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Rapid Growth, Radical Product

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Josh and Jenna Zwagil of MyDailyChoice/HempWorx feel like 2019 is just the beginning.

It took courage and the willingness to think outside of the box to introduce HempWorx and its uncommon products to the direct selling industry. With a line of health and wellness products that are built on a foundation of hemp-derived cannabidiol (CBD) oil, entering the market implied a fair amount of risk. Even though hemp still struggles to overcome its taboo status today, when Jenna Zwagil approached her husband Josh Zwagil about the idea of adding a CBD oil line to their existing company (MyDailyChoice) in 2016, the prospect seemed outrageous. “Absolutely not,” Josh told her at the beginning. “It’s crazy to mix marijuana and network marketing.”

However, Jenna saw potential in the long-prohibited plant. After an autoimmune disorder diagnosis in 2014, Jenna sought relief from her symptoms in the holistic space and found it through CBD oil that Josh had procured from their Kentucky farm. Over the next few months, she shared the oils with her family and friends, and all of them reported similar improvements with their own health problems and positive results overall. The results surprised Jenna. She had tried CBD oils before but had always been disappointed with the products’ lackluster results. The difference, she realized, was the purity and potency of the CBD oil, as well as the process through which the hemp plant had been grown. There was a marked difference, and Jenna knew she needed to share their carefully grown ingredients and the unique product that had given her life-changing results with others.

If she couldn’t get the word out about hemp and CBD oil through MyDailyChoice, she decided, she would do it on her own. With a simple Shopify website and Facebook groups, she spent hours every week educating people with Facebook live videos, and online chats and conversations. The orders she amassed quickly outgrew her homespun operation, and the proof that customers were ready for hemp was undeniable.

“Jenna launched HempWorx by herself,” Josh says. “People were getting such great results, and it was growing so fast, we decided to merge it with MyDailyChoice and take on the brand and the product.” Jenna’s intuition about the value of CBD oil and the receptiveness of customers was spot-on. The HempWorx product line launched in May of 2017 and brought in $10 million before the end of the year, then grew 900 percent in 2018, bringing in $100 million in sales. In its first 18 months, HempWorx and its radical products attracted 60,000 affiliates and 200,000 customers.

HempWorx’s massive and rapid growth not only led the company to be presented with its first appearance on Direct Selling News’ Global 100 list but also was one of two Bravo Growth Award winners for achieving the largest percentage of growth in sales of any company for 2018.

Barely two years old, HempWorx has capitalized on an almost untouched niche of the market with its nontraditional CBD-based products and rocketed itself to a No. 86 ranking on the Global 100 list.

Turning Rejection Into Rich Potential

Overcoming that initial rejection has set the tone for HempWorx who would go on to take the industry by storm while at the same time fielding objections, concerns and a regulatory environment that can be tricky. Even though the direct selling industry is becoming more comfortable and acquainted with the idea of hemp and CBD oil, the product still requires education to illustrate to consumers that hemp is not marijuana and that their formulation of CBD oil won’t deliver a high.

The confusion stems from vague nomenclature in previous laws pertaining to marijuana that lumped hemp in as a federally restricted drug like heroin, but all of that ended with the Farm Bill of 2018, which clearly defined hemp as legal and separate from its cannabis cousin marijuana. Shifts in the country’s impression of hemp, as well as third-party affirmations–like being one of only 13 companies who received the high-quality seal from the U.S. Hemp Authority–are giant victories for HempWorx and the Zwagils, who see incredible potential and value not only in their product, but their business opportunity as well.

“HempWorx is very much a productfocused opportunity, not an incomefocused opportunity,” Jenna says. “But now that people have been here a year or so, they are seeing the benefits of both sides of the business.”

Blazing New Trails

HempWorx reflects the culture and origins of its umbrella company, MyDailyChoice, which Josh started as a way to offer a business opportunity and compensation structure that was driven by the needs and preferences of affiliates, rather than the corporate executives. As a career network marketer, he entered the million-dollar earner ring by the age of 21 but left just a few years later to create a company that sought to level the playing field and prioritize the people who worked outside of the walls of the corporate office. MyDailyChoice and HempWorx are the results of that dream.

