US Weight Loss Industry

Part
01
of six
Part
01

Weight Loss Industry Trends, Part 1

Some trends in the U.S. weight loss industry include weight loss moving towards non-traditional and retail channels and the emergence of a younger generation of dieters.

Weight Loss is Moving Towards Non-Traditional and Retail Channels

  • Lately, more non-traditional channels are being used to reach weight loss dieters in the U.S., besides the utilization of commercial programs like Jenny Craig, Weight Watchers, and NutriSystem.
  • This trend also includes an increase in the quantity of in-store healthcare mini-clinics such as those being ran by Rite-Aid, CVS, etc.
  • The trend is being driven by the need for retail partners and their competitors to modify their programs so that they are more convenient and to improve their exposure.
  • Companies at the forefront of this trend include Sam's Club, Walmart, Amazon, the QVC, and Costco. Infomercials are also driving this trend.

Emergence of a Younger Generation of Dieters

  • Another trend is the emergence of a younger generation of dieters who are adopting weight loss efforts centered on bypassing overly-processed foods and artificial sweeteners, eating clean, exercising, and convenience.
  • The younger generation, which tends to have a limited income, also has a preference for diet plans that are affordable and convenient, as well as “wholesome” diet products.
  • This trend is beneficial to diet apps and websites and OTC meal replacements. However, it harms costly structured programs, diet soft drinks, artificial sweeteners, and frozen entrees.
  • The trend is being driven by the expanding volume of the country's largest cohort, Millennials, who are currently outnumbering Baby Boomers
  • Millennials, as a population group, are at the forefront of this particular trend.

The Rise of Ketogenic Diets for Weight Loss

  • This trend is characterized by more people eating high amounts of good fat, moderate amounts of protein, and very little carbohydrates.
  • It is being driven by the need to cut carbohydrates from the diet, as well as the limitation of proteins. This eating process "depletes the body of glucose, forcing it to primarily burn fat and produce an alternate source of fuel called ketones."
  • Normally, the ketogenic diet reduces carbohydrates to under 10% of all calories, while decreasing protein down to 20%. Meanwhile, the remainder consists of fat.
  • KetoneAid is an example of a company that is at the forefront of this trend.


Research Strategy:

To identify some trends in the U.S. weight loss industry, we searched for news articles, press releases, and media publications on related topics. The rationale was to try to find something that people, companies, or other actors are recently doing more often, or less frequently, and involves a change in how things are done.

We searched through sources such as Forbes, New York Times, Shape, Fit, Business Insider, Fortune, and Bloomberg, among others, and we were able to find information repeatedly mentioned by news and expert articles, as well as those specifically identified by authoritative industry entities and other reports (e.g., Infiniti Research Company). Also, we identified the leading brands in the sector, including Sam’s Club, the QVC, and reviewed infomercials to see if many of them are doing something differently. With this strategy, we were able to determine some trends in the U.S. weight loss industry.
Part
02
of six
Part
02

Weight Loss Industry Trends, Part 2

Other trends in the US weight loss industry include the growth of the meal replacement market, the emergence of do-it-yourself programs through weight loss apps, and the increasing number of weight loss surgeries. These trends are some of the factors driving the estimated 2.6% annual growth in the total US weight loss market through 2023. These and other details are presented below.

The Growth of the Meal Replacement Market for Weight Loss

  • Meal replacements such as nutrition bars and shakes have maintained their popularity among dieters.
  • In 2018, this market segment was worth $4.7 billion and is projected to outpace the sales of over-the-counter diet pills up to 6.8% per year (compared to 5.5%) through 2023.
  • The demand for meal replacements is driven by the increasing consumer awareness regarding weight management and weight loss diets due to the high prevalence of diabetes, obesity, and cardiovascular diseases in the US.
  • Another growth driver is the rising number of people living with a hectic lifestyle but is still looking for healthy and high-quality food products.
  • Health-conscious consumers find meal replacement shakes and bars to be healthy alternatives to fast foods.
  • Examples of companies that are providing major distribution channels for meal replacement products are the multi-level marketers like Shaklee, Isagenix, and Herbalife.

