Sima Sistani says its time for WeightWatchers to embrace Ozempic. Will its users agree?

new york
CNN
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WeightWatchers believes diet culture is over.

Welcome to the era of Ozempic. Diet pills have revolutionized the weight loss business. The number of Americans taking the drug semaglutide is 40x increase The past five years are in stark contrast to decades of advice on diet and exercise to lose weight.

Wegovy and drugs like it threaten to forever change the $76 billion diet industry and the foundations on which its wealth has been built. They also have consumer staples and retail giants such as: Coca-Cola and Walmart’s struggles.

Sima Sistani, 44, CEO of WeightWatchers, knew this and knew that WeightWatchers needed to evolve, if not evolve. She knows she can’t beat Wegoby. That’s why she’s cooperating with it.

When he joined the company last year, Sistani made fundamental changes. She canceled thousands of her company’s infamous in-person workshops, closed storefronts, and shifted her company’s focus to new weight management drugs like Wigoby. She also landed a huge deal to buy a telemedicine business that could issue virtual prescriptions for these weight loss drugs to patients.

It was a change that threatened to upend what WeightWatchers is best known for. CEOs rarely take such risks unless they see an existential threat on the horizon. But Sistani says the company has not lost its footing.

“What we do best is help people manage their weight. That’s the anchor,” she said. “I think we have to be honest and authentic about it and who we are.”

And that anchor allowed the company to chart a path forward, even as the ground beneath it changed.

“I think we were very intentional about the evolution,” Sistani told CNN. “We can ensure that all stakeholders benefit from this transformation and change.”

In-person meetings, the coronavirus pandemic, and wellness culture

When she took the helm of the crisis-ridden company in February 2022, change had already begun. The coronavirus pandemic halted in-person meetings for a while, the company tried unsuccessfully to try body positivity, and the semaglutide weight loss phenomenon was just beginning.

The traditional diet brand, which has been around for more than half a century, was on track to lose about $250 million in 2022.

In response to changing attitudes towards body acceptance in 2018, the company looked blankly at the rise of the body positivity movement and haphazardly tried to rebrand itself as a holistic wellness brand, but it didn’t quite work out.

“Part of the reason the Wellness Pivot didn’t work is because it was a marketing move. It wasn’t a product, and it didn’t change enough the way we actually presented ourselves as a wellness company. I did,” Sistani said.

The focus on in-person workshops and lack of a digital footprint also had a negative impact on the company’s bottom line, especially during the era of social distancing.

“Even though about 80% of our membership went digital-only, we still had this app that functioned as if it were an adjunct to our in-person meetings,” she said.

Sistani immediately implemented sweeping reforms, including canceling conferences, closing stores and promoting the drug semaglutide.

In March, she made more sweeping changes to revamp the company. WeightWatchers has signed a more than $100 million deal to acquire Sequence, a telemedicine business that gives patients virtual prescriptions for these weight-loss drugs on demand.

“These drugs have shown us that living with obesity is a chronic condition, and the science has evolved. “It’s not just about willpower,” she said. “And what we want to say now is that we know better and we need to do better so that people can feel positive and de-stigmatize this discussion about obesity.” It is our responsibility.”

Analysts at Goldman Sachs say the acquisition of Sequence and the inclusion of semaglutide have prevented the company from collapsing. Analysts at the bank predict that 15 million adults in the U.S. will be taking these drugs by 2031, or about 13% of all adults in the country excluding diabetics.

They believe these changes could generate $455 million in new revenue for WeightWatchers by 2025.

Sistani believes that had she not joined, the company would have followed in the footsteps of competitors like weight management company Jenny Craig, which declared bankruptcy in spring 2023. Later, part of Jenny Craig was sold to Wellful. Parent company of Nutrisystem.

The market seems to agree. The company’s stock price has increased about 78% since the beginning of the year. In 2022, the stock price fell about 76%.

Sistani says weight loss drugs have exploded in popularity, but there remains a shortage of knowledgeable doctors to prescribe them safely. That’s the role Weight Watchers can play, she said.

Semaglutide was approved by the U.S. Food and Drug Administration as Ozempic for the treatment of type 2 diabetes, but it was also used off-label for weight loss. A version of Wegovy to treat weight loss was approved in his 2021. They work by mimicking hormones that make users feel full, but their use comes with potential side effects, such as gastrointestinal discomfort. Long-term risks also continue to be studied. These drugs are not a stand-alone solution; sustained weight management requires a comprehensive approach to diet and exercise. You will often gain weight back when you stop taking it.

Most U.S. doctors are not trained in obesity drugs, and “there is no clear, safe, reliable way for people to understand whether they should take these drugs,” Sistani said. Ta.

WeightWatchers could be a source of that information, she said. “Because we are a publicly traded company, our operations are transparent. We believe we can provide a better experience for people taking these medications.”

WeightWatchers is staffed by clinicians and researchers, and has a scientific advisory board and a medical advisory board to ensure the experience is safe, side effects and complications are well managed, and people who need the medication. She said she guarantees that it will be delivered to the country.

Still, WeightWatchers is a company that has morphed several times over the past decade as it struggles to find its identity.

Even longtime publicist and investor Oprah Winfrey had to pull out. previous comment About weight loss pills becoming the “easy way out” after WeightWatchers started selling them.

Some longtime users of the program feel betrayed by the pivot from in-person meetings to medication-based solutions.

“WeightWatchers’ acquisition of Sequence really upset a lot of our members,” said Jamie Yonash, who runs a lifestyle blog. Life is sweeter through designWe focus on WeightWatchers related content. ”

“The feedback I’ve received is that people feel somewhat betrayed by Weight Watchers promoting a drug for weight loss because it seems to go against the core values ​​the company has held for many years. ” she said.

Regarding the lack of in-person meetings, she said: “I don’t think the transition to almost entirely digital programming is in the best interest of all of our members. People need human connections and interactions, and those can’t necessarily be achieved in a digital environment.” .”

Other WeightWatchers influencers were also confused by the change.Biz Velanti, who runs a popular blog and social media accounts my busy kitchentold CNN that “everyone is looking for a quick fix” through medicine. “Unfortunately, they don’t want to track their meals or exercise to reach their weight loss goals,” she said.

The future of WeightWatchers is still being considered, but Sistani is confident it won’t be centered around weekly meetings and weigh-ins. It’s probably not a consumer packaged goods company that sells diet snacks.

Evolution is inherently difficult, Sistani said. But this is not gambling, she added. It’s a “bold bet that is informed by data and injected into every part of what we do.”

In its latest corporate earnings report, the company reported net income for the third quarter of 2023 of approximately $43.7 million. WeightWatchers reported a net loss of $206 million in the year-ago period. Operating income was $30.6 million, and 2022 operating loss was $254.5 million.

The number of subscribers also increased by 6% from the previous year to 4 million. Still, the company lost money on subscription revenue, and its gross profit for the year declined.

Sistani said Weight Watchers was a marketing-driven company when she took over. Now, with a new outlook, we are a consumer-first company.

“We intend to grow in a way that resonates with more digital-forward consumers,” Sistani said. “There will be community building and workshops, but it doesn’t have to be coach-led. It’s more about being in places where people want to connect. Sunday walks in the park, going to the grocery store. There are so many ways to build those relationships organically and meet people on the spot.”