Diet and Weight Reducing Centers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,400 diet and weight reducing centers in the US help individuals attain or maintain a desired weight using non-medical methods. Weight loss services account for the majority of industry sales. Firms may also sell weight reduction products, such as food supplements or prepared food products.
Competition from Alternative Service Providers
Diet and weight reducing centers compete with a range of alternative service providers, including health care providers, fitness centers, pharmaceuticals, self-help programs, and surgical procedures.
High Customer Failure Rate
Most consumers fail to achieve or maintain weight loss through traditional programs.
Industry size & Structure
The average diet or weight reducing company operates out of a single location, employs about 10 workers and generates $1.2 million annually.
- The diet and weight reducing services industry consists of about 1,400 firms that employ about 14,000 workers and generates $1.7 billion annually.
- Franchises account for half of the industry. Franchisees account for 21% of establishments.
- The industry is highly concentrated; the top 50 companies account for 72% of industry revenue.
- Large firms, which include WW (Weight Watchers), Nutrisystem and Jenny Craig (both owned by Wellful), and Medifast, may have international operations.
Industry Forecast
Diet and Weight Reducing Centers Industry Growth
Recent Developments
May 23, 2024 - Higher Labor Costs, Consumer Spending Up
- Employment and wages at other personal care services, including diet and weight reducing centers, continued to rise in spring 2024, according to data from the Bureau of Labor Statistics (BLS). Employment grew by 1.5% in March 2024 compared to a year ago, and average wages were up almost 7% to $25.39. In addition, consumer spending levels showed an upward trend in the first quarter of 2024, according to personal consumption expenditures data from the Bureau of Economic Analysis.
- A new line of frozen meals aimed at GLP-1 users adds a new layer of competition to weight-loss management food options, according to Fast Company. Calling it an “emerging category,” Nestle announced a new brand aimed at those on the weight loss medicines called Vital Pursuit, which has portion-controlled meals with high fiber and other essential nutrients. Other companies have also added products to target the growing group of consumers taking GLP-1 medicines such as Ozempic and Wegovy. GNC is adding vitamins, supplements, and shakes focused on GLP-1 customers. Weight Watchers has recognized the opportunity, establishing a GLP-1 Program to help users build healthy habits while on the medicine.
- Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
- A new panel conducted by Gallup shows that key physical health metrics have worsened post pandemic, remaining at record and near record high levels for obesity and diabetes. The percentage of US adults classified as obese (above 30 BMI) was 38.4% in 2023, slightly less than the record high of 39.9% set in 2022 but 6 percentage points higher than in 2019. Older adults classified as obese increased in 2023, with the 30 to 44 age category up 6.1 points and the 45 to 64 age category up 8.2% since 2019. Eating habits have worsened since 2019, with the number of adults reporting eating healthy the day prior falling 5 points. The number of respondents who say a medical professional diagnosed them with diabetes reached a new high of 13.6% in 2023, up 1.1 points since 2019. Opportunities increase for diet and weight reducing centers when national obesity levels rise.
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