The Emergence of Do-It-Yourself Programs Through Weight Loss Apps

  • Weight loss programs have become digital. The availability of do-it-yourself programs made available through weight loss apps is becoming popular among dieters.
  • Its market was valued at $1.4 billion in 2018 and is predicted to grow 6.6% per year through 2023.
  • The affordability of weight loss apps is one of the reasons why these platforms are preferred by dieters, especially by Millennials who do not want structured plans and personal visits to weight loss centers.
  • With these apps, dieters can connect with doctors, dietitians, and top trainers without the need to go to brick-and-mortar wellness centers to be equipped with on-demand workouts.
  • Aside from this immediate connection, a weight loss app is also a great source of motivation because of the support gained from the online community.
  • Additionally, weight loss apps can be connected to wearable s and smart watches, helping dieters to keep track of their progress anytime and anywhere.
  • Weight Watchers (now called WW) is considered to be the "best diet app" by iOS and Android users with a 4.8/5.0 star rating. The app lets its users track their food consumption and fitness progress, convert their daily steps into reward points, and chat with other dieters in the community.

Increasing Number of Weight Loss Surgeries

  • About 239,000 weight loss or bariatric surgeries in 2018 were performed in the US, which is equivalent to a $5.98 billion market.
  • The number of this type of surgery has been growing at a rate of 5% per year.
  • According to O'Connor, a pediatric surgeon in Chicago, vigorous exercise and strict diet are not considered effective when young people who have problems with obesity have a weight loss goal of more than 100 pounds. This is when bariatric surgery is performed as a necessity.
  • Partly due to the shame and stigma around being obese, wherein mobility and self-esteem issues are also affected, bariatric surgery has become a realistic option according to experts.
  • Blossom Bariatrics is a weight loss surgery center in Las Vegas. Its procedures include safe sleeve, gastric revision, gastric balloon, and gastric banding.

Research Strategy:

To identify additional trends in the weight loss industry, we initially searched through market reports from sources such as Market Research, Business Wire, and Grand View Research that are particularly focused on trends in the US. We then consolidated the trends that are consistently mentioned in several sources and backed-up by experts. For each trend, we included statistics that prove their increasing popularity and growth, as well as examples of companies leaning into these trends.
Part
03
of six
Part
03

Health & Wellness Trends, Part 1

Two current trends in the US health and wellness industry are the increase of the home studio boutique experience, and the growing consumer awareness and uptake of the plant-based meat alternatives.

Home Studios

  • The at-home boutique fitness experience is currently trending, driven both by growing consumer demand and by increased supply in hardware/software combination products. 'At-home boutique fitness' describes the expansion of the at-home video workout market into greater digital penetration and integration, primarily via streaming workouts and hardware/software integration.
  • Multiple consumer segments are gravitating toward the convenience and flexibility of enhanced streaming and video workouts, including new mothers and small town residents who don't have access to brick-and-mortar boutique gyms.
  • Mirror, Tonal and Peleton are three examples of companies who are expanding beyond the cardio-centric home gym equipment theme. All three companies offer a variety of hardware-integrated digital workouts beyond cardio-based workouts.
  • The home fitness studio market is experiencing a significant surge in tech enhancement. Brick-and-mortar players like Equinox are expanding into digital subscription programs, and multiple tech startups have disrupted the space both with new hardware products (such as Vi's bio-sensing earphones) and innovative expansions in software products (like Studio Tone It Up's streaming group classes).

Plant-Based Foods

  • Consumer awareness and consumption of plant-based meat alternatives continue as a strong health and wellness trend, driven by vastly-increasing product lines as well as increased consumer concern about health and environmental sustainability. The neutrality of plant-based meat's impact on the environment (as compared to traditional meat) is a major driver of this trend.
  • The influence of the plant-based meat/dairy trend is so strong, it's driving growth in the overall grocery industry. Dollar sales of plant-based foods have increased by more than 30% in the past two years, driven in part by large amounts of funding for innovative plant-based meat companies.
  • Plant-based fish products are the newest segment in the market; Sophie's Kitchen is expanding its plant-based fish offerings, and is selling its current products in health-oriented grocery stores across the US, including Sprouts and Whole Foods.
  • Two additional, key drivers in the development of the plant-based meat trend are the composition and the marketing of current products. Unlike veggie burgers of a decade previous, current products are specifically intended to replace meat consumption; for this reason, the product composition is more meat-like, and the marketing is specifically targeted to meat-eating consumers.
  • Two key brands in the plant-based foods explosion are Beyond Meat and Impossible Foods, both of which have received considerable venture funding.
Part
04
of six
Part
04

Health & Wellness Trends, Part 2

Trends in the US health and wellness industry include moving towards meditative therapy and skincare. The growing interest in meditative therapy in the United States is driven by increased anxiety and depression among the country's population. The growing health trend towards skincare in the United States is driven by increased health awareness, expertise, and sustainability among consumers.

