Nature’s Sunshine rides cost cutting, interest in powder products to strong 2023

Nature’s Sunshine is bucking the MLM trend by posting strong full year 2023 results that show net sales up more than 7% when accounting for currency fluctuations. 

The company released results earlier this month that stand in stark contrast to many other of the top multi-level marketing companies selling nutritional products that have seen stagnant or constricting sales in the wake of the pandemic. 

Nature’s Sunshine, which is based in Lehi, Utah, reported $445.3 million in net sales in 2023 as compared to $421.9 million in 2022. That’s a 5.5% increase when not correcting for currency fluctuations. 

Restructuring bears fruit 

Nature’s Sunshine CEO Terrence Moorehead attributed the company’s strong performance in the face of continued inflation and geopolitical unrest in Europe (one of the company’s major markets) to delivery on its corporate restructuring plan. The company has cut what it’s paying for ingredients and stripped waste out of its manufacturing and shipping processes. 

“Moving forward, we expect to meet or exceed our $10 million savings plans with quarterly fluctuations in gross margins throughout 2024,” Moorehead said in an earnings call with stock analysts. A transcript of the call has been posted on the site seekingalpha.com. 

The strong year for Nature’s Sunshine is an outlier in the MLM sector. Herbalife, Usana and Nu Skin all reported falling sales in their fiscal 2023 reports. 

Herbalife, whose sales rose modestly in its fourth quarter, has been engaged in its own cost-cutting spree in an apparent attempt to reassure investors that its turnaround rhetoric has real teeth. The value of Herbalife’s shares has fallen more than 80% in the past five years. 

That effort seemed to gather steam as last week Herbalife demoted CFO Alex Amezquita. Herbalife’s steep fall from grace happened on his watch. He was replaced by John DeSimone, CFO from 2010 to 2018.  

Moorehead attributed some of the good vibes in 2024 to the successful launch of a line of powder supplements dubbed Power Greens, Power Beets and Power Meal, the last of which is a meal replacement shake.  

Catching a trend 

The company seems to have caught a trend. According to Nutrition Business Journal (NBJ), the powdered supplement market had been forecasted to grow at 5.6% in 2023 to reach a market size of $10.13 billion, or about 16% of the overall market, making it second only to gummies. 

Bill Giebler, content and insights director at NBJ, said those projections were based on a 2022 report, the last time NBJ assessed the market in terms of delivery formats. Nevertheless, he said the estimate is, if anything, on the low side. 

“In early data analysis in 2024, we're seeing that [sales of] powders will land higher than that for 2023," Giebler told Natural Products Insider. 

Giebler also cautioned that gummies and powders only come out on top when segmenting the market based on individual delivery forms. Pills of all sorts — tablets, capsules and soft gels — still hold more than 37% of the market, he said.