world’s fourth-largest pure play beauty company and is a major step in the creation by Natura &Co of a multi-brand, multi-channel, purpose-driven beauty group, which also includes Natura, The Body Shop and Aesop.

“We are very pleased to have received approval without restrictions from Brazil’s competition authority,” said Roberto Marques, executive chairman of Natura &Co. “The process is advancing according to our expectations, and we continue to expect a closing of the transaction by the first quarter of 2020.”

The decision, to be published in Brazil’s Official Gazette, is subject to the expiration of a 15-day legal deadline to be final.

Kannaway Receives Two 2019 BIG Awards for Business

by Leave a Comment

Medical Marijuana, Inc. subsidiary Kannaway was honored with two 2019 BIG Awards for Business by the Business Intelligence Group.

The company was named Small Business Company of the Year in the Life Sciences, Health, Wellness and Nutrition category, and Kannaway CEO Blake Schroeder was named Small Business Executive of the Year in the Life Sciences, Health, Wellness and Nutrition category.

“We are honored and humbled to have the hard work of our team recognized by the BIG Awards for Business,” said Schroeder. “2019 was a banner year for revenue growth at the company, especially in our international operations, and we are proud to continue to be a pioneer for the industry in educating new markets about hemp-based CBD.”

As the first direct-selling company to bring hemp-based cannabidiol (CBD) products to market in the U.S. and Europe, Kannaway was named Small Business Company of the Year to recognize the company’s international advocacy efforts for CBD access and education. Kannaway experienced an increase of nearly 200 percent in revenue over 2017 revenue, much of that success attributed to its European operations.

Schroeder was honored for his efforts in growing the company’s revenue more than 60 times since joining the executive team along with his work to help expand the company’s product offerings to meet growing consumer demand.

“We are excited by this recognition and believe that it will help us make CBD and hemp-derived products available to people around the world,” said Medical Marijuana, Inc. CEO Dr. Stuart Titus. “Awards like these continue to boost our reputation as a category leader and set a standard of professionalism that we wish to impart upon the entire industry.”

The Business Intelligence Group’s 2019 BIG Awards for Business were launched to acknowledge companies, products and people that are leading their respective industries. The organization’s proprietary and unique scoring system selectively measures performance across multiple business domains and then rewards those companies whose achievements stand above those of their peers.