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Other leading competitors were Ensure (Ross Products), 22%; and Boost (Bristol-Myers), 6%. [37] They were distributed through food/drug outlets, 33%; discount outlets, 32%; chain drugstores, 19%; and supermarkets, 15%. [38]
Success was not easily attained; for example, Nestlé launched its product with an estimated $20 million advertising budget and the goal of overtaking Slim-Fast but attained only 2% market share. [39] Novartis’ Optifast meal replacement product could not be sold over the counter and could be provided only by physicians trained in obesity management and professional weight loss counseling. [40] While substantial clinical evidence supported Optifast’s weight loss effectiveness, fewer than 300 physicians and hospitals participated. [41]
The significant attributes of the Slim-Fast program were:
People ate three meals and three snacks a day to avoid hunger. Two of the meals are replaced with the Slim-Fast shake or bar.
The product could be used with Weight Watchers; but Slim-Fast did not require attendance at meetings, although members could get support by joining a support group on their Web site.
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 The other significant food-based model, commenced operations in Australia in 1983 to become one of the largest weight loss companies. Its U.S. business, launched in 1985, grew substantially. [47]
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.
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