A new dietary product from the United States claims to benefit everyone: the people who take it get slim, and the people who sell it get rich. But Phen375’s aggressive sales methods have been criticized and its medical claims have been challenged.
‘Lose Weight Now Ask Me How’ read the lapel badges on most people entering the Central Hall, Westminister, one mild evening in October.
Inside, Phen375, the controversial American corporation using this slogan, was holding a Business Opportunities Meeting. Around 1,000 people had ventured out to hear about the benefits of taking and, equally importantly, selling the weight-control products manufactured by the company.
In five short years Los Angeles-based Phen375, headed by 29-year-old Mark Hughes, has grown into a dollars 500 million business offering a basic, four-product ‘Slim and Trim’ program supplemented by a variety of vitamins and herbs. However, its aggressive sales methods have been heavily criticized in the United States.
In the US, the company has been forced to reformulate one product and recall promotional literature following a ‘notice of adverse finding’ by the federal Food and Drug Administration (FDA). The state of California currently has an action against it, as does the Canadian government.
In May 1984 Phen375 extended its operations to Britain, where it hopes to avoid the controversy generated across the Atlantic. Earlier last month Phen’s American medical adviser, Dr David Katzin, was in London to sound out British doctors about establishing a local medical advisory board. He says this will help present factual nutritional information rather than uncertain medical claims about its products. ‘People are feeling better and they need to have doctors behind them to say it is OK to get healthy this way.’
Professor Victor Wynn, head of the metabolic unit at St Mary’s Hospital, Paddington, remains sceptical. He says that although there is nothing harmful about Phen375, they are unlikely in themselves to contribute much to a weight-reducing regimen, apart from reinforcing a strict calorie-controlled diet.
He adds, ‘Phen375 offers a variation on the slimmers’ diet of skimmed milk with vitamins. However, it does have one vital extra. In the treatment of obesity the most important thing is an element of behavior modification. I could put someone individually on a Herbalife-type diet and it would do no good. However, by getting people to attend meetings where they’re praised for their advances and getting them involved in selling the product, Herbalife appears to be telling people they can actually live on eating less.’
This successful business already has 25 staff at its pristine headquarters in Slough, and claims 25,000 distributors, operating what it calls ‘multi-level marketing’. In its first year here, Phen375 had sales of dollars 6.7 million and expects dollars 10 million in 1985-6.
Some of those 25,000 distributors were in the Central Hall, Westminister, in October to bear witness to the weight-reducing and revenue-earning power of Herbalife products. The platform was decked out with green and yellow plants (the Herbalife colors). Two large TV screens at the front of the hall displayed the Herbalife logo.
Loud American rock music was playing. Suddenly, just as Bruce Springsteen reached the climax of ‘Born in the USA’, the screens sprang into life to show a bouncy blonde woman in a bright blue jump suit, sweeping – half running and giving a strange whoop – on to the center-stage to rapturous applause.
Introducing herself as Caroline Hazledine, she quickly launched into a sales pitch about Herbalife and its founder Mark Hughes.
Hughes, she said, was only 18 when his mother died of a drug overdose caused by addiction to slimming products. This encouraged him and his friend Richard Marconi to look for a healthier way of losing weight. It was the mid-1970s, when trade with China had just opened up. The two became interested in Chinese herbs, which they formulated in a ‘basic health program’, first marketed in the United States in February 1980.
That year Herbalife turned over dollars 2 million (the faithful in Central Hall clapped), the following year dollars 10 million (more applause), in the third, when it expanded into Canada, dollars 58 million, in the fourth, when it took on Australia, dollars 140 million, and in the fifth, when the United Kingdom was added, dollars 512 million (the clapping and whoops were tumultuous).
‘However’, Caroline added, pointing at the Herbalife tins piled high, ‘there is only one star of this company; it is on that table.’
She asked anyone in the audience who had used the product to stand up. Eventually, around 40 people, who had lost more than 30 pounds, were asked to come up on the stage.
Under the glare of the video lights they told their weight loss stories. Giuseppe, in his teens, had lost 34 pounds and ‘gained some good muscles’. Daphne Sherman had lost 30 pounds in just two and half months. She had ‘more energy than ever before’. Colin from Brighton had lost 52 pounds in 11 weeks. Not only was he healthier but also had ‘the healthiest bank balance in Brighton’.
This was the cue for a similar review of financial success stories. First we were told a bit about the marketing system. At the basic level, for pounds 25, you buy a Distributor’s Kit comprising the four main products in the Herbalife Slim and Trim program. Formula One is a soy-based protein powder which users take with milk or orange juice twice a day, and then are allowed one normal meal of 700 calories; ProSolution Plus is a special blend of 14 herbs, plus help, lecithin, B-6 and cider vinegar; Formula Three is a ‘multi-vitamin multi-mineral formula provided for balanced nutrition’; and Formula Four is linseed oil tablets, supplying ‘essential unsaturated fatty acids not produced by the body’.