In the past year, Alaron has laid off nearly 180 staff, and that’s understood to be mostly because of the sharp cutbacks in AG1 business.
In the past year, Alaron has laid off nearly 180 staff, and that’s understood to be mostly because of the sharp cutbacks in AG1 business.
Celebrity-backed supplement AG1 was marketed online as ‘made in New Zealand’, but a podcast investigation reveals it’s mostly made at a super-factory in Utah. Jonathan Milne and Mike Wesley-Smith report.
There was a sense of secret pride among the 300 staff at the little-known contract manufacturer Alaron.
Tied up by non-disclosure agreements, the Nelson workers weren’t allowed to talk about their biggest customer – but many were excited to be making the world’s market-leading green supplement for the Nevada-based company Athletic Greens.
AG1, a green powder shake containing 75 botanicals, minerals and vitamins, was sold on New Zealand’s clean, reputation brand. Its advertising slogan became a catchphrase: “Made to the strictest quality standards. Made in New Zealand. Made for just about everybody.”
But two years ago, the new Powder Keg podcast reveals, he and his company signed a contract to shift most of its production to a big manufacturer called Capstone Nutrition, in the US state of Utah.
“I remember that we were sending them over our formulation paperwork to show how we made it to them so that they could emulate it over there, which I thought was a bad idea at the time,” says one former Alaron employee.
In the past year, Alaron has laid off nearly 180 staff, and that’s understood to be mostly because of the sharp cutbacks in AG1 business.
Past and present staff have spoken to the podcast, as part of a wide-ranging business investigation. “Athletic Greens is a behemoth,” says one former worker. “And for Alaron, it’s a cautionary tale about what not to do. All eggs. One basket. Major catastrophe. That’s the No 1 reason for all the layoffs.”
Another says: “It was very exciting to go to work, but there was always that bitter aftertaste. When I was laid off, it’s hard not to take it personally.”
Powder Keg, a Delve podcast, reports on Ashenden’s criminal past in New Zealand, the supplements industry’s lack of science and regulation, and the outsized role of influencers such as Joe Rogan and scientist Dr Andrew Huberman, who sources say are paid millions of dollars to promote AG1. The podcast hit No 1 on New Zealand’s Apple Podcast charts just a few days after it launched.
Alaron Products in Nelson. Photo / Jonathan Milne
The discovery that AG1 was still marketing itself online as made in New Zealand, as recently as May this year, had sparked concern at the Commerce Commission – the same New Zealand regulator that has twice before taken successful criminal prosecutions against Ashenden and his property companies.
Vanessa Horne is the general manager of fair trading at the commission, which has already prosecuted three other supplement manufacturers over false “made in New Zealand” claims. Between them, they’ve been fined $1.2 million.
Misleading claims about products’ connection to New Zealand can impact consumers and competitors, she says.
“It restricts consumers from being able to make decisions that reflect their preferences on a range of issues including quality, sustainability and supporting local primary production and industry. It also disadvantages other traders who produce goods that are genuinely made in New Zealand.”
Horne says AG1’s alleged conduct, if confirmed, would likely breach the Fair Trading Act – but it’s difficult for the regulator to take enforcement action in another jurisdiction.
“Our decision not to investigate Athletic Greens right now does not endorse or condone its conduct, nor does it limit us from possible further investigation in the future.”
Alaron was forced to disestablish the jobs of 39 workers just before Christmas last year, because of a downturn across all its products, and then another 139 workers in April this year, which sources say were almost entirely because of the cuts in AG1 production.
Nelson Mayor Nick Smith received an email from Alaron managing director Ron Geiger, giving him a heads-up about the lay-offs. He says it was a big hit to the local economy.
“I was truly shocked at not just the fact that there were redundancies, but the scale of them for a company that’s been so successful for over a decade,” Smith tells the podcast.
“The difficulty with products that are not necessarily backed by scientific proof is they run a risk of being fashion products. There becomes a period where they are very popular and are widely used, and can then simply slip out of fashion. So I think they do have a higher level of risk than your, what you might call mainstream products.”
Smith says there’s a lot of passion around the therapeutics industry, and a lot of politics.
“I’ve watched both as a parliamentarian and as a mayor, the real philosophical tension between those that say it’s my body and how dare the government regulate what is available and what can be sold, with those that are very worried about unscientific claims being made or purported or associated with products.
“Mega-billions involved in the industry with questionable health gains.”
Geiger said he was constrained by non-disclosure agreements from commenting, but acknowledged there had been a rapid decline in workload within “key market segments”.
Alaron was forced to disestablish the jobs of 39 workers just before Christmas, and then another 139 workers in April this year.
A week after Powder Keg paid a visit to Alaron in Nelson, and asked about production shifting to America, AG1 removed the “made in New Zealand” claims from its website.
The company’s Atlanta-based chief operating officer Kat Cole responded to questions with an emailed statement. She confirmed AG1 had been made at Alaron, and the impact of its cutbacks.
She said the company had worked closely with Alaron to forecast the reduction in its volume as AG1 shifted production to the US.
With regard to the redundancies in Nelson, Cole said she recognised the impact of AG1’s decisions. “We deeply appreciate the hard work, commitment, and contributions from our New Zealand partners and everyone who has worked to build AG1 over the past 14 years.”
The company’s vice-president for communications Biz Lindsay expanded on Cole’s comments. She said the New Zealand and US manufacturing facilities had different capacities for production and served different markets.
“The label on AG1 blended outside of New Zealand does not reference ‘made in New Zealand’. We have a tight supply chain process to ensure this is consistent.”
But she acknowledged the website hadn’t kept up: “As we expanded from one manufacturing facility to two, and further evolved the markets those facilities serve over time, there has been a natural transition period for our websites.”
The next day, the company announced Ashenden’s resignation as chief executive and Cole’s promotion to the top job.