“The accolades and all that stuff are great; the revenue is great, but I think what fuels my fire more than anything else is seeing people in this business that have never succeeded before start to win and win big,” Josh says. “Even
though we’ve been able to create a massive success as a company, and we’re profitable and debt free and all of these
great things, it still gives me a lot of pride to see the top winners and the brandnew people who have a great product
success story. It’s brought a lot of new people to the business who typically wouldn’t touch network marketing.”

That personal touch and connection have had a magnetic draw for people who might not typically be interested in the direct selling opportunity. Their success is also stretching the borders of the hemp and CBD market within
the direct selling industry as Josh and Jenna blaze new trails into product niches and genres that have yet to be infused with CBD, like their new CBD Bath Bomb, which announced the company’s entrance into the bath and body category.

“We’re excited about what we’re going to be doing in 2019,” Josh says. “We accomplished so much in 18 months, and we’re excited to see how things unfold. We still feel like we haven’t hit critical mass or gone into hypergrowth yet.”

The numbers are in! And they are…

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Well, I can’t quite say yet publicly, as they are still being refined and digested by the Direct Selling Association Research Committee. But we will be revealing and discussing industry performance at the upcoming DSA Annual Meeting in Austin, Texas June 3-5. And it will be a hot topic.

Direct selling, like many businesses, and retailing generally, is in a state of transition. This year, the numbers are an insight into that transition. After several years of introspection and transformation, it seems clear (to me at least) that our business model is poised to make the next big jump into the future.

I have spent much of the last few weeks in detailed, individual discussions with many of direct selling’s leading thinkers—CEOs, mid-level on the ground executives, industry consultants, academic experts, Association Hall of Fame Award winners among them. One persistent thought I’ve had is that this is a transformational moment. What our industry does during the coming months will shape our future.

These discussions will continue in Austin as we explore “The Way Forward.” Questions to be engaged include:

  •  What do the recent challenges in party plan performance signal?
  • What do historically low unemployment rates mean for recruitment and retention?
  • How do we react to the immediate delivery demands of consumers spawned by the Amazon phenomenon?
  • How do we cope with unauthorized online sales? What are the most recent trends in immediate compensation for direct sellers?
  • How have and will Association efforts to improve the credibility and reputation of the model benefit us all in the continuing competition against other commerce, especially in the battle for product sales and individual sellers?
  • What do demographic trends portend for an aging salesforce, and how is technology changing the very face of direct selling?
  • How can direct sellers work together to meet these challenges, while still maintaining their individual competitive edge?
  • How will direct selling businesses incorporate the experience of non-direct selling organizations into their business models without sacrificing their core identities?

I can say this about the numbers. They paint a picture that reflects the optimism shared by the industry experts with whom I’ve spoken, as well as the uncertainty about how direct sellers will reach our predicted success.

The Association’s job is to serve as an industry advocate and cheerleader while identifying the necessary areas of growth and challenges we all face. I am truly optimistic about the future of this great business, but I am not hesitant to identify the areas we need to address to reach that future. Fortunately, the numbers are a strong indicator of where direct selling is and where we are going, and that clearly is the “way forward.”

Welcome to our 10th Annual Global 100 edition!

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Each year, the direct selling news team works with companies around the world on this special project, and it has become our signature research endeavor. The goal from the outset of the project 10 years ago was to foster a greater level of transparency within the direct selling community, in turn supporting its growth as a channel for distributing goods and services while simultaneously promoting entrepreneurship.

We appreciate all of you who contribute to the effort by providing data or other support, especially to the many gracious sponsors who stepped up to make our 10th Annual Global 100 Celebration a huge success. Platinum sponsors include Mannatech, MONAT Global, MyDailyChoice/ HempWorx, SeneGence, Total Life Changes and Young Living. Our Gold sponsors include ACN, AdvoCare, Ambit Energy, Amway, b:HIP, Color Street, Isagenix, It Works!, Jeunesse, Kannaway, LifeVantage, Lyconet, Neora, Nu Skin, Oriflame, Plexus Worldwide, PM-International, PrimeMyBody, Prüvit, revital U, Stream, Team National, USANA, Vida Divina, Wine Shop at Home, WorldVentures, Xyngular, Youngevity and Zurvita.

