XANGO

•   Founded: 2002
•   Headquarters: Lehi, Utah
•   Executives: Founder, Chairman and CEO

  Aaron Garrity; Founders and Board Members Gary Hollister, Joe Morton, Gordon Morton, Kent Wood and Bryan Davis

•   Products: Nutrition and wellness based on the mangosteen

   

  As a music lover, XANGO® Founder and Board Member Gordon Morton gets a big kick out of the fact that his company has lasted longer than the Beatles were together. And while he and his fellow founders are grateful for their company’s success in its first 10 years, they’re hoping to incite a Beatles-like frenzy in the next decade. Guided by Founder, Chairman and CEO Aaron Garrity’s vision, they’ve already challenged distributors to double XANGO’s size by the end of next year.

  XANGO’s fab six—Gordon, his brother Joe, and friends Garrity, Gary Hollister, Kent Wood and Bryan Davis—launched the mangosteen juice category creator in 2002. But it was a tough time to start a new company. There were already plenty of other “juice” companies. The dot-com crash was crushing the economy. And investors were a tough sell. Garrity says that XANGO started “with nothing but the idea, our friendship and our dreams.”

Their dreams were so vivid that the founders suffered through a nightmarish first month to create a company with one of the most recognizable brands and personalities in the industry. They simultaneously launched the company, endured a trademark battle, and then struggled through dock strikes and resulting air cargo rate hikes. In the process, their first shipment of mangosteens spoiled. But distributors and orders were rolling in, so failure wasn’t an option. Running on adrenaline, the founders powered through the problems. They closed a new round of financing, re-harvested in two days, chartered a plane and flew in a new shipment of mangosteens. The result: They fulfilled every order on time. It was the first of a decade’s worth of promises kept.

Enduring that rough start paid off. Last month they ushered in XANGO’s 10-year anniversary with 43 markets around the globe, 27 office locations, 49 distribution centers, more than 2 million distributors and about $2 billion in cumulative revenues. Their goal for the future is impressive: to double their business in North America by the end of 2013.

And to think that it all sprouted from a fateful bite of an odd-looking fruit, the maroon mangosteen. XANGO’s Joe Morton worked for a different company at the time and was stationed in Southeast Asia. Friends there introduced him to the mangosteen, a fruit so prized for its delicious taste and health benefits that it was historically known as the “Queen of Fruits.” Intrigued by its flavor and folklore, he mentioned the fruit to his brother Gordon and his friend Aaron Garrity. But he didn’t stop there. He researched its uses, preparations, scientific credentials and market potential. His parents had developed health and nutrition products and brought them to market through direct selling, so he had learned a process from them that he immediately applied to the mangosteen. And when he learned that no other company marketed mangosteen products, it was the beginning of XANGO and the name-twin beverage that would be its only product for half of its first decade.

Reliable Basics

That single beverage was a symbol of the founders’ tight focus on keeping the business simple. From the beginning, they made intentional decisions about exactly which facet of the business would change—and approximately when—and which would remain consistent. The XANGO nutritional beverage would always be the product-line flagship, but at a given point it would be joined by other products. The brand would be the consistent underpinning for the whole company. And the compensation plan would offer the predictability that lets distributors build a business they can count on. Gordon is credited with developing the XANGO compensation plan that reflects his three goals.

“It had to be simple so our distributors could explain it to somebody in a conversation over the table without a lot of diagrams,” Gordon explains. “Second, I really wanted a big ‘middle class.’ We wanted a lot of people making good money, making their car payment, making their mortgage payment, or buying groceries from their XANGO income.”

The third goal was that the compensation would be reliable and predictable.

“As boring as ‘reliable’ is, we’ve been able to make good on that promise,” he says. “Our compensation plan is the same as in 2002.”

Endless Innovation

But in a company known for innovation, there’s still plenty of exciting change. For example, the original XANGO® Juice formula has been tweaked over the years as nutritional science uncovered ways to make it even more nutritious. The company now also offers a sibling product, XANGO Reserve. Its higher mangosteen concentration naturally offers an even greater amount of phytonutrients, along with a new flavor.

And last year XANGO took a giant step toward making its packaging and shipping process more earth- friendly. It replaced the juice’s traditional glass bottles with lightweight, high-gloss, crack-resistant plastic bottles that deliver multiple benefits. First, bottle breakage is almost eliminated. The plastic bottles reduce

XANGO’s carbon footprint and banish Styrofoam completely from shipping boxes. The move eliminated a substantial amount of waste from each step in the company’s supply chain. The entire case packaging— box, insert, bottle and cap—can be easily recycled, and its reduced size and weight also cut shipping costs while reducing greenhouse gases emitted in the manufacturing and transport of XANGO products by 64 percent. The eco-smart packaging even preserves the natural phytonutrients, flavor and color of XANGO Juice. All markets now use the new packaging.

“By shipping in a cardboard box with [eco-friendly] bottles, we’re not plugging up landfills,” Gordon explains. “We wanted to decrease our imprint in landfills around the world. It fits with our social purpose, and it’s a good decision to make all around.”

In addition to introducing new packaging, XANGO has systematically expanded its roster of products. In spring 2008 XANGO introduced the XANGO 3SIXTY5TM vitamin pack. Later that year came Glimpse® Topical Skin Nutrition, the first personal-care brand to bring mangosteen topical nutrition to a global market. In addition to providing a bigger product portfolio, Glimpse and 3SIXTY5 did something else. They subtly transformed XANGO from a nutritional beverage company into a wellness company with a strong emphasis on the mangosteen.

The line of product powerhouses now also includes dietary supplements plus a hair- and body-care line. Its new line of weight-control products, FAVAOTM, was awarded the 2012 ETHOS Award in the Wellness sub-category and named a Product Innovation category finalist by the Direct Selling Association. Every product includes the mangosteen.

