Alex Amezquita joined Herbalife Nutrition in something close to the ideal way.
After working alongside the company for five years as an investment banker with Moelis and Company, he knew Herbalife’s executive team well. So, when John DeSimone, Herbalife’s CFO at the time, asked him to come on board in 2017 as vice president of finance and strategic planning, Amezquita didn’t hesitate.
“It was a no-brainer,” Amezquita said this week in a CFO Thought Leader podcast. “I’ve seen a lot of executive management teams in my time in various transactions, various pressure situations, and this executive management team was a best-in-class team.”
Amezquita, who became CFO last year, said his assuming the top finance seat was never a given but it was clear the team wanted him to aspire to that role.
“It was like being on a five-year interview, in reverse,” he said. “It was a golden opportunity to learn from that CFO. He was my mentor. He continues to be my mentor.”
Distributed sales model
Herbalife Nutrition, a direct marketing company founded 41 years ago, offers dietary products in 90 countries and generated $5.5 billion in net sales last year.
”When you first hear about Herbalife Nutrition, there’s always that ‘wow’ moment when you say, ‘Oh, I didn’t realize it was that big,’” he said.
Like many today, the company has evolved its business model around data collection and analysis, first to make the business more attractive to the thousands of people who sell its products as independent distributors, and second to make the product mix more attractive to customers.
“What’s in people’s baskets?” he said. “How often are they purchasing? What’s the repeat pattern?”
Key to its data collection is the company’s role in order fulfillment, since its sales continue to come mainly through its independent distributor network. It’s the distributors, not the company, who work with customers on a one-on-one basis to customize product packages for them, based on their nutrition goals. The company’s data collection opportunity comes when it steps in to fulfill the orders its network generates.
“We’re building a muscle right now to figure out, now that we have all this information, how can we best leverage it?” he said.
The company relies on a business analytics team, separate from its FP&A team, to collect and look for patterns in the data. “‘We’re seeing this trend, we're noticing x, y and z,’” he said. “‘Have you thought about this?’ It’s a dialogue that can help on the front end.”
Mature growth mode
Since its founding, the company has been in fast growth mode, Amezquita said. Even during the pandemic, although there was some slowdown in parts of the world where virtual avenues for distributors to meet with customers weren’t well developed, the company saw strong growth.
“Regions in the world where the infrastructure was in place to allow the entrepreneurial nature of our distributors find a Plan B or Plan C, Covid was a net net,” he said. “They figured out a Plan B, like doing take-out or customer delivery. Not only that, but in most markets, the demand equation went significantly up; people care much more about what they’re putting in their body. Given the types of products we sell, we benefited from that increased awareness.”
Going forward, although growth is expected to remain solid, for the first time the company plans to focus on ways to create operational efficiencies.
“When you grow at the rate we have, you do what you need to do to support the top line,” he said. “You’re not necessarily worrying about finding or getting operational efficiency maximized; you’re about making sure those top-line dollars are coming in the door. Now we have the management capacity and vision to take a step back to think about how to reorganize the company, realign the assets in the front office to support the next decade of growth.”
Amezquita, a former computer chip designer whose work continues to help satellites orbit the planet today, appears well positioned by training to lead the operational efficiency effort.
"As an engineer, you really dig down into complicated problem solving, day in and day out,” he said, “how to get from point a to point b in a structured way. Today, as a finance leader, it’s very much that, taking unstructured information and figuring out how to make it structured, because it has to fit into a budget. It has to fit into a P&L.”