Amway opens Buena Park, CA manufacturing and R&D facility to support growth of supplement sales

By Hank Schultz contact

- Last updated on GMT

Related tags: Multi-level marketing, Amway

Amway opens Buena Park, CA manufacturing and R&D facility to support growth of supplement sales
Amway has passed another milestone in its massive manufacturing expansion with the formal opening of its $42 million manufacturing and R&D in Buena Park, CA.  The center is part of the company’s $375 million manufacturing expansion program.

Amway, the world’s biggest network marketing company, sells nutritional supplements under the Nutrilite brand. Over the past few years the company has been expanding its in-house manufacturing capability for its supplement products.  The Buena Park facility will also house an R&D division.

“These facilities are a key part of the brand's future,”​ said Steve Van Andel, Amway’s chairman.

“This investment in manufacturing and R&D is one of many that we make to ensure that we continue to provide the very best in nutrition to the global consumer,”​ said George Calvert, who manages Amway’s supply chain and R&D efforts.

How big is the sector?

Recently there has been some debate about exactly how big is the network marketing slice of the overall dietary supplement market pie​.  The question has revolved in part around concerns raised by activist investor William Ackman in his assault on Herbalife’s stock price. How much of the supplements manufactured by Amway, Herbalife, et al end up in the cupboard of actual consumers, and how much are purchased by distributors to qualify for higher commission rewards and end up languishing in storage? Complicating that picture is the fact that most (if not all) of the big network marketing companies that sell nutritional products as either part or all of their offerings to their distribution networks do a significant amount of their business overseas, in China and elsewhere in Asia especially. 

However one values this segment, it is obviously huge and appears to have been growing at rates faster than the overall market in many parts of the world.  If one relies on figures released by the public multilevel marketing firms such as Herbalife and Usana, the sector has been sluggish in North America in recent quarters but has been thriving the Asia/Pacific region.

Amway as a private company only releases the figures it chooses.  The company’s overall 2014 revenue was listed at $10.8 billion, putting it No. 1 on the Direct Selling News list of the 50 biggest network marketing companies worldwide as of April, 2015.  Sales of nutritional products came in at 43% of that $10.8 billion figure, or about $4.6 billion.

Herbalife, which only sells nutritional products, came at No. 4 on the overall list, with sales of $5 billion.  Shaklee ranked No. 21 with $844 million in 2014 revenue, and Usana ranked No. 24 at $790 million.  Other significant US-based network marketing supplement  and nutrition companies on the list include Advocare (No. 35/$494 million), Arbonne (No. 35/$486 million) and Nature’s Sunshine (No. 44/$366 million).

Related topics: Financial focus, Manufacturer insights

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