Our supplier sponsors include Avalara, Exigo, The John Maxwell Company, Katapult Events, LaCore, Planet, SS Biotech, Sunwest Communications, VistaPrint and SUCCESS Partners.

The Global 100 list is much more than a ranking of company names and revenue figures. It offers a scope of learning not only for industry members, but also for researchers, investors and those seeking information and opportunities within the industry. You’ll find the list itself starting on page 40, followed by more detailed profiles of each company starting on page 44.

As the 2019 Global 100 list celebrates its tenth birthday, writer Heather Martin examines how the industry has changed and what the landscape looks like as we head into the third decade of the 21st century. She also dives into the changes in the global environment for direct selling companies that are happening rapidly on all fronts, especially in China.

At our Global 100 Celebration, we also had the opportunity to present some special recognition.

This year we had two Bravo Growth Awards. Las Vegasbased MyDailyChoice/HempWorx saw an increase from
$10 million in 2017 to $100 million in 2018—a growth of 900 percent. The second Bravo Growth Award honoree went to New York-based Color Street who grew an incredible 881 percent over the last year, from $12 million in 2017 to $119 million in 2018.

Each year we also recognize a direct selling executive whose exceptional leadership qualities have propelled his or her company to extraordinary new heights. This year’s recipient of the Bravo Leadership Award, Stella & Dot Founder Jessica Herrin, had the goal of revolutionizing entrepreneurial opportunities for women by creating a modern home-based opportunity.

And finally, our Bravo Lifetime Achievement Award winner Stan Fredrick has either chaired or been a board member of both the Direct Selling Association and Direct Selling Education Foundation for more than 30 years. Fredrick is the major shareholder in several direct selling companies, and is currently Chairman of the Board at Mannatech.

For 10 years, the DSN Global 100 ranking has had the privilege of calling attention to incredible growth, which of course, represents millions of lives touched by what all of you do every day. Thank you again for your support.

We look forward to seeing you all next year!

Avon UK, Changing Faces Join Forces to Change Perceptions Around Visible Differences

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Avon UK recently announced a partnership with Changing Faces, the UK’s leading charity for everyone who has a mark, scar or condition that makes them look different.

Following Avon UK’s support for Changing Faces’ #PledgeToBeSeen as part its global stand4her program, which aims to improve the lives of 100 million women each year, the organizations are now formally joining forces. Avon UK will feature more models with a visible difference in its campaigns and co-fund Changing Faces’ support and information line.

The partnership launched on Face Equality Day, a special day of celebration and action which helps to give a voice to more people with a visible difference and to change people’s perceptions so no matter how your face or body looks, you’re treated equally. As part of its 60-year anniversary campaign later this year, Avon UK will feature plane crash survivor Tulsi Vagjiani who sustained second and third degree burns to 45 percent of her face and body. She was bullied about how she looked, which affected her mental health.

Research released by Changes Faces revealed that approximately one in three people (29%) reported feeling depressed, sad or anxious as a result of having a visible difference like a birth mark or scar. Almost a quarter (23%) say they feel self-conscious or embarrassed going out in public because of their visible difference.

Avon is committed to championing the power of beauty and together Avon and Changing Faces will work to ensure people who look different have the freedom to express themselves and are visible across fashion and beauty campaigns.

Avon was the first beauty brand to sign up to Changing Faces’ pledge to feature more people with a visible difference in its campaigns. In March, its “Perfect Nudes” campaign featured Changing Faces ambassador Catrin Pugh, who suffered 96 percent burns in a coach accident.

FDA Concerned Over Exaggerated Health Claims of CBD Products

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According to a CNN story, concerns over exaggerated health claims have prompted a US Food and Drug Administration hearing on the effects of CBD products.

