Company Profile: Weight Watchers International Inc.

The company was created in the early 1960s, when its founder, Jean Nidetch, organised meetings with friends to talk about how to lose weight, which eventually reached millions of people who now follow Weight Watchers plans in order to lose weight and achieve a healthier lifestyle. However, there has been a drastic change in how consumers are controlling their weight in developed countries. The concept of dieting has evolved to a way to address health and wellbeing in a more holistic manner.

This change has resulted in a struggle for the company, which has always been perceived as a weight management method. Consumers are embracing the concept of health as a whole and not weighing themselves. This is the approach that Mindy Grossman, new CEO of the company, has taken. This will definitely position Weight Watchers on the right path to succeed in an increasingly competitive HW landscape.

SWOT: Weight Watchers International Inc.

A need to reformulate Weight Watchers’ product strategy

Global sales of Weight Watchers’ health and wellness products mainly come from reduced fat ready meals, followed far behind by reduced fat ice cream. The US dominates both categories, accounting for 59% of the company’s global market for its ready meals, and 99% for its ice cream ranges. The UK and France also have a significant presence in ready meals. However, Weight Watchers had a rather disappointing performance over 2015- 2016 for most of the categories in which it has a presence, which shows a need to reformulate its strategy. The trend for fewer ingredients, no artificial additives, no GMO, as well as organic products remained prevalent in developed countries. Consumers are increasingly adopting healthier lifestyles, and are avoiding fad diets. This is negatively affecting sales of BFY products – namely reduced sugar and fat products – closely related to dieting.

Broad-based improvements translates in strong growth in Q2 2017

In Q2 2017, Weight Watchers reported 10% growth in net revenues. This positive performance is based on many improvements, such as enhancing its digital offerings, refreshing its meetings experience, and updating its science-based programme. Weight Watchers delivered another quarter of continued success with net revenue growth in every geography where it is present, driven by strong marketing programmes in its core markets. Leveraging technology, innovation, and the power of its community, Weight Watchers saw good results in the first half of the year, and it is confident of achieving full growth potential by the end of the year.

Weight Watchers’ transformation to embrace holistic approaches

Weight Watchers is facing huge difficulties as people are choosing foods that are minimally processed and natural, in the belief that eating them in moderation is better than heavily processed diet foods, with artificially removed fat and sugar. In order to deal with this situation, the company is currently executing a multi-year transformation plan to return to sustained growth. As part of this transformation, Weight Watchers launched its “Beyond the scale” programme in late 2015, which takes a more holistic approach to follow a healthy diet, emphasising healthy foods rather than only focusing on weight loss. The ultimate goal is to get members to eat more fruit and vegetables, less sugar and saturated fat.

Recommendations

Weight Watchers should broaden their footprint in emerging markets. The company is only focused in developed markets and mainly the US, where the “better for you” category is showing a rather disappointing performance. They should also continue to further their engagement with consumers from a more personal perspective. There is an increasing consumer desire for more integrated lifestyle approaches, instead of just a diet. Weight Watchers should broaden their portfolio to capture trends in the developed markets, such as clean label items and free-from products. Lastly, consumers are seeking tailor-made plans as scientific results underline that one size does not fit all. The company should explore ways to include a subscription box into their business model.

Weight Watchers should continue to grow their company to encompass new trends in the developed markets, as well as, in emerging markets. This will ensure the company to stay relevant in times where dieting is more than just losing weight.