Grupo Omnilife

Omnilife Group (Mexico) is a company that develops, produces, and distributes dietary supplements in the form of powdered and liquid vitamins. It is also involved in financial consulting, aircraft rentals, publishing, construction, research, biotechnology, and the production of albums and movies. The corporation is owned by Jorge Vergara,^[1] who also owns three soccer clubs: Club Deportivo Guadalajara (Mexico), Chivas USA (Major League), and Chivas Hefei (China). The group is based in Guadalajara, Jalisco, Mexico and employs more than 6,000 people worldwide. Its nutrition and supplementation products are distributed in 24 countries through a network of approximately 6 million sales representatives, who are rewarded both for the amount of product that they sell and for enrolling new representatives.

History

Vergara began working in Herbalife as a salesperson by actually smuggling products into Mexico that had not yet been approved for distribution in Mexico by the Federal government. He was instrumental in helping Herbalife’s founder, Mark R. Hughes in obtaining the right to sell in Mexico. (He later urged Hughes to offer vitamins that could be diluted in water, a proposal that was rejected.)

Vergara teamed up with two American colleagues and founded Omnitrion USA in 1989. On September 11, 1991, Omnitrion Mexico was officially founded and the company quickly became very successful. Vergara's associates later sold him the rights for Omnitrion Mexico, whose name was changed in 2000 to Omnilife. It began operations with three employers, six distributors and a total investment of $10,000. Its objective was to recruit many independent sales consultants to sell nutritional and dietary products to a broad public, offering these independent consultants the opportunity to build prosperous businesses marketing products that demonstrate an impressive sales record.

The company currently operates in Latin America, the United States, and Spain, manufacturing more than 70 different nutritional and dietary supplements. Headquartered in Guadalajara, Jalisco, Mexico, as of 2012, it directly employs more than 6,000 people around the world. Additionally, a network of about 6 million distributors serve 24 countries worldwide. Omnilife Group has become, in only two decades of operation, one of the top 200 companies in Mexico.

Marketing Strategy

Vergara has developed and adapted a system called “Multidesarrollo” (Multilevel Marketing) that was developed by, among others, Herbalife in Latin America. The distribution system is one in which the company contracts with independent sellers who, in turn, are encouraged to recruit more independent sales representatives under them to create a large sales and distribution network. Describing the way in which Omnilife functions in Guatemala, anthropologist Diane Nelson describes it as a "direct-sales pyramid scheme (like Herbalife and Amway) in which one accumulates points by selling the product and recruiting more sellers."^[2] All sales are made through use of a company catalog, but products can also be found in stores.

In her discussion of Omnilife in Guatemala, Nelson further notes that it "is a capital formation complexly linked to prosperity gospel forms, but also to Mayan heritage and post revolutionary dreams of improvement."^[3] Nelson is ambivalent about the role of the company in highland communities, but remarks that "it seems to offer both economic promise and ongoing, interethnic, communal therapeutics."^[4]

Philosophy

“People that take care of people” (“Gente que cuida a la gente”) means, according to Vergara, bringing better health and vitality to many people through an energetic and dedicated marketing force. The company promotes empathy with clients, showing respect toward them and having patience with them. They also encourage clients to care for the environment, support education, and participate in sports activities. Observing the "Omnilife Basic Course" in Guatemala City, Diane Nelson notes that "the dynamic is Oprah Winfrey-esque, with a tough love feel and strong engagement from the audience."^[5] At a later "Lack and Abundance" workshop, Nelson reports that participants were encouraged to share their stories of suffering and trauma, and were then asked to construct a "dream map" of their material and emotional aspirations.^[6]

Omnilife's Other Branches

In 1992, Omnilife founded Omniflys, a company that offers aerial taxi services for executives. The same year, it hosted the first Omnilife Extravaganza in Cancun, Mexico, the first in an annual event, a massive fiesta, that brings together over 350 employers. In 1993, Ego Development (Desarrollos Ego) was created to focus on research and development of new nutritional products for the company. It has signed an agreement with the IMSS to create FIDEIMSS, a fund to support athletes. It publishes an international magazine, Omniluz, that focuses on the company’s philosophy, products, distributors, and health related issues.

References

Bibliography

• Nelson, Diane. "100 Percent Omnilife." War By Other Means: Aftermath in Post-Genocide Guatemala. Ed. Carlota McAllister and Diane Nelson. Durham, NC: Duke University Press, 2013. 285-306.