Marketdata Enterprises



Marketdata Enterprises

The Information Specialists

Marketdata Enterprises, Inc.

2807 W. Busch Blvd.

Suite 110

Tampa FL 33618

Contact: John LaRosa

Marketdata Enterprises, Inc.

Phone 813-931-3900

Fax 813-931-3802

e-mail mktdata5@

For Release: October 17, 2002

Press Release

U.S. Weight Loss Market Worth $39.8 Billion:

26 Million Americans Use Do-It-Yourself Retail

Meal Replacements & Ephedra-based Diet Pills

Tampa FL, October 17, 2002: Marketdata Enterprises, Inc., a leading independent market research publisher of “off-the-shelf” studies about service industries since 1979, has released its biennial 353-page study: The U.S. Weight Loss & Diet Control Market (7th edition) This is a complete analysis and forecast of the major segments of the U.S. diet “industry”—outlooks for: diet soft drinks, commercial programs, medical programs/diet drugs, retail non-prescription meal replacements/diet pills, health clubs, artificial sweeteners, and low-cal entrees. The study estimates dollar receipts/growth for each market from the 1980s to 2006. It also examines select overseas markets, Internet-based diet programs (cyberdieting), dieter trends/demographics, and 34 profiles the major competitors. It contains 80+ tables/charts.

According to Research Director, John LaRosa: “It is rare when ALL segments of the diet market are growing concurrently. But that’s what we do have in 2002. Usually, several segments are growing while others are out of favor, subject to the whims of fickle dieters. What’s happening today is that due to rising global obesity rates, virtually all kinds of diet programs are in demand. Most Americans still do it themselves—an astonishing 12 million now use ephedra-containing OTC diet pills like Metabolife 356® and others and a combined total of 26 million use these supplements and meal replacements. There are more weight loss mail order scams and frauds than ever, but legitimate companies like Weight Watchers are booming.”

Major Findings:

• Jenny Craig is acquired by investment capital group and taken private in $115 million deal. Weight Watchers goes public, Fall 2001. Herbalife is taken private by an investor group, July 2002. Medifast goes public.

Marketdata estimates that the total US weight loss market will be worth $39.8 billion in 2002, up 6.6%. We project 5.8% average annual gains, to $48.8 billion by 2006.

America’s obesity rates continue to climb, and the number of “last resort” surgeries for the morbidly obese (such as gastric bypasses and stomach stapling, etc.) reach all-time highs.

Meal replacements was one of the better-performing O-T-C categories last year, with overall retail volume increasing 13.6% to $1.3 billion in 2001 (not including multi-level marketers such as Metabolife, Herbalife, others). As millions of people seek to lose weight, such category staples as Slim-Fast lines are thriving.

Non-prescription diet pills sales via retail outlets… According to Chain Drug Review, this was the best performing OTC category last year, with overall volume up 47.2% to $515 million (not including multi-level marketers).

Commercial programs…There IS growth here, but it’s unevenly spread. Weight Watchers’ sales rose 42% to $623 mill. in 2001 and 1st half 2002 sales were up 28%. LA Weight Loss also does well—ranked #3 behind Jenny Craig, with sales of $105 million. Jenny had 2001 sales of $299 million. The top 9 chains/franchises operate 4,400 weight loss centers in the United States.

There are 15 new drugs for treating obesity either in or about to begin human clinical trials. However, there are no new obesity drugs on the horizon for introduction in 2002, and no new ones made it to market in 2001. The anti-obesity drugs market in the U.S. was worth $705 million in 2001, a 6.5% increase over 2000. The same rate of growth is expected for 2002.

Medically-supervised modified fasting (VLCD) programs… No new companies entered this field in 2001-2002, but Ultrafast went out of business. HMR posted a 20% increase in 2001 and they currently have long waiting lists for programs. Novartis (Optifast) reported double-digit growth in 2001.

Diet soft drink sales are growing very moderately—an estimated 3.2% increase slated for 2002, to $14.4 billion. The total soft drinks market was valued at $61.7 billion in 2001, with diet sodas accounting for about 24% of that figure.

Internet-based diet programs are alive, but there has been consolidation, as leaders emerge… Cyberdiet and Dietwatch merged. bought out Dietsmart last year. This company went public, and has grown substantially during 2001, reaching revenues of $24 million and 300,000 paid subscribers. As such, it is now the largest Web-based weight loss company in the US.

Marketdata believes that the number of American dieters has risen to 52-54 million people currently, for a variety of reasons:

* mounting popularity of non-prescription (over-the-counter) herbal diet pills sold in

retail outlets and via multi-level marketing, by Metabolife.

* prescription anti-obesity drug sales have grown 50% from 1999 to 2001.

* increased number of overweight Americans

* strong rebound in Weight Watchers’ enrollments

* heavy advertising by mail order/infomercial diet programs from 2000 to 2002.

* New IRS rules passed, allowing for tax deductions for the cost of weight loss programs

recommended by one’s doctor.

Following are Marketdata’s estimates for the major weight loss market segments ($ billions)

| |1999 |2000 |2001 |2002 |2006 |

| | | | | |forecast |

|Diet soft drinks |$13.57 |$13.90 |$14.40 |$14.86 |$16.76 |

| | | | | | |

|Artificial sweeteners |1.61 |1.68 |1.74 |1.79 |2.05 |

| | | | | | |

|Health clubs’ revenues |10.65 |11.59 |12.52 |13.52 |17.85 |

| | | | | | |

|Commercial weight loss centers |1.13 |1.21 |1.31 |1.44 |1.83 |

| | | | | | |

|Medically supervised diet programs |1.50 |1.85 |1.98 |2.12 |2.44 |

| | | | | | |

|Low cal/diet entrees |1.47 |1.68 |1.91 |2.07 |2.66 |

| | | | | | |

|Retail & multi-level meal replacements & |1.70 |1.71 |2.03 |2.38 |3.52 |

|appetite suppress. | | | | | |

| | | | | | |

|Diet books, cassettes, exercise videos |1.04 |1.19 |1.26 |1.38 |1.76 |

| | | | | | |

| TOTAL INDUSTRY: |$32.67 |$34.81 |$37.15 |$39.85 |$48.87 |

Source: Marketdata Enterprises, Inc. estimates and forecasts

Editor’s Note:

John LaRosa is available for interviews. Call: 813-931-3900. The U.S. Weight Loss & Diet Control Market is a 353-page market study that costs $1,995.It is also sold by single chapters, at lower cost. For Table of contents, contact: Marketdata, Tampa, FL (FAX: 813-931-3802, Email: marketdataent@, Web site: w.).

For Release: October 17, 2002

A $59, 38-page Summary Report is Available for the General Public

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