Through multilevel marketing, the Brazilian açai berry becomes a billion-dollar business
Dallin A. Larsen's nutrition company was on the brink of collapse -- and then a friend tipped him off to a little-known berry found in Brazil called açai, which was said to be an antidote to premature aging. Four years later, MonaVie has sales of almost $1 billion of its namesake, an antioxidant-rich açai juice. Although the health merits of the company's products and its multilevel marketing structure have come under fire, Larsen is unfazed. And so, apparently, is MonaVie's rapidly expanding customer base.
I've been an entrepreneur my whole life. I put myself through Brigham Young University by selling shaved ice. My brother and I had about 20 shaved-ice shacks scattered throughout Utah.
In the 1980s, my family bought some weight-loss franchises from Diet Center. When I was 22, I talked my dad into cosigning a loan for money to buy my first franchise. It did pretty well, and I opened four more. It was a good experience: to learn how to hire people and run a business. It also taught me that a lot of success in business is because of the people.
A friend of mine introduced me to network marketing in the late 1980s. I became a distributor for the company he worked for. I didn't do great, but the more I learned about the concept, the more I was intrigued by it. Then another friend introduced me to the founder of Usana, a network marketing company that sells nutritional products. He asked me to come on board. While I was at Usana, from 1991 to 2000, we grew the company to over $100 million in sales.
In 2003, I teamed up with my brother Randy and Henry Marsh, a four-time Olympian, to start a weight-loss company called Monarch Health Sciences. We raised nearly $2 million from angel investors, but we rapidly went through the money. I like to joke that since I'm short and fat, it didn't work. Our program required big lifestyle changes, which people generally don't make. We were close to going out of business. My wife and I had eight kids to raise. I took out a second mortgage, because we weren't taking any money out of the company.
Around that time, a friend told me about the açai berry. I did a search on Google and found all this research about it being packed with nutritional value. So we asked one of our scientists to do some research. We blended it with 19 other fruits. Four months later, in January 2005, we introduced MonaVie.
Our timing was great. A doctor, Nicholas Perricone, had come on The Oprah Winfrey Show and named the açai berry as one of the world's greatest superfoods. We found a few key people who believed in us, and they went out and started sharing MonaVie with others. We gave stock options to people who reached $500,000 in yearly sales by a certain date. Soon our product was spreading like wildfire.
It certainly didn't hurt that Sumner Redstone, the chairman of Viacom, got on the juice. A distributor in Florida knew Redstone's butler and got him to try the product. All of a sudden, we're in Fortune magazine. Boston Red Sox players J.D. Drew and Jonathan Papelbon started drinking the product, and we're an official team juice. This year, we had a MonaVie car racing in the Indy 500 to launch our energy drink. I was there shaking hands with Richard Petty and Mario Andretti.
We've enrolled over a million distributors. When we developed the company, we said, "Let's create a compensation plan where you don't have to be Superman to achieve success." The plans in the 1970s, 1980s, and early 1990s forced people to constantly find people to sponsor. In our company, the average person who sponsors just two people can earn some money. They're not knocking door to door or having to stock up on thousands of dollars' worth of product. There are some people making an extra $1,000 a month, some making an extra $1,000 a year.
People have said that network marketing isn't legitimate, but it's a 100-year-old business. Warren Buffett even bought a direct-selling company (The Pampered Chef, which sells kitchen tools). There are some companies that haven't had legitimate products, and they've been rightfully shut down. But I'm proud of the industry I'm in. I can't control other companies, but I can make sure that MonaVie operates in an exceptional manner, that we're backing up our products, and that our distributors are not making outrageous claims.
Because of our success, we've now got people from all over the world calling. This year, we started selling in eight other countries, and we'll be in 15 by the end of the year. About 85 percent of our sales are domestic, so we're just barely beginning our international growth. And we have some pretty productive folks. MonaVie's top earners make over $5 million a year. We started with eight levels of distributors, and people kept hitting the top. We've taken distributors to Hawaii and the Mediterranean to celebrate their successes. Now we have 18 levels.
My goal is not for MonaVie to be the best company in the world, but to be the best company for the world. We founded the MORE Project, which is helping to feed, clothe, and educate over 1,500 children and adults in the slums of Brazil. We want to give back. At our most recent meeting, we raised over $1.1 million from our distributors. But although I'm pleased with what we've accomplished, I'm not satisfied yet.
Correction: The original version of this story, which appeared in the October 2009 issue, incorrectly stated that MonaVie contracted with Virgin Galactic to send its distributors on a commercial space flight. The two companies do not have a formal contract.
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