LOS ANGELES--(BUSINESS WIRE)--Herbalife Ltd. (NYSE: HLF) (“Herbalife Nutrition” or “Company”) announced today it has created its first ever “China Growth and Impact Investment Fund” to stimulate the development of its business and accelerate growth in China and help address challenging public-policy issues such as the rise in obesity.
Funds for this new initiative were granted to Herbalife Nutrition by governments in China as part of an economic development package for its proven contribution and commitment to the continuing growth and success of the Chinese economy.
CEO Rich Goudis said, “China is instrumental in our global growth plans and to fulfill our purpose to make the world healthier and happier. We are making this significant investment in China to leverage our deep operational expertise in nutrition to accelerate growth as well as helping address some of the most pressing and challenging societal issues such as the rise in obesity.”
This China Growth and Impact Investment Fund will focus on five key areas: New Acquisitions in Health and Wellness Products and Companies; Expansion of Nutrition Clubs; Increasing and Improving Technology; Providing Additional Research, Learning and Training; and Public-Private Partnerships Focused on Eradicating Obesity.
New Acquisitions in Health and Wellness Products and Companies
To complement Herbalife Nutrition’s already extensive lineup of quality products and wellness services, Herbalife Nutrition will look to increase the Company’s footprint in China through strategic acquisitions of innovative and impactful health and wellness companies, products and services. Furthermore, as technology plays a larger role in the global health and wellness field, Herbalife Nutrition will look to acquire devices and companies in this emerging and important sector. While focused on the Chinese market, some of these acquisitions will potentially take advantage of our worldwide distribution. The Company’s vast experience in sourcing, manufacturing and distributing products and services globally will bring significant value to any synergistic acquisition.
Expansion of Nutrition Clubs
Nutrition Clubs are run by Herbalife Nutrition service providers and provide local, supportive venues for communities of like-minded people to gather and receive nutrition and fitness coaching and counseling as they work to achieve their personal health and fitness goals. Research has shown that having a supportive community leads to better results and thus the Company is planning to invest in Nutrition Clubs and expand the number of Clubs serving communities across China. To this end, funds will be made available to qualified service providers to accelerate the opening of new lower-cost Nutrition Clubs, with a specific emphasis on opening new Clubs in tier two and tier three cities where the need for this type of support is particularly acute. Furthermore, the Company plans to equip Nutrition Club operators with advanced Point Of Sale (“POS”) systems to better capture key sales data, improve the Company’s marketing capabilities and improve the efficiency, productivity and profitability for its service representatives.
Increasing and Improving Technology
The use of technology by service representatives and service providers is significant. In order to take full advantage of technological enhancements, the Company plans to make an additional investment in technology, equipping the service representatives and service providers with the latest tools so they may better serve their customers, track their services and manage their businesses. Whether it is for use in the field or in Nutrition Clubs, the acquisition of new technologies will help service representatives and service providers identify areas where their customers can improve their nutrition as well as help track and analyze their customer’s journey.
Providing Additional Research, Learning and Training
The Company will also offer service providers and employees a more enhanced and extensive training program focused on nutrition and wellness. Developed in conjunction with leading global experts in the field, the new training regimen will ensure customers receive the latest and most relevant information about how to improve their nutrition and wellness habits. Herbalife Nutrition will also offer financial incentives to service providers who meet certain learning and training thresholds.
Additionally, as Herbalife Nutrition looks to the future, the Company will seek opportunities to partner with and provide endowments to universities in China for four chairs, each to play a distinct role.
The first endowment will be in the field of direct sales. Although more than 100 million people are engaged in direct sales around the globe, there is limited high-level and on-going research about the industry. As a global leader in direct sales, the Company is constantly seeking ways to evolve the industry and ensure direct sales companies are utilizing industry best practices. It is anticipated this endowment will fund research at one of China’s most prestigious universities to ensure both companies as well as the government have access to relevant, useful and most of all credible information.
