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Youngevity International, Inc. (NASDAQ: YGYI) Eyes Rapid Expansion as it Scales Up in Coffee and Cannabis

  • Enters $7.7 billion cannabis market with HempFX™ brand
  • Signs $250 million contract to supply 41 million pounds of green coffee annually
  • International expansion underway; direct marketers derive 50-75 percent of revenues from outside the U.S.

With ventures in coffee and cannabis, Youngevity International, Inc. (NASDAQ: YGYI) is set for a scalability that is already impacting its financial performance. Over the past six years, the company has enjoyed a CAGR of over 40 percent, with revenues rising from $22 million in 2011 to $166 million in 2017. Now, that growth trend has been strengthened; with the launch of its HempFX™ brand, Youngevity is entering the $7.7 billion cannabis market. The new product line will complement the extensive range of lifestyle products already marketed through the company’s direct selling division. Together, the company’s field-to-cup coffee operations and direct selling activities provide Youngevity with a viable platform to boost business to a global scale. Now it’s clear why its executives were ringing the opening bell at the Nasdaq Market Site in Times Square on January 3, 2018.

In a recent interview, Youngevity chairman and CEO Steve Wallach, and President and CFO Dave Briskie, discussed the company’s recent performance and talked about its future plans (http://cnw.fm/rp2bW). The company has spent the last three-and-a-half years building a global infrastructural platform to scale up its direct selling operations. Many large ($500 million or more in revenues) direct marketing companies derive 50-75 percent of their revenues from outside of the U.S. Statistics compiled by Direct Selling News indicate why.

In North America, the top three categories of direct sales – wellness, cosmetics & personal care, and household goods & durables – together make up a $37.8 billion business, a figure that, though large, is dwarfed by foreign markets. In South and Central America, the top three categories, albeit different from the North American top three, bring in $25.2 billion; in Western Europe, they are worth $29.5 billion; and in Asia, a monstrous $84.1 billion of goods are traded in the top three categories. Consequently, establishing an appropriate international infrastructural framework is an essential requirement to global success.

The product line-up is to be fortified with the introduction of the new HempFX products, which were launched in August at the company’s 21st Convention in San Diego, California (http://cnw.fm/3LBpi). Soothe™ contains a proprietary hemp-derived cannabinoid oil, as well as a variety of herbs and minerals, and a powerful antioxidant – glutathione. It supports a healthy immune system and soothes sore, tired, achy muscles and joints. Relax™ features the same hemp-derived cannabinoid oil found in Soothe, combined with the relaxing botanicals chamomile, lavender, valerian and melatonin – for sleep-supporting benefits. Uplift™ takes Youngevity’s exclusive hemp-derived cannabinoid oil and combines it with St. John’s Wort and a specialized set of natural terpenes, which are cannabinoid enhancers.

The potential for these products is enormous, as the cannabidiol market is poised for significant growth in the immediate future. A recent report in Forbes citing data from the Brightfield Group estimates that the global cannabis market will reach $31.4 billion by 2021. At the end of 2017, it was pegged at $7.7 billion.

Youngevity kicked off 2018 in grand fashion by ringing the Nasdaq opening bell to celebrate ‘Fit Week’, a most appropriate choice, since the company’s mission (http://cnw.fm/3uBBz) is “to help consumers understand the key components needed to reach and maintain optimal wellness and to provide tools and product resources that aid significantly in the process.”

It is likely to end the year in the same celebratory mood. Its wholly owned subsidiary, CLR Roasters (http://cnw.fm/n65Q6), has entered into a five-year contract for the sale and processing of over 41 million pounds of green (unroasted) coffee on an annual basis (http://cnw.fm/eH0QC). Based on current coffee prices and coffee futures, this contract should generate revenues in excess of $50 million dollars per year for each year of the five-year contract. The purchaser of the coffee is a major coffee importer and exporter that has, for over 70 years, been supplying some of the largest coffee brands in the industry. Revenue for this contract covers the period from 2019 through 2023, with first shipments to begin in January 2019.

For more information, visit the company’s website at www.YGYI.com

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