EXCITING THINGS have been happening with NewAge Beverages and ARIIX. In July, a partnership formed between the two companies, and a new name was adopted.
With Dr. Fred Cooper and Brent Willis as the CEOs, NewAge, Inc. is now a global firm with an estimated pro forma revenue in excess of $500 million. Together they have created a global enterprise—and the only omnichannel company in direct selling with access to e-commerce and direct-to-consumer channels in more than 75 countries. Recently, I had the pleasure of a Zoom interview with both of these dynamic gentlemen.
In just three short years, NewAge Beverages saw growth from $2M to $254M for the year ended December 31, 2019, and with the merger, you will now be over $500 million in combined revenue. Can you share what you consider to be the factors of your success?
Brent Willis: The keys to our success for both companies are threefold. Both NewAge and ARIIX are very purpose-driven companies. We stand for something, and it is at the very core of our being and what we stand for. Number two, we cascade that purpose to all of our teams to build a very powerful culture. It is a culture of winning, a culture of performance and doing whatever it takes to be successful. The third key to success is about disruption. We have a disruptive strategy and strive to flawlessly execute that strategy. Being purposedriven, having a strength of culture and being disruptive in every aspect of the businesses have led to our success.
Dr. Fred Cooper: I want to add that NewAge and ARIIX both have an inherent belief that the field is first at all costs. It is the primary principle that governs us. We believe that our reps are our business. They create our brand and our image. We can only do well and succeed when the reps know they are of paramount importance to us.
With the recent mergers and acquisitions, what are your plans and predictions for the rest of 2020 and beyond?
Dr. Fred Cooper: We want to see a milestone pinnacle that has never been accomplished in direct sales. We want to merge two dominant organizations, both of which are successful. We will merge cultures, philosophies and bring them together so that instead of two families—we have a united blended family. We want to set an example that two organizations can come together and that blended families do work, and they work very effectively.
Brent Willis: When I look at the rest of 2020 into 2021 and beyond, one word comes to mind—MORE—more growth, more opportunity for everybody, more markets, more brands. I feel like we are very inclusionary and accepting as a group. We love all of the different aspects, and we champion all of the different brands in our group (from LIMU, MaVie, Zennoa and Noni). We want everyone to share in the wealth creation and monetization of this very strong public company. We have the right public and financial foundations. This translates to wealth creation for our reps that earn shares and for all of the other companies or brands that want to join us. We want to be seen as a very productive, inclusionary harbor. For all of the ships in the industry, in a sea of increasingly choppy economic water—we can be that safe haven for them. A haven where everyone sees the benefit of being bigger and protected while still maintaining your identity and monetizing it for your people—that is attractive! We want to be inclusionary going forward, and we want more! More growth and resources for everyone in our fields.
What approach will set NewAge apart?
Dr. Fred Cooper: We want to build $100 million global brands within our direct sales umbrella—a house of brands of sorts, where individuals can affiliate with particular brands and services they want. With this model, you can have a smorgasbord of your choice of products you love, which have made a difference in your life and you can advocate for others to use. There is also the product lifecycle to consider. As the retail sector sees the demand and introduce, like products, the prices fall. Direct sellers are left with a conundrum. How can we lower the price and pay commissions and not be left with an overpriced product? So, we have become a house of brands, and our field is learning about new brands.
Innovation through the collaboration of scientists, research organizations and product development companies, they introduce their products in the U.S. We introduce them exclusively to our brands and representatives. They always have something novel and new to talk about.
As those products go into the product life cycle, price becomes the competitive factor. We have what we call value pricing for additional purchases that are made by a representative. Now, they don’t make as much commission on those particular products, but they make more commissions because we have a greater wallet share coming out of each representative. So, the consumer feels like they are getting a better value, and the reps are not taking a pay cut on commissions.
Brent Willis: Just as we’re innovating in terms of product, product lifecycle and portfolio of healthy products, we’re also innovating in route to market. This is really what omni-channel is. We’re not just a direct selling company. We are a direct selling company. We are e-commerce. We are direct-to-store, and we have access to traditional retail. Consumers don’t just shop in the direct selling channel. They buy off of Amazon. They buy off of individual websites and shop now from Instagram. So, the entire shopping behavior worldwide with millennials and Gen Z’ers, which is more than 50 percent of the global population, is changing.
From a route-to-market standpoint, our goal is to be at every single one of those consumer touchpoints. We know that you can’t sell one brand or one product in more than one channel because you have anarchy, but you can have dedicated products for dedicated channels and meet all of those consumer touchpoints. This is what we do. We hope to provide our reps earnings streams from more channels.
That is very different and unique if you can provide multiple earnings streams for your reps by giving them access to sales and in different channels versus just their networks. This is a way that’s really differentiated and innovative, and one of the things that the reps love about where we’re taking the company going forward.
What factors make NewAge see direct selling as an essential sales channel?
