Alticor Inc.

  • Overview

At the core of Alticor, there is Amway. Holding company Alticor operates direct-selling giant Amway International and North American Web sales affiliate Amway Corp., which does business as Amway Global. Its Access Business Group offers manufacturing and distribution services, primarily catering to the Amway units but also to contract clients. Outside the direct-sales realm, Alticor Corporate Enterprises operates resort management firm Amway Hotel, upscale cosmetics maker Gurwitch Products (known for its Laura Mercier and ReVive brands), and health diagnostics developer Interleukin Genetics. Formed in 2000, Alticor is owned by Amway's founders, the DeVos and Van Andel families.

Operations

Alticor is the parent company to Amway, Access Business Group LLC, and Alticor Corporate Enterprises.

Collectively through its network of businesses, Alticor serves more than 80 countries and territories worldwide. The company offers consumer products and business opportunities not available elsewhere. Its services include product development, manufacturing, and logistics. Besides Alticor's Amway Hotel, Gurwitch Products, and Interleukin Genetics businesses, the company operates several other unique entities. Its Metagenics unit, a global life sciences company, focuses on reversing chronic illness and on improving health through nutrition. Fulton Innovation, another subsidiary, is a technology licensing company. Its KinDex Therapeutics unit concentrates on the discovery of molecules associated with chronic disease.

Sales and Marketing

Amway boasts more than 3 million independent distributors worldwide. China has become its largest market. It's a well-known multi-level marketer and direct seller of household, personal care, nutrition, and cleaning items. The company also peddles the products of other companies worldwide in more than 80 markets.

Geographic Reach

Based in Ada, Michigan, Alticor's headquarters spans more than 1 million sq. ft. The company owns or manages manufacturing and distribution facilities worldwide. It boasts manufacturing facilities in the US, China, and India and oversees organically-certified farms in the US, Mexico, and Brazil for growing food supplements. Alticor's distribution facilities are located in North America, Europe, and the Far East.

Financial Analysis

Despite the global economic downturn, Alticor has continued to make strides in top-line growth. For the first time in 20-plus years, Alticor has logged sales increases across all top 10 markets: China, India, Korea, Japan, Malaysia, Russia, Taiwan, Thailand, Ukraine, and the US. Posting double-digit increases in 2012 were Colombia, Hong Kong, Italy, Mexico, Russia, Turkey, and Venezuela.

Representing the seventh consecutive year of growth, Alticor in 2012 recorded global sales of $11.3 billion, compared to 2011 sales of $10.9 billion. It has logged sales increases for the 12 out of the past 13 years. The majority of its $11.3 billion came from distributor sales.

Strategy

The company's success relies on setting up Independent Business Owners (IBOs) to sell its name brand products, but more importantly build its network. The company has been accused of focusing on new IBO recruitment rather than on selling and developing new products or services. Although individuals are required to pay a membership fee, Amway asserts that they can then buy its products and sell them at a 20% to 25% markup. IBOs that recruit get a cut from the sales made by those members.

The direct-selling business model is popular; Amway reaches across North America and Europe. Its focus, however, is increasingly on Asia's fertile market. Sales from its Amway China and India units are anticipated to jump by double-digits as consumers increase retail spending. The company deepens its presence by outsourcing its manufacturing operations to third parties in the Asia/Pacific region as well as by aligning its product design and branding around their cultures.

To this end, Amway is investing $335 million in manufacturing and research and development expansion. The initiative involves upgrading four factories in the US, building a new manufacturing facility in India, and adding second sites in both China and Vietnam. In 2013 Amway broke ground on a new $95-million production plant in Tamil Nadu, India, set for completion in 2015. Its second plant in China will be located in Guangzhou; the $75-million facility is slated for completion by 2016.

Alticor continues to invest in its supply chain, manufacturing, and scientific resources to ensure distributors have access to products when and where they need them.

Company Ownership

Alticor is owned by Amway's founding DeVos and Van Andel families.

Company Background

Alticor had Amway Corp. drop the Quixtar name in 2009 and adopt the trade name Amway Global for the purpose of uniformity.

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Alticor Inc.


7575 Fulton St East
Ada, MI 49355-0001
Phone: 1 (616) 787-1000
Fax: 1 (616) 7874000
www.alticor.com

STATS


  • Employer Type: Private
  • Chairman: Jeffrey Bland
  • Chief Executive Officer: Fred Howard
  • Managing Director, Amway Japan: John Parker

Major Office Locations

  • Ada, MI

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