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MonaVie is a defunct, American
multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
company that manufactured and distributed products made from blended fruit juice concentrates, powders, and
purée A purée (or mash) is cooked food, usually vegetables, fruits or legumes, that has been ground, pressed, blended or sieved to the consistency of a creamy paste or liquid. Purées of specific foods are often known by specific names, e.g., apple ...
s. 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 ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...
'', 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 Usana Health Sciences, Inc., or USANA, is an American multi-level marketing company based in West Valley City, Utah. As of 2021, Usana was the 14th largest multi-level marketing company in the world by revenue. The company manufactures most o ...
, founded Monarch Health Sciences in 2003 as a distributor of
diet Diet may refer to: Food * Diet (nutrition), the sum of the food consumed by an organism or group * Dieting, the deliberate selection of food to control body weight or nutrient intake ** Diet food, foods that aid in creating a diet for weight loss ...
and
weight loss Weight loss, in the context of medicine, health, or physical fitness, refers to a reduction of the total body mass, by a mean loss of fluid, body fat ( adipose tissue), or lean mass (namely bone mineral deposits, muscle, tendon, and other co ...
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 Utah ( , ) is a state in the Mountain West subregion of the Western United States. Utah is a landlocked U.S. state bordered to its east by Colorado, to its northeast by Wyoming, to its north by Idaho, to its south by Arizona, and to it ...
. 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 (referred to in multi-level marketing parlance as a "downline"); 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 Carbonation is the chemical reaction of carbon dioxide to give carbonates, bicarbonates, and carbonic acid. In chemistry, the term is sometimes used in place of carboxylation, which refers to the formation of carboxylic acids. In inorganic ch ...
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 The Chief Rabbinate of Israel ( he, הָרַבָּנוּת הָרָאשִׁית לְיִשְׂרָאֵל, ''Ha-Rabbanut Ha-Rashit Li-Yisra'el'') is recognized by law as the supreme rabbinic authority for Judaism in Israel. The Chief Rabbinate C ...
.


