Usana Health Sciences
| Company type | Public |
|---|---|
| Industry | Multi-level marketing, Nutritional supplements |
| Founded | 1992 |
| Founder | Myron Wentz |
| Headquarters | Salt Lake City , United States |
Area served | Worldwide (24 countries) |
Key people | Kevin Guest (CEO) |
| Products | Nutritional supplements, weight control products, energy boosters, personal care items |
| Website | www |
Usana Health Sciences, Inc. (USANA) is a U.S.-based multi-level marketing firm with its main office located in Salt Lake City, Utah. In 2021, it was ranked as the 14th largest direct-sales company worldwide by revenue. The company manufactures nutritional supplements, products for weight control, energy boosters, and personal care items, primarily at its Salt Lake City production site. These goods are marketed across 24 countries through an extensive network of independent distributors.
History
Established in 1992 by immunologist and microbiologist Myron Wentz, USANA originated from Gull Laboratories and developed into a multilevel marketing company specializing in supplements. Early management included Dallin A. Larsen, who held the position of vice president of sales before founding the MLM beverage enterprise Monavie in 2005. USANA’s product line is sold exclusively via independent distributors or direct customer orders, with no retail store presence.
In 2007, USANA was accused by Barry Minkow's Fraud Discovery Institute of functioning as an unlawful pyramid scheme. The U.S. Securities and Exchange Commission (SEC) conducted an investigation but did not identify any violations or take enforcement measures. During this time, Minkow engaged in short-selling USANA shares. A class action lawsuit claiming stock price inflation was also filed in 2007 but was dismissed after the SEC cleared the company in 2008. Additionally, in 2008, two Canadian distributors were awarded $7 million for wrongful termination.
USANA initiated defamation and stock manipulation lawsuits against Minkow; however, most allegations were dismissed under California’s anti-SLAPP legislation. The remaining stock manipulation claim was resolved in 2008 when Minkow consented to remove negative content and refrain from trading USANA shares.
Towards the end of 2010, USANA moved its stock listing from NASDAQ to the New York Stock Exchange, effective early 2011. That same year, it obtained FDA registration for producing over-the-counter medications. By 2012, associates were responsible for 91% of total product sales. The company expanded its global footprint by acquiring BabyCare Ltd., a prenatal supplement manufacturer based in China, in 2013 and announced plans to establish a manufacturing plant within China.
By 2018, USANA reported record revenue growth fueled by the Asia Pacific region but noted a 7% decrease in net sales in its 2019 annual report. Its strategic alliances include partnering with HealthCorps to promote child health education and becoming the official nutrition partner for the Spartan Race endurance series in the United States. The firm’s first-quarter sales for 2020 showed a year-over-year decline of 2.3%.
In early 2019, China’s Ministry of Commerce halted all multi-level marketing activities temporarily to conduct a regulatory review addressing issues such as exaggerated advertising claims and unregulated health products. During this "Hundred Days of Action," numerous industry licenses were revoked. BabyCare Ltd., a subsidiary of USANA, took part in government-supported industry self-regulation initiatives.
Leadership
In 2007, Usana encountered controversy when certain members of its board of directors, medical advisory board, and executive team were found to have misrepresented their credentials, including their educational background and professional licenses. The company’s founder, Myron Wentz, held the CEO position from 1992 until 2008, after which his son Dave Wentz took over, having previously served as president and senior vice president of strategic development. In 2015, the CEO responsibilities were divided between Dave Wentz, who managed global operations, and Kevin Guest, who oversaw field development and sales. Kevin Guest then assumed the role of sole CEO in November 2016.
Operations
Usana functions as a multilevel marketing enterprise, distributing its products mainly through independent distributors known as sales "associates" and via online platforms. According to the company's 2010 income disclosure statement, associates actively expand their businesses by purchasing products at wholesale prices or by recruiting new distributors. The 2009 SEC filing differentiates associates from preferred customers; the latter group purchases at wholesale rates strictly for personal consumption and is prohibited from reselling products. By July 2011, Usana reported having 222,000 active associates alongside 68,000 preferred customers.
