XanGo

Infobox_Company
company_name = XanGo LLC.
company_
company_type = Private| company_slogan = Discover the Goodness
foundation = 2002
location = Lehi, Utah, USA | key_people = Aaron Garrity, Gary Hollister, Joe Morton, Gordon Morton, Bryan Davis and Kent Wood
Revenue = $360,000,000 USD per year
industry = Multi-level Marketing
homepage = [http://www.xango.com/ XanGo.com]

XanGo, LLC, founded in 2002, is a privately owned international multi-level marketing company based in Lehi, Utah. [http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=17113&zoneid=34 "XanGo Top Executives Named as Finalists in National Ernst & Young Entrepreneur of the Year Award 2006"] , XanGo press release, November 29, 2006] The company markets and distributes Xango juice, a blended juice product consisting of mangosteen and other juices, which is promoted as a dietary supplement. [http://www.ftc.gov/os/comments/businessopprule/522418-08351.pdf Comments to the Federal Trade Commission by XanGo, LLC, on the Notice of Proposed Rulemaking for the Business Opportunity Rule (pdf)] , July 12, 2006]

Company Overview

Executives

*Aaron Garrity (co-founder), President/Chief Executive Officer
*Gary Hollister, (co-founder), Chairman of the Board/former Chief Executive Officer
*Joe Morton (co-founder), Executive Vice President
*Gordon Morton (co-founder), President of Sales and Marketing
*Bryan Davis (co-founder), Vice President
*Kent Wood, (co-founder) President of Operations
*Bob Freeze, Vice President of Public Relations

Revenue

XanGo is a privately-held company and does not publicly disclose its financial statements. Company press releases in 2005-2006 claimed that sales totalled $40 million in 2003 and $150 million in 2004, [ [http://www.industrialnewsupdate.com/news/food-processing/archives/2005/03/food_supplement.php "Food Supplement Has Healthy Sales Growth, Gains Popularity"] , XanGo press release, March 9, 2005] and that 2005 sales were more than twice those of 2004. [ [http://www.xangonewscenter.com/pressreleases/2006/4.html#4 "XanGo Named Top Growth Company by Nutrition Business Journal Awards"] , XanGo press release, February 9, 2006] In October 2007 the company said that cumulative sales since its inception five years earlier were over $1 billion.Foy P. [http://www.venturacountystar.com/news/2008/mar/02/exotic-and-lucrative/ FDA warns XanGo of its claims as juice sales top $1 billion] , Associated Press, March, 2008]

Financial sponsorships and contributions

In November 2006, Xango LLC became the official corporate 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. [Jack Bell, [http://www.nytimes.com/2006/12/25/sports/soccer/25soccer.html?ex=1324702800&en=e8bcf07948389597&ei=5088&partner=rssnyt&emc=rss "M.L.S. Wants Your Advertising"] , "New York Times", December 25, 2006] In 2006, the company made a 5-year, $1 million grant to [http://www.scera.org/aboutscera.html an Orem, Utah arts council] for naming rights to what is now called the "XanGo Grand Theater". [Sara Israelsen, [http://deseretnews.com/dn/view/0,1249,650199959,00.html "Aging SCERA gaining new luster: 5-year-plan aims to turn building into a state-of-the-art facility"] , "Deseret Morning News", October 19, 2006] 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.cite web|url=http://www.opensecrets.org/politicians/contrib.php?cycle=2006&cid=n00009869
title=Orrin G. Hatch: Top Donors |accessdate=2008-10-04|publisher= Center for Responsive Politics
]

Product Overview

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. Boey Ping Ping, [http://thestar.com.my/lifestyle/story.asp?file=/2007/7/8/lifeliving/18206277&sec=lifeliving "Queen of fruits, bottled"] , "The Star", July 8, 2007] The company began operating in Taiwan as of October 2007.

The company sells XanGo Juice mainly using a nine-layer multi-level marketing structure. [ [http://www.xango.com/misc/comp_plan.html XanGo Compensation] , company website, accessed February 16, 2007] In June 2006, the company said it had 350,000 distributors. [http://deseretnews.com/dn/view/0,1249,635213719,00.html "Hollister, Garrity build healthy business"] , "Deseret Morning News", June 11, 2006] In July, the company told the Federal Trade Commission that there were "roughly 500,000 distributors worldwide", 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. In July 2007, it said it had about 700,000 distributors, [http://www.bernama.com.my/bernama/v3/news_lite.php?id=276331 "Xango To Make Malaysia Launching Pad For Its Product"] , Malaysian National News Agency, July 30, 2007] of whom an estimated 70 percent simply use their status to buy the juice at the discounted membership price. [Chuck Jaffe, [http://newsok.com/article/3110827/1188132707?mp=0 "Investing in juice hard to swallow"] , "The Oklahoman", August 26, 2007]

XanGo juice sells for a retail price of $37.50 for a 750 ml (25.35 ounce) bottle.

