With the release of its second quarter 2018 results, Youngevity International, Inc. (NASDAQ: YGYI) offers a glimpse into coffee’s influence on our social and commercial milieus. This simple beverage, often overlooked because of its ubiquitous use, has been credited with nothing less than catalyzing the industrial revolution. Before its introduction to Europe, standard breakfast fare included beer, a practice that may have contributed to the counsel “Eat breakfast like a king.” However, kings typically do not need to rise early to plough the fields or take the sheep out to pasture. Early morning draughts of beer are unlikely to foster good work ethics, but coffee can, according to some commentators. It’s responsible “for the increase in productivity and innovation that characterized the industrial revolution.” At Youngevity, this dynamic appears to be at work again. The company’s second quarter 2018 results reveal that revenues have risen, boosted by a sharp performance improvement from its coffee segment.
Youngevity’s coffee connection began in 2014, when Youngevity International purchased a 1,000-acre coffee plantation in Matagalpa, Nicaragua. The plantation had long been neglected but still housed 180 dedicated workers and their families. The first phase in getting it fully operational again focused on those workers. The company launched, what seemed at the time, a simple “Kindness Project” request for used clothing from distributors and customers. The response was overwhelming. Enough was received to provide clothing for workers on all of the plantations in the vicinity, including the one belonging to Youngevity. This led to the establishment of the ‘Youngevity Be the Change Foundation’ after the neighboring plantations began calling the Youngevity estate ‘The Giving Plantation’, an initiative that aligns with Youngevity’s desire to promote healthy and empowered lifestyles.
Youngevity has reported that, for the three months ended June 30, 2018, revenues increased 6.6 percent to $44.26 million, as compared to $41.53 million for the three months ended June 30, 2017 (http://nnw.fm/1HdwG). Commercial coffee sales increased by $1.42 million, or 23.7 percent, to $7.41 million, compared to $5.99 million for the three months ended June 30, 2017, an increase that was mainly due to increased revenues of $1.17 million from its green coffee business. During the quarter, approximately 17 percent of total revenues came from commercial coffee sales.
The rest of Youngevity’s revenues were derived from direct sales. Total sales rose to $36.85 million, registering a 3.7 percent increase of $1.31 million over the prior year period. This increase was primarily attributed to revenues from new acquisitions and price increases on certain products that went into effect on January 1, 2018. For the quarter, gross profit increased approximately 5.3 percent to $25.38 million, compared to $24.1 million for the three months ended June 30, 2017. Overall gross profit as a percentage of revenues decreased slightly to 57.4 percent, compared to 58 percent in the same period last year.
Youngevity is also moving into the cannabidiol (CBD) market (http://nnw.fm/4ZtJQ). In August, the company announced that it is entering the CBD market with a proprietary line of hemp-derived CBD oil products. At present, the CBD market is experiencing meteoric growth and is projected to reach $2.1 billion by 2020, with $450 million coming from hemp-based sources, according to estimates provided by the Hemp Business Journal. That’s a 700 percent increase from 2016. Demand for CBD has skyrocketed, due primarily to a wide variety of applications that ranges from cosmetics to food and beverage to health supplements.
Youngevity is a leading omni-direct lifestyle company offering a hybrid of the direct selling business model that also offers e-commerce and the power of social selling. Assembling a virtual Main Street of products and services under one corporate entity, YGYI offers products from the six top-selling retail categories: health/nutrition, home/family, food/beverage (including coffee), spa/beauty, apparel/jewelry and innovative services. The company was formed in the wake of a summer 2011 merger between Youngevity Essential Life Sciences and Javalution® Coffee Company (now part of the company’s food and beverage division). The resulting company became Youngevity International, Inc. in July 2013.
For more information, visit the company’s website at www.YGYI.com