'Super-fruit' juice spawns $1B nutrition business - East Valley Tribune: Business

'Super-fruit' juice spawns $1B nutrition business

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Posted: Sunday, February 10, 2008 12:51 am | Updated: 11:53 pm, Fri Oct 7, 2011.

SALT LAKE CITY - At a sales convention, XanGo executive Joseph Morton said that when he stumbled across mangosteen, a tropical fruit with purported curative powers, "I didn't have to have it confirmed in the New England medical journal before I would listen."

The multilevel marketing company has built a huge business around its mangosteen-based juice, which it promotes as an immunity booster. The company still hasn't proved its health benefits - which it says could include a stronger immune system and improved joint function - to skeptical experts. XanGo's Web site includes a disclaimer, noting the juice is not meant to treat or prevent disease. A lab test arranged by The Associated Press found its antioxidant power to be on par with other fruit juices.

Morton, a 37-year-old triathlete nicknamed Ironman Joe, was on a business trip in Malaysia when he saw mangosteen, a white delicacy wrapped in a blood-red leathery shell, on the dessert menu.

From that introduction, Morton - the company's president of international and distributor relations - capitalized on a new brand category of liquid "super-fruits" that is "doing gangbusters," said Jeff Hilton, a partner at Integrated Marketing Group, a branding and packaging consultant.

XanGo has more than two dozen competitors that sell fruit juices, powdered drinks and vitamin fizz tablets. Tahitian Noni International Inc. sold $2 billion worth of noni juice, from the French Polynesia fruit, in its first 10 years by 2006. MonaVie, also of Utah, bottles a blend of acai juice from the Amazon basin berry. Pure Fruit Technologies Inc. underprices XanGo on a mangosteen-based juice that sells in health food stores.

XanGo, a private company that doesn't reveal financial statements, said at the October convention that since its launch five years ago, sales of the mangosteen-based juice topped a cumulative $1 billion. It ships out the $40 bottles by the case from Spanish Fork, Utah, and says it has sales associates in 17 countries.

"That's the only product they sell, and people are taking it around the world," said Sen. Orrin Hatch, R-Utah. Hatch was the prime sponsor of the 1994 Dietary Supplement Health and Education Act, which allows the sale of supplements unless the Food and Drug Administration can prove them harmful.

"My big concern with XanGo is that the business has gone a long way without showing any benefit in human trials," said Wayne Askew, director of the Division of Nutrition of the University of Utah's College of Health.

"It's a 'Wizard of Oz' story," said Anthony Almada, president and chief executive of GENr8 Inc., a marketer of dietary supplements. "The industry is built on storytelling, and because they do it one-on-one, without advertising, they don't incur the wrath of the FDA."

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