Forever Living Products

Forever Living Products International, Inc.
Private multi-level marketing
Industry Manufacturing, marketing, distribution
Founded 1978
Headquarters Scottsdale, Arizona, USA
Key people
 Rex G. Maughan, Founder
Products Aloe vera and bee-based products
Revenue $2.6 billion (2014)
Number of employees
 4,100 (2006)
Subsidiaries Forever Resorts, Aloe Vera of America, Forever Aloe Plantations, Forever Nutraceutical
Website www.foreverliving.com

Forever Living Products International, Inc. (FLPI) is a multi-level marketing (MLM) company based in Scottsdale, Arizona, which manufactures and sells aloe vera-based drinks and bee-derived cosmetics, nutritional supplements, and personal care products.[1] The company was founded in 1978 by CEO Rex Maughan. After acquiring the company Aloe Vera of America by the 1990s,[2] current divisions include a manufacturing plant in Texas, the farming division Forever Aloe Plantations,[3] and the real estate division Forever Resorts, which owns and operates properties such as Southfork Ranch.[3] In 1983 Forever Living was ranked as the sixth fastest-growing private company in the United States on the Inc. 500 list,[4] and in 2006 it was ranked #340 on the Forbes 400 list of the largest private companies in the United States.[1] In 2010 revenue was 1.7 billion. By that time the company was selling its products through 9.3 million distributors[5] and had over 4,000 employees.[1]

History

Founding and business model (1978–1980s)

Forever Living was founded in 1978 in Tempe, Arizona as a direct-sell company[6] by businessmen Carl Jensen and Rex Maughan.[1] By the 1990s, Maughan had purchased the Texas company Aloe Vera of America, with Aloe Vera of America selling its products to Forever Living for distribution.[2] Initially selling only aloe vera juice, jelly, and lotions[7] in several Western states,[8] by 1979 the company was spreading its distribution across the United States.[9] Some journalists have likened the multi-level marketing business model of Forever Living's distribution system to that of a pyramid scheme.[10]

Forever Living Products headquarters in McCormick Ranch in Airzona in 2007. The company's resort division owns several similar properties.

The company purchased aloe fields in Texas in 1980.[8] Forever Living then purchased the assets of the company Aloe Vera of America in 1981.[11] Forever Living also opened the resort division Forever Resorts in 1981,[12] which over the coming years would come to own 18 resorts in various states,[12] including Southfork Ranch.[7] In 1983 the company launched its Forever Bee products[8]—a dietary supplement line consisting of royal jelly, bee pollen, bee propolis, and pure honey.[13] The company later expanded its product line to include dietary supplements consisting of aloe combined with vitamins, ginseng, minerals, fish oils, garlic, and other supplements.[13] Also in 1983 the company was named No. 6 on Inc. Magazines annual Inc. 500 list. Introduced in 1982, the list ranks the fastest-growing private companies in the United States.[4]

International expansion (1990-2009)

In 1992 sales exceeded $500 million.[8] According to Arthur Andersen's Top 100, as of 1993, Forever Living Products International was Arizona's second-largest private company.[14] Operating in the UK since 1992,[15] as of August 1995, Forbes reported the company's product line included "deodorants, toothpaste, laundry detergent and three dozen other products, nearly all of which contain extract of aloe."[16]

2005 saw annual revenues of over $1.15 billion[1] and Forever Living ended the year with around 150,000 distributors,[17] and 55 employees.[18] The following year Forbes named Forever Living as No. 340 on the Forbes 400 list, which ranks the largest private companies in the United States. With 4,100 employees, at the time Forbes stated the company was "the world's largest distributor of aloe vera and beehive-based products."[1] At that point the company was selling "aloe vera gel, natural aloe vera drinks, vitamins, and glamour and skin products in 100 countries."[1]

Recent developments (2010-2015)

