WeightWatchers: As Australian members mourn meetings, could off-brand Ozempic be program’s saviour?

For the past six decades WeightWatchers members have lined up at community centres and town halls around the world to face the scales and share no-nonsense diet tips. But from the start of next month Australian members of the program will lose these weekly catch-ups and the “coaches” they’ve relied on — in some cases for decades — will lose their jobs as the company closes the doors to in-person meetings and shifts to online-only support. It has members “disappointed”, “disillusioned”, and in many cases “downright furious”. But in the US, even more controversially, they are also abandoning sole reliance on their program’s traditional advice mantras of eating healthily and exercising more. Instead they are barrelling headlong into becoming a subscription service offering compounded versions of the new breed of “miracle” weight loss drugs. So what has led to this dramatic change in direction and can it save a global company that by any measure is struggling? Humble beginnings Originally the brainchild of American housewife Jean Nidetch, in-person meetings have been a staple of the WeightWatchers program for 63 years. In 1961, weighing in at nearly 100kg, she had turned in desperation to a free 10-week, state-provided weight loss program after a neighbour had mistakenly congratulated her on being pregnant. She succeeded in shedding some pounds, but once the course ended she found herself struggling to maintain her efforts. The entrepreneurial and charismatic Nidetch wasn’t to be beaten — she turned to friends also attempting to diet, inviting them into her home to discuss their challenges and successes as they battled the bulge together. Her gatherings proved to be a smash hit. Within months more than 40 people were packed into her home each week and, eventually, Nidetch was helping others set up their own groups. As she worked to do so, she came to a realisation — weight loss wasn’t just about calories in and out. It was about encouraging people to support each other to change their habits. And there was a business opportunity to exploit there. With that theory in mind, Weightwatchers was born, holding its first official gathering in 1963 in a rented loft above a New York cinema. An astonishing 400 people turning up. Franchises quickly sprung up in countries as far flung as the UK, Israel and Puerto Rico and by 1968, the brand was truly global, with meetings being held in 102 countries. WeightWatchers Australia opened its doors in April 1969, with the first meeting held in Sydney. As time went on, the program became famous for its “points” system — first introduced in the late ’90s — and its simple messaging that “no food is off limits”. Rather, moderation and healthy choices were the aim of the game with offerings of simple recipes the whole family could enjoy. While it was possible to follow the program without branded food purchases, convenience products based on the program were developed including heat-and-eat meals. Business of weight loss Nidetch stepped down as president of WeightWatchers in 1973, leaving the running of the company to one of her original business partners. But he found its phenomenal growth, bolstered by the development of cookbooks, foods magazines and other weight loss products, too much to handle and H.J Heinz Company purchased WeightWatchers International five years later. Heinz would go on to sell the firm to Luxembourg-based investment company Artal for $US735 million in 1999. Under Artal’s management. its profit margin tripled in just three years and on November 15, 2001, WeightWatchers International was floated on the New York Stock Exchange. On its first day of trading it was described as an “outstanding offering” by one analyst who added it was a ”warm fuzzy kind of stock . . . people want”. It debuted with a market capitalisation of just under $US7 billion — a far cry from the $US71m Heinz had paid in 1978. And over the years, celebrities flocked to the program, from the Duchess of of York Sarah Ferguson to actress Jennifer Hudson. The crowds followed. In Australia, it was reported that in 2003, between 80,000 and 90,000 slimmers were attending the 2200 meetings held each week. The Oprah effect But the success wasn’t to last. In June 2015, the company’s market capitalisation had plummeted to just $310m. Media reports at the time claimed management couldn’t quite pinpoint why — obesity levels were skyrocketing, but memberships were down. In stepped Oprah Winfrey. Buying a 10 per cent stake worth $43.2million and joining the board, she got to work pumping star quality into the company’s marketing efforts. An American sweetheart, anything the the talkshow host touched seemed to turn to gold. And so it was for WeightWatchers. She promoted the program by saying she followed it, helping push its fortunes higher than they had ever been before — its stock reached its biggest peak of just over $US100 a share in 2018, giving it a market capitalisation of more than $US9b. Winfrey’s personal fortune rose with the company’s. While she had sold a quarter of her stake in March 2018, her remaining portion added an estimated $US400m to her worth by August that year. However, in a dramatic reversal of fortune, one year later WeightWatchers’ share price was languishing at $19. And by the start of 2022 the share price had plunged to new depths of $US4. Ozempic shock Just as the gloom of COVID lockdowns began to lift and in-person meetings began slowly to ramp up again, a new threat was looming for WeightWatchers. This time in the form of a disrupter as powerful for the weight loss industry as Napster was for music — Ozempic. Novo Nordisk’s now-infamous drug was first approved by the US’s FDA in 2017 as a treatment for Type 2 diabetes. But word soon got out it was also extremely effective for weight loss. Hollywood caught on and interest in it shot through the roof. When, in December 2023, Winfrey suddenly revealed she used one of the new breed of drugs, it sent shockwaves through the diet industry. The Oprah spell on Weightwatchers had been broken. She would follow up her admission with a TV special on shedding the “shame” when it came to the use of such medications, almost simultaneously announcing she was gifting her stake in the company to charity and exiting the board. The company’s share price has struggled to regain any form of momentum ever since and, despite hopping on the GLP1 bandwagon in the US, at last close was worth around $US1.60, giving it a valuation of just $US127 million — a fraction of its former glory. Like many others, Australian WeightWatchers member, Melbourne-based Sue Onslow, was unsurprised by Winfrey’s departure. “She’s just a brand. She promoted it and now she’s turned around and gone,” Mrs Onslow told The Sunday Times