Youngevity International, Inc. (OTC:YGYI)

We are engaged in two industries, the direct selling industry and the sale of coffee industry.
 
Direct Selling Industry
 
Direct sales are a business-distribution model that allows a company to market its products directly to consumers by means of independent contractors and relationship referrals.  Independent, unsalaried salespeople, referred to as distributors, represent the company and are awarded a commission based upon the volume of product sold through each of their independent business operations.
 
According to an Opus Group Research report dated February 21, 2012, direct sales is rapidly becoming the most successful commercialization of social networking.  With more and more retail sales migrating either to the internet or large shopping malls – a prime locale for individually owned and operated kiosks – as well as the globalization of brand names, direct sales has been one of the few bright spots of retail growth in an otherwise moribund consumer sector.
 
Retailers may be noticing the success of the Direct Selling Industry as noted in the January 9, 2012 news article by Direct Selling  News which pointed out that the industry was facing new competition via e-commerce from online retailers.  The article pointed out that the expansion of e-commerce has changed the selling landscape. It is estimated that e-commerce will top $300 billion in revenues in the United States alone in 2012. Market share is shifting from traditional forms of commerce such as retail stores to more online forms that challenge everyone engaged in the marketing of a product or service including direct sellers.  It is apparent that the companies within the Direct Selling Industry will need to better integrate their selling processes with the capabilities evident in the online retailing space.  Those that do not focus on the e-commerce opportunities will have trouble competing effectively with online retailers.  More and more traditional retailers are moving into the e-commerce space which will provide even greater competition to the Direct Selling Industry.
 
Coffee Business Industry
 
Over the last decade, the U.S. retail coffee market has seen explosive growth.  As reported in New York based, National Coffee Association’s (“NCA”) 2011 Coffee Trends Study, sales continue to show robust expansion even during the current consumer recession.  NCA’s 2011 Coffee Trends Study revealed the following:
 
·   In 2011, 40% of 18-24 year olds reported that they drink coffee every day, up from 31% in 2010, and 54% of 25-39 year olds reported that they drink coffee daily, up from 44% in 2010;

 
·   Gourmet and specialty coffee continues to be a significant portion (37%) of total coffee consumed;

 
·   86% of coffee consumers reported that they purchase coffee for home consumption; and

 
·   25% of all coffee consumers drink a gourmet or specialty coffee at least once a day.

Last updated March 4, 2013