ADA — Direct-selling giant Amway Corp. reported a slight sales decline in 2022 from the prior year, citing the strength of the U.S. dollar, the sale of an affiliated nutritional supplement company and the company’s withdrawal from Russia.
Excluding a strengthened exchange rate for the U.S. dollar as a result of the Fed’s response to inflation, sales for Amway’s direct-selling business increased 1 percent in 2022, which would have marked a third consecutive year of sales growth.
Amway reported $8.1 billion in sales in 2022, compared to $8.9 billion in 2021. While the company’s U.S. sales declined last year, Amway experienced growth in China and South Korea, two of its top markets. Mainland China is Amway’s largest market, while the company modernized its 25 Cent Ride virtual fitness program to drive growth in South Korea. Amway also is experiencing growing consumer demand in other Southeast Asia markets, including Taiwan, Hong Kong, Malaysia and Vietnam.
The company’s revenues are driven largely by its nutritional products line, including its Nutrilite supplements that represent 56 percent of Amway’s total sales and helped generate 8-percent sales growth for its nutrition products. Nutrilite sales have grown 27 percent over the past three years, CEO Milind Pant said in an interview with MiBiz.
Last year also marked a withdrawal in certain markets for Amway and the recent sale of an affiliate owned by parent company, Alticor Inc. In October 2021, Alticor closed on its sale of global nutritional supplement Metagenics to private equity firm Gryphon Investors for an undisclosed sum.
In March 2022, Amway then announced that it would cease operations in Russia following the invasion of Ukraine. Company officials have said the country’s attack on Ukraine made it “impossible” to do business in Russia.
The family-owned Amway publicly reports annual sales, but does not disclose earnings.
Amway employs more than 14,000 people globally and 2,500 in West Michigan. The company’s West Michigan presence decreased in 2021 as part of a 6-percent cut in its global workforce, and more than 800 jobs in Ada.
Amway operates nearly 6,000 acres of organic farms in the U.S., Mexico and Brazil to grow plants for its nutrition supplements. Amway also has manufacturing facilities in the U.S., India, China and Vietnam.
Pant said executives continue to gauge the company’s strength to the benchmark set in 2019, the last full year before the COVID-19 pandemic when Amway generated $8.4 billion in sales. Since then, Pant said the pandemic has accelerated multiple trends in the direct-selling and wellness sectors, including the “need in society for optimal health” and the need for flexible workplaces.
“Amway is built on these two,” Pant said. “So our strategy going forward is to do everything we can with our expertise and great scientific products and technology to help our entrepreneurs build these health and wellness communities.”
Meanwhile, Amway is wrapping up a $35 million expansion at its Spaulding manufacturing facility in Ada, where it will grow production volumes of its Nutrilite and beauty products. The company also is modernizing its Ada corporate headquarters as part of a multi-year expansion plan.
“Most people don’t know that West Michigan is the home where we manufacture products that are then exported globally,” Pant said.
Looking ahead, Amway still has ground to make up if executives seek to return to its sales peak of $11.8 billion in 2013. But that is the goal, Pant said.
“Are we happy with 1-percent growth or a 6-percent growth between 2019 and 2022? No. The potential of this business is much higher,” he said. “With the pandemic and what we’ve learned through the pandemic … we now have the recipe for growth, and that’s the recipe we executed in 2020, 2021 and 2022. In 2023 and beyond, I’m very confident that we are just getting started.”