One of the biggest distribuitors in Latin America and the whole world is Gildardo Alvarez, he is the best reference for this product and xango business structure, contact: gil_alvarez@lycos.com

XanGo juice composition

XanGo Juice is a blend of mangosteen aril and pericarp purée [http://naturalproductsinsider.com/articles/07mar12feat3.html] with juice concentrates of eight other fruits: apple, pear (juice and purée), grape, blueberry, raspberry, strawberry, cranberry and cherry. ["Supplement facts", pop-up at [http://www.xango.com/drink/bottle.html The XanGo Bottle] , XanGo website, accessed February 18, 2007] Other ingredeints 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.Clarisse Douaud, [http://www.nutraingredients-usa.com/news/ng.asp?n=77971-xango-chromadex-mangosteen "Xango plugs analytical method for xanthone content"] , NutraIngredients.com, July 5, 2007, accessed July 19, 2007]

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. 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. 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. [ [http://www.ncbi.nlm.nih.gov/pubmed/17157175 Lotito SB, Frei B. Consumption of flavonoid-rich foods and increased plasma antioxidant capacity in humans: cause, consequence, or epiphenomenon? Free Radic Biol Med. 2006 Dec 15;41(12):1727-46] ]

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. [ [http://www.amquix.info/xango/xango_4-21-05_patent_rejection.pdf US Patent and Trademark Office rejection of claim] , mailed April 21, 2005]

New products

In March 2007 the company announced that it would market a "premium brand", XALO(tm) Juice, "a proprietary fusion of aloe with mangosteen and other premium ingredients", including grape seed and green tea. The new brand will be sold by the case (four 750 ml bottles) and the company said it would introduce it in Europe in the summer of 2007. [ [http://www.xangonewscenter.com/pressreleases/2007/6.html#6 "XanGo Announces New Premium Brand, XALO Juice"] , XanGo press release, March 29, 2007, accessed July 31, 2007]

Controversy

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. [http://www.casewatch.org/fdawarning/prod/2006/xango.shtml U.S. Food and Drug Administration warning letter] , September 20, 2006] 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. [ [http://www.cancer.org/docroot/ETO/content/ETO_5_3x_Mangosteen_Juice.asp?sitearea=ETO Profile of Mangosteen Juice, American Cancer Society] , revised June 1, 2005, accessed February 16, 2007]

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 footnoted 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." [ [http://www.xango.com/learn/index.html] XanGo website, accessed February 16, 2007]

A scientific advisor for the company, David A. Morton, PhD [ is a member of the research and clinical faculty of Department of Neurobiology and Anatomy in the School of Medicine of the University of Utah, per the [http://www.neuro.utah.edu/people/faculty/index.php department's directory] (accessed February 18, 2007)] (whose brothers, Joe and Gordon, helped found the company), Linda Fantin and Robert Gehrke, "XanGo and the FDA", "Salt Lake City Tribune", November 20, 2006] [ [http://www.xango.com/learn/execs.html] XanGo founders and executives] stated in 2006 there is "emerging evidence that mangosteen has anti-inflammatory, antioxidant, and anti-microbial properties" [http://www.cspinet.org/nah/11_06/juice.pdf "Mangosteen" (pdf)] , "Nutrition Action Healthletter", Center for Science in the Public Interest, November, 2006, page 9] , yet acknowledged the only study of humans consuming mangosteen juice was conducted as a test of dysentery therapy in Singapore in 1932. [ [http://www.consumeraffairs.com/news04/2006/10/cspi_fruit_juice.html "Specialty Fruit Juices' Health Claims Questioned"] , consumeraffairs.com, October 26, 2006] "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."

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. [* [http://www.mayoclinic.com/health/mangosteen/AN01197] MayoClinic.com. Mangosteen juice: can it relieve arthritis pain? October 2007]

US FDA warning

On September 20, 2006, the United States Food and Drug Administration (FDA) 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. [ [http://www.fda.gov/foi/warning_letters/archive/g6031d.pdf FDA Warning letter] , September 20, 2006] 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 inclunding 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.

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." [ [http://www.mayoclinic.com/health/mangosteen/AN01197 Mangosteen (Xango) juice: Can it help arthritis?] , Mayo Clinic, October 3, 2005, accessed February 16, 2007]

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." [ [http://www.wellnessletter.com/html/wl/2006/wlAskExperts0206.html "Ask the Experts"] , U.C. Berkeley Wellness Newsletter, February 2006.]

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). [ [http://chetday.com/mangosteen.htm "A Friendly Skeptic Looks at Mangosteen"] , Dr. Ralph Moss, accessed February 16, 2007]

In an article published in February 2007, Paul M. Gross, PhD (physiology), and Ian Crown, a mangosteen grower, said, "As mangosteen's supposed health claims are not supportable by sufficient nutrient density or a complete research process allowing conclusions about human health benefits, it has not met standards to be a superfruit. Research on xanthones is only at a preliminary stage from which no conclusions regarding lowered disease risk are valid at this time." [Paul M. Gross, PhD, and Ian Crown, [http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=17613&zoneid=43 "Is mangosteen a superfruit? Nutrient and antioxidant properties"] , "Natural Products Information Center", February 5, 2007]

When assessed by four criteria for superfruit status -- nutrient density, antioxidant strength, research intensity and commercial success -- mangosteen ranks lowest among five other exotic plant foods. [Paul M. Gross, PhD [http://www.naturalproductsinsider.com/articles/tracking-market.html Tracking market meteors: exotic superfruits] , "Natural Products Insider", November 16, 2007]

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, [Wong LP, Klemmer PJ. Severe lactic acidosis associated with juice of the mangosteen fruit, "Garcinia mangostana" Am J Kidney Dis 51:829-3, 2008] 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, [ [http://www.ncbi.nlm.nih.gov/pubmed/15498656 Matsumoto K, Akao Y, Yi H, Ohguchi K, Ito T, Tanaka T, Kobayashi E, Iinuma M, Nozawa Y. Preferential target is mitochondria in alpha-mangostin-induced apoptosis in human leukemia HL60 cells. Bioorg Med Chem. 2004 Nov 15;12(22):5799-806] ] leading to impairment of cellular respiration and production of lactic acidosis.

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. [ [http://www.heraldextra.com/content/view/178505/3/ Daily Herald - Tahitian Noni, XanGo settle dispute over juice ] ]

References

External links

* [http://www.xango.com/ XanGo official website]
* [http://www.xangonewscenter.com/ Company press releases]


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