XanGo

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XanGo LLC.

Type	Private
Founded	2002
Headquarters	Lehi, Utah, USA
Key people	Aaron Garrity, Gary Hollister, Joe Morton, Gordon Morton, Bryan Davis and Kent Wood
Industry	Multi-level Marketing
Website	XanGo.com

XanGo, LLC, founded in 2002, is a privately owned international multi-level marketing company based in Lehi, Utah.^[1] The company markets and distributes Xango juice, a blended juice product consisting of mangosteen and other juices, a skin care product, and a nutritional supplement.^[2]

Contents 1 Company Overview 1.1 Executives 1.2 Revenue 1.3 Financial sponsorships and contributions 2 Awards 3 Charity & Philanthropic 4 Product Overview 4.1 Production and distribution 4.2 XanGo juice composition 5 Controversy 5.1 Claims of health benefits 5.2 US FDA warning 5.3 Critical assessments of XanGo juice 5.4 Litigation 6 References

[edit] Company Overview

[edit] Executives

• Aaron Garrity, Founder, Chairman of the Board, Former President/Chief Executive Officer^[3]
• Gary Hollister, Founder, Former Chief Executive, Former Chairman of the Board, Chairman Emeritus^[3]
• Joe Morton, Founder, Board of Directors
• Gordon Morton, Founder, Board of Directors
• Bryan Davis, Founder, Board of Directors
• Kent Wood, Founder, Board of Directors
• Robert Conlee, Chief Executive Officer, Board of Directors
• Craig Hale, President, Former General Counsel
• Robert Spangler, Chief Financial Officer
• Nate Brown, Chief Operations Officer
• Larry Macfarlane, Chief Marketing Officer
• Scott Smith, Sr. VP of Distributor Relations
• Brian Carmack, Sr. VP of International
• Beverly Hollister, Sr. VP

[edit] Revenue

XanGo is a privately held company and as such does not publicly disclose its financial statements. Company press releases in 2005-2006 stated that sales totalled $40 million in 2003 and $150 million in 2004,^[4] and that 2005 sales were more than twice those of 2004.^[5] In October 2007 the company said that cumulative sales since its inception five years earlier were over $1 billion and by November 2008 had exceeded $1.5 billion.^[6]

XanGo now operates in 23 countries throughout the world and has over one million distributors.^[7]

[edit] Financial sponsorships and contributions

In November 2006, Xango LLC became the official corporate jersey-front sponsor of the Real Salt Lake, a MLS soccer team based in Salt Lake City, Utah for four years, at a cost of between $500,000 and $1 million per year.^[8] In 2006, the company made a 5-year, $1 million grant to an Orem, Utah arts council for naming rights to what is now called the "XanGo Grand Theater".^[9] XanGo LLC has been the top contributor to the political campaign of Utah Senator Orrin Hatch, contributing $47,200 in 2008 and $46,700 in 2006, according to the Center for Responsive Politics.^[10][11]

[edit] Awards

XanGo founders Aaron Garrity and Gary Hollister were national finalists in the USA 2006 Ernst & Young Entrepreneur of The Year Award for their success in the founding and growth of the company. Garrity, now Chairman of the Board was recognised in Utah Business magazine in 2008 as the state's CEO of The Year. The company has also won awards in the fields of Social Responsibility. XanGo LLC has also received press honours for the state of Utah as 'Best Place to Work' and 'Best Employer'. The custom created XanGo Juice bottle has also won awards for packaging excellence.

[edit] Charity & Philanthropic

Since the inception of the company 7% of profits have been set aside and donated to children's charities, notably Operation Kids. The company also operates initiatives under the brand 'XanGo Goodness' building partnerships with NGOs and other organisations to benefit children around the world. A part of this program is the XanGo Meal Pack, a custom foodstuff designed as a first line recovery food for those suffering serious malnutrition. Distributors are encouraged to participate in the charitable and philanthropic ventures in the style of Humanitarian and Social Entrepreneurs.

[edit] Product Overview

[edit] Production and distribution

XanGo juice is sold in the U.S. and (as of mid-2007) exported to Australia, Canada, Germany, Hong Kong, Japan, Malaysia, Mexico, Philippines, Singapore, Sweden, and the United Kingdom.^[12][13] The company began operating in Taiwan as of October 2007.^[12]

The company sells XanGo Juice mainly using a nine-level multi-level marketing structure.^[14] In June 2006, the company said it had 350,000 distributors.^[15] In July, the company told the Federal Trade Commission that there were "roughly 500,000 distributors worldwide"^[2], and in November, it reported having more than 600 employees at its Lehi headquarters and more than 500,000 independent distributors in 15 international markets.^[1] In July 2007, it said it had about 700,000 distributors,^[12] of whom an estimated 70 percent simply use their status to buy the juice at the discounted membership price.^[16] In October 2008 it said that it operated in 24 countries and had more than 1 million independent distributors.^[3]

In the United States, XanGo juice sells for a retail price of $37.50 for a 750 ml (25.35 ounce) bottle.

[edit] XanGo juice composition

XanGo Juice is a blend of mangosteen aril and pericarp purée[5] with juice concentrates of eight other fruits: apple, pear (juice and purée), grape, blueberry, raspberry, strawberry, cranberry and cherry.^[17] Other ingredients include citric acid, natural flavor, pectin, xanthan gum, sodium benzoate, and potassium sorbate.

