New Shake Shop Really a Herbalife Nutrition Club

By Liza Mackeen & Juli Freedman | lmackeen@oberlin.edu, jfreedm2@oberlin.edu | December 14, 2018 @ 5:00 am

If you have an Instagram account, chances are you’ve seen a picture of someone you know with a shake from Oberlin Nutrition over the past couple of days. This store, which opened for business on November 27th, and is located at 175 South Main Street, specializes in selling purportedly healthy shakes, teas, and coffees. While they do not yet have an official website or Yelp page, their rather active Instagram (@oberlinnutrition) displays glossy pictures of students drinking beverages such as their Cake Batter shake or Blue Raspberry tea alongside captions boasting of health benefits such as increased energy and boosted metabolism. At first glance, Oberlin Nutrition seems like any other smoothie bar; however, under further scrutiny, Oberlin Nutrition is not a typical juice or smoothie shop. In fact, it’s not a shop at all, but rather a “nutrition club.” Like approximately 5,900 other establishments across the United States, Oberlin Nutrition is an outpost of the controversial multi-level marketing company Herbalife, run by the undeniably charismatic couple Ray and Golden. This is the second establishment they run together (they also own Westpark Nutrition), alongside Hustle & Heart, Sunshine’s Herbalife-affiliated women’s health and motivational group.

 

Founded in 1980 by the businessman Mark Hughes, Herbalife is one of the world’s most popular multi-level marketing companies, with approximately 3.7 million members in over 90 countries. The company manufactures shakes, teas, snacks, and skincare products, which it then sells to local distributors at a discount. Because Herbalife is a multi-level marketing operation, these representatives theoretically not only profit by selling the products, but also by recruiting new members to become distributors themselves.This is the same business model as Avon, Mary Kay and other brands you may have seen heavily promoted on the Facebook walls of friends and family. However, in order to actually receive additional compensation from the company, distributors must first “qualify to earn,” which entails collecting enough “documented volume” points. Each Herbalife product has a volume point value — thus, distributors must purchase more products from the company in order to receive greater payouts.

However, Herbalife has come under fire for their multi-level marketing approach, with many critics arguing that the company is essentially a pyramid scheme and that it is nearly impossible for distributors to make a profit. As shown in the documentary Betting On Zero, victims claimed to have lost thousands of dollars by buying large quantities of product never to be sold and undocumented distributors being threatened with deportation by those in their upline. In 2017, the FTC determined that Herbalife is not a pyramid scheme, but did force them to both pay out a $200 million settlement to disgruntled consumers and to restructure their downline business approach. The Chairwoman of the FTC, Edith Ramirez, said “Herbalife is going to have to start operating legitimately” at the press meeting.

In order to reach more customers, many Herbalife distributors open up so-called “nutrition clubs.” While these clubs may seem like regular shops, Herbalife makes very clear in their training materials that they are not retail establishments. As Section 3B of their official nutrition club manual reads, “Nutrition Clubs are social gatherings, bringing people together with a focus on good nutrition. They are not retail stores or outlets, nor are they restaurants or carry-out establishments.” Thus, instead of charging for individual shakes or teas, the operators of these clubs are actually charging a membership fee. Because they are not technically selling their beverages, these nutrition clubs are not allowed to display prices on their menus, with the manual stating that, “club operators may post a list of available flavors of shakes and teas, as well as any optional ingredients such as protein or fiber, but consistent with the proper operation of a Nutrition Club they may not post, list or charge individual prices for these products or ingredients.”

As one of these nutrition clubs, Oberlin Nutrition operates along the lines dictated by Herbalife — however, the owners make it difficult to distinguish the club experience from a regular store. When we visited the store on Monday, December 3rd, Sunshine presented us with a large menu of their shake and tea varieties and a half-sheet listing the flavor combinations of tea, aloe, and “liftoff flavors,” which included varieties ranging from Original to Peach to Skittles. After we completed the tea portion, we selected our shake flavor from their vast array of options. Although the menu advertised extras such as a collagen boost or a fat-burning “donut shot”, we did not order any of these add-ons. Before you submit your order, you must also include your email, number and “wellness goal”. As the rules of Herbalife dictate, there were no prices on the menu, and we placed our order not knowing how much it would cost. We were only charged for our order after receiving the shake and tea, which cost 11 dollars. Despite the clause in Herbalife’s Nutrition Club Rules stating that “membership fees may not be represented as the price or cost of products offered to members or their guests for consumption,” this charge was not presented to us as a membership fee but rather the price of the tea-shake combo. When we asked the owners about their motives behind not displaying prices, they informed us that the decision is largely an aesthetic choice. Ray elaborated, “People ask if they’re curious, but when people go to a smoothie shop, you just know it’s gonna be around this amount of money. It’s not gonna be like it’s just free. People know it’s gonna cost money, and with a tea and a shake, it’s like a meal. It’s going to be more than a dollar,so that’s why we don’t. And it’s just more attractive.” Furthermore, Golden noted that they had posted the prices of both their basic and popular combo (8 and 11 dollars, respectively) on their Instagram account. However, considering that one of the rules of operating a nutrition club prohibits displaying prices, this explanation feels misleading.

