Herbalife

Definition

Herbalife is a US company that sells weight loss, weight management, personal care, health, food/dietary, and nutritional supplement products. Named Herbalife International since 1980, the company announced in February 2018 that it was changing its name to Herbalife Nutrition Ltd. The company uses network marketing, also called multi-level marketing, which is a type of marketing plan that uses direct marketing along with franchisers and/or independent contractors. The company describes itself as follows: “Herbalife Nutrition is a global nutrition company whose purpose is to make the world healthier and happier. The Company has been on a mission for nutrition—changing people's lives with great nutrition products and programs since 1980. Together with our Herbalife Nutrition independent distributors, we are committed to providing solutions to the worldwide problems of poor nutrition and obesity, an aging population, skyrocketing public healthcare costs, and a rise in entrepreneurs of all ages. Herbalife Nutrition offers high-quality, science-backed products, most of which are produced in company-operated facilities, one-on-one coaching with an Herbalife Nutrition independent distributor, and a supportive community approach that inspires customers to embrace a healthier, more active lifestyle.”

Herbalife is headquartered in Los Angeles, California, with more than 8,000 employees worldwide. The company is part of the nutrition and skin care products industry. It sells a wide range of herbal, botanical, and other health-based products in 90 countries, and had annual net sales of $4.5 billion in 2016. More than 2.3 million (qualified and unqualified) independent distributors are associated with the company.

Purpose

According to information contained on the Herbalife website, the company sells its products to consumers so they can manage and control their weight, add nutritional supplements to their diets, and provide personal care items to their daily body regimen. Weight management and weight loss products include protein snacks, enhancers for energy support, enhancers for appetite support, and enhancers for digestive support. Nutritional supplements sold by the company include herbs, minerals, and vitamins. Some of its nutritional supplements are for specific body parts such as the heart and digestive system, and/or for certain physical and mental conditions such as stress, energy/fitness, and aging. Its personal care products emphasize nutritional and herbal ingredients such as aloe vera and vitamin C and include skin essentials and skin revitalizers, anti-aging treatments, body essentials, hair essentials, and fragrances.

The Herbalife mission, according to its website, is to “change people's lives by providing the best business opportunity in direct selling and the best nutrition and weight management products in the world.” The company states that it provides safe weight control products that supplement a balanced low-calorie diet and a regular exercise program. Its weight management and nutritional products use macronutrient and micronutrient food formulas. Macronutrients include carbohydrates, fats, and proteins, which together provide most of the energy needed by humans. Micronutrients are essential elements (minerals and vitamins) that are needed in minute quantities for a healthy body and include chromium, cobalt, copper, iron, manganese, molybdenum, selenium, and zinc.

As part of its advertising and marketing strategy, Herbalife relies on testimonials from health professionals. Customer testimonials also appear on the company's website.

Description

Within two years, the company had grown to over two million dollars in sales through its distributorships in the United States and its sole distributor in Canada. Vehicles all over the United States were seen with the company's slogan: “Lose weight now, ask me how!” At that time, the Herbalife plan recommended only one meal each day, which was supplemented with protein powders and nutritional pills.

By 1985, Herbalife was listed on INC magazine's list of fastest growing private companies. Its five-year profits from 1980 to 1985 went from $386,000 to $423 million. More than 700,000 distributors in the United States, Canada, the United Kingdom, and Australia had total gross sales of about $500 million.

In 1994, Hughes started the Herbalife Family Foundation to help children worldwide. In 1996, Herbalife reached one billion dollars in sales. Four years later, Hughes died from an overdose of alcohol and doxepin (a psychoactive drug with antidepressant and anti-anxiety properties).

Precautions

Historically, there has been controversy about Herbalife due to the way the company operates its business. This controversy has concerned potentially dangerous ingredients in some products, perceived inaccurate marketing claims, and unconventional distribution methods. Company supporters stress that Herbalife is a profitable and reputable business that is a member of the New York Stock Exchange (NYSE). Critics state that the company is run like a pyramid scheme, that its independent distributors use improper marketing methods, and that the company has poor organization and management of distributors.

