Oprah Winfrey’s departure from WeightWatchers has sent shockwaves through the company and the diet industry as a whole. The announcement, made in an SEC filing, caused the company’s stock to plummet by 25% on Thursday morning. This move potentially spells serious trouble for WeightWatchers, a company that was once the weight loss standard for many people, particularly women.
Winfrey’s involvement with WeightWatchers, which began in 2015 when she bought 10% of the company’s shares and became a face of the program, had a significant impact on its success. The “Oprah effect,” a term coined by analysts, refers to the remarkable trend of products endorsed by Oprah experiencing a huge spike in sales almost overnight. WeightWatchers was no exception. Within three years of Winfrey joining the company, its value increased by 13 times.
Even when Winfrey disclosed that she used a weight-loss drug rather than following a traditional WW-style diet, there was an immediate spike in demand for GLP-1 medications, a popular class of weight-loss drugs. This prompted WW to acquire Sequence, a service that provides weight-loss drugs, and led to a 10% increase in the company’s shares. This event solidified a clear shift in the world of weight management, with companies moving away from traditional calorie-shaving diet plans and focusing on more attractive options like weight loss medications.
Furthermore, the general public’s understanding of weight, weight control, and obesity has evolved. Obesity is now seen as a medical disease rather than solely an issue of lifestyle and willpower. This change in perception has made the traditional “just eat less” method feel outdated. People are becoming more educated about the influence of hormones and genetic factors on weight, leading to a greater demand for alternative weight-loss solutions.
Winfrey’s departure from WeightWatchers is undoubtedly a significant blow to the company. The “Oprah effect,” whether positive or negative, takes a long time to recover from. When Winfrey announced her weight loss on WeightWatchers in 2016, the stock price soared by 170% in two days and remained elevated for over a year. It took around 14 months for the price to return to a normal level.
In the long term, WeightWatchers will need to find a new identity. While it may benefit from being a purveyor of hard-to-access weight-loss drugs, its core business of diet and lifestyle needs to adapt to the changing industry. WW could cater to people on weight-loss drugs who are looking for a new eating plan to maintain their weight loss. However, some market analysts remain cautious about the company’s future, stating that the situation is unfolding in real time.
The departure of Oprah Winfrey and the shift towards weight-loss drugs signify a change in the diet industry. Traditional methods of calorie counting and restrictive diets are becoming less popular, with consumers seeking more sustainable and personalized approaches. WeightWatchers has attempted to adapt its brand to these shifting trends in the past, such as investing in a diet app for kids and adopting the tagline “wellness that works.” However, the company’s profitability has declined in recent years, and it remains uncertain whether its pivot towards weight-loss drug pharmacy will be successful.
As the diet industry continues to evolve, it is clear that a new era is dawning. While we may not be entirely free from the clutches of diet culture, the focus is shifting towards more individualized and holistic approaches to weight management. WeightWatchers and other companies in the industry will need to navigate these changes carefully to remain relevant and meet the evolving needs of consumers.