 

One of Herbalife’s, and by extension, Oberlin Nutrition’s, central selling points for their products is their health benefits. As Golden told us, “The shakes are gonna be 24 grams of protein and 21 vitamins. They’re gonna taste like a dessert, and it’s gonna fill you up and give you things we would lack from most of our processed grocery food because of the way that our system is set up. It’s gonna give you energy in return because your body is giving you things that you aren’t used to getting, and it also puts you at your healthiest weight.” When we asked what exactly makes Herbalife an alternative to “processed” grocery food, considering the base for all their shakes is a powder made up of an extensive list of highly processed ingredients like soy protein isolate and sucralose, she responded, “So when you get food from the grocery store, the label gets to be about 30% true because of the FDA. That’s the regulations — this comes straight from the factory, so everything on the label is gonna be 99.9% true. It’s straight vitamins and all-natural. We have the best doctors in the system. Actually, Herbalife is the number one nutrition company in the world year after year after year...I’m not a nutritional person and I’m not into the small details. What I am into, though, is how it makes me feel. I’ve been doing this for two years, and I’ve been focusing more on just expressing how I feel and sharing it with other people, and it’s worked really well for me. They have, like, a ton of laboratories — they even have one that is specifically made just to test the products, so they really just put a lot of love and time and intelligence and science into the product.” The claim that Herbalife is the number one nutrition company in the world is slightly vague, and we could not find any information to support that fact in terms of quality of products, profits, or size.  While it is one of the world’s largest nutrition companies, and was included on the Forbes' List of Best Midsize Employers three years in a row starting in 2015 (currently ranked at #462 in the 2018 list), nothing seems to suggest that it is somehow the number one nutrition company in the world in any regard.

Despite the owners’ claims about the vetted quality of their products, the science behind Herbalife’s supposed nutritional benefits is shaky at best. As the news outlet Vox found, the studies conducted on Herbalife products by the company are extremely flawed and incomprehensive. Out of the four studies the company touts as evidence of their scientific bonafides, two were 12-week trials comparing the effects of two different products (both manufactured by Herbalife), one was a three-week trial with a sample size of 16 participants, and one was not actually published. Herbalife shakes are low-calorie meal replacements, so while people may lose weight by following the prescribed diet, it is reasonable to assume that this can be attributed to simply ingesting fewer calories than normal. When we asked the owners which specific aspect of Herbalife’s products causes weight loss, Ray told us, “the vitamins and the nutrients,” and when we asked which particular vitamins and nutrients these were, he simply directed us to look at the list of ingredients on the back of the canisters. We also asked the owners about what makes Herbalife products energizing, with Sunshine telling us that, “It [a shake] has a lot of B12 vitamins so it feeds your brain focus...t gives off the feeling of energy, because you’re so focused that you can get a lot more done.” The claim that B12 vitamins provide energy is slightly misleading — while they help the body convert glucose into the energy molecules it uses (known as ATP), they do not inherently have any energizing properties. Thus, while the vitamins in Herbalife products may provide the tools for the body to create energy from other food, they are not energizing in and of themselves. However, the Herbalife tea concentrate does contain caffeine, and considering that the teas and shakes are marketed to be sold together, this is likely responsible for any energy-boosting effects.

While it is true that an internal survey conducted by Herbalife itself found that 57% of club owners either did not profit or lost money off their ventures, and that the last disclosed (reported in 2005) non-supervisor distributor turnover rate was greater than 90%, Golden and Ray are no doubt a success story for the the company. They clearly do not have any malicious intent, and are not out to scam Oberlin students into becoming shills for Herbalife. When we reached out to the owners about our research, the responded: “In response to this article which focuses on negativity, I recommend to focus [sic] on how I know these shakes and tea make people feel and the results they have been able to get. We are not the only success story. We are actually a small percentage because just like anything if you are coachable and work hard you too can be successful. Everyday so many humans eat things like McDonald’s chipotle and grocery store food they have no idea what’s inside of it [sic]. This is the number 1 nutrition company in the world backed by number 1 doctors [sic], & I’d do less time trying to make a good thing bad and focus more on making myself better personally! Focusing on our personal development as humans has worked wonders for us! Show more real life results & less online stats. Thanks for the love! Come see us fam!”

Regardless, this does not change the fact that the health benefits of their products are dubious at best. Therefore, if you’re considering visiting Oberlin Nutrition, don’t go in believing that you’ve found your new miracle diet. Instead, accept that you’re essentially consuming a glorified milkshake, and inadvertently becoming a member of a billion-dollar company with a dark past.

  • Facebook Social Icon
  • Twitter Social Icon
  • Instagram Social Icon