The huge rise in the use of GLP-1 weight control drugs such as Ozempic is turning the world of dieting on its head, and leading to the decimation of some of the former star brands in the industry.
While data is scarce on how many people are regularly using the drugs – originally approved for use in the US in 2017 – to control their weight, numbers from the US suggest that more than one in ten people there are regular users. Those same people would have been the core customers for the traditional weight-loss industry which had been dominated by WeightWatchers, and where Glanbia’s SlimFast brand operated.
This huge change in consumer behaviour led to the announcement by WeightWatchers last week that it was filing for bankruptcy in the US. The move, called a “Chapter 11 bankruptcy” does not mean the end of the company.
Under the plan announced by the company, $1.5bn of debt will be eliminated. The bankruptcy has the support of holders of approximately 72% of the outstanding principal of the company’s term loan, revolving credit and senior secured notes. WeightWatchers said it expects to exit bankruptcy protection within 45 days of announcement.
WeightWatchers said the transaction would position the company “for long-term growth and success” adding that it is “well equipped to execute its transformation plan”. The company has launched a website titled ‘here to stay’, on which it reassures members that there will be no disruption to its services, including use of the app, clinical appointments and workshops.
One of WeightWatchers’ biggest growth areas recently has been in its own dedicated GLP-1 programme, which no longer relies on the traditional points system and instead focuses on maintaining nutritional needs in meal plans for those on weight-loss drugs. The company can also write prescriptions for GLP-1 drugs for members.
For Glanbia’s SlimFast brand, the option of Chapter 11 bankruptcy is not available as the brand is a wholly-owned subsidiary of Glanbia and therefore doesn’t have its own debt to reorganise. This means the costs arising from the drop-off in popularity of traditional slimming solutions has to be borne by Glanbia.
In its annual report, Glanbia announced it was writing down the value of SlimFast’s brand and customer relationships in North America by $91.4m (€82.3m), leaving that business with a carrying value of $44.1m (€39.7m). Glanbia did not give a breakdown of the carrying value of the SlimFast international brand. The company purchased SlimFast for $350m (€315m) in 2018.
Glanbia also announced in its 2024 annual report that it has put the SlimFast brand up for sale. With current trends in the diet industry, it is difficult to see how that brand might be valued.
Novo Nordisk's Ozempic
Comment
The dieting industry has been shaken to its foundations by the emergence of effective weight-loss drugs. While the consumer demand – to be slimmer – remains the same, the route to that goal offered by GLP-1 drugs is seen as less onerous by many of those who now regularly take the medication.
Traditionally, dieting has been a path of denial, where people feel they have to make a sacrifice in order to get the weight-loss they desire. The drugs, by making people feel fuller for longer, remove a lot of those feelings of sacrifice.
Traditional brands such as WeightWatchers and SlimFast are inevitably associated with the old way of losing weight and so have seen an evaporation of demand in the key North American market.
WeightWatchers bankruptcy and pivot to offering the drugs and Glanbia’s large writedown and potential sale of its SlimFast brand are the immediate effects of this change.
However, over the longer term, if GLP-1 drugs become ubiquitous then the effects will be much wider than just in the traditional weight-loss category. The demand for high-quality nutrition – especially protein – will only be increased by people becoming more choosey about what they are consuming. If people are snacking less, and are hungry less, then there is an opportunity to sell them food that will give them maximum nutrition in what they are consuming.
WeightWatchers have pivoted to GLP-1 in order to survive the changing landscape. Glanbia is already a majority provider of protein solutions, but it seems there could be opportunities for the company to widen its offering to a consumer base of increasingly discerning eaters.
The huge rise in the use of GLP-1 weight control drugs such as Ozempic is turning the world of dieting on its head, and leading to the decimation of some of the former star brands in the industry.
While data is scarce on how many people are regularly using the drugs – originally approved for use in the US in 2017 – to control their weight, numbers from the US suggest that more than one in ten people there are regular users. Those same people would have been the core customers for the traditional weight-loss industry which had been dominated by WeightWatchers, and where Glanbia’s SlimFast brand operated.
This huge change in consumer behaviour led to the announcement by WeightWatchers last week that it was filing for bankruptcy in the US. The move, called a “Chapter 11 bankruptcy” does not mean the end of the company.
Under the plan announced by the company, $1.5bn of debt will be eliminated. The bankruptcy has the support of holders of approximately 72% of the outstanding principal of the company’s term loan, revolving credit and senior secured notes. WeightWatchers said it expects to exit bankruptcy protection within 45 days of announcement.
WeightWatchers said the transaction would position the company “for long-term growth and success” adding that it is “well equipped to execute its transformation plan”. The company has launched a website titled ‘here to stay’, on which it reassures members that there will be no disruption to its services, including use of the app, clinical appointments and workshops.
One of WeightWatchers’ biggest growth areas recently has been in its own dedicated GLP-1 programme, which no longer relies on the traditional points system and instead focuses on maintaining nutritional needs in meal plans for those on weight-loss drugs. The company can also write prescriptions for GLP-1 drugs for members.
For Glanbia’s SlimFast brand, the option of Chapter 11 bankruptcy is not available as the brand is a wholly-owned subsidiary of Glanbia and therefore doesn’t have its own debt to reorganise. This means the costs arising from the drop-off in popularity of traditional slimming solutions has to be borne by Glanbia.
In its annual report, Glanbia announced it was writing down the value of SlimFast’s brand and customer relationships in North America by $91.4m (€82.3m), leaving that business with a carrying value of $44.1m (€39.7m). Glanbia did not give a breakdown of the carrying value of the SlimFast international brand. The company purchased SlimFast for $350m (€315m) in 2018.
Glanbia also announced in its 2024 annual report that it has put the SlimFast brand up for sale. With current trends in the diet industry, it is difficult to see how that brand might be valued.
Novo Nordisk's Ozempic
Comment
The dieting industry has been shaken to its foundations by the emergence of effective weight-loss drugs. While the consumer demand – to be slimmer – remains the same, the route to that goal offered by GLP-1 drugs is seen as less onerous by many of those who now regularly take the medication.
Traditionally, dieting has been a path of denial, where people feel they have to make a sacrifice in order to get the weight-loss they desire. The drugs, by making people feel fuller for longer, remove a lot of those feelings of sacrifice.
Traditional brands such as WeightWatchers and SlimFast are inevitably associated with the old way of losing weight and so have seen an evaporation of demand in the key North American market.
WeightWatchers bankruptcy and pivot to offering the drugs and Glanbia’s large writedown and potential sale of its SlimFast brand are the immediate effects of this change.
However, over the longer term, if GLP-1 drugs become ubiquitous then the effects will be much wider than just in the traditional weight-loss category. The demand for high-quality nutrition – especially protein – will only be increased by people becoming more choosey about what they are consuming. If people are snacking less, and are hungry less, then there is an opportunity to sell them food that will give them maximum nutrition in what they are consuming.
WeightWatchers have pivoted to GLP-1 in order to survive the changing landscape. Glanbia is already a majority provider of protein solutions, but it seems there could be opportunities for the company to widen its offering to a consumer base of increasingly discerning eaters.
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