The Real Holiday Party For Weight-Loss Firms? It's Now | KERA News

The Real Holiday Party For Weight-Loss Firms? It's Now

Jan 4, 2012
Originally published on January 5, 2012 11:20 am

The New Year is almost always happy for the weight-loss industry. When the holiday gorging ends, the resolutions to shed those extra pounds begin.

Weight Watchers North America president David Burwick says the first week of the year is the biggest week in what is typically his company's most profitable quarter.

"This is our Super Bowl," he says. "The first week of January is our Super Bowl for Weight Watchers."

This week, Weight Watchers got a helpful endorsement from the folks at U.S. News and World Report, who named it the No. 1 weight-loss program in their 2012 rankings of popular diets. (The title of best all-around diet once again went to DASH — short for Dietary Approaches to Stop Hypertension — an approach originally developed to help people lower their blood pressure.)

Still, in this business, there's plenty of opportunity to go around: About a third of Americans are medically obese. But the recession has delivered mixed results to weight-loss companies. Nutrisystem's revenues have been on a steady decline in recent years. Herbalife and Medifast have both grown. Weight Watchers' sales have yo-yoed in recent years, but were up last year.

The recession hit food-delivery services, such as Nutrisystem and Jenny Craig, harder because they cost more, according to Gary Albanese, a research analyst with Auriga USA. Then again, hope springs eternal in January.

"It's an interesting sector," he says, "because at the beginning of the year there's so much promotion surrounding the brand, surrounding the product, that it's almost like a reset every year." Albanese says the average client sticks to the program for seven to eight months.

"If you get somebody to join in the first quarter, then you get a good feel for how the rest of the year shapes up," he says.

One way these companies attract customers is through celebrity endorsements. Jenny Craig — which came out on top in Consumer Reports' head-to-head match-up of diet plans last year -- features its latest endorser, singer Mariah Carey, scantily clothed, minus 30 pounds.

Women make up the lion's share of the client base for weight-loss programs. About 85 percent of customers at Weight Watchers are women. But this year, the company is targeting men, Burwick says. It has drafted former basketball star Charles Barkley to appear in commercials.

Nutrisystem has also been targeting men. The company announced last month that it had signed up football commentator Terry Bradshaw. According to Nutrisystem, Bradshaw has lost 32 pounds on its program.

Companies are also trying to increase sales is by partnering with big employers. Obesity is a major factor in driving up insurance costs, and corporations are interested in trimming those costs by trimming workers' waistlines. Weight Watchers this week announced partnerships with American Express and the New York Stock Exchange.

All the companies are also trying to get doctors to refer their overweight patients to their programs, according to Albanese. "That's really the big goal — integrating yourself more with the healthcare providers," he says.

Patients might benefit if their insurance will pay for the program. And weight loss companies can, once again, expand their customer base while possibly even lowering their marketing costs.

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LINDA WERTHEIMER, HOST:

This time of year is big for companies that specialize in weight loss. Companies actually add staff to accommodate all the people who sign up for their services as part of New Year's resolutions.

And as NPR's Yuki Noguchi reports, there's plenty of room for their customer bases to expand.

YUKI NOGUCHI, BYLINE: If there's a downtime for dieters, Weight Watchers North America president David Burwick says it's typically when the eggnog, turkey, and ham come out.

DAVID BURWICK: People really don't want to start a weight-loss program right during the holidays when there are so many temptations and there are parties and things that they want to enjoy.

NOGUCHI: But when the party ends, there's plenty of pent-up demand for weight-loss programs. This week is the biggest week in what is typically Weight Watchers' biggest quarter.

BURWICK: This is our Super Bowl. The first week of January is our Super Bowl for Weight Watchers.

NOGUCHI: The opportunities in this business keep growing. About a third of Americans are medically obese. But the recession has delivered mixed results to weight-loss companies. Nutrisystem's revenue has been on a steady decline in recent years. Herbalife and Medifast have both grown. Weight Watchers' sales have yo-yo'd in recent years, but were up last year.

Gary Albanese is a research analyst with Auriga USA. He says the recession hit food-delivery services like Nutrisystem and Jenny Craig harder because they cost more. Then again, hope springs eternal in January.

GARY ALBANESE: It's an interesting sector because at the beginning of the year there's so much promotion surrounding the brands, surrounding the products, that it's almost like a reset every year.

NOGUCHI: Albanese says the average client sticks to the program for seven to eight months or right about when holiday season kicks in.

ALBANESE: If you get somebody to join up for the first quarter, then you can sort of predict or get a good feeling for how the rest of the year sort of shapes up.

NOGUCHI: One way these companies attract customers is through celebrity endorsements.

(SOUNDBITE OF MUSIC)

NOGUCHI: Jenny Craig, for example, features its latest endorser - singer Mariah Carey -scantily clothed, minus 30 pounds.

(SOUNDBITE OF MUSIC)

NOGUCHI: Women make up the lion's share of the client base for weight-loss programs. About 85 percent of customers at Weight Watchers are women. But its president, Burwick, says this year, the company is targeting men. They've signed former basketball star Charles Barkley to appear in commercials.

(SOUNDBITE OF TV AD)

NOGUCHI: Nutrisystem has also been targeting men. It announced last month it signed up football commentator Terry Bradshaw. According to the company, Bradshaw has lost 32 pounds on its program.

Companies are also trying to increase sales is by partnering with big employers. Obesity is a major factor in driving up insurance costs, and corporations are interested in trimming those costs by trimming workers' waistlines. Weight Watchers this week announced partnerships with American Express and the New York Stock Exchange.

Gary Albanese, the research analyst, says all the companies are also trying to get doctors to refer their overweight patients to their programs.

ALBANESE: That's really the big goal, integrating yourself more with the health care providers.

NOGUCHI: Patients might benefit if their insurance will pay for the program. And weight-loss companies can, once again, expand their customer base while possibly even lowering their marketing costs.

Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.