Brent Willis: If you look at every single region in the world, North America, Europe, Latin America and Asia, the largest driver of purchase intent for consumers is word of mouth in their social feeds. This makes this a perfect unique time for our industry. That’s why we are doubling down on the direct selling and e-commerce aspects of our business because it is how consumers are making their purchase decisions. We want to be the Uber for CPG as part of this new shared economy. We see it very differently of where consumers are going in the future, not just in terms of how they purchase, but also for the needs of millennials and Gen Z’ers. Everybody needs a little bit of extra income these days, and we provide that opportunity in a very low cost of entry. We’re really focused on putting reps first, and we try to make it successful for them. We really want to provide that respite for consumers. That’s why we’re seeing people joining our system worldwide in droves.
Dr. Fred Cooper: In terms of the attractiveness of this business model versus other kinds of business models, we realize that word of mouth is it in advertising. We are letting our reps know that it is more than just recruiting someone into multi-level marketing—it is about the acquisition of customers who have no intent on earning commissions but have a genuine conviction because they have had a transformational experience with those particular products. What we are going to be doing in the future is pushing this customer acquisition platform—not because of legal requirements or regulator concerns—but because we believe in the products.
Brent Willis: We’ve got more than 400,000 reps in our company now working. Joining us because we have, what we stand for, our bill of rights for reps and the condition systems that we think are the most attractive in the industry. But going forward, we’ll still build on that number of reps, but as Fred talked about, we want to build more customers.
We want hundreds of thousands of reps and hundreds of millions of consumers. —Brent Willis
This issue of DSN is focused on Innovation. Can you describe how NewAge is innovative in the industry?
Brent Willis: Innovation doesn’t come from looking at the future. Innovation comes from looking around, and Fred looked around and said, “Here are the problems I see in industry.” He went to go fix that with the Bill of Rights for reps, with a unique compensation system, with an ability to acquire and integrate companies and to drive growth. We did similar things on the NewAge site. So together, we are taking this disruptive by design model and having growth through collaboration. So, this is a winning team with a great vibe. We are looking for advance through collaboration and disruptive innovation!
Can you share your strategies and thoughts on branding and product diversity?
Brent Willis: Our branding approach is that we want to build $100 million-dollar brands and invite other scale brands to join in. As a public company, one of our greatest assets are the intangible assets on our balance sheet which comes from brand value. We focus on three omni-channel brand platforms: Health and Wellness, Inner and Outer Beauty and Nutritional Performance. We never compromise on the efficacy and quality and superior functionality of each one of our products. So, we try to be the best in what we do in terms of true functional performance. We are following consumer trends with sustainable packaging, clean ingredients and addressing fundamental human needs states. We are working toward multiple organic growth initiatives: Noni/immunity shot, TeMana Shape expansion, Noni + CBD expansion, the LUCIM skincare launch and the core brand Tahitian Noni evolution.
Dr. Fred Cooper: The bottom line is when you are going after consumers—they only care about two things. Value and that get what the pay for—conformance to specification. And fitness for use. It does what we claim it will do. No more, no less. In our industry, hyping people up on a product that doesn’t work to earn money isn’t going to work anymore. That’s got to change. So, the big passion has to be—look, try our products and see if you notice a difference. Then share your story and success. When we focus on it in this matter— that’s when the money comes.
What is the goal for the future of NewAge?
Brent Willis: Combined NewAge now has a greater global reach in our focus markets in Japan, China, Europe and the Americas. We have penetration in over 75 markets and by having a larger global footprint benefits each channel which contributes to overall growth. We also have exposure in emerging markets. We have a new office in Brazil, which is one of the largest direct selling markets, and a focus in South Africa. Through this system, we are building and driving this disruptive portfolio and disruptive route to market to enable ourselves to win and grow the business.
Is there anything else that you would like to share?
Brent Willis: We have only been working together for a couple of months, but it is so easy and symbiotic. We each have relative strength, and we are building on those strengths. We share the same view that reps come first.This isn’t about an acquisition or a merger. All of that is very paradigm language. This is about two major companies coming together because we know we can do more. We know we can do more for the leaders. We know we can take the best of everything we have and build on that and become much more disruptive and much more powerful, much stronger for the benefit of all the leaders and everybody that touches this company. We have this very good public company that we think is the best public company structure in the entire industry. Everybody can benefit from that. I feel it every day that is just so easy with this partnership between Fred and the rest of the leadership team because we’re just focused on doing whatever it takes to win. It’s just easy.
Dr. Fred Cooper: Our company has been acquiring companies, learning and getting better at this as we bring them all together.
This isn’t about we take you over—It is about you join us. This is a message of invitation. So, sit back and see if this merger isn’t everything we said it was. See if it becomes a team. -Dr. Fred Cooper
And if that’s the case, you might want to consider that you can be part of a larger organization. People will see that …I can be my brand. I can promote and take care of my field. I can monetize and be apart of a larger infrastructure. Consider joining the team because it really is all about winning and not about competing or being right. That’s what we’re trying to establish. I have been the company that’s been doing acquiring other companies, and by all means, now my company has been converted to NewAge. So, what was good for the goose has been good for the gander, and I hope people will watch that in the industry and say, “Wow, ARIIX was doing it—now it has been to them.” It will be like a moth to a flame. People will see that fire burning in us and be attracted to it.