Look, I'm not slamming them, nor am I anti-Monavie. I want all direct sales companies to represent the industry well, something I feel MonaVie does not do. I know some of you have found success in this business, I have received the testimonials, I have simply pointed out that I do not believe they represent us, the industry in the best light.
I have received multiple emails on our other site concerning MonaVie. Everything from distributors asking me to try it, to potential distributors asking for an assessment. Here is the same take I gave you there; when you add up all the facts and current events, their checkered history, combine it with their compensation plan, mix that with recent allegations of buying distributors from other companies, add a dash of legal problems, and you have a potential sinking ship.
Any of you wonder why they are not members of the DSA? For those who are a little more internet challenged, may I present the research collected and posted on wikipedia. I am interested to hear your thoughts on this so keep it coming.
Source Below. http://en.wikipedia.org/wiki/MonaVie
Product overview
The MonaVie product line includes bottled juices, MonaVie Original, Active, Pulse, and (M)mūn in addition to gel pack versions of these products and an energy drink, EMV.
A patent application for Opti-Acaí, a primary product ingredient for MonaVie juices, was submitted to the World Intellectual Property Organization in 2004 by developers Alexander G. Schauss and Kenneth A. Murdock and approved by the U.S. Patent Office on July 21, 2009.
Product research
An analysis conducted by contract laboratory Chromadex indicated that Monavie contained low levels of key antioxidants such as vitamin C, anthocyanins, and phenolics. The phenolic level in Monavie was lower than that of apple juice (which is relatively low in phenolics), and Monavie was found to contain one-fifth the vitamin C level of Welch's grape juice.
Distributor earnings
Monavie products are sold by non-employee distributors who are eligible to receive commissions based on product sales. Individual distributors are encouraged to build their own sales networks by recruiting new distributors to sell the products (referred to in multilevel marketing parlance as a "downline"); the recruiter can, in theory, receive additional commissions based on sales by their downlines.
Regarding the earnings prospects for Monavie distributors, a Newsweek article reported that, based on MonaVie's 2007 income disclosure statement, "fewer than 1% qualified for commissions and of those, only 10% made more than $100 a week." More than 90% were counted as wholesale customers, whose earnings Newsweek said were mostly discounts on sales to themselves. According to a top recruiter, the dropout rate in 2008 was around 70%.
According to an article published by the Hartford Courant, the Monavie 2008 income disclosure statement shows that about 45% of the company's distributors earned an annualized average check of less than $1,600, and 37% took home about $2,000; approximately 2% earned an annualized average check of more than $29,000, and just 7 out of 80,000 distributors. Monavie Executive VP Henry Marsh responded to Newsweek's analysis of distributor earnings, stating that "...more like 14 percent..." of distributors make a profit.
Criticism
Nutritional value disputed
Physician Andrew Weil and nutritionist Jonny Bowden claim that the nutritional and health benefits of MonaVie juice are not proven and that the product is exorbitantly priced relative to more cost-effective conventional antioxidant-rich foods, such as blueberries, raspberries, and pomegranates. According to Men’s Journal, a nutritional analysis conducted by ChromaDex, a contract-testing laboratory, showed that MonaVie Active juice "tested extremely low in anthocyanins and phenolics" and that "even apple juice (which also tested poorly) has more phenolics". The report also noted that "MonaVie’s vitamin C level was 5 times lower than that of Welch’s Grape Juice."
Misleading advertising and health claims
Bowden, Newsweek correspondent Tony Dokoupil, and Palm Beach Post reporter Carolyn Susman commented on the use of misleading promotional testimonials by MonaVie distributors in which the product was said to prevent and treat a variety of medical conditions. Dokoupil noted that “the FDA warned MonaVie about medicinal claims on its Web site” in reference to the Food and Drug Administration's action against MonaVie distributor Kevin Vokes in July 2007. According to the FDA's warning notice, Vokes had promoted MonaVie as a drug in violation of the Federal Food, Drug, and Cosmetic Act by claiming that it was effective for treating inflammation, high cholesterol, and muscle and joint pain. The FDA was ultimately satisfied with the company's response after the claims on the offending website had been greatly dialed down. In a 2008 article in Forbes magazine, reporters Emily Lambert and Klaus Kneale described MonaVie as a pyramid scheme and noted that a MonaVie video testimonial by distributor Louis "Lou" B. Niles implied that the product could cure cancer. Niles, who claims in the video to be a doctor and an end-stage cancer specialist, is introduced at the distributor-sponsored meeting by Monavie executive Jason Lyons.
Company executives have repeatedly acknowledged ongoing problems with Monavie distributors making unlawful claims that the juice can treat and prevent diseases. A Newsweek article published August 2, 2008, noted that CEO Dallin Larsen "realizes that his sales team can get him in hot water with the Feds", and in reference to the company's ability to investigate distributors suspected of making false claims, Larsen commented that "it’s next to impossible; like herding cats." A November 4, 2008 statement from the company noted: "many distributors, perhaps unwittingly, have engaged in methods of advertising that are in violation of MonaVie’s policies. Such actions put our business and yours at an unnecessary risk." In a May 14, 2009 Bloomberg News article, Monavie executive vice-president and cofounder Randy Larsen was quoted saying that "the company is struggling with independent distributors who promote the juice as a miracle drug."