The FDA is holding its first hearing today to assess the safety and efficacy of these CBD products. Cannabis-related products have flooded the market, making health claims about pain relief, immune function and anxiety and depression.

The goal of the hearing is to “identify and collate all available data to help us answer these questions in order to make sure that the American public is protected—including to the extent CBD is being introduced into our food supply or other common consumer products,” Michael Felberbaum, an FDA spokesman, said in an email to CNN.

CBD, also known as cannabidiol, is the ingredient in marijuana and hemp touted to have many medicinal benefits. It’s different from tetrahydrocannabinol or THC, the main psychoactive component of cannabis. Last June, the FDA for the first time approved a cannabis plant-derived, CBD-based drug, Epidiolex, which is approved to treat two severe and rare forms of epilepsy: Dravet Syndrome and Lennox-Gastaut syndrome.

Dr. Amy Abernathy, principal deputy commissioner of the FDA and head of the agency’s CBD working group, said in a tweet last week, “The FDA has not approved any other CBD-containing products. We want consumers to be aware that there is only limited available information about CBD, including about its effects on the body.”

It is illegal to introduce CBD or THC into the food supply or market it as a dietary supplement. Marijuana remains illegal under federal law. However, at least 10 states have moved ahead and legalized the purchase and possession of recreational marijuana while 33 states allow the use of medical marijuana.

As states have liberalized the use of marijuana, CBD-related products such as oils, lotions, chocolates and even dog food have stormed the market.

In December, President Donald Trump signed the Farm Bill into law, legalizing hemp, which also contains high levels of CBD. Market analysts expect the hemp-derived CBD market alone to hit between $15-20 billion in the next five to six years.

“The industry is exploding; it’s growing in popularity every day. It’s so important for the FDA to get a regulatory handle on this,” said Jonathan Miller, general counsel for the US Hemp Roundtable, an industry-backed advocacy group. “There are bad products out there. There are products that make false claims. It’s important that FDA develop standards.”

Witnesses from the supplement industry, researchers, doctors and patients are all expected to testify about their experiences with cannabis at the hearing. The agency will also make a docket available for public comments that will close on July 2.

To read the full article, click here.

LIVE! Technologies Acquires Iacono Productions

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LIVE! Technologies has acquired Iacono Productions, creating one of the largest event, specialty fabrication, video production and creative services companies in the Midwest.

Since its founding in 1974, Live Technologies has created and produced over 30,000 live events for premier brands, organizations, business market leaders and top-tier entertainers throughout the country.

“For decades, some of the most memorable live experiences, creative videos and successful brand activations have been created by two Ohio-based companies,” said Rusty Ranney, Live Technologies and Mike Iacono, President of Iacono in a joint statement. “It is our privilege to announce the next chapter for these two storied organizations. This acquisition brings together two enormously successful companies, with services, teams and creative approaches that complement each other perfectly. We will now be able to provide our clients with an even wider range of services, which include a more extensive catalog of inventory and technology, a larger creative services team, and more ways than ever to help our clients create experiences that make audiences say “wow!”

Iacono Productions was established in 1981 by Mike Iacono and has also become one of the nation’s largest live event, media production, brand activation and experiential marketing companies. The firm employs 90 associates with additional offices in Indianapolis, Detroit and Chicago.

“We are really just pleased to have a new depth of company talent and creativity,” Ranney said.

Vince Perfetti Named Nu Skin Enterprises Chief Transformation Officer

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Nu Skin Enterprises recently announced Vince Perfetti has joined the company as chief transformation officer and senior vice president of technology.

Perfetti will lead the company’s technology transformation to develop an industry-leading customer experience and further empower the company’s sales force to build a socially enabled business to attract more customers.

“Technology plays a fundamental role in our vision to become the world’s leading business opportunity platform,” said Ritch Wood, CEO. “Vince has a proven track record of senior leadership in digital and information technology for global enterprises across multiple industries. His experience and insight will be key in helping us accelerate our efforts.”

Ryan Napierski, Nu Skin president, added, “In order to become the world’s leading opportunity platform, we are focused on attracting more customers through our global sales force. By utilizing technology to enhance each of the touchpoints throughout the customer journey, we are making it easier for our sales force to connect, communicate and build relationships with them.”

