Diet business losing weight

People look at products from Scosche, including the fitRAIL, an exercise mount system for the iPad and iPad2 for use when working out on a treadmill or similar piece of exercise equipment, displayed on the opening day of the International Consumer Electronics Show on January 10, 2012 in Las Vegas, Nev. Tough economic times and smartphone technology are trimming diet industry earnings.

Kai Ryssdal: The Centers for Disease Control says more than two-thirds of all the adults in this country are overweight or obese. A solid customer base, it would seem, for the weight-loss industry. Yet both Nutrisystem and Weight Watchers have reported sub-par earnings the past week or so.

And Marketplace's Amy Scott reports there's another competitor out there too.


Amy Scott: I didn’t have to look far to find someone trying to slim down. Sarah Whipps takes care of my son during the day.

Sarah Whipps: So my wedding is coming up in September and I want to float down the aisle a little bit, versus, you know, feel self-conscious about it.

After breakfast, she opens an app on her iPhone called Lose It! She searches its huge database of ingredients and restaurant foods, enters a cup of cottage cheese and a peach, and voilà!

Whipps: So my breakfast was, like 228 calories. So I have 1,201 calories left for the day.

Weight Watchers offers a similar program with a $20-a-month subscription, and its online business is growing. But apps like Lose It! and MyFitnessPal are free.

John LaRosa tracks the diet industry at Marketdata Enterprises. He says there’s another threat looming. The FDA recently approved two prescription diet pills that will come on the market soon. LaRosa says Weight Watchers’ biggest competitor has always been the do-it-yourself diet, but he says a lot of people need the face-to-face support of counseling and meetings with other dieters.

John LaRosa: When the economy improves and people’s income improves, I think we will see a return to some of the more costly, structured programs with meetings, but we’re not there yet.

Online apps have another appeal. At his heaviest, novelist Harry Connolly weighed 300 pounds. His wife had been after him to sign up for Weight Watchers or Jenny Craig.

Harry Connolly: The truth is, I was embarrassed. This was something private that I could do kind of quietly at home and never tell anyone about.

Until he succeeded, that is. Connolly says last year he lost 40 pounds using a $3 iPad app, and so far he’s kept it off.

I’m Amy Scott for Marketplace.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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