Carl F. Rehnborg
Inventor of Multivitamins
and Multilevel Marketing
While working in China as a salesperson for Colgate between 1915 and 1927, Carl F. Rehnborg observed that urban dwellers showed terrible signs of malnutrition, but that this malnutrition was not as widespread among the poorer citizens in rural areas. He began to study the relationship between health and nutrition and realized that there were many plant-based substances critical to the human diet. He thought about making a plant-based supplement for the human diet and, on returning to the United States in 1927, set up a laboratory on California's Balboa Island to study which such supplements were needed.
The more Rehnborg studied, the more he could see that the average person needed a single simple solution to the complex problem of dietary supplementation.
After years of research Rehnborg came up with the then-revolutionary idea of combining every needed mineral and vitamin into a single product. He called his company California Vitamins and produced one of the world's first multivitamin/multimineral food supplements in 1934. The name of the product and the company was changed to Nutrilite in 1939.
Back then, the concept of a single food supplement containing many different vitamins and minerals required a great amount of customer education—especially to a public just learning that vitamins existed. Moreover, since Nutrilite's new multivitamin/multimineral product was a hybrid between a food and a medicine, it wasn't carried by either traditional supermarkets or pharmacies.
In order to distribute his product, his wife suggested that Rehnborg set up his own sales force of people—people who were already zealous consumers of Nutrilite themselves. This strategy created a constant need for Nutrilite to recruit and train new salespeople as the company expanded.
In 1945, Rehnborg and his two main distributors came up with another idea that not only revolutionized the marketing of his nutritional supplements but also created a whole new multibillion dollar distribution industry.6
Rehnborg's second revolutionary idea was a marketing plan that would allow salespeople both to sell the Nutrilite product and to recruit and train new salespeople—earning one line of income from their product sales and another line of income from the sales of the people they recruited and trained.
Each individual salesperson, now called a distributor, would be treated equally by the company based solely on their sales and the sales of the people they recruited. When the sales of an individual salesperson reached a certain level, they could break away from the person who recruited them and become direct distributors for the company themselves.
In 1949, two young entrepreneurs from Grand Rapids, Michigan, Jay Van Andel and Rich DeVos, purchased a Nutrilite sales kit and quickly rose to the highest sales levels in the company. Ten years later, while keeping their existing Nutrilite sales business, Jay and Rich started a new company to sell household products based on a similar marketing plan. They called their new company Amway, for "American Way." In 1973, Carl F. Rehnborg passed away at age 86, and Amway purchased Nutrilite Products, Inc. Today, Nutrilite is still maintained as a separate corporate entity and, with several billion dollars in annual sales, is one of the largest vitamin/mineral/supplement manufacturers in the world.
Rehnborg successfully used technology to solve a problem with our food supply (lack of vitamins and minerals) that had been created by another technology (food processing). There are thousands of entrepreneurial opportunities today to solve similar problems created by our processed and fast-food industries.