Dallin Larsen and Dynamic Essentials/Royal Tongan Limu
MonaVie CEO and founder Dallin Larsen was previously a senior executive with an MLM company that sold a similar juice product prior to being shut down by the FDA for illegal business practices. According to Newsweek correspondent Dokupil, Larsen, who was “a 20-year-veteran of the multi-level marketing industry", "left a senior post at another juice company in 2002, a year before the FDA destroyed the company's ‘bogus products’ that were being falsely promoted to treat ‘cancer, arthritis and attention deficit disorder’." The company in question, Dynamic Essentials, distributed an MLM juice product known as Royal Tongan Limu juice. According to the U.S. Federal Trade Commission Dynamic Essentials, from 2001 to 2003, had illegally advertised that Royal Tongan Limu ””was clinically proven to cure, prevent, or treat a range of diseases and disorders such as allergies, diabetes, cancer, and Alzheimer’s disease.”
Pyramid scheme allegations
In spring of 2008, Larsen formed a business partnership with former Amway distributor (Quixtar in the US) Orrin Woodward, founder of an Amway distributor sales network company known as TEAM. Woodward subsequently became a distributor and speaker for MonaVie, mixing his TEAM organization structure and distributor sales tools (e.g. sales brochures, audio/video recordings, etc.) concept with MonaVie's compensation plan. In 2008, Forbes magazine reporters Emily Lambert and Klaus Kneale noted:
“Team is one step ahead of all these juice selling schemes. It is a pyramid atop a pyramid. It is selling motivational aids to help MonaVie vendors move the juice. But wait. If you can't earn back the $258 you've spent on the motivational lectures by selling $39 juice bottles, you could earn it back in another way—getting people to buy $258 motivational lectures. If you're good, you flog the lectures to other people, who sell them to yet others. Everybody gets rich. Everybody, that is, except the last round of buyers. That's the theory, anyway. The reality is that a mere 1% of Team members make any money from involvement with the firm.”
Regarding pyramid scheme issues, Lambert and Kneale elaborated:
”In a 1979 regulatory action involving [Amway], the Federal Trade Commission attempted to draw lines between legitimate and fraudulent pyramids. The ones that are legit focus on getting revenue from consumer goods sold to retail customers. The FTC did not, however, define ‘retail’ in that case. That leaves plenty of wiggle room for guys like Orrin Woodward; he counts the vast majority of people in his pyramid, who seemingly try but fail to make money, as retail customers..”
Litigation
The company, its executives, and various senior distributors were involved in five lawsuits between 2007 and 2009. MonaVie was the plaintiff in trademark infringement suits against rival companies Fruitology (2007) and Amazon Thunder (2007) and was the defendant in false advertising suits filed by Amway (2008), Imagenetix (2008), and Oprah Winfrey/Mehmet Oz (2009).
On July 11, 2007, Monarch Health Sciences, the company that launched MonaVie, filed a lawsuit with the Utah district court against rival açaí juice manufacturer Amazon Thunder, alleging that owner/founder Todd Reum had made “harmful, false, and defamatory statements" about MonaVie which "purportedly injured Monarch’s reputation”. The suit sought $75,000 in damages. On November 15, 2007, the Utah district court ruled to dismiss the case against Reum.
On November 8, 2007, Monavie, Inc. filed a trademark infringement suit against Fruitology, a rival acai beverage (Fruitavie) manufacturer, in Utah District Court. Monavie voluntarily dismissed the suit on March 20, 2008.
On March 17, 2008 MonaVie preemptively filed a lawsuit with the Utah district court asking for a ruling as to whether Quixtar Inc. and Amway Corp. had been over-reaching the boundaries of its non-compete agreements and address whether or not such agreements are enforceable for independent distributors.
On March 18, 2008, Quixtar North America filed a multi-count federal court complaint against the MonaVie company and 16 of its distributors (John Brigham Hart, Lita Hart, Jason Lyons, Carrie Lyons, Lou Niles, Farid Zarif, and 10 anonymous defendants) for unfair competition. The complaint alleged that MonaVie competed unfairly by making false claims about its products. According to a company press release, MonaVie filed to dismiss the Amway/Quixtar lawsuit on April 15, 2008. On November 12, 2008, MonaVie et al. filed a lawsuit in the Colorado District Court against Quixtar.
On May 5, 2008, the MonaVie company, its board of directors, and several of its senior distributors were sued by Imagenetix, Inc. for $2.75 billion over trademark infringement arising from false claims that Monavie Active juice contained the ingredient Celadrin. The case was settled out of court and the lawsuit was dropped on May 20, 2008. On June 2, 2008 Imagenetix announced that it had entered into a new business relationship with MonaVie, the terms of which were not disclosed.
An August 20, 2009 article in the Chicago Sun-Times reported that television celebrities Oprah Winfrey and Dr. Mehmet Oz filed suit against 40 companies that are either selling açaí or related products, with their name endorsements on them." According to their complaint, such companies are "fabricating quotes or falsely purporting to speak in Dr. Oz's and/or Ms. Winfrey's voice about specific brands and products that neither of them has endorsed." Monavie Inc. was one of the companies named as a defendant in the lawsuit. Winfrey’s website elaborated that “consumers should be aware that neither Oprah Winfrey nor Dr. Oz are associated with nor do they endorse any açaí berry product, company or online solicitation of such products, including MonaVie juice products."
So there you have it. Facts are facts. I am interested in hearing your thoughts on this....
G-MAN
