Omnilife is one of the biggest supplement producers in the world. Through its network of sales people which, Amway-style, distribute the company’s products door to door and to their friends, family, and co-workers, Omnilife posts annual sales at around $2.2 billion from its operations in 20 different countries.
Now with its brands, reputation, and market share growing, Omnilife recently saw fit to invest $60 million in a brand new, state-of-the-art production facility in Guadalajara, Jalisco, Mexico, where the company has its headquarters. New markets beckon, as well as new products as Omnilife’s dedicated researchers continue to investigate new innovations and new market trends.
Founding and growth
Omnilife came onto the scene in 1991 with the invention of OmniPlus, its flagship product brought to market by company founder – and current owner – Jorge Vergara. One of the early multi-vitamin supplements, OmniPlus provided essential nutrients in a liquid form, in several different flavors that could be mixed with fruit juices.
Since then, growth has been vertiginous, both in terms of sales and market share and range of products. From its headquarters in Guadalajara, Omnilife has extended its reach through most of Latin America and some of the Caribbean. It also has a presence in Russia, the United States, and Spain.
With such a far-flung market, Omnilife found itself in need of greater infrastructure. It already had production facilities in Tlaquepaque, in the state of Jalisco, as well as a plant in Caloto, Colombia dedicated to producing Omnilife’s powdered offerings. But that wasn’t quite enough.
In 2006, Omnilife invested $60 million in a brand new plant in Guadalajara. With 40,000 square meters of floor space and equipped with the newest technology and a greater production capacity, the plant will serve Omnilife well as it reaches to even further-flung markets.
The machinery in the plant has its origin in Canada, Sweden, France, Italy, Switzerland, Spain, and the United States. Some of its plastics packaging equipment, for example, is manufactured by the Sidel Group, while injection molding equipment comes from Husky Injection Molding Ltd, a Canadian company. Swiss company Buhler, meanwhile, supplies the machinery that measures and mixes powder supplements.
Other equipment suppliers include Vestali, Gallay, Volpak, Brossar, and Cloud.
Dozens of products
Omnilife’s plants have a combined monthly production capacity of 30 million 200 ml bottles of liquid products; 35 million canned units; and 38 million preformed bottles. For its powder products, the company can produce two million units per month.
As for the products, Omnilife has more than 80 different products that break down into several different categories. Its nutrition products include classic vitamin supplements like OmniPlus and all of its various offshoots, in both powder and liquid forms.
That category also includes energy drinks that come in both cans and bottles, as well as products like Estop – an almond-based powder that helps control cholesterol – and Fiber ‘N Durazno – a multi-fruit flavored fiber supplement.
Newer products include Power Maker, a dietary supplement designed to build strength in athletes and people who work out on a daily basis. The powder-based product provides essential amino acids for building and repairing muscles and connective tissue.
Weight loss trends
One burgeoning branch of Omnilife’s business is thermogenic, or weight loss, products. “People are more aware of the thermogenic products, because they want to control their weight,” said Roberto Santacruz, Omnilife’s general director. “They are products with a lot of demand and a lot of popularity.”
In that category can be found products such as the Cafetino Chromium Supplement that comes in a powder form and should be taken after each meal. Ego Cola, meanwhile, comes in a six-pack of aluminum cans and contains no sugar or caffeine. Combined with a low-calorie diet, it also can help people lose weight.
These products illustrate an advantage that Omnilife has tried to cultivate. The company is in a unique position in that most supplement companies gravitate toward producing their products in pill or capsule form. Omnilife, however, offers its products in a variety of more customer-friendly forms – like flavorful powders, liquids, and soft drinks.
Omnilife doesn’t limit itself to nutritional products. It also has a line of refreshments, like its “Blue” brand of mineral water, and its Soft Drink Cola, the official drink of the Guadalajara Sports Club (better known as Chivas), a soccer team owned by Omnilife.
Omnilife also recently came out with a line of cosmetics under the brand Kenya Vergara. Also sold through a network of independent distributors, Kenya Vergara’s more than 100 different products represent a complete line of skin care, makeup, hair care, and many other items.
Next stop: Brazil, India, China
Omnilife’s mission has been to bring a better way of life to its customers through superior products and professional concern, “people caring for people.” It’s done that in 20 countries already, including its home base of Mexico. And in the next few years, the company will add a few more populations to its list of people it cares for.
First up is Brazil. Santacruz said Omnilife plans to enter that market before the end of this year. It represents one of the last South American countries where Omnilife has yet to stake out a presence.
Another country Omnilife has its sights on is India, where it also plans to open operations by the end of this year. Then in 2008 the company will add to its target markets some 1.2 billion more customers when it seeks to enter the Chinese market.
Accomplishments and philosophy
Santacruz noted three principle advantages in entering these enormous new markets. First and most obviously, huge volumes of people mean a huge potential base of customers. That takes care of the profit side of things. Yet as the company’s philosophy states, money may be an important part of life – but it’s not everything.
That’s why the second great accomplishment of serving such large markets is the possibility of bringing Omnilife’s healthy products to a large group of people. The third benefit comes from Omnilife’s unique structure of private distributors. Omnilife’s presence in a country means commercial opportunities for the millions of people needed to sell the company’s products.
At the moment, Omnilife’s strongest market is Mexico, with Venezuela coming in second and the United States third. Throughout all of the 20 countries it serves right now, the company has 181 distribution centers, 84 of them in Mexico and the rest in other parts of the world. In total, the company has about 3.5 million independent distributors working on its behalf.
Omnilife has 3,500 employees, which include all of the subsidiary businesses of the conglomerate: Guadalajara real estate, the sports team division, the cosmetics side of the business, and, most importantly, the nutrition products.
Bringing new products
Omnilife has been growing at a steady annual growth rate of between 15 and 20 percent, and Santacruz said he expects that to continue unabated. As the company continues to enter into new markets, its research centers in Guadalajara and in Spain will continue to design new products targeting the needs and desires of the company’s growing roster of customers.
“We’re constantly developing new ideas with new products with the purpose of having them available for the public,” Santacruz said. In the end, he said, this is one of the principle accomplishments of Omnilife: The development, with their own technology, of products that have a high benefit for the consumer – products so successful that the people who use them can see the results.