MonaVie
MonaVie is a defunct, American multi-level marketing company that manufactured and distributed products made from blended fruit juice concentrates, powders, and purées. The company was the subject of several controversies. Health claims for its products had not been scientifically confirmed or approved by regulatory authorities, and its chairman had been previously involved in false health claims concerning another beverage company. According to Forbes, MonaVie's business plan resembled a pyramid scheme. In 2015, the company defaulted on a US$182 million loan and went into foreclosure. Florida-based Jeunesse Global took over MonaVie’s assets when it purchased the note for $15 million.
Company overview
Dallin Larsen, who held senior executive positions with the multi-level marketing companies Dynamic Essentials and USANA, founded Monarch Health Sciences in 2003 as a distributor of diet and weight loss supplements. Monarch Health Sciences launched MonaVie juice in January 2005, and the same year founded MonaVie LLC/MonaVie Inc., a privately held multi-level marketing company based in South Jordan, Utah. The newly formed company took over the bottling, distribution, and marketing of MonaVie juice products. MonaVie also owned and operated a charity organization, The MORE Project.MonaVie products were sold by non-employee distributors who were eligible to receive commissions based on product sales. Individual distributors were encouraged to build their own sales networks by recruiting new distributors to sell the products ; the recruiter could have, in theory, received additional commissions based on sales by their downlines.
Products
MonaVie produced a variety of blended bottled fruit juices, carbonated energy drinks, dietary supplements and dieting products. MonaVie Kosher, one of the company's juice products, was certified as kosher according to Jewish dietary laws by the Orthodox Union of North America and the Chief Rabbinate of Israel.Product research and physiological context
An analysis conducted by contract laboratory ChromaDex indicated that MonaVie contained low levels of antioxidant vitamin C and of phytochemicals such as anthocyanins and phenolics associated with antioxidant activity in test tubes.MonaVie promoted that the juice had key polyphenol antioxidants from açai and other fruits in the blend; however, there is no physiological evidence that any fruit polyphenols have such actions in humans or that oxygen radical absorbance capacity has any relevance in the human body. Research shows that although polyphenols are good antioxidants in vitro, antioxidant effects in vivo are probably negligible or absent. As interpreted by the United States Food and Drug Administration, Linus Pauling Institute and European Food Safety Authority, dietary polyphenols have little or no direct antioxidant food value after digestion. Unlike controlled test tube conditions, most polyphenols are not absorbed following digestion, and what is absorbed is metabolized and excreted.
Interactions and adverse effects
A clinical case report showed an association between MonaVie ingestion throughout pregnancy and prenatal closure of the ductus arteriosus resulting in cardiac hypertrophy and dysfunction at birth. Another case report noted that MonaVie Active may cause fluctuations in blood clotting in patients treated with warfarin or other coumadin blood thinners, and it was recommended that this combination should be avoided.Distributor earnings
Around 14% of distributors made a profit, according to MonaVie Executive VP Henry Marsh quoted from a 2009 Deseret News article. A Newsweek article, reporting on MonaVie's 2007 Income disclosure statement, stated "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 were mostly discounts on sales to themselves. According to a top recruiter, the dropout rate in 2008 was around 70%. An article published in the Hartford Courant reported 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; roughly 2% earned an annualized average check of more than $29,000, and just 7 out of 80,000 distributors took home more than $3 million, according to MonaVie's 2008 Income Disclosure statement. According to a 2011 article in The Salt Lake Tribune, 85% of MonaVie's distributors earned commission checks in 2009 averaging $35 a week or less, while the company's top seven distributors earned an average of $3.4 million a year.Criticism
Nutritional value
Physician Andrew Weil and nutritionist Jonny Bowden claimed that the nutritional and health benefits of MonaVie juice were unproven and that the product was overpriced relative to more cost-effective conventional polyphenol-rich foods. Weil and Bowden also criticized the product for being sold through multi-level marketing. A Men’s Journal nutritional analysis showed that MonaVie Active juice "tested extremely low in anthocyanins and phenolics" and that "even apple juice has more phenolics". The report also noted that "MonaVie’s vitamin C level was 5 times lower than that of Welch’s Grape Juice", a product priced at a fraction of the cost of MonaVie for the same serving volume. Ralph Carson, the original developer of MonaVie and the company’s chief science officer cautioned that the juice was "expensive flavored water" and that “any claims made are purely hypothetical, unsubstantiated and, quite frankly, bogus." Carson added that he did not know how much açai was in the product.Misleading advertising and health claims
Bowden, Newsweek correspondent Tony Dokoupil, Palm Beach Post reporter Carolyn Susman, and Salt Lake City Tribune correspondent Tom Harvey 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. Harvey also stated that MonaVie's rise, based on odds "stacked against low-level distributors who poured in the billions of dollars that fueled the company's spectacular growth," raised questions about the foundations of other companies in Utah's nutritional supplement industry. In 2007, the US Food and Drug Administration issued an FDA Warning Letter to MonaVie distributor Kevin Vokes, for violations of the Federal Food, Drug and Cosmetic Act relating to online promotional material claiming that MonaVie was an effective treatment for inflammation, high cholesterol, and muscle and joint pain. The FDA considered the issue resolved after therapeutic claims on the offending website were scaled down. In a 2008 Forbes magazine article, reporters Emily Lambert and Klaus Kneale described MonaVie as a pyramid scheme, referencing a video testimonial by distributor Louis "Lou" B. Niles that implied the product could cure cancer.Company executives had repeatedly acknowledged ongoing problems with MonaVie distributors making unlawful claims that the juice can treat and prevent diseases. In a 2008 Newsweek article, CEO Dallin Larsen stated that "his sales team can get him in hot water with the Feds", and that it was "next to impossible" for the company to investigate distributors suspected of making false claims. Later in 2008, the company issued a statement acknowledging that many of its distributors, "perhaps unwittingly", violated its advertising policies. In a 2009 Bloomberg News article, MonaVie executive vice-president and cofounder Randy Larsen stated that "the company is struggling with independent distributors who promote the juice as a miracle drug."