What the Weight-Loss Biz Has in Store for 2010
NEW YORK (AdAge.com) -- The recession is slimming down the diet business.
Though the $59.7 billion industry rose 2% in 2009, that's way down from its historical rate of 6% or higher annual growth, said John LaRosa, who runs Marketdata Enterprises and BestDietforMe.com. The industry has taken a beating as high-priced diet programs lose subscribers to cheaper weight-loss options -- or no diets at all.
"The recession of the last two years affected people so that more people traded down to lower-priced food and fast food and more comfort food to combat their stress," Mr. LaRosa said. The result has been a rise in the do-it-yourself diet; he said that 76% to 78% of dieters are following regimes at home, rather than with institutional programs. That's up sharply from a historic average of about 70% who have gone it alone.
"We think the do-it-yourself programs and meal replacements will continue to do well at least through first half because they're inexpensive and easily obtained," Mr. LaRosa said. "High-priced programs like Jenny Craig will continue to struggle." To win new dieters, and keep others in the fold, he said diet companies will continue to offer incentives such as waived registration, free weeks of food and free shipping throughout the year.
Even so, there's still opportunity for the industry to steal share and as non-traditional "diet" players such as fast food get into the act. An estimated 75 million Americans will diet sometime this year, but many will stop and start three to four times, often with new programs. "There's not much loyalty among dieters," Mr. LaRosa said.
And that could be good news for the industry: As Americans trade down to cheaper, more comforting food, they're now bigger than ever before. "When they do go back to diet programs, they'll have more to lose, and it'll take them longer to lose it, so they'll stay longer on the diet programs."
Below is an outline of how some of the bigger players are marketing during diet season.