Weight Watchers, the world’s oldest and most recognized diet program, has had a bad run lately. After rebounding from the recession, its stock and earnings have been declining since 2011. This past week, it announced particularly bad results, and its CEO of four years departed to “pursue other opportunities.”
When a company gets nervous enough to ditch the guy on top, it’s time to take a look at what’s really going on. And Weight Watchers looks to be a similar story to any number of industries floundering in the internet age: There are a bunch of new ways to get free the stuff for which they used to charge.
Weight Watchers is actually an amazing survival story. In an industry that’s inherently faddish, it’s been around since 1963, expanding to dozens of countries around the world. It’s moved through several different weight loss methodologies as the science around obesity evolves; just this year it adopted a more environmentally-focused “360 Degrees” program for dealing with food choices at any given point in time. There’s some clinical evidence that joining up delivers results, at least if you stick with it. Just by virtue of being around for 50 years, Weight Watchers has extremely high brand recognition, and an IbisWorld study from last month pegged it at 43.2 percent share of a $2.4 billion U.S. market.
The company has also weathered challengers before. The late 1990s saw news stories about an American public that had just gotten tired of diets, and resigned itself to its flab. “What we’re finding is that Americans aren’t dieting and saying ‘it’s OK to be fat,’” one Weight Watchers franchisee told Crain’s Detroit Business in 1997. The low-carb craze took a chunk out of profits in the early 2000s, with millions flocking to meat rather than Weight Watchers’ balanced program. Finally, the company started recovering as awareness of the obesity epidemic ramped up, and diet pills lost their luster–Weight Watchers seemed like the most tried-and-true option.
Sure, Weight Watchers has an app, but meeting fees are still the bulk of its business. Even with a new science-based regimen that incorporates attention from one of Weight Watchers’ trained staff, it’s hard to compete with free (or even almost free).
Read the full story about Weight Watchers at www.Washingtonpost.com.
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