Perfetti comes to Nu Skin from Amazon Web Services (AWS) where he was a principal consultant on the cloud advisory team, advising enterprise executives on program development to maximize cloud adoption and transformation. He also has senior leadership experience from GE Digital and Dow Jones and Company, where he led the transformation of technology teams and culture.

Young Living Opens New Global Headquarters

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Young Living Essential Oils recently celebrated the grand opening of its global headquarters in Lehi, Utah, with a ceremonial ribbon-cutting event.

The five-story, 263,000-square-foot building is constructed to qualify for both LEED and Green Globe certification. The design organizes workspace for nearly 1,000 employees around a botanical atrium with two immense skylights and a three-story waterfall. Keeping with Young Living’s dedication to nature and its zero-waste goal, the building has more than 20 eco-friendly features, including roof solar panels, interior glass walls to maximize natural lighting, regionally sourced construction materials, vehicle-charging stations and extensive recycling systems.

“The opening of a new corporate headquarters in Lehi is nothing new,” said Jared Turner, president and COO of Young Living. “That’s why we wanted our campus to stand out. Our goal was to embody the vision of our founder, D. Gary Young. He envisioned a world where everyone enjoyed whole-life wellness. That’s why we pulled out all the stops when it came to construction and catering to our employees’ needs. Employees and our neighbors and friends can eat organic, locally sourced food at the Vitality Cafe, while employee amenities also include an on-campus gym with company-subsidized personal training, an indoor atrium and outdoor gardens for a dose of nature during the workday.”

Additional features include the Skyrider Amphitheater, a research greenhouse and the D. Gary Young Museum, which is scheduled to open in this summer.

The unveiling of the new global headquarters is part of the company’s commemoration of its 25-year anniversary.

Kannaway Receives Authorization in Bulgaria to Sell Hemp-Derived CBD Products

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Medical Marijuana, Inc. announced that it has received the first-ever authorization in Bulgaria to sell hemp-derived cannabidiol (CBD) products.

“As the EU continues to navigate its stance on CBD, we are proud to continue paving the way for the acceptance of CBD in Bulgaria just as we have in many other countries around the world,” said Kannaway CEO Blake Schroeder. “With this authorization, we hope that we can establish our company as pioneers in Bulgaria’s CBD industry and leaders in CBD education throughout Europe.”

The authorization certifies that Kannaway’s imported goods are normally and freely sold in the certifying country’s open markets and are approved for export.

“As a company of firsts, we look forward to trailblazing the international CBD market as advocates of this supplement’s potential benefits,” said Kannaway Vice President of International Alex Grapov. “We have met with all of the appropriate regulatory bodies to ensure that our operations are within the bounds of the law creating a stable opportunity for our customers and Brand Ambassadors.”

Kannaway is a direct selling company specializing in the sales and marketing of hemp-based botanical products. CBD, a non-psychoactive cannabis compound found abundant in hemp, has been researched extensively for its antioxidant and anti-inflammatory properties.

Tricia Stitzel Named Tupperware Brands Chairman of the Board

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Tupperware Brands announced that Patricia A. Stitzel has been appointed Chairman of the Board effective May 22, 2019, following the company’s annual meeting of shareholders.

Stitzel is the first woman to hold this position in the company’s 70-year history and takes on this responsibility in addition to her existing role of chief executive officer, which she has held since May 2018, after serving as president and chief operating officer since October 2016.

Rick Goings, who served as chairman and chief executive officer until May 2018 and executive chairman, thereafter, stepped down after 26 years of successful leadership. He will continue to serve as a member of the company’s Board of Directors. Susan M. Cameron, who has served as presiding director of the Board since May 2018, will continue in this role, now known as lead director.

“I am honored to serve as chair of the board of directors,” Stitzel said. “I’m confident that, with the support of our Board and leadership team, we are poised to transform our business into one that is more relevant, more engaging and more accessible to our sales force and customers to deliver and sustain stakeholder value.”