Research about quality in sourcing raw materials and manufacturing will be conducted at yet another leading university in China for the second endowed chair. With a focus on food and nutritional supplements, this endowed chair will be of significant value to not only the nutrition industry, but to the entire industry responsible for feeding and ensuring the people of China have access to quality nutrition products.
As a premier nutrition company, it is critical for Herbalife Nutrition to support research into health and wellness and therefore the Company is planning on providing funds to a university for this purpose. The information derived from this research will be made available to the general public thereby benefiting the people of China.
The final endowment being planned will conduct research into the best ways to combat the growing epidemic of obesity. This endowed chair, in conjunction with the Company’s creation of a public-private partnership in this area, will aid governments and other organizations that are focused on putting an end to generations being overweight or obese.
The Company also continues to invest in its employees in this important market, which was named a Great Place to Work in China. The Company plans on enhancing its opportunities for employees by offering a variety of experiential learning opportunities including rotational assignments, customized coaching and leadership development programs and opportunities for global advancement. The Company also anticipates introducing new technologies to further support learning development.
Public-Private Partnership Focused on Eradicating Obesity
Obesity has become one of the world’s most dire issues. According to the World Health Organization, in 2016, globally more than 1.9 billion adults (25% of the population) were overweight while 650 million adults (10% of the population) were obese. Rates amongst children are also at alarming levels with 41 million preschool children overweight. Additionally, approximately 2.8 million people die each year as a result of being overweight or obese. And unfortunately the problem is only growing as the prevalence of obesity nearly tripled from 1975 to 2016.
This epidemic, unfortunately, has not bypassed China and the government is addressing these issues head on in part with the approval of the Healthy China 2030 plan by China’s Central Committee. President Xi Jinping has made the promotion of health a top priority for the government and is making great progress. The Company supports this mission and believes everyone has a role to play.
The Company plans to fund a series of public-private partnerships at the local and regional levels that will focus on best practices to end obesity. The learnings from these programs will help policy-makers, thought leaders and families make better decisions in an effort to initially curb and ultimately to eradicate obesity.
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About Herbalife Nutrition
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 & 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. We offer 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.
Our targeted nutrition, weight-management, energy and fitness and personal care products are available exclusively to and through dedicated Herbalife Nutrition distributors in more than 90 countries.
Through its corporate social responsibility efforts, Herbalife Nutrition supports the Herbalife Family Foundation (HFF) and its Casa Herbalife programs to help bring good nutrition to children in need. The Company is also proud to sponsor more than 190 world-class athletes, teams and events around the globe, including Cristiano Ronaldo, the LA Galaxy, and numerous Olympic teams.
The company has over 8,000 employees worldwide, and its shares are traded on the New York Stock Exchange (NYSE: HLF) with net sales of approximately $4.5 billion in 2016. To learn more, visit Herbalife.com or IAmHerbalife.com.
The company also encourages investors to visit its investor relations website at ir.herbalife.com as financial and other information is updated and new information is posted.
This release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following:
- our relationship with, and our ability to influence the actions of, our Members;
- improper action by our employees or Members in violation of applicable law;
- adverse publicity associated with our products or network marketing organization, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;
- changing consumer preferences and demands;
- the competitive nature of our business;
- regulatory matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of our products and network marketing program, including the direct selling markets in which we operate;
- legal challenges to our network marketing program;
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- risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, disruptions or conflicts with our third party importers, pricing and currency devaluation risks, especially in countries such as Venezuela;
- uncertainties relating to interpretation and enforcement of legislation in China governing direct selling and anti-pyramiding;
- our inability to obtain the necessary licenses to expand our direct selling business in China;
- adverse changes in the Chinese economy;
- our dependence on increased penetration of existing markets;
- any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, and cyber-security incidents;
- contractual limitations on our ability to expand our business; our reliance on our information technology infrastructure and outside manufacturers;
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- product concentration;
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- restrictions imposed by covenants in our credit facility;
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- taxation relating to our Members;
- product liability claims;
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- whether we will purchase any of our shares in the open markets or otherwise; and
- share price volatility related to, among other things, speculative trading and certain traders shorting our common shares
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