MonaVie, Dallin Larsen Hit with Negative Press

by louabbott on December 13, 2011

The headline from the Salt Lake Tribune’s Tom Harvey, first published Dec 10 2011 and then updated Dec 12, 2011 reads…

“Utah juice companies offer few prospects”

The tone of the article quickly paints MonaVie in a negative light. Notice the use of the past tense for MonaVie’s successes:

The once-surging Utah-based seller of a blend of fruit juices, MonaVie LLC, is rebranding itself to the world as “MonaVie Community Commerce: The No. 1 Business Opportunity.”

The new slogan is the South Jordan company’s effort to stir up some of the passions and sales that sprung up after its debut almost eight years ago, when it built a cult-like following and generated billions of dollars with a concoction of juices formulated around the supposed healthy attributes of the açai fruit from the Amazon jungle.

Unfortunate for the industry overall, the article also points out some of the biggest problems that have plagued the industry from the beginning – (bold is by me)

The history of the rise of MonaVie also reveals a spotted record of exaggerated claims of relief from serious illnesses and questionable claims of nutritional values, as well as odds clearly stacked against low-level distributors who poured in the billions of dollars that fueled the company’s spectacular growth. MonaVie’s story also raises questions about the foundations on which other companies in that thriving segment of Utah’s multibillion-dollar nutritional supplement industry were built.

Also of interest, the article gives an overview of founder and CEO Dallin Larsen’s career which includes previous run ins with the FDA:

In 2001, Larsen became vice president of sales for Dynamic Essentials in Lake Mary, Fla., which sold a fruit juice called Royal Tongan Limu, where he claimed to have increased revenue 300 percent.

But in 2002, during Larsen’s tenure, the federal Food and Drug Administration issued a letter to Dynamic Essentials warning that claims on the company’s website that the juice could “treat various diseases such as cancer, arthritis, and attention deficit disorder” were in violation of federal law. Dynamic Essentials sometime after that ceased operation. In October 2003, the FDA said it witnessed the voluntary destruction of 90,000 bottles of Royal Tongan Limu.

Larsen left Dynamic Essentials in February 2003.

The Brigham Young University grad returned to Utah for his next venture. Monarch Health Sciences was registered in the state in August 2003 with a focus on weight-loss products, listing Larsen as co-founder, along with Henry Marsh, the former Olympic track and field athlete, and others.

Here some of the other points made in the article that, if true, illustrate practices that have created ill will:

Early on Monarch, which in 2005 became MonaVie, began using millions of dollars of incentives to lure away successful distributors from other MLMs in order to rapidly build its own business.

One of those was Brig Hart, a Bible verse-spouting reborn Christian from Florida, who came to Monarch after holding a highly successful top-level position at Amway, the original multilevel marketer, before he had a falling out with the company. Another was former top Amway distributor Orrin Woodward, who received a $3 million loan from Monavie he didn’t have to repay if he met certain recruiting distributor goals, according to a lawsuit Amway filed against MonaVie in 2008 that was settled last year. A lawsuit by nutritional juice company Tahitian Noni said one of its distributors also was offered more than $3 million to join MonaVie.

While any company in any kind of business certainly has the right to pay any kind of incentives that they would like to recruit top talent, it creates a unique problem in the network marketing industry as pointed out in the article:

…payments to lure in top-level distributors also illustrate the company’s practice of providing capital to help certain distributors, while telling new ones they can prosper with little investment.

Other comments of interest:

Hart said in an interview earlier this year that when he approached Monarch he found a company “merchandising substandard weight-loss products” but in time was able to convince its officers to emphasize the açai juice. Soon after MonaVie was launched in early 2005 with its signature juice, Hart and others started making claims that there was evidence it could relieve various conditions and diseases, including cancer.

At one meeting, top-level distributor Jason Lyons said that MonaVie was “helping people with arthritis, diabetes, cholesterol, high blood pressure, aches and pains, energy levels, sleeping, just numerous ailments out there,” according to transcripts that are part of the Amway lawsuit.