this week. “We’ve seen her flip on so many things. “I’ve been involved with WeightWatchers for the past 10 years and the changes I’ve seen are just wild. They used to be all about the people, but now it seems like it’s all about endorsements and money.” Member fury In a further blow to members, earlier this year WeightWatchers moved to online-only meetings in the US. It was quietly revealed in September that Australia would follow suit, with the last in-person meeting set to close its doors on November 2. The outcry has been swift with many members threatening to leave the program. One of those who have spoken out over the closure is Perth-based Anna Van Dyken, who has written two cookbooks in association WeightWatchers after she lost more than 70kg over eight years using the program. Ms Van Dyken, who amassed more than 45,000 followers on Instagram by charting her weight loss efforts and sharing recipes, was also an “ambassador” for the company. “I think meetings are an integral part of what made Weight Watchers successful,” she told The Sunday Times. “If it was easy to lose weight online and do it by yourself, everyone would be able to do that. But they can’t. “At meetings, you got to know your coach. It was personalised. And all the people in your meetings became your friends.” Ms Van Dyken believes, like many members, that the failure to re-open more meetings after lockdown was a fatal blow — some estimates have it that fewer than half of meetings in WA returned. “Saving money by cutting all the staff and cutting a lot of workshops was the biggest mistake, in my opinion, that they ever made, because a lot of the older generation still needed that contact.” Mrs Onslow agreed, adding that without that personal touch, the program just became just another online food tracking app, and one linked to a brand that wasn’t holding sway with younger generations who would instead turn to cheaper, or even free alternatives. Or to weight loss drugs. “You might see a young one at a workshop, but she’s usually there with her mum,” she said. “Once upon a time, if you needed to lose weight, the first brand that came to mind to you was Weight Watchers . . . but now everybody wants instant answers, instant fixes.” Once an employer of hundreds, with a separate CEO, cookbook editor, fitness expert and a team of marketers, customer support workers, not to mention coaches helming meetings around the country, insiders say WeightWatchers Australia has been consistently shedding staff since COVID hit. Just 150 staff remain on the books in Australia at this stage and it is understood numbers in the Sydney headquarters have dwindled to the mid-teens, with the global parent company now overseeing day-to-day operations. Even the chat function on the program’s app used by Australian members, once manned by locals, is now manned by overseas staff more often than not, with the telltale being that advice on recipes and weights and measures is regularly given in pounds, ounces and cups instead of the metric measurements favoured here. It may also be telling that multiple requests to WeightWatchers Australia’s media team went unanswered this week. Can the enemy turn saviour? Despite the doom and gloom that currently surrounds it, Weightwatchers did react to the GLP1 storm that was headed its way, with analysts at the time cautiously celebrating its efforts. In March of 2023, as Oprah was leaving the fold, WeightWatchers announced it was to purchase US telehealth provider Sequence. Offering access to drugs including Ozempic, WeGovy and Trulicity, Sequence cost WeightWatchers $US106m. But while the announcement gave WeightWatchers’ share price a bump, the sugar high didn’t last. This week, the firm made a further move, announcing it would be offering compounded semaglutide to members — or as it is often described, off-brand Ozempic. The company says the move is “expanding the accessibility and affordability of weight loss medications”, reacting to long-term, widespread shortages of branded products. It also says the compounded versions can be offered at a significantly reduced price, particularly catering to those in the US whose insurance companies have refused to foot bills for high-cost branded products. But the announcement has attracted a fair amount of negative feedback, with the FDA “concerned” over unapproved versions of semaglutide. In Australia, the company is yet to dip a toe into the field of online-weight loss medication subscriptions. But if they do they will encounter stiff competition from the likes of local incumbent Juniper. And they might want to pay careful attention to the fortunes of that Woolworths-backed offering, given it was supplying compound semaglutide to patients here last year. Juniper turned to compounding, using a loophole in TGA rules, while Australia struggled to secure regular supplies of Ozempic and WeGovy, losing out to larger markets like the US. But while their patients loved it, the TGA didn’t. Within months the loophole was closed, forcing Juniper back to the branded alternatives and facing significant price rises for their members — from $285 a month for 1mg of compounded semaglutide to $449 for the same dose of WeGovy. And, if local WeightWatchers devotees are to be believed, even if the company can offer the new breed of weight loss drugs at an affordable price, it still might not be enough to save the ailing firm. Neither Ms Van Dyken nor Mrs Onslow want to try the drugs and said many others were like-minded. “The members here like traditional weight loss,” Ms Van Dyken said. “And there is absolutely nothing wrong with the program. The program is absolutely amazing. I’ve been on it for over 10 years, and it worked. “Personally, I don’t want to be on a drug for the rest of my life.” Meanwhile, in suburban loungerooms and kitchens . . . Instead of turning to a drug, Mrs Onslow, said she was “seriously considering“ sticking to a traditional approach, hosting meetings in her own front room. “I’ve never really achieved long-term success when I was only accountable to myself,” she said. “The workshops, however, provided a space to celebrate both wins and setbacks, ask for help when struggling, and offer support to others. I know so many people feel the same way. “(In the US people are independently) going back to the original version of somebody’s loungeroom, and for free. It’s really a full-circle back to what Jean did. “This is how WeightWatchers started. It started as a community. I want to keep the fundamentals, bring back personal connection.” When asked if she thought the closure of in-person meetings might just be the end of the road for WeightWatchers, her answer is simple — there’s a very limited window of opportunity before November 2 to keep the doors open. “I think unless they do something now, it’ll be the end of the road for them. I really do.”