XanGo claims its juice maintains the structure of xanthone compounds from the mangosteen pericarp.^[18]

The Associated Press commissioned the Linus Pauling Institute to measure the in vitro antioxidant strength of XanGo juice against retail fruit juices. The antioxidant strength of XanGo measured slightly higher than cranberry juice but lower than black cherry and less than half the value for blueberry juice.^[6] However, the value of in vitro analysis of antioxidant strength is in question, as there is no current evidence that antioxidant phytochemicals present in XanGo or other fruit juices actually have functions inside the human body.^[19] The measurements of antioxidant strength apply to test tubes, but consumed juices are affected by stomach acids that would neutralize or destroy antioxidant value preventing the same biological effects in vivo.^[6][19][20]

In 2002, XanGo founders Aaron R. Garrity, Gordon A. Morton, and Joseph C. Morton (doing business as DBC, LLC) applied for a United States patent (#6730333) for Xango juice; however the application was rejected by the United States Patent and Trademark Office on April 21, 2005.^[21] On November 3, 2008, the U.S. Court of Appeals for the Federal Circuit ruled that the decision of a patent appeals board to deny XanGo's patent application would still stand.^[22][23]

[edit] Controversy

[edit] Claims of health benefits

Marketing materials used to promote mangosteen juice claim more than 20 human health benefits, including "anti-inflammatory," "anti-microbial," "anti-fungal," "anti-viral," "anti-cancer," "anti-ulcer," "anti-hepatotoxic," "anti-rhinoviral," and "anti-allergic" effects.^[24] Promotional literature for the product cites antioxidants from the inedible rind of the fruit as providing health benefits. None of these claims, however, has scientific proof established by peer-reviewed research and human clinical trials, as discussed below.

The American Cancer Society profile of mangosteen juice states there is no reliable evidence that mangosteen juice, puree, or bark is effective as a treatment for cancer in humans.^[25]

The company's website states that "research shows xanthones (an alleged component of XanGo juice) possess potent antioxidant properties that may help maintain intestinal health, strengthen the immune system, neutralize free radicals, help support cartilage and joint function, and promote a healthy seasonal respiratory system"; however, they also add a footnote with the following disclaimer: "These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease."^[26] Furthermore, there is increasing scientific understanding that xanthones or other polyphenols from plant foods do not serve antioxidant roles in the human body.^[19]

A scientific advisor for the company, David A. Morton, PhD^[27][28] (whose brothers, Joe and Gordon, helped found the company),^[11][29] stated in 2006 there is "emerging evidence that mangosteen has anti-inflammatory, antioxidant, and anti-microbial properties"^[27], yet acknowledged the only study of humans consuming mangosteen juice was conducted as a test of dysentery therapy in Singapore in 1932.^[27][30] "I don’t think there are plans to study mangosteen in humans in the near future," Dr. Morton said in 2006, because "there’s much too much that still needs to be studied in the lab."^[27]

In 2007, the Mayo Clinic stated there was laboratory evidence that the xanthones in mangosteen had anti-inflammatory activity, but there was no evidence demonstrating such anti-inflammatory effects in humans.^[31]

[edit] US FDA warning

On September 20, 2006, the United States Food and Drug Administration issued a warning letter to XanGo LLC International in response to the company's promotion of Xango juice as a drug, in violation of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. § 321(g)(1)], by claiming that it could treat and/or cure various diseases.^[32] The agency's letter further warned that Xango juice had not been properly tested for safety and efficacy, and as a proposed new drug it could not be legally sold in the US without prior approval of the FDA, and that the company could face enforcement action including seizure and/or injunction of products or suspension of business. Under FDA drug labeling rules, XanGo LLC, as manufacturer, is responsible for satisfying scientific criteria to make health claims on its product labels and all marketing materials. As of September 2008, the case remains open.

[edit] Critical assessments of XanGo juice

The Mayo Clinic said in October 2005 that "there are no published clinical trials showing evidence that either the fruit or its juice — marketed under the name XanGo juice — is an effective treatment for arthritis, cancer or any other disorder in humans."^[33]

In February 2006, the U.C. Berkeley Wellness Newsletter, sponsored by the University of California at Berkeley, said that "Mangosteen marketers make farfetched and unsubstantiated claims for their products." The newsletter notes that "there are no clinical trials, and what happens in a test tube or animal may not occur in a human. Any reported benefits in humans have been anecdotal. No one even knows if the processed fruit juice and capsules retain the potentially beneficial compounds. What’s more, the juice is typically a mix of fruit juices — with an undisclosed amount of mangosteen in it." ^[34]

Dr. Ralph Moss, author of several natural remedy books, has said of mangosteen juice:

In my opinion, what we have here is simply an overpriced fruit drink. Fruit drinks are often healthful beverages. But the only reason I can see that the promoters of mangosteen can get away with charging $37 for this product is that they are playing on patients' hopes and fears in a cynical way. Without the health claims, open or implied, the product could only be sold for at most $5 or $6 (which, for example, is the cost of antioxidant-rich pomegranate juice).^[35]

A 2008 medical case report described a patient with severe acidosis possibly attributable to a year of daily use (to lose weight, dose not described) of mangosteen juice (brand not described) infused with xanthones,^[36] as occurs in the manufacture of XanGo juice. The authors proposed that chronic exposure to alpha-mangostin, a xanthone, could be toxic to mitochondrial function,^[37] leading to impairment of cellular respiration and production of lactic acidosis.

[edit] Litigation

Tahitian Noni International (TNI), a rival MLM beverage company, sued XanGo LLC and several of its top executives in February 2003 in the 4th District Court in Provo, Utah, alleging that XanGo executives stole TNI's concept for a mangosteen-based supplement while they were employed by TNI's parent-company. After a countersuit against TNI was launched by XanGo LLC, the two parties settled out of court. A joint statement by TNI and XanGo said that they had "agreed to resolve their disputes and the litigation between them and their founders" but the particulars of the settlement were not disclosed.^[38]

[edit] References

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