Diet Industry Weighs In on New Promotions
It's the usual post-holiday assault on overweight consumers, with marketers pitching pills, potions and weight-loss programs. But as they jockey for position, many marketers are still trying to overcome the dulling impact of the fen-phen/Redux debacle late in 1997.
Jenny Craig Inc. has doggedly continued to market its line of low-calorie packaged meals long after customers cooled to its fare. But in new commercials that show plump but happy consumers cascading out of a Jenny Craig center, the San Diego-based company is offering a new, less-costly menu of supplements, soups and snacks.
Weight Watchers International Inc., meanwhile, is revving up a 2-year-old campaign that features Sarah Ferguson, the slimmed-down Duchess of York, telling consumers that it's still as simple as "1-2-3" to lose weight.
Television and print are also alive with advertisements for Meridia, a new prescription diet drug from Knoll Pharmaceuticals Co. that, in less than a year, generated $111 million in revenue, according to IMS Health, a Plymouth Meeting, Pa.-based market research company.
The direct-to-consumer advertising from Knoll is part of a massive influx of advertising spending from pharmaceutical companies. And the ads will increase later this year, observers say, when drug industry giant Hoffmann-LaRoache Inc. wins Food and Drug Administration approval to market Xenical, a new compound already sold overseas.
Big advertising budgets are increasingly common in the drug industry following a 1997 FDA decision to loosen up on how prescription drugs are marketed. Competitive Media Reporting says that drug companies spent just $12 million on consumer advertising in 1989--but now are on track to spend $100 million a month in 1999.
But it's possible that Meridia and Xenical won't have the power to draw patients the way that fen-phen and Redux did, experts say, because neither pill offers the quick weight loss that the now-banned drugs delivered. And, because of strict rules on advertising, the prescription diet pills must include a laundry list of possible side effects in ads.
Fen-phen and Redux together rang up 7 million prescriptions valued at $322 million in the 12 months before they were banned after being linked to heart valve damage.
"Meridia has not taken off anywhere near what happened with fen-phen," said John LaRosa, president of Tampa, Fla.-based Marketdata Enterprises Inc., which tracks diet industry spending. "Drug companies are being more cautious with marketing to the doctors, and doctors are being more cautious as to what they'll say to patients."
They also are being more cautious in messages to consumers. One new marketing twist this year is the appearance of commercials with overweight people in them. Merida television ads, created by Chicago-based Corbett HealthConnect, show people who look like they could benefit from losing weight. And the "anchorwoman" in Jenny Craig's commercials has been losing weight--something Jenny Craig hopes that consumers will notice when new commercials air later this year.
Diet industry observers expect advertising claims to remain noticeably muted because the industry is keeping a wary eye on Washington, where a panel consisting of industry representatives, doctors and researchers is working with the FDA to craft voluntary marketing guidelines.
The move is an outgrowth of a Federal Trade Commission crackdown on the weight-loss industry. An FTC advertising challenge in 1995, for example, prompted Jenny Craig to modify an ad that said nine of 10 Jenny Craig clients would recommend the program to friends. In 1993, the FTC took issue with a Nutri/Systems claim that its low-calorie program customers lost 29% more weight than dieters on other programs. The FTC also took issue with a 1993 Weight Watchers claim involving a low-calorie diet program.
Jenny Craig Needed More Than New Ads
Jenny Craig has spent the last few years trying to recapture the recipe that pushed its 1993 sales to $467 million. In contrast, revenue for the fiscal year ended June 30 totaled just $352.2 million.
Last year, frustrated Jenny Craig executives put the company's $40-million advertising account up for review. But new Jenny Craig President Phil Voluck, who joined the company in July after serving as president of rival Nutri/Systems, opted to retain Los Angeles-based Suissa Miller and instead revamp the company's aging product line.
"It quickly became obvious to me that advertising was just a minor part of the situation," Voluck said. "What was really going on was a lack of newness in the product . . . there was a whole group of customers out there who were looking for something that Jenny Craig wasn't offering."
Voluck contends that Jenny Craig's reliance upon prepared meals that customers pick up at franchised centers has been missing the mark in an industry where new products are the fuel that powers marketing campaigns. The company in December began to advertise a new "On The Go" line of lower-cost soups, drinks, energy bars and dietary supplements.
Voluck acknowledged that Jenny Craig, which is now exploring co-branding with a food company and an exercise equipment manufacturer, has failed to use its brand effectively, despite talk of finding corporate partners: "It seems silly that a brand that's the 190th most recognized brand isn't out there more."
At Weight Watchers, executives crow that business is booming. "This January is much stronger than last January," said Carmen Dubroc, executive vice president of marketing for the nation's largest program, with an estimated $1 billion in total revenue. "I think the whole fen-phen/Redux thing sent a new constellation of people looking for another kind of solution to help with weight loss."
But elsewhere in the industry, some competitors are still reeling from the disappearance of fen-phen and Redux. Manhattan Weight Control Centers closed 15 of its 19 centers after fen-phen and Redux were banned.
Medeva Pharmaceuticals Inc. has been forced to tackle the tough marketing challenge of correcting a common misconception that its longtime diet drug phentermine--the "phen" in fen-phen--was pulled from the market along with the fen-phen combination and Redux.
Even doctors who specialize in weight loss and weight control are being forced to fatten their marketing budgets. "Our physician members experienced the same withdrawal of patients from their practices after fen-phen, that the Jenny Craigs and Nutri/Systems of the world went through," said James Merker, executive director of the Englewood, Colo.-based American Society of Bariatric Physicians, whose 2,200 doctors specialize in weight-loss treatment.
Few People Lose Weight and Keep It Off
The bariatrician group estimates that Americans spent $467 million on prescription weight-loss drugs in 1996. Consumers also spent an additional $32 million on over-the-counter drugs and an estimated $1 billion to $2 billion on formal weight-loss programs.
A huge percentage of diet industry sales come from repeat customers who try a diet and fail before going on to another regime. Only a relatively small percentage of dieters, experts say, lose weight and learn to keep it off.
Anaheim resident Gina Triolo, 23, is representative of the customers that Jenny Craig and others are chasing. The office worker has the desire to lose weight and is willing to spend money for products that will help her succeed. Using exercise and a blend of Jenny Craig's packaged meals and the new "On the Go" line of supplements, she's shed nearly half of her 50 unwanted pounds.
But Triolo also represents another issue facing program marketers. If she's successful--and Triolo says she will meet her goal--she'll no longer need to buy products. Triolo, in fact, said she hopes the behavior-modification techniques she's learning allow her to do just that. "It's all about lifestyle changes, learning which tools are out there to get the weight off and keep it off," Triolo said.