Nutrisystem CEO Says It's Expanding Its Holistic Approach to Weight Loss Post-Acquisition

January 2, 2019
Updated 2mo ago

By Carlo Versano

January is a critical month for diet-plan companies, which count on the masses of consumers who have resolved to eat better and live healthier in the new year. For Nutrisystem, which was acquired by Tivity Health ($TVTY) last month for $1.4 billion, that presents an opportunity to bring new products to the market as consumers are primed to be thinking about their weight.

CEO Dawn Zier told Cheddar Wednesday that Nutrisystem ($NTRI) is taking a "multibrand" approach to dieting rather than offering a one-size-fits-all plan. The company acquired the South Beach Diet brand in 2015 and that diet's trendy keto-friendly program has seen a resurgence in popularity of late. Two new programs the company is using to reach new would-be dieters are FreshStart, a quick-start plan that offers more flexibility, and the DNA Body Blueprint, a genetic test that is said to reveal what foods are best for your genotype.

Zier pointed to both new programs as part of the company's plan to help build and maintain a younger, savvier clientele of dieters.

Zier said the holistic approach to dieting that is thought to be most effective involves a fitness element ー so, calories in and calories out ー as well as an element of social connectivity that introduces a sense of reinforcement and accountability. Being under the Tivity umbrella will help NutriSystem develop all three legs of that stool, according to Zier.

"I think this leap-frogs us," Zier said of the acquisition. "I think it gives us the opportunity to do what others in the weight loss industry are only talking about." In addition to the expanded fitness and social options, Zier said Tivity gives Nutrisystem access to a much wider range of distribution channels.

"We, Nutrisystem, will have access to the health plans that we currently don't have access to, and that are pretty complicated relationships to develop, and we'll also have access to over 16,000 fitness partners."

Tivity, meanwhile, will gain access to Nutrisystem's "digital and consumer marketing capabilities."

Nutrisystem stock has struggled, along with other diet plans like WW ($WTW), formerly known as Weight Watchers, over the last year. WW recently partnered with Blue Apron ($APRN) ー a meal-kit service in the midst of its own existential crisis ー as a way of obtaining a new revenue stream. For Nutrisystem, Tivity's ownership provides some revenue and cost synergies that will help it compete.

With the holidays over, Zier said it's "game time" for the wellness industry, which is a "seasonal business" that thrives in January and February, then from April to June, and again around back-to-school time.

From about Halloween to New Year's Day, people let tend their healthy habits slide. Zier said that's where Nutrisystem is counting on its more flexible programs, like FreshStart, to both increase the number of people on its programs and extend them through the times of year when dieting comes less easily.

For full interview click here.