Product research and physiological context

An analysis conducted by contract laboratory ChromaDex indicated that MonaVie contained low levels of antioxidant
vitamin C Vitamin C (also known as ascorbic acid and ascorbate) is a water-soluble vitamin found in citrus and other fruits and vegetables, also sold as a dietary supplement and as a topical 'serum' ingredient to treat melasma (dark pigment spots) ...
and of phytochemicals such as
anthocyanins Anthocyanins (), also called anthocyans, are water-soluble vacuolar pigments that, depending on their pH, may appear red, purple, blue, or black. In 1835, the German pharmacist Ludwig Clamor Marquart gave the name Anthokyan to a chemical com ...
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 (ORAC) 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.Studies force new view on biology of flavonoids
, by David Stauth, ''EurekAlert!''. Adapted from a news release issued by Oregon State University
As interpreted by the United States
Food and Drug Administration The United States Food and Drug Administration (FDA or US FDA) is a List of United States federal agencies, federal agency of the United States Department of Health and Human Services, Department of Health and Human Services. The FDA is respon ...
,
Linus Pauling Institute The Linus Pauling Institute is a research institute located at the Oregon State University with a focus on health maintenance. The mission statement of the institute is to determine the functional roles of micronutrients and phytochemicals in pr ...
and
European Food Safety Authority The European Food Safety Authority (EFSA) is the agency of the European Union (EU) that provides independent scientific advice and communicates on existing and emerging risks associated with the food chain. EFSA was established in February 2002, ...
, 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 Prenatal development () includes the development of the embryo and of the fetus during a viviparous animal's gestation. Prenatal development starts with fertilization, in the germinal stage of embryonic development, and continues in fetal devel ...
closure of the
ductus arteriosus The ''ductus arteriosus'', also called the ''ductus Botalli'', named after the Italian physiologist Leonardo Botallo, is a blood vessel in the developing fetus connecting the trunk of the pulmonary artery to the proximal descending aorta. It a ...
resulting in cardiac hypertrophy and dysfunction ( pulmonary hypertension) at birth. Another case report noted that MonaVie Active may cause fluctuations in
blood clotting Coagulation, also known as clotting, is the process by which blood changes from a liquid to a gel, forming a blood clot. It potentially results in hemostasis, the cessation of blood loss from a damaged vessel, followed by repair. The mechanis ...
(
prothrombin time The prothrombin time (PT) – along with its derived measures of prothrombin ratio (PR) and international normalized ratio (INR) – is an assay for evaluating the ''extrinsic'' pathway and common pathway of coagulation. This blood test is als ...
) in patients treated with
warfarin Warfarin, sold under the brand name Coumadin among others, is a medication that is used as an anticoagulant (blood thinner). It is commonly used to prevent blood clots such as deep vein thrombosis and pulmonary embolism, and to prevent st ...
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 ''Newsweek'' is an American weekly online news magazine co-owned 50 percent each by Dev Pragad, its president and CEO, and Johnathan Davis, who has no operational role at ''Newsweek''. Founded as a weekly print magazine in 1933, it was widely ...
'' 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 (<0.01%) took home more than $3 million, according to MonaVie's 2008 Income Disclosure statement. Retrieved July 13, 2009. 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 Andrew Thomas Weil (, born June 8, 1942) is an American celebrity doctor who advocates for alternative medicine including the 4-7-8 breathing technique. Early life and education Early years Andrew Thomas Weil was born in Philadelphia on June 8, ...
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 Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of different courses of action. Cost-effectiveness analysis is distinct from cost–benefit analysis, which assigns a monetar ...
conventional
polyphenol Polyphenols () are a large family of naturally occurring organic compounds characterized by multiples of phenol units. They are abundant in plants and structurally diverse. Polyphenols include flavonoids, tannic acid, and ellagitannin, some o ...
-rich foods. Weil and Bowden also criticized the product for being sold through multi-level marketing. A ''
Men’s Journal ''Men's Journal'' is an American monthly men's lifestyle magazine focused on outdoor recreation and comprising editorials on the outdoors, environmental issues, health and fitness, style and fashion, and gear. It was founded in 1992 by Jann Wenne ...
'' nutritional analysis showed that MonaVie Active juice "tested extremely low in
anthocyanins Anthocyanins (), also called anthocyans, are water-soluble vacuolar pigments that, depending on their pH, may appear red, purple, blue, or black. In 1835, the German pharmacist Ludwig Clamor Marquart gave the name Anthokyan to a chemical com ...
and phenolics" and that "even
apple juice Apple juice is a fruit juice made by the maceration and pressing of an apple. The resulting expelled juice may be further treated by enzymatic and centrifugal clarification to remove the starch and pectin, which holds fine particulate in suspe ...
(which also tested poorly) has more phenolics". The report also noted that "MonaVie’s
vitamin C Vitamin C (also known as ascorbic acid and ascorbate) is a water-soluble vitamin found in citrus and other fruits and vegetables, also sold as a dietary supplement and as a topical 'serum' ingredient to treat melasma (dark pigment spots) ...
level was 5 times lower than that of Welch’s
Grape Juice Grape juice is obtained from crushing and blending grapes into a liquid. In the wine industry, grape juice that contains 7–23 percent of pulp, skins, stems and seeds is often referred to as '' must''. The sugars in grape juice allow it to be ...
", 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 ''Newsweek'' is an American weekly online news magazine co-owned 50 percent each by Dev Pragad, its president and CEO, and Johnathan Davis, who has no operational role at ''Newsweek''. Founded as a weekly print magazine in 1933, it was widely ...
'' correspondent Tony Dokoupil, ''
Palm Beach Post ''The Palm Beach Post'' is an American daily newspaper serving Palm Beach County in South Florida, and parts of the Treasure Coast. On March 18, 2018, in a deal worth US$42.35 million, ''The Palm Beach Post'' and ''The Palm Beach Daily News'' we ...
'' 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 The United States Food and Drug Administration (FDA or US FDA) is a List of United States federal agencies, federal agency of the United States Department of Health and Human Services, Department of Health and Human Services. The FDA is respon ...
(FDA) issued an FDA Warning Letter to MonaVie distributor Kevin Vokes, for violations of the
Federal Food, Drug and Cosmetic Act The United States Federal Food, Drug, and Cosmetic Act (abbreviated as FFDCA, FDCA, or FD&C) is a set of laws passed by the United States Congress in 1938 giving authority to the U.S. Food and Drug Administration (FDA) to oversee the safety of f ...
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 ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...
'' 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."