The suit also uncovered an internal MonaVie memo by Ralph Carson, the company’s chief science officer, who created the original juice. The memo was in response to raised eyebrows about claims being made about the juice. Carson cautioned that the drink was “expensive flavored water. Any claims made are purely hypothetical, unsubstantiated and, quite frankly, bogus,” according to a court transcript that quoted an Amway attorney. That attorney also read from a portion of a transcript of a deposition in which another attorney questioned Carson:

“You have indicated, as I understood it, during your deposition today, that you never understood or knew the contents of MonaVie’s drink. Is that correct?”

Answer: “Completely correct.”

“When you say completely, what do you mean by that?”

Answer: “If you were to ask me how much açai is in the product, I do not know.”

After citing a number of rather dismal income statistics for MonaVie, Xango, and Tahitian Noni, the article quotes Brig Hart again (bold, in disgust, is mine):

Top-level MonaVie distributor Hart freely admitted in an interview earlier this year that the MLM business was about constantly attracting new people.

“I have nothing to lose or gain in telling the truth. I love this industry,” Hart said. “But our industry is all about sponsoring them faster than they quit. So you have to put them in faster than they get out.”

Gee, all along I thought our industry was about a better way to move great products and services that we really believe in to end consumers in such a way as to provide a real opportunity for the average person to make additional profit.

My opinion? Network Marketing done well is an absolutely beautiful concept and business. Unfortunately, “done well” is relatively rare, IMHO. The 12 Critical Success Factors in my book and course would successfully have excluded most of the companies that experience some of the biggest complaints like those in this SL Tribune article.

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{ 12 comments… read them below or add one }

Rosemarie March 8, 2013 at 4:09 am Thumb up 0 Thumb down 0

These three chemical compounds are the polyphenols that make the Turmeric spice orange-yellow in color.
‘ Another, not quite so old, states that ‘Insanity is repeating
the same actions and expecting different results. It is an organic antibacterial and antiseptic agent,
helpful in sterilizing burns and cuts.

Reply

Nate January 14, 2012 at 9:37 am Thumb up 0 Thumb down 0

Great post… It’s time that people should have a broader sense of what MLM really is and not just a mere way of getting fast income. . .

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Michael Bowman December 14, 2011 at 6:39 pm Thumb up 1 Thumb down 0

Network Marketing is similar to politics; people get into it usually for the right reasons but over time start making compromises based on greed. They overlook the fact that the product is over-priced or that it really doesn’t work and sell the opportunity.

Oftentimes the “opportunity” revolves around some mega star like Mr. Hart. They point out how fast he made it, how easy it is if you just go to work, etc. You’re right Lou, it is every company’s right to “buy” talent and downlines. What’s wrong is if that person is pointed out as a role model for how easy it is to make money with our system, product, etc.

It wasn’t long ago that another “juice” company faced a similar problem in that the lead chief science officer had no clue how much of the “magic fruit” was in the drink.

I think that there are ethical companies, solid products and real people that care about others in our industry, unfortunately it just takes one or two stories like this a year to really put a negative spin on our industry.

People like you Lou are taking our industry to a professional level and for that I thank you. Keep it up! Together, all of us, can turn this industry into a recognized profession that people will be very proud to represent.

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Anil singh December 14, 2011 at 2:09 am Thumb up 0 Thumb down 0

Thanks for news of Monavie.

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Alan Eames December 14, 2011 at 12:27 am Thumb up 0 Thumb down 0

Hi Lou,
Good article! Thanks for sharing this with us.
This article is a perfect illustration of why people should get and study your course on MLM-The Whole Truth.
Keep on telling it like it is!
Best,
Alan

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Scott Caldwell December 13, 2011 at 8:44 pm Thumb up 0 Thumb down 1

Ugh, it’s a shame to see anyone in our industry portrayed in a negative light. And especially one that was in the Top 20 in size according to Direct Selling News this year.

The inherent problem with any juice or nutritional company is that people get excited and over-state the product’s benefits. Add in a healthy dose of “placebo effect” and it can propogate pretty fast. MonaVie’s done a lot right, including their MORE Project charity, it’s a shame to see them get a black eye like this.