Mediation

  • According to the Center for Disease Control, meditation is currently the fastest-growing health trend in the United States.
  • Meditation has been named the mindful revolution that attacks anxiety and focus-restoring choices for government officials, Silicon Valley entrepreneurs, and others.
  • A few years ago mediation was perceived as an alternative activity for wellness. Today, it is gaining momentum.
  • Meditation is predicted to move from a singular to a plural practice, which will highlight and differentiate several types. This shift will offer mediators more understanding of brain mechanisms and the varying results of the different types.
  • The popularity of meditation has increased more than threefold in the past five years in the United States. More researchers are looking into meditation or mindful-based therapy to treat PTSD, depression, and even therapy for chronic pain.
  • Approximately 35 million adults in the United States practice meditation.

Trend Driver

  • The trend towards meditative solutions is driven by the increased rate of anxiety and depression. Research shows that the impact of meditation on stress and an individual's overall mood is promising.
  • The search for low-cost solutions, as well as solutions with little or no side-effects, contributes to the pace at which the trend is accelerating.
  • The benefits of meditative solutions, such as the navigation of both acute and chronic stress, improvement of mental focus, boosting of positive emotions, and an overall improvement in mental health, are also driving this trend.

Brand at the Forefront


Hyper Focus on Skincare

Trend Driver

Brand at the Forefront

  • Unilever, the maker of brands such as Dove and Suave, launched and acquired over ten new skincare brands in the past five years.

Research Strategy

Our research began by conducting a general search for 2020 health and wellness trends in the United States. From the search results, we selected meditation and skincare trends. We confirmed that meditative therapy is a wellness trend in the United States by ensuring it was supported by at least three-four sources. To obtain information on meditative therapy, we conducted a general search and visited sources such as Global Wellness Summit, Destination Deluxe, Mindful, and Global China Daily. From reading articles on these four sources, we obtained information relating to the description of the trend as well as the driving forces behind it. To obtain the information on companies at the forefront of the trend, we visited the official website of The Panther Group due to it being sited as a company at the forefront of mindfulness in previous readings.

Next, we gathered information on health trends towards skincare. To obtain information on skincare trends, we conducted a general search and found sources such as My Domaine, Business Insider, Everyday Health, and Well and Good. By reading the articles from these sources, we were able to obtain a description of the trend, factors driving it, as well as an example of a company at the forefront of the trend. We confirmed that skincare is a health trend in the United States by ensuring it was supported by at least three to four sources.


Part
05
of six
Part
05

Weight Loss Industry Drivers

High obesity rates, the shift to clean eating, and the growing demand for meal replacements are three key drivers of growth in the United States market for diet and weight loss products.

High Obesity Rates

  • According to market research firm Infiniti Research, high obesity rates, together with sedentary lifestyles, higher disposable income, and low unemployment, are driving growth in the weight loss industry. These factors, together, make people more willing to spend a considerable amount on weight loss products.
  • The percentage of adults aged 20 or older who are obese has steadily risen from 24.5% in 2004 to 31.3% in 2018. Obesity prevalence is particularly high in Mississippi, Oklahoma, and West Virginia.
  • Obesity is associated with diabetes, cardiovascular disease, and some types of cancer, so anyone who wants to lower their risk of developing these diseases would likely consider purchasing weight loss products.
  • Of Americans watching their diet, 100.22 million or around 30% say they do so to lose weight.

Shift to Clean Eating

  • Dieters are opting to eat clean and are thus seeking food that does not contain artificial flavors, genetically modified organisms (GMOs), preservatives, or sweeteners.
  • This is especially true among millennials, who now outnumber boomers.
  • Low-calorie or diet frozen entree makers have been experiencing flat or decreasing sales in recent years, but thanks to some adjustments in ingredients and packaging, they are now showing signs of growth and a turnaround. This growth, in turn, is driving growth in the weight loss industry.
  • Low-calorie frozen entrees were a $1.9-billion segment of the weight loss industry in 2018.
  • Stouffer’s Lean Cuisine and Conagra’s Healthy Choice are examples of brands that were able to reverse their fortune for the better. They started seeing growth after introducing new products that contain more natural ingredients and are packaged more attractively.

