[Page 5]

The significant attributes of the Slim-Fast program were:

Slim-Fast promoted weight loss of 5% to 10% of a person’s weight, with average weight loss of one to two pounds per week. A four-year study of 100 patients concluded that providing a structured meal plan was a safe and effective dietary strategy. [42] Females, usually 30 to 40 pounds overweight, comprised 80% of its customer base. [43] A loyal core of fans accounted for half its revenue. [44]

Slim-Fast also held 8.5% of the nutrition/snack/energy bar category. [45] Other competitors included the ZonePerfect Nutrition Co. (purchased by Abbott Laboratories for $160 million.) The appeal of the bar category was noted by a CVS spokesman: “Consumers want products that are convenient to use, which is why bars are more popular than shakes. In shakes, the ready-to-drink shakes are more popular than the shake mix—it all boils down to convenience.” [46]

Jenny Craig’s business model included a calorie-controlled, nutritionally balanced diet, education and motivation to assist participants in weight loss. The cornerstone of the program was the sale of Jenny’s Cuisine to participants only at the centers. The company believed that its healthful, high-quality, and tasty food products contributed to a large part of its success. During the first half of the program, participants were encouraged to eat Jenny’s Cuisine at every meal and to visit the center weekly. After the initial period, participants were encouraged to eat Jenny’s Cuisine five days a week. The program was designed for 1.0–1.5 pounds of weight loss per week. [48] Jenny Craig competed with food manufacturers, such as Lean Cuisine, and distributors that also developed, distributed, and marketed a wide range of low-calorie products, widely available at supermarkets.

The majority of sales revenues were generated by products (93%) versus service (7%). Participants paid a fixed service fee for all aspects of the program, at times as low as $6 a week. Participants also paid an average of $80–$90 per week for Jenny’s Cuisine. Its three-month cost was about $1,400. Jenny Craig purchased its product line from various food companies [49] Jenny Craig was sold to Nestlé in 2006 for $600 million.

This online case study is authorized for use only in the HarvardX course "Innovating in Health Care," Spring 2014. Copyright 2014 by the President and Fellows of Harvard College. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the permission of Harvard Business School. Course participants may procure a PDF version of this content along with all course content by purchasing a coursepack here: https://cb.hbsp.harvard.edu:443/cbmp/access/25969413.