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Mitch Mundy December 13, 2011 at 7:08 pm Thumb up 0 Thumb down 0

Hello Lou,

I,m glad to see you back in the game again! This reminds of a quote I once heard…It goes like this!
“Integrity, is the essence of everything successful…It carries you forward in the business world. It’s as simple as keeping your word or, in some cases, remembering what your words were. It seems that, for some people, simple isn’t always easy!”

Thanks Lou,
For everything you do my friend!

Mitch

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andries johannesen December 13, 2011 at 4:08 pm Thumb up 1 Thumb down 1

Yes these problems with Monavie give MLM a bad name. MLM works and there are many good companies with real products that are sustainable. We need less Hype and more transparency and ethical standards where people are not paid millions up front to join a company without that being openly disclosed. Let’s make MLM a profession we can all be proud of.

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Maggie Kress December 13, 2011 at 3:22 pm Thumb up 1 Thumb down 0

Lou, it is good to see you back mentoring us on MLM companies or Network Marketing.
Lou, it is sad to know that many companies are in it just to make a mega amount of money. I know money is important but I think more important than that is character and honesty. As this article reveals, they really do not care about their clients or customers but just how much money they can make. They do not care that they make promises that they know can never be met. Their only focus is on themselves.

I agree that the industry is a great concept if the leaders are being truthful and representing a true product. I am in three different companies. I do not promote them until I feel what I am promoting is complete honesty. I use the products and must see the value for others before promoting. I know I will never be a big earner but that does not matte to me. Integrity is worth more than money. All three of my companies are completely different and compliment one another. I am honest with the people I talk with because I tell them how the products are helpful to me. Sharing is the best way to build a downline. I feel completely responsible to the people I talk with. Some are customes and some decided to join the company. I must see value or I cannot promote.

I realize this is not the way top producer operate but it is my simple way. I am satisfied with my companies and are not looking at anymore.

Lou, thanks for letting me post how I see Network Marketing. We represent the company and ourselves. Helping and Sharing with others is my way.

God Bless
Maggie Kress

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Tracy King December 13, 2011 at 2:54 pm Thumb up 1 Thumb down 2

I have done so much research on MLM companies and according to Melaleuca, the #2 “exotic” fruit juice with the best ORAC and most health benefits was Welch’s grape juice. How sad a commentary on the entire juice industry that it is ALL a fraud. The biggest misconception is about anti-oxidants in general… they are useless unless activated by redox signaling molecules … if you have the real thing, you can let the product speak for itself and let people discover on their own what the product can do for them …Legacy companies can afford to be patient and to let true word-of-mouth advertising take hold. It’s still a GREAT industry, you just have to be choosy and do your homework.

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Tony Rush December 13, 2011 at 1:42 pm Thumb up 4 Thumb down 1

A quote comes to mind. It’s from Oliver Wendell Holmes:

“Truth is tough. It will not break, like a bubble, at a touch; nay, you may kick it about all day like a football, and it will be round and full at evening.”

While I think it’s obvious that this newspaper article started off with a negative sentiment toward Monavie……it looks to me like it’s warranted, doesn’t it?

For instance, the newspaper may have been completely unbiased when they started their research and — on finding out what is revealed in the article — they chose to write an article that simply portrays Monavie and its leaders for what they are: a company that sells an over-priced product based on pseudo-science. And which has built its own company by attacking others.

These fruit juices are largely a fraud. I’ve often joked with my own friends in the industry that if I wanted to ever make the “really big money” all we need to do is to bottle up some Florida orange juice for $40 a bottle and then start an MLM in an area of the world where an “orange” is considered an exotic fruit.

The truth is that this article — at least the product part of it — could have been written about any number of juice/nutritional companies.

So, again Oliver Wendell Holmes’ quote comes to mind and it begs the question:

What’s the problem with this article? That someone actually said it out loud? Or that our industry has been overrun by pseudo-scientific products that do little except a.) produce anecdotes and b.) separate people from their money?

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louabbott December 13, 2011 at 1:49 pm Thumb up 0 Thumb down 0

Thanks, Tony, for your the great Holmes quote and your post.

Reply

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