Amway to build new $31.8 million herb facility

09-Apr-2012 - Last updated on 10-Apr-2012 at 14:10 GMT

Related tags Multi-level marketing Marketing Sales

Direct selling giant Amway is to build a new 48,000-square-foot extraction and concentration facility in Quincy, WA, as the company restructures it supply chain.

The new facility, expected to begin operations in 2014, fits Amway’s plans to move processing facilities closer to its growers.

Jim Brundidge, the company’s director of nutritional product operations, told The Wenatchee World: “[Building a plant in Quincy] creates supply-chain efficiencies that will benefit Amway distributors and their customers through new processing technology and faster order delivery.

“[It also] allows direct shipments of plant concentrates to manufacturing operations, including facilities in California, China and India.”

The 48,000-square-foot extraction and concentration facility will process ingredients for nutritional products sold under itsNutrilitebrand. The company also has the option for an additional 15 acres at the same industrial park.

Direct selling

While retailers dominate the sales market for nutrition products in the US, the direct-to-consumers route was still worth $16 billion in 2010, according to theNutrition Business Journal.

There are four main channels for direct-to-consumer sales: multi-level marketers (MLM), direct media (TV, radio, print), practitioners, and the internet. MLMs accounted for 46% of the market, with direct media, practitioners, and the internet accounting for 17, 19, and 18%, respectively, saidNBJ.