"The Diet Industry Goes On A Diet" by The New England Consulting Group

April 6, 2010 - PRLog -- For the first time in decades, the diet industry has gone on a diet – a big diet!  And the industry is losing millions (pounds of product sales) and millions (dollars of profits).

This has been true more or less across the board, ranging from packaged foods and beverages in food stores to restaurants, weight loss centers, bariatricians’ offices, etc.  As a population, we may be gaining weight; but as an industry, the weight loss industry is losing business.

According to a recent New York Times article, the percent of American women who claim to be on a diet has dropped from 36% in 1991 to 25% today.

While this phenomenon may be new to a business that has been booming over the past several decades, it is not new to the Westport, CT based New England Consulting Group, whose consultants average 25 years experience a piece in the weight loss industry, including packaged foods and beverages, restaurant and food service, weight loss classes and do-it-yourself diets and Rx and OTC drugs.  According to Gary Stibel, who heads the firms’ weight loss practice, “this is a recurring phenomenon that the New England Consulting Group has seen almost once per decade over the past 50 years”.

But, as so often is the case, there are always exceptions to the rule.  In the drug industry, numerous molecules are working their way through the regulatory pipeline towards commercialization in 2012.  In weight loss regimens, Medifast has been growing at double-digit rates throughout this period, as has Kellogg’s Special K and a host of other weight loss products and services – most clients of the New England Consulting Group.

Going forward, the New England Consulting Group predicts “the restoration of above average growth throughout the industry in 2011, with the rate of growth growing increasing throughout the decade”.  Pockets of strength will include Rx drugs, computer ordered and home delivered foods, meal replacement bars and shakes, holistic eat/exercise regimens and selected other products and services documented in an exclusive study published by the firm.

The key insight operative here is that most diet products and services are purchased by women at a perceived price premium versus alternatives.  During good times women are anxious to invest in such products and services, for themselves and their families, but they are among the first to be sacrificed when times turn tough.

According to Stibel: “Women tend to deprive themselves much faster than their children, their spouses or extended family members (including pets).  When times get tough, women often replace diet products, which are associated with deprivation, with comfort foods that make family members feel better, even when everybody else feels bad.”

Stibel sites work being done by Gaurav Kapoor using genetic/evolutionary algorithms to successfully reposition aging diet brands for new age cohorts and multiple needs states in addition to work being done by Ed Rhoads in behavioral finance/pricing to squeeze higher price diet lemons into affordably positioned weight loss value bundles.

In addition to recent work for Medifast, the New England Consulting Group worked on the 2005 turnaround of the Jenny Craig business, the 1998 turnaround of Weight Watchers, the creation of Lean Cuisine, the launch of Amstel Light, and a very long list of successful weight loss foods, beverages, programs, drugs, etc.

For more information on the New England Consulting Group’s weight loss practice, please contact Michelle Zarrilli, Media Relations Manager, at news@necg.net or 203-226-9200, x118 or call the New England Consulting Group’s Proprietary Q&A “Convenience Store” 7-11 at 203-226-9200 x711.

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The New England Consulting Group is a growth strategy consulting firm for marketing-driven organizations. Our services include: corporate and business unit strategy, branding, competitive assessment, benchmarking, product development and implementation.