Current Trends in the Overall U.S. Weight Loss Market

Reprinted with permission. The following information comes from Marketdata’s February 2009 study entitled: “The U.S. Weight Loss Market: 10th Edition”.

Dieter Demographic Trends…

No Statistically Significant Change in Obesity Among Adults in the United States Since 2003-2004

According to a new study released by the Centers for Disease Control and Prevention in Nov. 2007, after a quarter century of increases, obesity prevalence has not measurably increased in the past few years but levels are still high –- at 34% of U.S. adults aged 20 and over, The report, “Obesity Among Adults in the United States — No Change Since 2003-2004,” is the latest analysis based on the National Health and Nutrition Examination Surveys, conducted by CDC’s National Center for Health Statistics.

According to government data, 66% of the 229.5 million American adults are now overweight, or 151 million people (BMI 25.0-29.9), and 31% are obese, or 71 million people (BMI of 30 or higher). Those 71 million that are obese (a BMI of 30+) is the potential universe of customers for a medical VLCD (very low calorie diet) program.

This means that the potential “market” for medically supervised weight loss programs (very low calorie and modified fasting programs, or doctors prescribing diet drugs for their patients, or weight loss surgery - via hospitals, clinics and private physicians’ offices) is 69 million Americans. These are the people that are in greater and more immediate danger of developing obesity-related health complications such as heart attacks or diabetes.

The larger group of 147 million overweight Americans constitutes the share for whom their overweight condition is not life threatening, i.e. they’re concerned with cosmetic weight loss to help them look and feel better. This is where the large “mass market” lies for most of the commercial weight loss products and programs in the United States.

According to surveys of American dieting habits performed by the Calorie Control Council, following are the estimated number of Americans using some kind of diet. The latest estimate of 72 million is a major 35% increase from the year 2000. Marketdata analysts agree with this estimate.

• 1996 – 45 million
• 1998 – 45 million
• 2000 - 53 million
• 2004 - 71 million
• 2009 – 72 million

With population growth, Marketdata estimates that in 2009 there are 72 million American dieters.

• Male – 40% (28.8 million)
• Female – 60% (43.2 million)

Source: Marketdata estimates

A 2007 survey from the Calorie Control Council shows that nearly nine out of ten people (86 percent) use low-calorie, reduced-sugar or sugar-free foods and beverages.

Although the percentage of people who are dieting has declined (from 33 percent in 2004 to 29 percent in 2007), the number of dieting attempts is on the rise. In 2004, on average, just 2.5 dieting attempts were made by dieters during the year, compared with almost four attempts made in 2007 – a significant increase. In more than 15 years, this is the greatest number of dieting attempts made by dieters in a one-year period, according to the Calorie Control Council Survey.

Dieting Methods Used

2003 Nielsen data found that 40% of consumers were NOT taking part in ANY weight loss program, and nearly 29% design their own program (do-it-yourself plan). That leaves a huge untapped market for structured programs (both medical and commercial).

Do-it-yourselfers…
Marketdata estimates that 75% of all dieters design their own plan or use a diet guru’s diet book, philosophy or mail order of infomercial product. This would encompass people following the low-carb regimen of Atkins or South Beach, the Zone, the Blood Type Diet, or those using OTC diet pills or meal replacement shakes, bars and foods sold retail, or using products sold by multi-level distributors, or using diet websites.

These are consumers who do NOT join a formal, structured program. This is a huge number—53 million dieters.

Commercial weight loss chains…
are estimated to be used by 6.9 million Americans, or 9-10% of all dieters. This share is down from about 14-15% in the early 1990s, due to all the closures of centers by most of the chains during the past several years, most recently, LA Weight Loss/Pure Weight Loss Centers.

Meal replacements…
The Atlanta-based Calorie Control Council’s 1993 survey of low-cal food and beverage usage and dieting, reported that 17% of a total 51 million dieters (or 8.7 million) used meal replacement products in early 1993, down sharply from the 31% of dieters in 1991 (16.4 million people). However, currently Marketdata estimates that there are 72 million dieters, and the share of all U.S. adults using meal replacements alone is about 4.2% (or 3-5 million people).

Weight Watchers reported in a document filed with the SEC on 9/13/2001 that a 2000 Gallup study found that meal replacements were used by 7% of U.S. adults, as a weight loss method.

Consequently, it appears that the share of dieters using a meal replacement product has fallen from a high of 24% in the early 1990s to about 4% today. Part of the reason for this decline is that over-the-counter diet pills and capsules had become even more popular. Another reason was the Atkins low-carb craze.

Size of the Market…
Following are Marketdata’s estimates for the major segments of the U.S. weight loss market: ($ billions)

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