“When it comes to product launches throughout the world, the mangosteen story will lace every product we have,” Garrity notes. “Over the next 10 years, every product we’ve prepared and envisioned will incorporate that story. Ultimately, as new research emerges, we’ll combine those innovations with
our story.”

XANGO is passionate about giving back,withaparticularfocusonissues that affect children. Their longtime association with Operation Smile is a touchstone of that commitment.

Women Building Bridges unites XANGOwomenfromaroundthe globe. Pioneered by Senior VP Beverly Hollister, the movement fosters the ideal environment for women—80 percent of networkers— to succeed in all aspects of their lives.

XANGO events draw distributors fromallovertheworldtoprovide motivation, inspiration and education.

International Enthusiasm

Global Goodness Just as XANGO’s founders built the compensation plan and new product launches into their initial business plan, they also built in philanthropy. They say they had no choice. Giving back is part of their DNA.

As XANGO has entered new markets, they’ve followed their successful template of leading with XANGO Juice and introducing other products later.

International expansion has been a key element of XANGO’s success story, and it’s a prime focus of its growth strategy today. Joe oversees the company’s expansion strategy in the Americas. He is excited about opening new markets in Central and South America but he emphasizes that the U.S. Latin market is also huge.

“In the U.S. alone, there are more Latinos than the whole population of Canada where I was born,” Joe says. “It’s staggering. It creates tremendous opportunity for the expansion of our existing markets.”

That Latin market stretches south of the border, of course, and at XANGO it’s driven by a strong contingent of distributor leaders.

“A lot of markets haven’t been touched in Central and South America—places where people are seeking to improve their health and wellness,” he says. “For example, we recently expanded into Colombia, and we’re seeing lots of activity there. There’s so much opportunity for growth, mostly being spawned from Mexico. We have a strong business there and a very solid group of people. They’re driving our expansion. At our biggest North American event recently, there were cheers every time Mexico was mentioned. There’s lots of energy there.”

That big event was XANGO’s 10th-anniversary regional convention, where the company dramatically expanded its global “attendance” numbers by continuing the practice they had established the year before, streaming the convention online to any distributor anywhere. For a small fee, distributors around the world could see the convention as it was happening—without ever leaving their home. They could even switch among the five camera angles covering the convention.

“In 2011 [at the international convention in Salt Lake City] we took a 10,000-person event and turned it into an 80,000-person event,” Garrity says. “My vision is that we’ll eventually turn it into a 200,000-person event throughout the world. In the future, we will take that technology and apply it to global distributor groups. Leaders will be able to see into every country and build their business in those countries with no additional setup fees. My intent is to one day facilitate the creation of distributor organizations within XANGO that surpass the size of the whole company in our first five years.”

“In 2011 [at the international convention in Salt Lake City] we took a 10,000- person event and turned it into an 80,000-person event [by streaming it online].” —Aaron Garrity, Founder, Chairman and CEO

Double Vision

The vision fits right into the company goal announced at the convention: to double its size by the end of next year. XANGO is fueling that growth through several initiatives, including a challenge called Go Double. The reward framework for it is called Ready, Set, Go!.

Go Double encourages distributors to double their efforts and be rewarded with business growth and success. How individuals choose to Go Double is up to them. Some will Go Double in the amount of money they earn each week or month, while others will double the number of prospecting calls or meetings they hold each month.

Complementing Go Double, the Ready, Set, Go! program challenges distributors to Go Double with their paychecks. The program rewards distributors for advancing in rank quickly through the XANGO compensation plan. And if they do, the company doubles their check, up to $1,000—1K in XANGO- speak—at one rank and pays up to $5,000 at the next. XANGO also rewards distributors who Go Double in 30 days by sending them a case of XANGO Reserve to enjoy personally or to use in their business.

In the first month of Go Double’s life, recruiting jumped by 75 percent. As a result, sales are expected to double in the next year. Clearly, the rewards are much more than short term.

“As we’ve studied XANGO distributors, we’ve learned that individuals who come in with purpose and achieve 1K in their first month of business are hundreds of times more likely to hit top leadership positions in the company,” Garrity explains. “We want to get them working and focused on what it takes
to succeed.”

Those new XANGO distributors—who often skew a bit younger than the industry average—can take advantage of technology at its best. In fact, Gordon says that “XANGO is what happens when the MTV Generation grows up and gets a budget.” The company offers a brand-new mobile app that will help distributors explain the compensation plan. Even though they could explain it without props, the app will let them tap technology to professionally demonstrate XANGO’s dedication to innovation.

“XANGO is what happens when the MTV Generation grows up and gets a budget.”
—Gordon Morton

A distributor group receiving particular XANGO emphasis is women. At its convention XANGO announced a focus on empowering women at every level. XANGO Senior Vice President Beverly Hollister leads the effort through a personal-development program called Women Building Bridges.

“In this industry women make purchasing decisions more than 70 percent of the time,” Garrity notes. “In our company, it’s close to 80 percent. Women hold powerful positions among our distributors and in our corporate ranks. Beverly has joined with dozens of top distributor leaders to hold women’s events in countries all around the world. Depending on where it is held, a variety of subjects are offered that help women learn from each other and learn how to develop greatness in their own lives.”

Even while XANGO celebrates its first decade, the founders look forward to the next 10 years with excitement. Garrity says that XANGO watchers can expect more of the same. For some companies, that could sound a little boring, but for a company that thrives on energy, innovation and creativity, “more of the same” is sure to produce sizzling results.

“I’m happy with our success, but one way you’ll never see me is satisfied,” Garrity insists. “I’m driven to make XANGO a better place for more people. Our first 10 years will pale in comparison to what will happen in the next 10 years.”