MonaVie Acai Juice: Cure-All or Marketing Scheme?

Flanked by a Ferrari, a Maserati, a Bentley, a Rolls-Royce and a Lamborghini, Dallin Larsen paced the stage, swigging deeply from a bottle in his hand. "I'll tell you what," said the tanned 49-year-old, opening his arms to the 4,000-person crowd, people are "looking for something they can count on, they can depend on, that's constant." The stirring scene would not be out of place at a megachurch revival—except Larsen's event, organized this June in Orlando, Fla., was bent on earning sales rather than salvation. The object of hope was not God but a dark purple fruit juice called MonaVie.

The rich syrupy blend of Brazilian açai (pronounced "ah-sigh-ee") berries and 18 other fruits has gained a cult following among those who say it can kill pain, disease and malnutrition. Packaged in wine bottles like the one Larsen gripped onstage, MonaVie retails for around $40 a pop and isn't available in stores. Instead, the Utah-based company tore a page from the Avon lady, enlisting regular people to sell the product to friends and family. Now MonaVie claims to be one of the world's fastest-growing private companies, with inroads on five continents, and an army of drinkers and sales apostles signing up at a rate of 10,000 a week. Earlier this year, the company announced that cumulative sales had topped $1 billion and that it had signed its millionth unsalaried sales person. "We're blessed," says Larsen, who founded the company in 2005. (As a private organization, MonaVie isn't required to publish financial data, making such claims difficult to judge.)

In a sliding economy, MonaVie appears to buck the trend, minting dozens of mom-and-pop millionaires, according to company sales data, and luring customers who rave about the not-too-sweet taste and miraculous health benefits. In NEWSWEEK interviews and proliferating online videos, people testify to MonaVie beating back cancer, curbing anxiety and controlling the symptoms of autism. Among the converted are former Daytona 500 champ Geoff Bodine, who credits MonaVie with helping him recover from one of the worst crashes in NASCAR history; Viacom CEO Sumner Redstone, who says it will help him live another 50 years (he's 85); and Boston Red Sox outfielder J.D. Drew, who sells the stuff on his MySpace page.

Distributors Diane Nafziger and Sherry Whitaker embody the two-sided MonaVie pitch: better health and more income. The former first-grade teacher and onetime flight attendant travel the country hosting "tasting parties" and sales meetings to entice new recruits. At a recent event in a New Jersey Holiday Inn, they put on a smooth presentation for an audience of around 10 people. Nafziger took the stage first, describing how a diabetic friend committed to MonaVie broke his need for insulin shots. Then Whitaker plied the business angle, outlining MonaVie's sales structure. For a $39 initiation fee and responsibility for sales of at least eight bottles of MonaVie a month, people can retail the product and build their own sales tree, which is where the big money is. In two years, Whitaker and Nafziger have built a 30,000-person tree, earning them up to 20 percent of every sale—which is more than $1 million each in annual commission.

But not everyone is drinking the Kool-Aid. Critics call MonaVie a "legalized scam" that benefits only a few kingpin executives. The product itself, they say, is an overhyped fruit drink that eludes drug regulation by the Food and Drug Administration by letting its distributors (as opposed to MonaVie itself) make the health promises. On, a hugely trafficked MonaVie discussion Web site so large that it's slow to load, outraged distributors and perhaps more level-headed juice fans trash the purple elixir. a NEWSWEEK reporter who took the MonaVie daily dose—two ounces, twice a day—for two weeks, didn't experience the drink's miraculous benefits, and got headaches. (Then again, that might have been because he got new glasses.)

Meanwhile, most of the million-strong sales team is really just drinking the juice, according to MonaVie's 2007 income disclosure statement, a federally required printout of their distributor earnings. More than 90 percent were considered "wholesale customers," whose earnings are mostly discounts on sales to themselves. Fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week. And the dropout rate, while not disclosed by MonaVie, is around 70 percent, according to a top recruiter.

Larsen, for his part, realizes that his sales team can get him in hot water with the Feds. A 20-year-veteran of the multi-level marketing industry, he left a senior post at another juice company in 2002, a year before the FDA destroyed the company's "bogus products" that were being falsely promoted to treat "cancer, arthritis and attention deficit disorder." Last summer, the FDA warned MonaVie about medicinal claims on its Web site and, in an email to NEWSWEEK, says it's satisfied with the company's response. At sales meetings, like the one in Florida, Larsen says he reminds people that MonaVie "is just a juice." Meanwhile an 18-person compliance department investigates distributors suspected of making false claims—although with a million sales people on the books, that's easier said than done. "It's next to impossible," Larsen concedes, "like herding cats." With sales of a million bottles a week, it's also like minting money.

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