January 01, 2011
Transforming the Masses: Why Weight Loss Products Are Thriving in a Bad Economy
by J.M. Emmert
Click here to order the Direct Selling News issue in which this article appeared.
While the economic downturn of the past few years has forced many consumers to tighten their belts on discretionary spending habits, sales of weight loss products has remained consistent and, in many instances, experienced tremendous growth over other products offered by the direct selling industry.
For companies that offer weight loss or weight management products, that means good news for the bottom line. However, that good news comes tempered with the knowledge that the success of these companies is in large part due to the failures of millions of Americans who continue to struggle with weight issues.
Sadly, more than two-thirds of the American population—190 million people—are overweight or obese. The neglect to their health is generating long-reaching effects that ripple into the economy, the workforce and the medical industry, which currently exceeds $147 billion annually for obesity-related diseases.
The problems associated with the escalating obesity rate—like weight loss solutions—have no easy fix. However, direct selling companies are doing what they can to help those suffering from weight issues find alternative ways to live healthier and more fulfilled lives. Even in these recessionary times, companies are growing this segment of their businesses and new companies are forming to meet the increased demand.
Why Business Is Thriving
“You only have to watch the news every day to hear about the obesity epidemic that’s taking place and the quality of the food that everybody’s eating,” says Kevin Guest, Chief Marketing Officer for USANA. “The health issues, the diabetes epidemic that’s taking place across the board—there’s a significant relationship among weight, nutrition and many of the degenerative diseases that are plaguing our world. So we see this as a very viable business.”
The challenge, says Guest, is getting people to change their behavior, change their habits and change those things which they are accustomed to and comfortable with.
“Many times we see that it’s not until they have a health crisis in their life that they are really motivated to make a big change,” he says. “And so our challenge in that space is it’s hard to sell prevention. People are pretty comfortable, and selling prevention is a difficult sell.”
USANA, which focuses on a nutrition message and not a weight loss message, offers meal replacement shakes and nutrition bars as part of its overall diet and energy program. In addition, its biggest seller, the RESET weight management system, encourages customers to reset their bodies and reset their cravings. The nutritional-based product, which consists of low-glycemic ingredients to control carbohydrate cravings, represents about 12 percent of the company’s overall business.
At Herbalife, more than 60 percent of the company’s business is weight management. Products targeted to dieters include shakes and snacks that help them lose those unwanted pounds.
“Obesity continues to be a global health problem, and so weight management products are in high demand as people become more aware of the benefits of incorporating healthy nutrition into an active healthy life,” says Des Walsh, President of Herbalife. “Weight management products are popular because they can be life-changing, and their effects can spill over into other aspects of one’s life. It’s about more than just buying a product; it’s about changing habits to improve one’s life.”
Herbalife, which also offers energy and fitness drinks, vitamins, nutritional supplements and skin and hair care products, recently reported that net sales for the third quarter of 2010 had increased 14.7 percent over the same quarter the prior year.
For ViSalus Sciences, the shift in its business model in July 2009 due to the recession led to a 90 percent weight loss focus. As a result of that focus, the company went from adding 12,000 new people a year to 12,000 new people a month.
“When we were looking at who we wanted to be and what we could be passionate about, how we could live this business as founders and management, weight loss and fitness were the only two things that were really consistent among all of us,” says Ryan Blair, CEO of ViSalus. “If we love what we do and try to do what’s best for our customers and really focus on providing them value, we’re going to win. In a bad economy, people don’t have discretionary spending and are going to cut anything and everything that is not necessary to the functioning of their daily lives. We added a lot of value to our consumers in terms of saving them time, getting them results and saving them money.”
The ViSalus product line offers solutions for eating right, cutting calories, boosting metabolism and calming hunger pains, which is all part of its Body by Vi Challenge that provides customers with a game plan for success.
“I’m a firm believer that a big element of our success is the fact that I’m a product of our products and I’ve dealt with the challenges of weight,” says Blair. “So I know firsthand exactly what people go through—the mindset, the decisions, the lack of clarity.”
EIRO Research, which has been in business for only a year, has had a phenomenal first 12 months with its weight loss products.
“For us, the weight loss business is a rapidly growing segment of our product mix,” says Chris Hausman, CEO of EIRO. “Obesity continues to be a problem. It’s a growing problem in the United States. I think it will continue to be a viable category for the company for quite some time based on an analysis that came out recently stating that certain trends, as well as genetic and biological factors, calculate the steady state of obesity to reach 42 percent in the United States.”
The company’s EIROfit weight management system includes energy shakes and diet and exercise guidelines to help customers achieve meaningful and sustainable weight management. Its meal replacement shake is a proprietary blend of resistant starch and fiber for optimal wellness and weight management.