Growing Demand for Meal Replacements

  • Meal replacements such as shakes and nutrition bars are spurring growth in the country’s weight loss industry. They were a $4.7-billion segment of the weight loss industry in 2018.
  • They remain in demand among dieters and are forecast to grow at an annual growth rate of 6.8% per year during the period 2020-2023. They are expected to outpace over-the-counter (OTC) diet pills.
  • Since they are inexpensive, portable, and safe, several channels find distributing meal replacements attractive. Retailers, physicians, and multi-level marketing (MLM) distributors such as Beach Body, Herbalife, Isagenix, and Shaklee are some examples of these channels.

Part
06
of six
Part
06

Weight Loss Industry SWOT

The weight loss market in the United States is a multi-billion dollar industry. Its strengths center on its audience and its fast-growing commercial diet product and meal replacement segments, while its weaknesses center on its reputation and its low-performing segments. Weight loss surgeries, the body positivity movement, and the do-it-yourself movement all pose a threat to the industry, but untapped niches, millennials, and higher disposable incomes, among others, all present opportunities for growth.

Strengths

  • The industry’s strengths include both the commercial diet product and the meal replacement segments. According to market research firm Market Data, both segments are experiencing strong growth.
  • The segment represented by commercial weight loss chains such as Weight Watchers and Medifast, which was worth $3.74 billion in 2018, is expected to grow at an annual growth rate of 6.0% during the period 2020-2023. Profile by Sanford, a new player in the segment, has reportedly been selling a lot of franchises.
  • The segment represented by meal replacements such as shakes and nutrition bars, which was worth $4.7 billion in 2018, is expected to grow at an annual growth rate of 6.8% during the period 2020-2023.
  • The industry has an audience that is willing to spend a considerable amount to lose weight.

Weaknesses

  • The diet soft drink and artificial sweetener segments of the industry are the industry’s weaknesses, as both continue to see declining sales and consumers continue to shift to clean eating.
  • These two segments fell to $18.63 billion and $2.25 billion, respectively, in 2018.
  • The low-calorie, frozen entree segment is also a weakness, as the segment has been seeing flat or decreasing sales in recent years. The segment, which was worth $1.9 billion in 2018, is slowly recovering, however, as a result of changes to products. Frozen entree producers make adjustments to their products, as more and more consumers move away from artificial ingredients and processed foods.
  • The industry has a reputation plagued by accusations that the products or services offered by the industry do not actually work as advertised. Articles such as those published by Cornell University and Business Insider suggest that the industry is deceiving consumers.

Opportunities

  • There are several opportunities for expansion because, according to market research firm Market Data, “many untapped niches still exist.” Among these untapped niches are the markets for African Americans, diabetics, the elderly, Hispanics, millennials, men, overseas consumers, teens, and worksite-based business-to-business firms.
  • According to John LaRosa, Market Data’s research director, the industry also has the opportunity to leverage customization and offer virtual and offline programs at various price points. Several alternative distribution channels are at the industry’s disposal, and they include multi-level marketers and retail healthcare mini-clinics.
  • The industry should stop chasing after boomers and turn its attention to overweight millennials instead, according to LaRosa. The industry can attract millennials through affordable programs, apps, influencers, peer community support, social media, and virtual weight loss programs.
  • Dawn Zier, president of Tivity Health, the company that acquired Nutrisystem in 2018, says that “the younger generation is all about being on demand.” Younger consumers want food when they want it. They want to be able to talk to a counselor whenever or wherever they have an issue.
  • Favorable economic conditions such as low unemployment and higher disposable income and unfavorable public health conditions such as high obesity rates and sedentary lifestyles together present a growth opportunity for the industry.

Threats

  • The body positivity and size acceptance movement appears to be threatening the industry. According to market research firm Market Data, a decrease in the number of dieters has been recorded as a result of this movement.
  • LaRosa of Market Data warns that the possibilities of a bad winter and a mild recession pose a threat to the industry and can be considered headwinds.
  • Weight loss surgeries, if not considered part of the weight loss industry, pose a threat as well. The market for weight loss surgery is a $5.98-billion industry, and the number of surgeries has been increasing by 5% per year.
  • Free fitness and diet apps are, to some extent, a hurdle because they enable consumers to prepare do-it-yourself plans and lose weight on their own without paying for weight loss products or services.

Research Strategy

Though a SWOT analysis of the weight loss industry in the United States is not publicly available, we were able to prepare one by analyzing what market research firms, media outlets, and other organizations say about the industry.
Sources
Sources