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2014 Diet Season Begins – What’s New This Year?

Yes, the annual battle of the bulge has officially begun. The office parties are done, the holiday family gatherings are over, the pumpkin pie and egg nog have been consumed. Now it's time to pay the piper. If history is a guide, then the average American has put on 7 lbs. since Thanksgiving. Now the choice of companies to help them take it off.

Will the diet companies be able to eke out some growth this year? Will they introduce something compelling for dieters? Will they be able to partner with technology firms to address the electronic threats such as mobile apps? Will they begin to tap underserved niches? That's the $64,000 question. So far, the weather is not helping, as snowstorms and extreme cold blanket the Midwest and Northeast (not good for weight loss center meeting attendance). Let's examine some of the offerings...

Weight Watchers

Weight Watchers is responding to the technological changes in the industry by hosting webcasts for members and will have spokeswoman Ana Gasteyer, the former Saturday Night Live cast member participate in a webinar with clients. Jessica Simpson will tout its new two-week Simple Start program, which gives clients a list of food to eat and has a mobile app. Nothing earthshattering here.

Jenny Craig

Jenny Craig may not have much new this year until its acquisition by North Castle Partners LLC, announced in November, is complete. Fact is, its plan is still very pricey for the typical dieter. However, Obamacare may be a blessing since the company does provide coaching which may be covered under new insurance company rules. The key is whether the firm's coaches qualify as "qualified healthcare professionals" (such as a Nurse Practitioner of Physician's Assistant). We'll have to get more clarification.

NutriSystem

Nutrisystem is banking on customized diet programs to help revive sales that have slumped for five years. The new My Way diet is based on the Mifflin-St. Jeor equation, which uses age, gender, height and weight to calculate the number of calories a person needs. The company aims to have its customers lose 1-2 pounds a week by consuming 1,000 to 2,000 calories a day. Before signing up for My Way, customers answer an online survey about how much they exercise, why they want to lose weight and what they crave. The firm still faces headwinds with the price of its food.
Nutrisystem’s core 28-day menu of fare is $269.99. Also, many users complain about the shelf stable food's quality. We think that management DOES get it - that dieters need customized plans, not one size fits all.

Medifast

Medifast had 83 corporate stores and 36 franchises as of Sept. 30, and is closing some underperforming centers and plans to double the number of franchises in the next three years. The company also is improving its mobile business and making its website easier to navigate with a simpler layout. The company is working with technology companies about collaborating on potential products such as a mobile-phone application to help its customers track daily activity. Medifast sells a four-week starter weight-loss kit of food for $363.90, lower than Jenny Craig but still high in consumer's minds. To its credit, Medifast is exploring non-U.S. markets and has the most diversified distribution channels (MLM, medical clinics, direct to consumer).

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