Amway, which has seen sales for weight management products flat in recent years, anticipates growth in this category due to a unique product offering that aims to solve weight challenges for consumers: The new NUTRILITE Weight Management Program.
Based in genetic science, the program has customers begin with the Inherent Health Weight Management Genetic Test, a simple cheek swab that generates a report within days. The test results include a personalized plan backed by clinical studies and strong genetic science to show if a person should follow a Carb Reducer (low-carb), Fat Trimmer (low-fat) or Better Balancer (balance of protein, fats and carbs) eating plan, as well as the level of exercise intensity to be followed for best results based on one’s genetic makeup.
“Science has proven that you are more likely to lose weight following an eating and exercise plan matched to your specific genetic makeup,” says Mark Nelson, Director of Nutrition for Amway North America. “In a recent clinical study, people lost over 2.5 times more weight on a diet that was matched to their genes than those who were following a diet inappropriately matched to their genetic makeup.”
Nelson notes that additional weight translates into an increased risk for serious medical conditions, including heart disease, type 2 diabetes, high blood pressure, high cholesterol, stroke, sleep apnea, respiratory problems and osteoarthritis. The company believes that the NUTRILITE product line will be a valuable addition to its overall health and wellness business, which includes NUTRILITE nutritional supplements, sports nutrition, energy drinks and functional foods and the weight management products that account for the largest share of its business in North America.
AdvoCare, a nutrition company specializing in health and wellness, weight management, vibrant energy and sports performance since 1993, has seen sales go up 40 percent for its weight loss and energy products.
“The reason [sales are] sustaining for us is that people are looking to sustain their weight loss,” says Jan Wold, Vice President of Marketing for AdvoCare. “Once they lose the weight, they want to continue that. How do you do that? You do that with good nutrition, you do that by becoming active, you do that through increased fitness. And those are all product solutions that we offer.”
Those solutions include the 24-Day Challenge Bundle, a comprehensive weight loss system of shakes, supplements and snacks.
Health vs. Image
While health concerns are very real and valid for many purchasers of weight loss products, some executives believe that another motivation is driving the purchasing of their products—body image.
At Nature’s Sunshine Products Inc.—which offers MetaboStart Plus to boost metabolism, reduce stored fats and feed lean muscle—the belief is that the motivation for buying really depends on the person. “Health or body image… I think people are concerned with both,” says Blake Christensen, Director of Product Marketing for Nature’s Sunshine. “Not only is it image for a lot of people, but it is because they have poor health. A major factor with weight loss these days is diabesity. A lot of people are becoming diabetic as well as being overweight. What makes us unique is that we have the products to help maintain normal blood sugar levels that people can get on while they are doing a weight loss program.”
Herbalife’s Walsh believes the motivation may be driven by both concerns, as well as the age of consumers. “We think it’s a little of both, but primarily driven by a growing awareness of the importance of healthy nutrition and the negative impact of being overweight or obese,” says Walsh. “In addition, we have an aging population in many markets. People want a program that’s personalized to their specific nutritional needs, and this is where Herbalife distributors can add significant value in helping customers achieve their weight loss and nutrition goals.”
Sales spikes in January and the summer months at companies such as USANA, Amway, ViSalus and AdvoCare lead some executives to believe that many buyers are more concerned about improving their body image or self-esteem.
“I would say the physical appearance, image, self-esteem is the No. 1 driver,” says Blair. “On January 1, when people are writing their goals, I don’t think it’s because the doctor told them ‘you’ve got to lose the weight.’ Those would be the more advanced stages of obesity and extreme health-related issues. There are certainly people who join our challenge because they know they have to, not because they want to. However, a larger portion joins because they want to look better for their husbands, their wives; they want to fit in a pair of jeans that they keep putting on and taking off. They know that they’ve let themselves lapse, and they want to get back on track. And they don’t want to take a shortcut.”
Guest agrees that body image is the concern of many and the impetus for the growing market segment that caters to those seeking to improve their appearance. “There are a few groups out in the marketplace that focus on body image, and they are really, really doing well,” he says. “And so I think body image is part of it. From a USANA perspective, though, our concern is health and nutrition. That is what we’re talking about and what we’re trying to get people engaged in—taking an active approach to improving their health, and once it’s improved, to maintain it. So our focus here is not body image; it’s truly ‘find your best healthy self,’ so to speak.”
Of course, as Wold points out, there is one other driver that could be just as important as the health or body image concerns—the fact that people simply don’t know how to diet successfully. “They need assistance,” she says. “A lot of people start out because they are overweight and have no energy. They can’t exercise properly. They have a host of other problems, but once they start losing weight they realize that they see relief from the diabetes and joint problems. It ends up being all-encompassing at the end of the day, especially for those who lose significant amounts of weight. And AdvoCare products work. We’ve seen success after success after success with our weight loss and energy products.”