Some of the early products sold by Herbalife contained ma huang (Ephedra sinica). The herb contained ephedrine (EPH), which is one of the active ingredients in the plant genus Ephedra. Ephedrine was used widely as an appetite suppressant, asthma and hay fever aid, decongestant and cold reliever, and hypotension treatment. Eventually, Herbalife eliminated ephedrine after consumers complained of adverse reactions and its insurance premiums increased. The U.S. Food and Drug Administration (FDA) banned the sale of all ephedra-containing supplements beginning on April 12, 2004.

QUESTIONS TO ASK YOUR DOCTOR

In 1981, the FDA began receiving complaints from Herbalife consumers with symptoms of constipation, diarrhea, headaches, and nausea from various products. Initially, Herbalife officials told distributors to tell customers that such symptoms were the result of the removal of poisons and toxins from the body by their products. The FDA acted against Herbalife in 1982 for making claims that its Herbal-Aloe drink helped to treat bowel, kidney, and stomach ulcers, and that its Herbalife Formula-2 should be used to treat bursitis, cancer, herpes, and impotence. Consequently, the FDA required the company to eliminate the ingredients of mandrake and poke.

The Canadian Department of Justice filed numerous criminal charges against Herbalife for false medical claims and misleading advertising practices in 1984. The California Department of Health, California Attorney General, and FDA brought a civil lawsuit against the company in 1985. The company was charged with misleading consumers, making improper product claims, and operating an illegal “endless-chain” scheme. Herbalife reached an out-ofcourt settlement by paying $850,000 in costs, fees, and penalties.

In 1986, Herbalife expanded into other countries, including Israel, Japan, Mexico, and New Zealand, after U.S. and Canadian sales declined due to negative news stories. To raise cash, the company merged with a Utah-based public company and called itself Herbalife International.

https://www.fda.gov/aboutfda/centersoffices/officeoffoods/cfsan/cfsanfoiaelectronicreadingroom/default.htm .

The U.S. Food and Drug Administration (FDA) has issued more than 20 warning letters to Herbalife regarding inappropriate marketing and health claims.

The company was also cited by the U.S. Securities and Exchange Commission (SEC) for numerous violations involving its business practices. Herbalife officials promised to fix their managerial problems. In 2006, the company reported to the SEC that it annually requalified distributors as a way to better manage its independent contractors, but Herbalife did not rectify its marketing and organizational problems sufficiently. In 2016, the U.S. FTC ordered Herbalife to fully restructure their U.S. business operations and pay $200 million to settle FTC charges that the companies deceived consumers into believing they could earn substantial money selling Herbalife products. The $200 million was to be distributed to compensate consumers for losses from what the FTC considered unfair and deceptive business practices. The restructuring required Herbalife to differentiate between those who joined to buy products at a discount and those who joined for the company's business opportunity. Multi-level compensation would now have to be based on retail sales that were tracked and verified, rather than distributor personal purchases. The FTC order also required that Herbalife pay for an independent compliance auditor (ICA) to monitor adherence to FTC order provisions requiring restructuring of the compensation plan; the ICA would be active for seven years and report to the FTC.

Complications

Herbalife, as many other companies, sells products that do not require FDA regulatory approval before marketing. The FDA, under the Department of Health and Human Services, is responsible for the regulation of foods, drugs, dietary supplements, biological medical products, blood products, medical devices, radiation-emitting devices, veterinary products, and cosmetics. With respect to dietary supplements, the FDA, under the Dietary Supplement Health and Education Act of 1994, can only take action against manufacturers if their dietary supplements are proven unsafe. Manufacturers can legally claim their products have health benefits; however, they cannot claim these products diagnose, treat, cure, or prevent disease.