Dallin Larsen and Dynamic Essentials/Royal Tongan Limu

MonaVie CEO and founder Dallin Larsen was a senior executive with an multi-level marketing company that sold a similar juice product prior to being shut down by the FDA for illegal business practices. In 2001, Larsen became vice president of sales for Dynamic Essentials, a Florida-based company selling a fruit juice called
Royal Tongan Limu Royal Tongan Limu was a seaweed extract product manufactured and distributed by Dynamic Essentials, a now defunct multilevel marketing company based in Lake Mary, Florida, until legal issues with the U.S. Food and Drug Administration forced the co ...
, where Larsen claimed to have increased revenue 300%. In 2002, during Larsen’s tenure, the FDA warned Dynamic Essentials that claims on the company’s website that the juice could "treat various diseases such as cancer, arthritis, and attention deficit disorder" were illegal. Dynamic Essentials ceased operating soon after. In 2003, the FDA saw the voluntary destruction of 90,000 bottles of Royal Tongan Limu.


Pyramid scheme allegations

In 2008, Larsen formed a business partnership with former
Amway Amway (short for "American Way") is an American multi-level marketing (MLM) company that sells health, beauty, and home care products. The company was founded in 1959 by Jay Van Andel and Richard DeVos and is based in Ada, Michigan. Amway and it ...
distributor ( Quixtar in the US) Orrin Woodward, founder of an Amway distributor sales network company known as TEAM. Woodward subsequently became a distributor and speaker for MonaVie, mixing his TEAM organization structure and distributor sales tools (e.g. sales brochures, audio/video recordings, etc.) concept with MonaVie's compensation plan. Woodward received a $3 million loan from MonaVie which he did not have to repay if he met certain recruiting distributor goals, according to a lawsuit Amway filed against MonaVie in 2008. A ''
Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...
'' magazine article in 2008 described MonaVie as a pyramid scheme, and TEAM as "a pyramid atop a pyramid," in which MonaVie vendors were sold motivational lectures, using a multi-level model, which were purported to help them increase their sales of MonaVie's products. The article proposes that this system takes advantage of ambiguities in the Federal Trade Commission's regulation of pyramid schemes, and that only 1% of members make any money from their involvement with the company.


Litigation

The company, its executives, and various senior distributors have been part of significant lawsuits since the company's founding. MonaVie was the defendant in a false-advertising/trademark infringement suit against Imagenetix, Inc (2008), a multi-issue legal battle with Quixtar/Amway (2008), a false advertising suit by Oprah Winfrey and
Mehmet Oz Mehmet Cengiz Öz (; born June 11, 1960), known professionally as Dr. Oz (), is an Turkish American former professor of cardiothoracic surgery at Columbia University, television presenter, author and former political candidate. The son of Tur ...
(2009), two class action lawsuits (2010, 2013), and a copyright infringement suit against Zrii (2010). Also, MonaVie filed several suits against former sales representatives for breach of contract.