So who is it making these lifestyle changes, regardless of whether they’re for health or self-esteem reasons? Virtually everyone—from teens to septuagenarians, at-home moms to athletes, and even entire families. While some companies see a marked difference in gender purchasing—that women do the majority of the buying—weight loss products have been designed with everyone in mind.
“It’s equal because we designed it to be equal,” says Blair. “Culturally, we have young males who founded the company, and so it’s really for us to identify with our male target audience, our under-50 male audience. However, we wanted the design to be gender-neutral. We wanted to give families the opportunity for everyone to get involved.”
Amway’s NUTRILITE Weight Management is a highly personalized program that is for you, regardless of age, gender, fitness level, and so forth,” says Nelson. “Our sensible eating plans support both the parent who needs to prepare dinner for the whole family or the individual who cooks for one.”
Nature’s Sunshine is one company that has seen a large number of women coming into the business and purchasing products. “About 85 percent of the people who become a member of Nature’s Sunshine are women,” says Christensen. “The biggest age category is the baby boomers, about a 59-year-old female, which is probably older than the norm. The simple reason for this may be because we have been around for 40 years, and a lot of our customers have been with us for a long time.”
Herbalife doesn’t have precise data on gender and age groups, although Walsh acknowledges that women may outnumber men in purchases. “Men and women both buy our products, although it’s probably safe to say that women may be bigger consumers of certain products than men,” he says. “We also have a significant number of athletes as customers, since these individuals are always looking to improve their performance, and through our sponsorships, we have a growing awareness of our products and their value in sports nutrition.”
Maintaining Weight, Maintaining Customers
For most people, losing weight is only part of the battle. The real challenge comes after the pounds have been dropped and the realization hits that losing weight is not about a quick fix—it’s about a lifestyle change.
Direct selling companies understand this as well and have carefully designed their weight management programs to address those long-term needs, thus, in effect, maintaining their customer bases and realizing greater profit margins.
USANA offers ongoing education on the importance of nutrition, stressing to its customers that through the right combination of proper nutrition, exercise and a healthy diet, they can maintain not only their ideal weight but also the new lifestyle transformation that comes with their efforts.
“The focus for us really is a lifestyle change,” says Guest. “As you see results, you’re not just dieting, but you’re literally changing your lifestyle, you’re reprogramming your body. It’s not the same as it was before you started.”
At EIRO Research, customers are guided through two phases of a weight management program that was designed to help change behavior and, most important, be simple enough to follow to accommodate today’s busy lifestyles.
“We gathered a lot of data showing mainly that the products were not so important; the specific ratios of carbohydrates to calories to proteins and fat, not so critical. What was most critical was getting people to stick to the program,” says Hausman. “In the induction phase, you lose the weight, and there are product regimes and dietary and exercise guidelines specifically designed for that. Once the weight is off, then you move into the maintenance stage, where we have specific products and regimes as well.”
Companies such as Herbalife manage to draw in repeat customers for the personalized programs they offer. “Our company is focused on more than just weight loss; we’re focused on creating customers of good nutrition for life,” says Walsh. “We have products to help people manage their weight on an ongoing basis and products to help meet needs at different stages. Our customers stay with us, because they realize by working through their distributor they’re getting a personalized program with someone who gets to know their needs and lifestyles and how to help them improve their overall nutrition throughout their lives.”
Of course, the key for any company to retain customers is to provide a positive customer experience. “If you get customers results and have a positive experience with them, those customers will buy for life,” says Blair. “I don’t care if they lose all their weight in 30, 90 or 120 days; I want to get them the results. And we’re really focused on creating positive experiences with our customer and distributor bases. If a person decides not to use our products after they’ve lost the weight, great. When someone asks them how they did it, they’re going to refer us proudly. Our motto is to give the customer the best experience, the best results, and they’ll do the selling for you.”
As Americans look for wellness solutions to combat their struggles with weight and the myriad of health issues associated with obesity, direct selling companies are on the front lines, arming consumers with the products and knowledge they need to reverse the alarming health trends and help create positive lifestyle changes.
Through new scientific research and data, quality nutritional foods and supplements and weight-management programs that teach the benefits of healthier living, these companies have successfully impacted millions of lives.
And what has perhaps brought about the greatest success for these companies is one intangible that continues to draw in customers—the personalized care and honest goodwill that encourages those in need to live well and live long. This gives direct sellers a competitive edge over other channels that will help them continue to thrive for many years to come.
“To be a weight loss company and to really profit from the channel, you have to live it, you have to be it,” says Blair. “Our goal is not to show you befores and afters and unattainables. Our goal is to show you somebody who was unhappy with their weight, whether it be for health or for self-esteem reasons, and now they’re happy with their weight. That’s true transformation.”