Interactions

Since 2007, reports of liver complications (e.g., acute liver failure) from some Herbalife supplements have been published in medical journals. Although Herbalife-affiliated researchers have published rebuttals, the safety of certain herbs used in some Herbalife and other brands of herbal supplements remained in question, especially when used in combination with other herbs or prescribed medications.

Some medical conditions may be adversely affected by unregulated products. Even though a product is advertised as being natural, this does not mean it is necessarily safe to use. Also, since nutritional supplements are not regulated by the FDA, dosage inconsistencies may occur within products.

KEY TERMS
Botanical—
Relating to plants.
Doxepin—
A psychoactive drug used to treat depression and anxiety.
Macronutrient—
Any carbohydrate, fat, or protein.
Micronutrient—
Essential elements needed for human life such as minerals and vitamins.
Pyramid scheme—
A fraudulent act in which perpetrator(s) recruit other people to pay money to those above them in a structured hierarchy with the expectation that they will get a portion of that money.

Parental concerns

Herbalife sponsors many sporting events that are especially attractive to children and young adults. For instance, the company is a regular sponsor or nutritional advisor for amateur and professional beach volleyball, tennis, soccer, bicycling races, and triathlons. Parents need to be especially concerned that children do not think that Herbalife products are safe to use based solely on sponsorship in such events.

Before parents give children any unregulated FDA products such as nutritional supplements, whether it be from Herbalife or any other company, they should consult their family doctor due to the potential for interaction with prescribed medications and dangerous side effects. Because Herbalife and similar products are not required to obtain FDA marketing approval, they also are not required to perform research on the safety or effectiveness of such products. Only products under FDA regulation are required by their manufacturers to perform such activities.

See also Diet drugs ; Ephedra .

Resources

BOOKS

Hendler, Sheldon, and David Rorvik. PDR for Nutritional Supplements. 2nd ed. Montvale, NJ: Physician's Desk Reference, 2009.

Skidmore-Roth, Linda. Mosby's Handbook of Herbs and Natural Supplements. 4th ed. St. Louis, MO: Mosby, 2012.

Talbott, Shawn M. The Health Professional's Guide to Dietary Supplements. Philadelphia, PA: Lippincott Williams and Wilkins, 2007.

PERIODICALS

Appelhans, Kristy, Casey Smith, Ezra Bejar, et al. “Revisiting Acute Liver Injury Associated with Herbalife Products.” World Journal of Hepatology 3, no. 10 (October 27, 2011): 275–77.

Stickel, Felix, and Daniel Shouval. “Hepatotoxicity of Herbal and Dietary Supplements: An Update.” Archives of Toxicology 89, no. 6 (February 2015): 851–65.

WEBSITES

Federal Trade Commission. “Herbalife Will Restructure Its Multi-Level Marketing Operations and Pay $200 Milion For Consumer Redress to Settle FTC Charges.” FTC.gov . https://www.ftc.gov/news-events/pressreleases/2016/07/herbalife-will-restructure-its-multilevel-marketing-operations (accessed May 18, 2018).

Herbalife. “About Herbalife.” Herbalife.com . http://www.herbalife.com (accessed May 18, 2018)

ORGANIZATIONS

Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., HFS-009, College Park, MD, 20740-3835, (888) 723-3366, https://www.fda.gov .

Food and Nutrition Information Center, National Agricultural Library, 10301 Baltimore Ave., Beltsville, MD, 20705, (301) 504-5755, Fax: (301) 504-7042, fnic@ars. usda.gov, https://www.nal.usda.gov/fnic .

Office of Dietary Supplements, National Institutes of Health, 6100 Executive Blvd., Rm. 3B01, MSC 7517, Bethesda, MD, 20892-7517, (301) 435-2920, Fax: (301) 480-1845, ods@nih.gov, https://ods.od.nih.gov .

William Arthur Atkins
Revised by Jennifer E. Van Pelt, MA

  This information is not a tool for self-diagnosis or a substitute for professional care.