XanGo

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XanGo LLC.
Type	Private
Founded	2002
Headquarters	Lehi, Utah, USA
Key people	Aaron Garrity, Gary Hollister, Joe Morton, Gordon Morton, Bryan Davis and Kent Wood
Industry	Multi-level Marketing
Website	XanGo.com

XanGo, LLC, founded in 2002, is a privately owned international multi-level marketing company based in Lehi, Utah.^[1] XanGo, LLC was the first company to market a beverage based on the mangosteen, XanGo Juice.^[2] Its main product is a proprietary formula multiple-fruit juice promoted as a dietary supplement.^[3]

In May 2004, the company was granted a United States patent 6730333 ^[4] which was declared invalid a year later by the United States Patent and Trademark Office.^[5] The company is appealing the ruling.^[6][7]

The company's annual revenue reported for 2007 was about $425 million,^{[citation needed]} with total sales since inception (2002) exceeding $1 billion.^[8]

Contents 1 Production and distribution 2 Revenues 3 Sponsorships and charitable donations 4 New products 5 XanGo juice components 5.1 Claims of health benefits 5.2 US FDA warning letter and response 5.3 Supporters 5.4 Critical assessments of XanGo juice 6 References 7 External links

[edit] Production and distribution

Mangosteen puree is exported from south east Asia to the United States, where the drink is produced. The juice is then sold in the U.S. and (as of mid-2007) exported to Australia, Canada, Germany, Hong Kong, Japan, Malaysia, Mexico, Philippines, Singapore, Sweden, and the United Kingdom.^[9][10] In July 2007, the company said that it had 5,000 distributors in Malaysia within one month of the launch, and that it was looking at launching sales into India, Pakistan, Sri Lanka, Indonesia and Brunei through its new marketing network, doing so with Malaysians with close direct contacts in these countries. The company recently opened up operations in Taiwan as of October 2007.^[9]

The company sells XanGo Juice mainly using a nine-layer multi-level marketing structure. ^[11] In June 2006, the company said it had 350,000 distributors.^[12] In July, the company told the Federal Trade Commission that there were "roughly 500,000 distributors worldwide"^[3], and in November, it reported having more than 600 employees at its Lehi headquarters and more than 500,000 independent distributors in 15 international markets^[1]. In July 2007, it said it had about 700,000 distributors,^[9] of whom an estimated 70 percent simply use their status to buy the juice at the discounted membership price.^[13]

[edit] Revenues

In March 2005, the company said that its 2003 sales were $40 million, increasing to $150 million in 2004.^[14] In February 2006, the company reported that 2005 sales were more than twice those of 2004.^[15]

In June 2006, the company said its goal was to have $1 billion in annual sales by 2009^[12]. In July 2007 a company official said that cumulative sales had exceeded 40 million bottles ^[9] and The Nutrition Business Journal stated XanGo's revenue was about $360,000,000 per year, 4th amongst all nutrition oriented companies.^{[citation needed]}

In October 2007 the company said that cumulative sales since the company began selling five years earlier were over $1 billion.^[8]

[edit] Sponsorships and charitable donations

In November 2006, the company became the official corporate sponsor of the Real Salt Lake, a MLS soccer team based in Salt Lake City, Utah for four years, at a cost of between $500,000 and $1 million per year.^[16] Also in 2006, XanGo made a 5-year, $1 million grant to an Orem, Utah arts council for renovating and operating what is now called the "XanGo Grand Theater".^[17]

Xango is a recognized Champion for Children donor for the national children's charity Operation Kids, having donated over $1,000,000 to helping children in need. In 2008 Xango founder and executive, Gordon Morton, was appointed to the National Advisory Board for Operation Kids.

The company said in July 2006 that it gives 5 to 7 percent of its net profits to charity.^[3] As a privately held company, it does not publish its financial statements.

[edit] New products

In March 2007 the company announced that it would market a "premium brand", XALO(tm) Juice, "a proprietary fusion of aloe with mangosteen and other premium ingredients", including grape seed and green tea. The new brand will be sold by the case (four 750 ml bottles) and the company said it would introduce it in Europe in the summer of 2007.^[18]

At a convention in October 2007, the company released information about the "XanGo Goodness Meal Pack" that is a specialized form of nutrient to help feed 50 children per pack. It also mentioned the company was exploring possibilities of going into the skin care market.^{[citation needed]}

In February 2008, the company issued their single serving packet that was available for purchase by distributors seeking to market sample sizes.

[edit] XanGo juice components

XanGo Juice is a blend of mangosteen aril and pericarp purée[8] with juices of eight other fruits: apple, pear (juice and purée), grape, blueberry, raspberry, strawberry, cranberry and cherry.^[19]

XanGo claims its juice maintains the structure of xanthone compounds from the mangosteen pericarp which also contains other polyphenols such as oligomeric proanthocyanidins.^[20] Chromatographic analyses have isolated selected xanthones in mangosteen pericarp,^[21][22] providing confirmation that pericarp xanthone content is quantifiable. Although XanGo claims the epigallocatechin gallate found in green tea is slightly more abundant in mangosteen pericarps,^[23] this difference has not been systematically studied and published.