Trademark infringement and false advertising cases

In 2008, Imagenetix, Inc. sued the MonaVie company, its board of directors, and several of its senior distributors for $2.75 billion over trademark infringement alleging that MonaVie Active juice contained the ingredient Celadrin. The case was settled out of court and the lawsuit was dropped. Soon after, Imagenetix announced that it had entered into a new business relationship with MonaVie, the terms of which were not disclosed. In 2010, MonaVie sued Zrii, a competing multilevel marketing drink company, claiming that Zrii copied its distributor compensation plan. MonaVie sought an injunction to prevent Zrii from continuing to use the plan, force the destruction of all the existing copies of the plan, and claim damages. In 2009, television celebrities Oprah Winfrey and Dr. Mehmet Oz filed lawsuits against 40 companies who sold açaí or related products. The parties alleged that the companies had fabricated quotes "falsely purporting to speak in Dr. Oz's and/or Ms. Winfrey's voice about specific brands and products that neither of them has endorsed." MonaVie was one of the defendants. Winfrey’s website stated that “consumers should be aware that neither Oprah Winfrey nor Dr. Oz are associated with nor do they endorse any açaí berry product, company or online solicitation of such products, including MonaVie juice products." In 2010, a
class action A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
lawsuit was filed against MonaVie in the Circuit Court of
Miller County, Arkansas Miller County is a county located in the southwestern corner of the U.S. state of Arkansas. As of the 2010 census, the population was 43,462. The county seat is Texarkana. Miller County is part of the Texarkana, TX-AR, Metropolitan Statisti ...
, alleging that MonaVie and its distributors, through the use of false and misleading advertising had engaged in civil conspiracy and other criminal activities. In 2013, a class action lawsuit was filed against MonaVie in the US District Court of New Jersey alleging that the company had used unfair and deceptive business practices, and false advertising, in violation of the New Jersey Consumer Fraud Act. According to the lawsuit, MonaVie and its distributors used false and misleading claims of curative benefits to promote the company’s juice products, which were sold at an unjustly inflated price. In 2014, a similar class action lawsuit was filed against MonaVie in the US District Court of Southern Florida. The suit alleged that the company had deceptively advertising its juices, such as MonaVie Active, MonaVie Essential, MonaVie Pulse. According to the complaint, the company had promised that its juices would provide a variety of health benefits, including increased energy and improved joint health, without scientific proof to support such claims. In addition, the plaintiffs claimed that the company failed to warn consumers that the juices contain ingredients – such as
arsenic Arsenic is a chemical element with the symbol As and atomic number 33. Arsenic occurs in many minerals, usually in combination with sulfur and metals, but also as a pure elemental crystal. Arsenic is a metalloid. It has various allotropes, ...
and lead – that could cause health problems. In 2014, K2A LLC, a company formed by Alex Schauss and Kenneth Murdock, filed a lawsuit claiming that MonaVie owed tens of millions of dollars for infringing on a patent held by K2A for the freeze-dried açai berry used in MonaVie's products. K2A claimed that they had terminated their 2004 licensing agreement on Oct. 18, 2013 and that MonaVie continued to sell products that infringed on the patents. The lawsuit alleged that MonaVie had not made any royalty payments since June 2009 and failed to deliver shares in the company that were promised to K2A. The court was petitioned to declare that the licensing agreement has been terminated and to award K2A at least 10 percent of MonaVie’s gross sales, plus triple damages. In January 2015, MonaVie announced that it had settled the case for an undisclosed sum.


Dispute with Amway

In 2008 Quixtar, a sister company of Amway, filed a multi-count federal court complaint against the MonaVie company and 16 of its top-level distributors who had previously worked with Amway. The complaint alleged that MonaVie competed unfairly by making false claims about its products, and that the former distributors had violated their contracts with Amway.Laura Hancock
"MonaVie Sued for 2.75B"
''Deseret News'', May 16, 2008
Shortly after, MonaVie filed a lawsuit with the Utah district court asking for a ruling as to whether Quixtar had been over-reaching the boundaries of its non-compete agreements and to address whether or not such agreements are enforceable for independent distributors. MonaVie filed to dismiss the Amway/Quixtar lawsuit. Later in 2008, MonaVie et al. filed a lawsuit in the Colorado District Court against Quixtar. Amway and MonaVie settled in 2010 before trial. In 2009, Orrin Woodward and his wife Laurie were found liable in an arbitration case for soliciting other distributors to resign from Quixtar and join its competitor MonaVie, The Woodwards were ordered to pay a settlement of $12,736,659. Co-defendants Chris and Terri Brandy were ordered to pay $9,578,756 and Tim and Amy Marks, $3,533,230.


Lawsuits with former distributors

In 2012 the company sought legal action against Joseph Licciardi and several other distributors for breach of contract by allegedly attempting to recruit MonaVie distributors to competing multilevel marketing companies. In April 2015, an arbitrator awarded Licciardi $1.2 million, ruling that MonaVie breached its contract by revoking Liccardi's distributorship.


Loan default and foreclosure

In May 2014 it was announced that MonaVie had defaulted on a $182 million note securing assets of the company. The note was issued in 2010 by TSG-MV Financing LLC, part of TSG Consumer Partners of San Francisco and then purchased in March 2015 by multi-level marketing company Jeunesse Global of Altamonte Springs, Florida. On May 11, a Federal court judge issued a temporary restraining order to halt the takeover of MonaVie by Jeunesse Global. The petition had been filed by Bankers Trust, the trustee overseeing MonaVie's employee stock ownership program (ESOP) which had become a major holder of MonaVie stock, noting that the foreclosure would render the ESOP worthless.


References

{{DEFAULTSORT:MonaVie Multi-level marketing companies based in Utah Companies based in Salt Lake City Defunct multi-level marketing companies American companies established in 2005 2005 establishments in Utah