On Jan 2015, Amway a direct selling giant has acquired a California based brand of snacks and energy drinks XS Energy. The company has successfully marketed its product through parties around the Asia and U.S. Any information related to this agreement was not disclosed. Neither the terms of the agreement or price were disclosed. This deal was announced on Jan 14 by the Ada – based giant. In 2013, sales report by Amway was USD 11.8 billion. Amway Corporation manufactures and sells its own products as well as brand name products from other companies through a network of three million independent distributors worldwide. On the other hand, XS Energy was incorporated in 2001 which was co-founded by former Amway business owner David Vanderveen.
Since 2003 the XS Energy brand has been sold as an Amway product. At present the brand is distributed in more than 35 countries and generating overall sales of USD 150 million annually. The XS Energy products are available in range of flavors, the company describe itself the markers of sugar free energy drink loaded with lots of vitamins B.
Vanderveen who has started as an Amway distributor 20 years ago will join Amway as a vice president and also the general manager for the XS brand. This approach is to provide his expertise how to connect with the young crowd below 35 years of age.
Analyst View:
This acquisition of the two brands Amway and XS Energy will act as a strategic move for Amway to leverage the approach XS Energy to connect with young business people. Moreover it will provide Amway with the strong and young growing customer base of the XS Energy brand. This will also create new opportunities for the budding entrepreneur and aspiring people over the coming years. This deal of Amway and XS Energy brand will also increase the geographic reach of the company. Amway, by the acquisition of XS brand, will infuse the rest of its portfolio with the authenticity, energy and customer experience which has already made XS so successful, while traditionally maintaining its focus on entrepreneurship. Amway has witness success particularly with its events and lifestyle branding in key growth markets such as North America and Japan, where half of the business owners registered in the past year are younger than 35.