Introduced in 2009, the FDA Food Safety Modernization Act set stricter standards for nutraceutical manufacturers, and to meet the regulations Forever Living spent $7 million on a new manufacturing plant in Phoenix. Completed in April 2010, the facility was named Forever Nutraceutical and initially employed around 60 people.[19] Forever Living also continued to own and operate its Aloe Vera of American Inc. manufacturing arm in Dallas,[19] as well as the farming division Forever Aloe Plantations.[3]

In 2010, revenue was 1.7 billion, and the company was selling its products through 9.3 million distributors.[5] In 2013 the publication New Vision reported that Forever Living had over 20,000 distributors in Uganda, of which only 83 had reached a managerial level and begun to recoup expenses.[20] The company was active in over 150 countries as of 2015.[6] In February 2015, the company announced they had appointed a new management team to "oversee the affairs of the company in Nigeria."[21]

Products

Aloe vera

Forever Living's primary product is an aloe vera beverage. As of 2015, it marketed four different edible varieties of "fresh, stabilized aloe vera gel," with flavors including original, "berry nectar," peach, and "forever freedom." Other drinks include herbal tea and spring water.[22] The company also markets various personal care, skincare, petcare and household products made from aloe, including lotions, creams, soaps, hair care products, deodorant, aftershave, lip balm, toothpaste, colognes and perfumes, and laundry detergent.[23]

Forever Bee supplement line

In 1983, Forever Living launched its Forever Bee products—a dietary supplement line consisting of royal jelly, bee pollen, bee propolis, and pure honey. The company later expanded its product line to include dietary supplements consisting of aloe combined with vitamins, ginseng, minerals, fish oils, garlic, and other supplements. Currently, the products are combined as part of a fitness regimen and health regimen. As of 2015, the company continued to sell natural bee products.[13]

Legal

In 1996, upon suggestion of the American authorities, the Internal Revenue Service (IRS) and the National Tax Agency Japan (NTA) initiated a joint audit of Rex and Ruth Maughan and related entities Aloe Vera of America (AVA), Selective Art Inc., FLP International, and FLP Japan for the period of 1991 to 1995.[24] In 1997, following Japanese media reports that FLP Japan Ltd. committed tax evasion, AVA, Rex and Ruth Maughan, Maughan Holdings, Gene Yamagata, and Yamagata Holdings[25] sued the United States for unauthorized disclosure of tax return information.[26] After years of court proceedings, in February 2015, a USA district court stated that the IRS knowingly provided some false information about AVA to the NTA, in violation of the United States' tax treaty with Japan.[27] The court also found the IRS liable for disclosure of false information and awarded the plaintiffs damages equivalent to the statutory limits.[27]

In 2004 claims made about Forever Living products were found to be in violation of several laws in Hungary related to advertising, registration of nutritional products, and the use of cosmetics as medicinal agents. As a result, the company was fined 60 million HUF (approximately $280,000 USD).[28] In Uganda, although supplements are approved by the National Food and Drug Authority, as of 2013 the government received complaints that patients and carers were being falsely led to believe that network marketing products from many foreign companies can be used to treat diseases.[20]

In 2007, author Richard Bach made claims against the company for copyright infringement and trademark infringement.[29] The lawsuit stated that for over 20 years Forever Living had used the character, storyline, and copyrighted excerpts from the novel Jonathan Livingston Seagull to promote its marketing plan, and also used the motion picture and novel as its corporate logo.[30][31] The claim was satisfied through arbitration,[32] and shortly after, Forever Living changed its company logo[33] from a seagull to an eagle.

