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The battle for your bulge: traditional weight-loss industry giants struggling

The Washington Post

This should be a feeding frenzy for the weight-loss industry. The health consequences of obesity, a national epidemic, are more powerful reasons to shed pounds than fitting into last year’s bathing suit ever was. Employers are pushing workers to downsize, and the IRS now allows tax deductions for certain weight-loss expenses.

Yet Weight Watchers, Jenny Craig and Slim-Fast – the industry’s traditional giants – have been struggling to compete with a low-carbohydrate craze that is proving to harder to lose than a couch potato’s spare tire.

“People walk into our centers and say, ‘Gee, my friend Mary lost 15 pounds in two weeks, and she was eating bacon and steaks,’ ” said James Evans, chief executive of Jenny Craig Inc., the privately held California company that offers a low-calorie, nutritionally balanced diet based on its own portion-controlled meals, which cost about $70 a week.

But responding to the low-carb threat can be risky. For years, the three largest weight-loss programs have competed with fad diets precisely by not changing, and being there like an old friend when the fad passed.

What especially worries the traditional weight-loss industry is the staying power of the low-carb diet. “Unless something comes out from the medical community saying there’s something wrong with the Atkins Diet, I don’t see any end to it,” said John LaRosa, president of Marketdata Enterprises Inc. in Tampa, Fla., an industry research firm.

Many in the medical community have, in fact, said there are problems with the Atkins approach, but enthusiasm for its delivery of quick weight loss has kept “Dr. Atkins’ Diet Revolution” in print continuously since 1972.

Slim-Fast has been hit hard. The privately held meal-replacement program that was introduced in 1977 built its business around the convenience of drinking a shake rather than eating a meal. But “easy” isn’t enough for customers anymore. According to data collector Information Resources Inc., sales of Slim-Fast’s traditional meal-replacement shakes and powders slipped 27 percent last year, to $290 million.

“I think it’s kind of like, ‘Been there, done that, what else is new,’ ” LaRosa said of consumer sentiment about Slim-Fast.

Slim-Fast Foods Co. officials declined to discuss the company’s recent financial record. But it has been heavily promoting a new line of shakes and snack bars “for use as part of a low-carb diet.”

Jenny Craig, meanwhile, still advocates a balanced approach to dieting. A new management team has been making major changes since Sid and Jenny Craig sold the company in 2002. Sales had been flat or declining for much of the past five years, CEO Evans said.

But increased marketing to corporate customers, a home-delivery program called Jenny Direct, the sale of new franchises and the hiring of celebrity spokeswoman Joy Behar helped push sales up last year and in January this year, he said.