April 01, 2017
Medifast’s New CEO Talks Strategy
by Emily Reagan
Take Shape For Life is gearing up for its National Convention in July, when the business will complete a yearlong transition to the OPTAVIA lifestyle brand. The new identity, along with exclusive OPTAVIA products, will differentiate the brand within parent company Medifast, which also sells its weight-loss plans and products online, at Medifast Weight Control Centers and through a network of physicians. Last October, in the thick of this transition, Medifast brought in a new CEO with nearly two decades of direct selling experience. Daniel Chard most recently served as president and CEO of a home fragrance company. Early in his career, he also held marketing roles with PUR Recovery Engineering and The Pillsbury Co. Chard’s appointment signals the importance of Take Shape For Life and its network of Health Coaches, which generated 81 percent of Medifast revenue in 2016. Overall revenue was $274.5 million. Read on for more on Chard and the OPTAVIA commitment to “lifelong transformation, one healthy habit at a time.”
DSN: You’ve been with the company about six months now. What attracted you to Medifast in the first place?
DC: I’d heard of Medifast quite a few years ago and knew they’d been strong in the medical provider market. It wasn’t until this past summer that I actually met someone from the company. Mike MacDonald, current Executive Chairman and former CEO, asked me to breakfast and shared the mission of the company, as well as recent developments in how they were planning to deliver on that mission. I was intrigued by the background in the medical industry, the credibility and science behind the products, and then the whole focus on health and wellness and a peek into upcoming initiatives.
DSN: Take Shape For Life has logged its fifth consecutive quarter of year-over-year growth. Seeing positive trends and momentum, some might hesitate to overhaul the brand and product line. Why is this the right time to take on a new brand identity?
DC: It’s really a reflection of our continued innovation in this category. We started as a product for physicians to give their patients, and since then have consistently invested in ensuring that our offerings reflect the latest science and understanding of how to deliver on this benefit.
OPTAVIA is a new brand that takes all the past benefits of the product and offers them in a format that’s very similar—in terms of being bars, shakes and entrées—but the formulation includes some new and unique claims. First, there’s the clean label claim; we don’t have any flavors, colors or sweeteners from artificial sources in our products. We saw that’s where the market was moving, and we’re on trend with that. We’ve also incorporated a proprietary probiotic, GanedenBC30®, which helps support digestive and immune health, as part of a balanced diet.
DSN: Thus far, what has been the response from Health Coaches?
DC: They like it a lot. Last year, the excitement leading up to the announcement resulted in our largest convention ever. We launched 13 new products—our OPTAVIA Select Fuelings line—and then, at our recent Go Global leadership event, we launched 20 more products in our OPTAVIA Essentials. That was also the largest leader event we’ve had. The excitement is there. They love the products and the concept, and they’re eager to have the full OPTAVIA Essential Fuelings line, which we anticipate will be completed in July.
DSN: As Take Shape For Life transitions to OPTAVIA, with products exclusive to the brand, how does that impact Medifast’s other sales channels?
DC: We’ll continue to offer the Medifast brand through Health Coaches, because we have a lot of clients who currently use that brand. In the other business units, we’re really focused on doing things that will promote and enable our Health Coach community. Though we’re only selling OPTAVIA through Health Coaches, which gives it a little bit of independence as a brand, at the same time we’re leveraging other business units to support the coaches.
DSN: What are the strengths of an omni-channel approach?
DC: As I mentioned earlier, what attracted me to Medifast is the mission. Being mission-driven means we’re focused on doing everything we can to deliver that end health benefit to the client. By having this omni-channel approach, we know exactly how effective we are in delivering that benefit. Over the years, we’ve recognized that the support that comes through a Health Coach dramatically improves the client’s result. They’re roughly twice as successful in achieving their health goals when they’re linked to a Health Coach, versus just purchasing a product without support. I think what you’ll be seeing more and more of are ways to facilitate that relationship with a Health Coach, regardless of the channel.
DSN: You recently took part in your first Take Shape For Life leadership conference. What stands out from that experience?
DC: This is a qualified event, meaning Health Coaches had to achieve a certain level to attend, and it was our largest yet. We had more than 1,000 leaders on hand, excited to hear the next chapter in our OPTAVIA story. The launch of 20 new OPTAVIA Essential Fuelings was a highlight. We also talked a bit more about the product science than we have in the past. The chair of our Scientific Advisory Board, Dr. Larry Cheskin, who heads the Johns Hopkins Weight Management Center, talked about why the products and our approach are relevant not only in this country, but around the world right now.
We’ve set a goal internally and externally to double the size of our business as measured by the number of Health Coaches, meaning we want to grow to 30,000 Health Coaches. We shared that strategy, called the OPTAVIA Compass to Success, which gives our leaders a high degree of visibility into all the activities we’re engaged in as a company over the next year, and we’ve worked to make that approach repeatable and transparent to our Health Coach community so they know exactly where we’re going.