See also

References

  1. 1 2 3 4 5 6 7 "The Largest Private Companies: #340 Forever Living Products Intl". forbes.com. 2006. Retrieved 2008-06-29.
  2. 1 2 "ALOE VERA OF AMERICA INC v. UNITED STATES". Case Law. July 30, 2009. Retrieved 2015-06-06.
  3. 1 2 3 "Our Aloe". DiscoverForever.com. Retrieved 2015-06-06.
  4. 1 2 Richman, Tom (December 1, 1983). "Going Their Way - Whatever else catapulted them to the peak, it wasn't conformity to the norms of business". Inc.com. Retrieved 2015-05-27.
  5. 1 2 Emmert, J.M. (2011). "DSN Global 100: The Top Direct Selling Companies in the World". Direct Selling News. Retrieved 2015-06-06.
  6. 1 2 "About Forever Living". www.foreverliving.com. Retrieved January 31, 2015.
  7. 1 2 "Interview: Transcripts with Rex Maughan". traveltalkmedia.com. June 24, 2012. Retrieved 2015-06-06.
  8. 1 2 3 4 "Forever Living Timeline". Facebook. Retrieved 2015-06-06.
  9. ↑ "Timeline - Forever Living Products Expands". Facebook: Forever Living. Retrieved 2015-06-06.
  10. ↑ Max de Leon (28 April 2003). "A very thin line between multilevel marketing and pyramid schemes". Retrieved 21 April 2014.
  11. ↑ "Manufacturing Facilities Purchased". Facebook: Forever Living. Retrieved 2015-06-06.
  12. 1 2 "About". ForeverResorts.com. Retrieved 2015-06-06.
  13. 1 2 3 Forever Living bee products
  14. ↑ Huston, Jenni (Nov 12, 1993). "No. 2 private company is 'best-kept secret' in state. (Forever Living Products International Inc.) ( in state)". The Business Journal (Trove). Retrieved 2015-06-06.
  15. ↑ "About". Forever Living UK. Retrieved 2015-06-06.
  16. ↑ Palmeri, Christopher (August 14, 1995). "The aloe juice man. (Forever Living Products International)". Forbes (Business: Highbeam). Retrieved 2015-05-27.
  17. ↑ "Forever Living Products hopes to see sales up in H2". Ziarul Financiar. August 2006. Archived from the original on 2008-08-04. Retrieved 2008-06-29.
  18. ↑ "Forever Living Products hopes to see sales up in H2". Ziarul Financiar. August 2006. Archived from the original on 2008-08-04.
  19. 1 2 Gonzales, Angela (March 4, 2011). "FDA gets tough with makers of herbal products". Phoenix Business Journal. Retrieved 2015-02-25.
  20. 1 2 Kagolo, Francis (17 February 2013). "Network marketing sucking billions out of Ugandans". New Vision. Retrieved 29 January 2015.
  21. ↑ Bilbur, Jon (February 20, 2015). "Forever Living Product Gets New Management Team In Nigeria". The Tide News Online. Retrieved 2015-05-27.
  22. ↑ Forever Living drinks
  23. ↑ Forever Living products
  24. ↑ Cope, Charles W. (February 2015). "United States Held Liable for Making False Statements to Foreign Tax Authority". copetax.com. Retrieved 2015-05-27.
  25. ↑ "376 F. 3d 960 - Aloe Vera of America Inc v. United States". OpenJurist. July 19, 2004. Retrieved 2015-05-27.
  26. ↑ "Tax agency takes back penalty tax on U.S.-affiliate firm.". Kyodo News International, Inc. July 26, 2002. Retrieved 2015-05-27.
  27. 1 2 Kroh, Eric (February 11, 2015). "Ariz. Judge Docks U.S. $3,000 For Disclosing Taxpayer Info". law360.com. Retrieved 2015-05-27.
  28. ↑ "Hungarian Economic Competition Office fined FLP for 60 million HUF".
  29. ↑ Schwabach, Aaron (2011). Fanfiction and Copyright. Ashgate. pp. 39–40. ISBN 978-0-7546-7903-5.
  30. ↑ Law Updates: Richard Bach et al
  31. ↑ "Bach v. Forever Living Products US, Inc., 473 F. Supp. 2d 1110". February 6, 2007. Retrieved 2015-05-27.
  32. ↑ "Bach v. Forever Living Products U.S., Inc.". Law Updates. July 13, 2007. Retrieved 2015-05-27.

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