A Chocolate, With Amway Undertones, Networks Its Way Into New York
The little wrapped chocolates were passed around the Upper West Side living room on a silver tray, plucked one at a time by the manicured hands of the guests perched on sofas and kitchen chairs.
“Probiotic,” the hostess of the tasting, Patricia Watt, a theater producer, told a group seemingly culled from the front page, gossip sheets and back copies of Playbill. They chewed and nodded with approval, among them a prominent 9/11 widow, a bankruptcy lawyer, an Argentinean investor and avid polo player, a Pace University student, and a former sister-in-law of the last president.
Ms. Watt said a few words about the chocolate, pitched as being so rich in antioxidants that, if eaten three times a day, it provides some nutritional benefits on the order of a pound of spinach. Then she said a few more, about a new way to make some money in a shaky economy.
Exotic name and sleek day-spa packaging notwithstanding, Xoçai (pronounced show-SIGH) is a cousin of the humble Amway products, among the newest in a seemingly endless series of network-marketing ventures. But where Tupperware parties and door-to-door sales are a time-honored tradition in suburban towns, Xoçai has found a foothold among the ladies who lunch — and the men who love them — in New York City.
“When you think of Amway, you think about people in a ranch house somewhere,” said Ronnie Glucksman, 47, a theater producer and Xoçai distributor who said he found network marketing “unseemly” until Ms. Watt, a close friend, persuaded him to sign up. “You’ve got people in penthouses who are involved in this.”
Xoçai is a product of MXI Corp., a Reno, Nev., company that heavily promotes the chocolate’s oxygen radical absorbance capacity, or ORAC. Typical dark chocolate has ORAC levels around 15,000 per 100 grams; milk chocolate has more like 6,700. Xoçai’s levels are said to be more concentrated. A 12-gram “nugget” (recommended serving: three) has 3,120, while three fluid ounces of a Xoçai drink has more than 15,000, according to Andrew N. Brooks, who founded the company with his mother in 2005.
Brunswick Laboratories, which assigns ORAC levels, has run independent tests confirming Xoçai’s levels, according to Jim Nichols, Brunswick’s president, who cautioned that chocolate companies tend to overplay the importance of the number, when exactly how it translates into promoting health is unknown.
“Marketeers in general overstate the importance of a high number,” Mr. Nichols said. “Because we don’t know how high is high.”
The business operates on a familiar model: New distributors buy in at various levels and receive cases of chocolate products — bars, nuggets, cookies, drinks — at home every month. These distributors recruit newer distributors, earning a percentage of their sales. The promotional materials promise larger and larger monthly checks for those who greatly expand the tree.
About a third of those who sign up follow this model; another third keep ordering the chocolate to eat it; and a third drop out, according to Mr. Brooks.
Ms. Watt was introduced to the chocolate in July by an old friend, Debra Scott, who lived in Las Vegas, and quickly became the Johnny Appleseed of Xoçai in New York, urging friends and acquaintances from the theater world to sign up. She now sits atop a tree of about 300 distributors, and said she makes $1,500 a month.
One early convert was Robin Cofer, an ordained swami and ballet dancer who lives on the 90th floor of Trump World Tower. She signed up in August and said she has about 20 executives — high-volume sellers — working beneath her. One of the friends she signed was Jill Zarin, one of the stars of the show “Real Housewives of New York City.”
“Robin is a very holistic light person,” said Ms. Zarin, a former Avon lady (at 14, on Long Island). “She says, ‘Jill, I have to tell you about this thing I found, this chocolate, it’s unbelievable, and not only that, you can make money.’ I said, ‘You know what, Robin? Here’s my credit card. You’re my friend, I trust you, sign me up.’ ”
Ms. Zarin said that she wanted to try to promote the chocolate on the air — “I have a lot of fans” — but that a planned scene involving Xoçai was cut.
“Last month, I made $650,” she said. “And yes, that $600 last month bought me a pair of shoes.”
The business model might seem a less-than-perfect fit for city dwellers. For instance, a taped message on the company’s customer-service line reminds sellers to use the “Xoçai three-feet rule,” wherein distributors offer chocolate and encouragement to recruit anyone within three feet — a sure way to make yourself unwelcome, or worse, in New York.
Peter M. Birkeland, an adjunct professor at the University of Chicago and author of “Franchising Dreams: The Lure of Entrepreneurship in America” (University of Chicago Press, 2002), said New Yorkers have been historically loath to try similar businesses in the past.
“I think New York has always kind of looked down its nose at something that’s lowbrow, that’s crass,” Professor Birkeland said. “They can make their money in other ways.”
Mr. Brooks, the founder, agreed that the New York sellers were “forging unknown territory” but said, “They looked at that as an opportunity.”
At a large tasting in the conference room of an apartment building in Chelsea in March, dozens of distributors and their guests — prospective distributors — wore name-tag stickers and sat in plastic chairs. “Have a Xoçai moment,” an executive-level distributor from Winnipeg purred to the guests tasting for the first time.
Grant Innes, a painter in SoHo, signed up at the executive level after a friend from Canada visiting New York gave him some Xoçai and, he said, he lost seven pounds within a month of eating it. But Mr. Innes, who is 46, said the “whole philosophy” of network marketing “kind of rubs me the wrong way.”
“I think it’ll be more of a one-on-one thing to start out with, rather than a big party,” he said. “If it works, it works. If it doesn’t, it’s not the end of the world. I don’t want a Mercedes. I don’t have anywhere to park it.”
Peter J. Laitmon, 68, a veteran marketing executive, peeled off his name tag and left unimpressed, finding the data on the chocolate’s health benefits too scant and the process of selling it ill suited to city life.
“This is not a Tupperware party in Jericho, Long Island,” he said. “These are people who don’t need a lot of people in their home.”
Back at Ms. Watt’s apartment, she began her pitch, citing three friends who lowered their cholesterol eating Xoçai: “I have their records from their doctors.” Then she sought to head off any stigma: “There’s a great difference between a pyramid and a Ponzi.”
The 9/11 widow, Monica Iken, who is on the World Trade Center Memorial Foundation’s board, begged off because, she said, she has no time to sell between “doing my nonprofit work and raising two kids under 4.”
The Pace student, Christina Nieto, 24, said she could not imagine pitching health-related products to her peers, noting, “People my age don’t think about that.”
Sharon Bush, the ex-wife of Neil Bush, George W. Bush’s brother, was a fixture in the tabloid headlines last year when her former fiancé, Gerald Tsai, sued her to get an 11-carat engagement ring returned. She spent most of the tasting sitting apart in the corner and said she preferred not to be interviewed.
But, she said afterward, “You can say that I think it’s very tasty.”