Commissions are earned by associates based on their personal sales and the sales generated by their recruited distributors. Corporate disclosures indicate that 87% of associates fail to recover the costs associated with qualifying purchases through commissions, while 67% receive no commission payments at all. Additionally, 72.2% of total commissions are distributed among the top 2.31% of associates. A 2011 analysis revealed that the average yearly income for all 165,710 associates during fiscal year 2009 was $617, whereas those in the highest tiers earned an average annual income of $857,865.
Sponsorships
Usana has financially supported various sports organizations, including speed skating and ski jumping teams based in the United States, Canada, and Great Britain. The company has implemented an "Athlete Guarantee Program" that offers compensation up to $1 million to certain sponsored athletes who test positive for banned substances due to Usana products, underscoring its dedication to promoting clean athletic competition.
In 2006, Usana entered into a co-sponsorship agreement with the Women's Tennis Association (WTA) tour that was renewed in 2011. As part of this collaboration, Usana pledged to donate $1 to the Children's Hunger Fund for every ace recorded at WTA tournaments starting from Wimbledon through the remainder of the season.
In 2003, Usana secured naming rights for the USANA Amphitheatre in West Valley City, Utah—a large outdoor venue with a seating capacity of 20,000. This sponsorship was extended through March 2018, enhancing the company’s brand recognition within the local market.
Prior to the 2020 Summer Olympics, Usana established multi-year agreements with USA Swimming and the USA Skateboarding National Team to serve as their official multivitamin sponsor and nutritional supplement provider respectively. These partnerships align with Usana’s strategy to increase its visibility in prominent sports sectors.
Products
Usana’s product portfolio consists of three primary categories: Usana Nutritionals (including Cellsentials, Optimizers, and Digestion/Detox supplements), Usana Diet & Energy (featuring Reset meal replacement shakes, protein bars, and Rev3 energy beverages), and Sensé & Celavive personal care lines (covering skin care treatments as well as hair and body care products).
In 2011, Usana Essentials successfully met ConsumerLab.com’s stringent testing criteria for multivitamins marketed in both the U.S. and Canada. These standards evaluated ingredient quality, tablet disintegration rates, compliance with lead contamination limits under California Proposition 65, and adherence to FDA labeling requirements.
By 2019, Usana had expanded its product distribution across various global markets including the United States, Canada, Australia, New Zealand; Asia-Pacific territories such as Hong Kong, Japan, Taiwan, South Korea, Singapore, Malaysia, and the Philippines; European countries including the Netherlands, United Kingdom, France, Spain, Italy, Germany, Romania, and Denmark; Latin American nations like Mexico and Colombia; Caribbean regions such as Puerto Rico; as well as Indonesia.
Reception
Between 2004 and 2006, Usana earned a spot on Forbes list of the "200 Best Small Companies." Yet, by 2007, concerns surfaced from Forbes and other outlets regarding the cost of Usana’s supplements and the nature of its multi-level marketing (MLM) framework.
An investigation by the Canadian Broadcasting Corporation brought to light issues related to product pricing and allegations that income claims made to prospective distributors were misleading. Undercover footage captured certain representatives breaching company guidelines by suggesting Usana products as treatments for serious conditions like leukemia—actions that contradict Canadian MLM regulations mandating clear disclosure of income potential.
John Cloud of Time Magazine undertook a five-month trial using Usana’s supplement program, which amounted to an expense of $1,200. His blood analysis revealed only slight changes, such as elevated vitamin D and HDL cholesterol levels. Cloud attributed his perceived increase in energy and improved dietary habits mainly to a placebo effect, noting no significant health benefits.
In 2008, Murray H. Smith, a statistician with New Zealand’s Commerce Commission, expressed doubts about the likelihood of distributors achieving substantial earnings. He pointed out features reminiscent of pyramid schemes within Usana’s model: most participants do not recover their initial investment; income is heavily skewed toward those at the top; recruitment becomes more difficult as the network expands; and high turnover among distributors requires ongoing recruitment efforts. Smith’s statistical evaluation highlighted inherent risks embedded in the company’s compensation structure.