As part of its report on the financial success of XanGo, the Associated Press commissioned the Linus Pauling Institute to analyze and compare the antioxidant capacity (measured in a test tube with the oxygen radical absorbance capacity or ORAC) of XanGo juice among other common fruit juices. XanGo was slightly higher than cranberry or apple juice, but lower than black cherry and less than half the ORAC value of blueberry juice.^[8]

[edit] Claims of health benefits

Marketing materials used to promote mangosteen juice indicate more than 20 human health benefits, among which are "anti-inflammatory," "anti-microbial," "anti-fungal," "anti-viral," "anti-cancer," "anti-ulcer," "anti-hepatotoxic," "anti-rhinoviral," and "anti-allergic"^[24]. Promotional literature for the product cites antioxidants from the inedible rind of the fruit as providing health benefits. None of these claims, however, has scientific proof established by peer-reviewed research and human clinical trials, as discussed below.

In mid-2005, the American Cancer Society profile of mangosteen juice said that there was no evidence that any part of the fruit is effective as a treatment for cancer in humans, but preliminary laboratory studies showed some promise for treating acne. The profile mentioned laboratory studies indicating need for further research ^[25].

On its website, after stating that "Research shows xanthones (a component of XanGo juice) possess potent antioxidant properties that may help maintain intestinal health, strengthen the immune system, neutralize free radicals, help support cartilage and joint function, and promote a healthy seasonal respiratory system", the company adds this disclaimer as a footnote: "These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease"^[26].

The company's scientific advisor, David A. Morton, PhD^[27][28](whose brothers, Joe and Gordon, helped found the company^[29][30]), stated in 2006 there is "emerging evidence that mangosteen has anti-inflammatory, antioxidant, and anti-microbial properties"^[27], yet acknowledged the only study of humans consuming mangosteen juice was conducted as a test of dysentery therapy in Singapore in 1932^[31][27]. "I don’t think there are plans to study mangosteen in humans in the near future," Dr. Morton said in 2006, because "there’s much too much that still needs to be studied in the lab"^[27].

In 2007, the Mayo Clinic stated there was evidence that mangosteen had anti-inflammatory activity but no studies exist to prove such anti-inflammatory effects in humans^[32].

[edit] US FDA warning letter and response

On September 20, 2006, the United States FDA issued a warning letter to XanGo LLC International itemizing the company's extensive health claims.^[33]

Jared Frei, XanGo's regulatory lawyer, said the materials collected by the FDA were published and sold by Sound Concepts of Orem, Utah, a separate company that is financially independent of XanGo. Frei said that "we, as a company, do not publish any materials that make drug-related health claims. We say nothing about a disease or symptom of a disease. . . . We take FDA compliance very seriously."^[29]. Frei said XanGo has extensive distributor education.^[34]

If XanGo Juice were expressly claimed by XanGo to have such health effects, said the FDA letter, then the claims “cause XanGo to be a drug” (paraphrased from FDA Warning Letter) which has not been subjected to the same human research and scientific scrutiny for safety and efficacy as other marketed drugs.

As new drugs can not be sold for interstate commerce in the US without approval of the FDA, the letter warned XanGo LLC that enforcement was imminent, including seizure and/or injunction of products.

Under FDA drug labeling rules, XanGo LLC, as manufacturer, is responsible for satisfying scientific criteria to make health claims on its product labels and all marketing materials. As of February, 2008, the FDA still has XanGo under surveillance.^[8]

[edit] Supporters

Dr. David Morton and J. Frederick Templeman, MD, who are part of a company called Phytoceutical Research, LLC ^[35], have written a number of editorials, available at their website, about the benefits of XanGo Juice. They criticize authors who made negative comments about the purported benefits of mangosteen juice. Drs. Templeman and Morton sell books, brochures, audio CDs and video DVDs about mangosteen juice therapy, such as Mangosteen: the X-Factor, fifth edition, at their website. Some of their books are also sold by Sound Concepts of Orem, a company closely linked with XanGo International LLC.^[29]

[edit] Critical assessments of XanGo juice

The Mayo Clinic said in October 2005 that "there are no published clinical trials showing evidence that either the fruit or its juice — marketed under the name XanGo juice — is an effective treatment for arthritis, cancer or any other disorder in humans."^[36]

In February 2006, the U.C. Berkeley Wellness Newsletter, sponsored by the University of California at Berkeley, said that "Mangosteen marketers make farfetched and unsubstantiated claims for their products." The newsletter notes that "there are no clinical trials, and what happens in a test tube or animal may not occur in a human. Any reported benefits in humans have been anecdotal. No one even knows if the processed fruit juice and capsules retain the potentially beneficial compounds. What’s more, the juice is typically a mix of fruit juices — with an undisclosed amount of mangosteen in it." ^[37]

Dr. Ralph Moss, author of several natural remedy books, has said of mangosteen juice:

In my opinion, what we have here is simply an overpriced fruit drink. Fruit drinks are often healthful beverages. But the only reason I can see that the promoters of mangosteen can get away with charging $37 for this product is that they are playing on patients' hopes and fears in a cynical way. Without the health claims, open or implied, the product could only be sold for at most $5 or $6 (which, for example, is the cost of antioxidant-rich pomegranate juice).^[38]

In an article published in February 2007, Paul M. Gross, PhD (physiology), and Ian Crown, a mangosteen grower, said, "As mangosteen's supposed health claims are not supportable by sufficient nutrient density or a complete research process allowing conclusions about human health benefits, it has not met standards to be a superfruit. Research on xanthones is only at a preliminary stage from which no conclusions regarding lowered disease risk are valid at this time." ^[39]

When assessed by four criteria for superfruit status -- nutrient density, antioxidant strength, research intensity and commercial success -- mangosteen ranks lowest among five other exotic plant foods.^[40]

[edit] References

[edit] External links

• XanGo official website
• Company press releases