NEWS13 June 2013

Herbalife hires former Novartis exec as insights VP

North America People

US — Nutritional supplements company Herbalife has appointed former Novartis marketing services executive Monica Wood as vice president of consumer and distributor insights.

Wood (pictured) most recently ran her own consultancy but was vice president of global marketing services for Novartis between 2005 and 2009. Prior to that she held insight roles at Toys ‘R’ Us and Edelman Public Relations.

According to Herbalife, Wood “will help advance [the company’s] commitment to ongoing, in-depth market research”.

News of her appointment follows the release of a study by Nielsen, which estimates the size of Herbalife’s customer base at 7.9m customers.

Herbalife commissioned the study as part of its fight back against allegations made last year by hedge fund manager Bill Ackman.

Ackman accused the firm of running a pyramid scheme. The firm recruits consumers to sell its products, in much the same way as companies like Avon do. However Ackman claims that Herbalife sellers “earn more than 10 times as much from recruiting [other sellers] as they do by selling the company’s overpriced products to bona fide retail customers”.

Herbalife has said repeatedly that Ackman’s allegations are wrong, calling it “a malicious attack on Herbalife’s business model based largely on outdated, distorted and inaccurate information”.

Prior to making his allegations in December, Ackman shorted more than $1bn worth of Herbalife stock. In response, Herbalife said: “This appears to be yet another attempt to illegally manipulate the market by an overzealous short-seller. “We’ve been in business for 32 years. We have millions of customers worldwide. We don’t pay to recruit distributors.”

To support its counterattack, Herbalife hired Nielsen to survey 10,000 US consumers between April and May. The survey found that 3.3% of respondents had bought Herbalife products in the past three months.

CEO Michael Johnson said: “This survey confirms what we at Herbalife already know to be true: that Herbalife products have a broad consumer base here in the US and that the majority of individuals that purchase Herbalife products do so for personal consumption.”

The company currently has 550,000 distributors in the US, and these individuals are included in the estimates of Herbalife’s total customer base.