USANA pursues measured growth strategy with entry into Colombia
USANA ranked 17th globally among all direct selling companies in 2011 with $582 million in sales, according to Direct Selling News.
According to a report from the World Federation of Direct Selling Associations, there were 1.2 million direct sellers in Colombia in 2011, with total retail sales of $2.06 billion. Colombia is the fourth leading market in Latin and South America and 16th largest overall direct sales market. Euromonitor International, a world leader in researching consumer markets, forecasts consistent growth in Colombia for years to come. Direct Selling News ranked Brazil and Mexico as the top two direct selling markets in Latin America, with sales in 2011 of $10.8 billion and $5.7 billon respectively.
USANA has a wide product range, but has a special emphasis on sports nutrition products, and pursues a strategy of marketing through sponsorships of high-profile athletes.
Dan Macuga, chief communications officer for USANA, sat down with NutraIngredinets-USA to talk about the company’s measured growth strategy, which he said is unusual in the direct marketing business.
Q:When USANA enters a new country, what does the market development look like?
A: New international development relies on the utilization of each department throughout USANA. A 150-page document is compiled for each market before making a decision to open. Data gathered includes entity establishment, product registrations, compensation plan review, localization of marketing materials, online tools development, banking and payment arrangements, office and will-call procurement, 3PL and hire staff.
After new development is finalized, distributor leaders from other countries join the corporate development team in marketing and growing the new country. Focus is placed on growth through sales and one-on-one meetings.
USANA’s primary goal is consistency in each country. Even with each country’s own set of regulations and cultural protocol, USANA sticks to its core products, brand and messaging. However, there are times when adjustments are made—such as utilizing different smells, labels, or images—depending on which part of the world USANA is operating. But consumers seek after what a company is best at producing, so USANA stays true to its primary mission in every country it serves.
In regards to increased growth, USANA keeps its international expansion minimal. After 20 years of business, USANA appears in only 19 markets, which is rare in the direct sales industry. Instead, USANA strives to provide each market the resources they need to be successful instead of opening several markets each year. (Ed note: By way of comparison, Herbalife, which has been in business 12 years longer than USANA, now operates in 88 countries.)
Q: Why is South America especially good for network marketing?
A: Typically, South Americans are good communicators, which lends itself well into network marketing since most business is based upon establishing relationships and building teams. South Americans are also able to create strong bonds while working in a team environment due to their solid social skills.
The strong Associate connections to the country and the huge opportunity for growth and impact make Colombia a perfect choice for USANA. It is one of the largest Spanish-speaking countries in the world and the third-largest economy in South America.
In addition, Colombia is a strong direct selling country.
Q: Was Colombia’s recent more stable political situation a factor in your decision?
A: Colombia is more politically stable today than it was ten years ago, but that was a minor factor in deciding to open that market. Bigger factors played into the decision, such as Colombia’s success in direct selling, USANA’s distributor leaders’ strong connections to the country, and Colombia’s favorable 5-10 year projected growth trends.
Q: How is the market for sports nutrition / active lifestyle products different in Colombia as opposed to the US? Do you expect the product mix to be different in Colombia than it is in the US, and if so, how?
A: Each market differs, but USANA sells a similar amount of each product in every country around the world. At times, one country may sell more of a specific product than another. Market trends are analyzed to determine which products will sell better in a certain area of the world and focus is placed on these products when that market opens. Research indicates Colombia will do well with the nutritional products that have been selected for promotion in that country.
According to Euromonitor International, sports nutrition saw 17% current value growth in 2011. In just 2009, these products became legally approved for sale in Colombia. Even though it took a couple of years for sales to increase, consumers are now becoming more aware of their presence and the ability to buy them in legal retail channels. The rise of sales will continue as there is an increasing appeal of sports nutrition and amateur athletes in the country.
