KANSAS CITY — When it comes to food and beverages, words like “zero” and “low” often are associated with weight management products. Matthew Oster, head of consumer health research for Euromonitor International, offers another word: “plus,” as in weight management-plus.
“Weight management as a subcomponent of living healthy, as a subcomponent of nutrition, as a subcomponent of performance,” he said in a November presentation at SupplySide West in Las Vegas.
Weight management product manufacturers need to find other ways to promote their products, such as plant-based, clean label and convenient, he said. Earlier this year, Jenny Craig, Inc., Carlsbad, Calif., announced plans to enhance its service by integrating DNA testing of specific nutrition and health genetic markets into its weight loss plans.
The DNA test will be an optional offering for Jenny Craig members and includes a non-invasive cheek swab to identify unique genetic markers. A customized nutrition plan will then be created and shared with each member in a one-on-one setting.
“By incorporating DNA testing into our program, Jenny Craig offers members an even more personalized plan designed to help optimize weight loss and work naturally with the body,” said Monty Sharma, president and chief executive officer of Jenny Craig. “We are excited about the test results to date and look forward to rolling out this new testing to other parts of the country.”
Calories in, calories out
Tivity Health, Inc., Nashville, Tenn., a provider of fitness and health improvement programs, entered into an agreement to acquire Nutrisystem, Inc., Fort Washington, Pa., for $1.3 billion on Dec. 10. Nutrisystem manages weight management brands under its namesake and the South Beach Diet.
“The acquisition of Nutrisystem is an exciting and transformational event for Tivity Health as we expand our portfolio of healthy lifestyle brands,” said Donato Tramuto, chief executive officer of Tivity Health. “Many of the most common chronic conditions afflicting Americans today are associated with weight management, nutrition and physical fitness, and addressing both calories in and calories out is an important part of alleviating those conditions.
“Today, Tivity Health manages calories out with our SilverSneakers, Prime Fitness and flip50 programs, and Nutrisystem manages calories in with its weight loss solutions. We believe combining our two companies will create entirely new value propositions for our health plans, fitness partners, members and consumers.”
Under the terms of the agreement, Nutrisystem shareholders will receive $38.75 per share in cash and 0.2141 Tivity Health shares for each share of Nutrisystem common stock. The transaction values Nutrisystem at an enterprise value of $1.3 billion and an equity value of $1.4 billion, or approximately $47 per share. The implied stock consideration of $8.25 per Nutrisystem share is based on the volume-weighted average price of Tivity Health’s shares for the 10 days ended Dec. 3, 2018.
Upon the closing of the transaction, Tivity Health said it expects to maintain all existing Nutrisystem brands as well as its offices in Fort Washington. Dawn Zier, president and c.e.o. of Nutrisystem, will become president and chief operating officer of the company and report to Mr. Tramuto.
“Our objective is simple, we want to reduce the burden of chronic conditions among adults enabling them to live their best lives,” Mr. Tramuto said in a conference call with analysts following the announcement on Dec. 10. “With Nutrisystem, we can provide an integrated portfolio of fitness, nutrition and social engagement programs to improve overall health and wellness. In fact, we believe we will be among the first companies to take this unique approach.”
Ms. Zier said Nutrisystem is the largest meal delivery company for weight loss in the United States and features two distinct brands.
“Nutrisystem offers healthy versions of America’s favorite foods, portion control to jumpstart your weight loss and get you on the path to healthy living,” she said. “South Beach focuses on a low carb approach to healthy eating. All plans can be customized to specific dietary needs and preferences, including the NutriSystem D program designed for people with type 2 diabetes or prediabetes.”
Earlier in the year, Nutrisystem introduced its DNA Body Blueprint program, a product that provides customers a personal action plan based on eating behaviors, nutrition and their metabolism.
“We meet our customers where they are and provide our products when, and where they want them through a variety of channels, and at multiple price points,” Ms. Zier said.
Another component of Tivity’s business is offering plans and programs utilized by health insurance plans.
“Today, the health care challenges are not about innovation, it’s about integration,” Mr. Tramuto said. “And what you see here today is we’re integrating a value proposition that quite frankly is already occurring with our health plans. They are beginning to pay for food deliveries.
“C.M.S. (Centers for Medicare and Medicare Services) has announced that in 2020, they will begin to reimburse for food for four weeks for those who have had surgery or for the seniors who have identified themselves as being incapable of getting food delivered to their homes,” Mr. Tramuto said.
Wellness that works
WW International, Inc., formerly Weight Watchers International, also has adopted a more holistic approach to weight management. This past September, the company rebranded itself under the WW banner, which stands for Wellness That Works.
“We are committed to always being the best weight management program on the planet, but now we’re putting our decades of knowledge and expertise in behavioral science to work for an even greater mission,” said Mindy Grossman, president and c.e.o. of WW. “We are becoming the world’s partner in wellness. No matter what your goal is — to lose weight, eat healthier, move more, develop a positive mind-set or all of the above — we will deliver science-based solutions that fit into people’s lives.”
At the Morgan Stanley Global Consumer Conference, held Nov. 14, Ms. Grossman said changing the company was based on “where the consumer is going.”
“People want things that will inform them, inspire them, and when you think of who we define as our greatest competition, it’s people thinking they can get healthy themselves,” she said. “And we can now be the brand that can give people this ecosystem of support so they could live their best, healthiest lives.”
Personalization is a component of the company’s new approach. In October, WW introduced its WellnessWins members rewards program. The program tracks and rewards members for healthy behaviors around nutrition, exercise and weight management.
“As WW moves beyond weight to wellness and continues to innovate as a technology experience company, we want to enhance our digital experience in ways that are meaningful to people’s lives,” Ms. Grossman said. “The new WellnessWins rewards program is a prime example of how we are meeting people at every step of their wellness journey, uniquely rewarding members for building healthy habits and unleashing a suite of new experiences, products and services that will help motivate them along the way.”
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