Seed to Feed: The Herbalife Manufacturing Success Story – Part One
By Rich Goudis, Chief Operating Officer, Herbalife
May 20, 2016
Recently, at the annual Herbalife leadership conference in Cancun, Mexico, I had the pleasure of sharing with our team, including Company executives, independent Herbalife members and board of director members, the progress we’ve made with our Seed to Feed initiative. Having spent over 18 years in the nutrition industry, it’s been exciting to lead our Company’s commitment to creating world-class self-manufacturing, industry-leading quality systems, a talented and highly skilled work force, and state-of-the art technology and facilities around the world. In fact, over the last six years, we’ve invested more than $250 million to make our Seed to Feed strategy a cornerstone of Herbalife excellence. Today, approximately 70 percent of all Herbalife® nutrition products are manufactured in-house at Herbalife Innovation and Manufacturing facilities (H.I.M. for short) around the world. We’ve created a true competitive advantage because of our manufacturing capabilities and capacity.
Our Seed to Feed initiative begins with our desire for complete traceability of the active ingredients in our products. We partner directly with farmers in Mexico for our aloe, and in China to source our teas and certain botanicals. Additionally, we have developed strategic sourcing arrangements with several of the largest producers of both macro and micronutrients to ensure the identity and purity of our ingredients.
In 2012, we opened a botanical extraction facility, H.I.M. Changsha, in China, that has enabled us to have complete control over the extraction process and methods used to create many of our active ingredients. This facility encompasses both state-of-the-art extraction and spray drying equipment, and a highly technical team of scientists and technicians. H.I.M. Changsha can produce up to 83,000 kilos of ingredients every month, which will support our growth well into the future. These raw ingredients then travel to our other H.I.M. manufacturing facilities and select partners around that world for inclusion in our nutrition products.
Our first H.I.M. facility opened in 2000 in Suzhou, China and has since doubled in size to accommodate the strong growth of our China business. Today, we produce tablets, capsules and powders in Suzhou.
In 2010, we expanded our self-manufacturing by opening our first U.S. facility in Lake Forest, California. H.I.M. Lake Forest produces three different FDA-regulated product forms – dietary supplement tablets, such as Thermo-Bond®, the Herbalife24® line, and Niteworks®; food products like Herbalife® Formula 1 Nutrition Shake Mix and Personalized Protein Powder; and acidified foods such as our aloe digestive health product. This facility is both NSF- certified and NSF-certified for Sport, reinforcing our commitment to excellence.
In 2012, our board of directors approved the single largest investment in company history with the $130 million launch of a state-of-the-art manufacturing facility in Winston-Salem, North Carolina. This decision reflected our confidence in the future growth of our business, and our ability to self-manufacture products efficiently and with the highest quality. H.I.M. Winston-Salem will support our growth through 2021 and allow us to export U.S.-made products to over 50 countries. This facility is also NSF-certified and NSF-certified for Sport.
This summer, we will commence operations in Nanjing, China. Our H.I.M. Nanjing facility, located in the Jiangsu province, will produce dietary supplements and food products, and will support our growth in China for the foreseeable future.
As we cannot, nor do we desire to self-manufacture all of our products, we have developed strategic relationships with regional manufacturing partners who can help us overcome geopolitical and economic hurdles, border and tariff obstacles, and shorten the lead time to service many of our worldwide markets. We’ve found manufacturing partners who have the financial wherewithal to invest in expanding the capacity of their businesses to support our future growth; the technical capabilities to manufacture our sophisticated products; and, most importantly, partners who share our same commitment to quality. To ensure they meet our standards, we’ve created a mobile technical staff that goes out into the field and assists these manufacturers. In turn, these partners extend our reach and provide the necessary flexibility, capacity and, in some cases, actual innovation to help us stay competitive in our markets.
One such partner is Fine Foods in Europe, which supports over 50 of our markets. Their capabilities in powders and tablets are unmatched in Europe and have helped us support the strong growth and geographic reach of that region. Another is Liotechnica in Brazil, who worked closely with our R&D team to produce our very first Nutri Soup, based upon the nutrition profile of our leading Herbalife® Formula 1 Nutrition Shake Mix.
The centerpiece and foundation of our Seed to Feed program, and all of the products that we manufacture, is our quality system. We’ve invested millions of dollars in quality labs and scientists around the world. A true measure of our commitment to industry-leading quality is the attainment of the ISO17025 accreditation of our five quality laboratories. The ISO International (ISO17025) accreditation means that Herbalife adheres to strict standards for the technical competency of laboratory scientific personnel, the accuracy of testing methods, the validation of equipment and more. Additionally, NSF’s Good Manufacturing Practices (GMP) and GMP for Sport Facility Registration certifies that our two U.S. H.I.M. facilities manufacture product in accordance with the applicable cGMPs, maintain continual investment in the latest technologies, and use the latest instrumentation to test all Herbalife24® products made in the United States.
For more about Seed to Feed, check out the second half of the story coming soon.