Why the Largest Global Supplement Brands Utilize Multilevel Marketing (MLM)

Have you ever wondered why so many of the largest global supplement companies utilize a multilevel marketing strategy? Is it just that effective or is there something deeper at play? I can’t be the only supplement industry professional that’s ever wondered why an MLM brand like Herbalife sells more supplements in 90 days than a massive brand like Optimum Nutrition can throughout an entire year. Or that an MLM brand like USANA Health Sciences sells a billion dollars of supplements annually. Or that MLM brands like Shaklee, Shakeology, and Isagenix each sell hundreds of millions in supplements annually and rank in the top 25 biggest companies in the space that aren’t owned by a CPG conglomerate. And then finally I can’t forget about the largest MLM company in the world by revenue…Amway. But to explain the outsized impact Amway plays on all this MLM & the supplement industry stuff, I need to go back several decades before the company was founded when vitamin ingredients switched from being extracted from food to synthesized in a lab. During that same timeframe in the mid-1930s, Carl Rehnborg founds the California Vitamin Company…which is generally recognized as introducing the first multivitamin/multimineral supplement sold in the United States. In 1939, the name of California Vitamin Company is changed to one that might be much more familiar to the consumers today…Nutrilite. While Carl Rehnborg might hold a special place in the supplement industry history, he actually had a much larger impact on the multilevel marketing space. That’s because in 1945…he invented the form of direct selling that is now called multilevel marketing. Nutrilite devised an approach whereby distributors purchased products at a thirty-five percent discount and then played the dual role of retailing products to non-distributor consumers while also recruiting new distributors in a pyramid-type incentive structure. But while Nutrilite might have started the deep connection between supplements and MLM, the Direct selling Association notes that today’s largest single “direct sales” product category is wellness. This category of products (which includes supplements), represent 35.6% of total sales in the Network Marketing sales channel…and wellness is the fastest growing category of all. Furthermore, I'll explore a few other historical linkages between multilevel marketing and the supplement industry...including why women and Mormons in the State of Utah are important to this story.

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