Tupperware Brands, a company committed to women’s empowerment, continues to solidify its commitment to diversity with equal representation at all levels of the company. Today, women hold positions representing 55 percent of the Board, 50 percent of the executive and staff officers and 36 percent of the senior leadership positions globally. Currently, the company supports and works with an independent sales force of 3 million, most of whom are women.

 

“It is a transformative time for Tupperware Brands,” said Cameron. “With tremendous appreciation for Rick’s years of visionary leadership, we are confident that Tricia is the right choice to position the company for future growth.”

Natura Acquiring Avon Products, Inc.

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Natura &Co (B3: NATU3) announced late yesterday that it is acquiring Avon Products, Inc. (NYSE: AVP) in an all-share transaction.

The deal, valued by Natura at around $3.7 billion, caps Avon’s strategic pivot to focus on foreign markets, where sales have been stronger in recent years. The company moved its corporate headquarters to London in 2016 and sold its North American business to private equity firm Cerberus Capital Management for $435 million.

Natura & Co., a consolidation of the beauty brands Natura, The Body Shop and Aesop, said the combined company will have a combined $10 billion in revenue. Natura said it expects the Avon merger to generate $150 to $250 million in revenue annually. It’s expected to close in early 2020.

As part of the all-stock transaction, Natural & Co. shareholders will own about 76 percent of the combined company, while Avon shareholders will own nearly 24 percent.

Avon’s share price soared 16 percent after hours Thursday on the New York Stock Exchange to $4.05 per share.

The acquisition creates a best-in-class multi-brand and multi-channel beauty group, with direct connections to consumers on a daily basis. The group will hold leading positions in relationship selling through Avon´s and Natura’s over 6.3 million Consultants and Representatives, a global footprint through 3,200 stores, as well as an expanded digital presence across all companies. The combined Group is expected to have over 40,000 associates and be present in 100 countries.

“We have always looked at Avon with respect and admiration,” said Luiz Seabra, co-founder of Natura. “Natura was founded on its passion for beauty and relationships, and today’s transaction creates a major force in the direct-to-consumer space. Direct selling was a social network before the word even existed, and the arrival of technology and globalization only multiplied opportunities to connect with consumers in a meaningful way. The peer-to-peer sales model is evolving towards social selling and the power of digital allows the group to go beyond providing products and advice, and advances women empowerment, through financial independence and enhanced self-esteem. We believe that business can be a force for good and together with Avon, we will amplify our pioneering efforts to bring social, environmental and economic value to an ever-expanding network.”

Jan Zijderveld, CEO of Avon, said, “This combination is the start of an exciting new chapter in Avon’s 130-year history. It stands as a testament to the progress of our efforts to ‘Open Up Avon’, and we believe it will allow us to significantly accelerate our strategy and further expand into the online channel. Over the past year, we have started a transformation to strengthen Avon’s competitiveness by renewing our focus on Her, simplifying our operations, and modernizing and digitizing our brand. Together with Natura, we will have broader access to innovation and a portfolio of products, a stronger e-commerce and digital platform, and improved data and tools for Representatives to drive growth and enhance value for shareholders. Further, with the support of Natura, we will continue to invest in cutting-edge technology to enhance our digital capabilities and productivity for our Representatives. Both Avon and Natura are purpose-driven organizations, and the combination will enable us to better serve our millions of Representatives, leveraging Avon’s international presence with the same strongly-held commitment to enhancing Her experience and earnings.”

As part of this transaction, a new Brazilian holding company, Natura Holding S.A., has been created. Upon closing, Natura Holding S.A.s’ stock will be listed on B3 with a 55 percent public float and it will also have ADRs listed on the NYSE. Avon shareholders will have the option to receive ADRs traded on the NYSE or shares listed on B3. Further information is available in the Material Fact which can be accessed here.

Upon closing, the Board of Directors of the combined company will consist of 13 members, three of which will be designated by Avon. The transaction remains subject to customary closing conditions including approval by both Natura &Co’s and Avon’s shareholders as well as anti-trust authorities in Brazil and certain other jurisdictions.