Weight Watchers finding the right connections

by Jeff Gelski
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Weight Watchers Flatout
Weight Watchers has partnered with Flatout.
 

NEW YORK  — Weight Watchers International, Inc. in December 2015 launched Connect, which allows members to connect on the company’s mobile app. Connect led to Weight Watchers finding Flatout, a new brand partner.

Ryan Nathan, Weight Watchers
Ryan Nathan, vice-president of products, licensing and e-commerce for Weight Watchers

“That one actually came from Connect,” said Ryan Nathan, vice-president of products, licensing and e-commerce for New York-based Weight Watchers. “It was a preponderance of members on there saying, ‘Look, I can use Flatout flatbread, Weight Watchers cheese and make a pizza for 3 or 4 SmartPoints. How great is that?’”

Weight Watchers executives reached out to Flatout. The Weight Watchers’ logo now appears on the packaging of Flatout flatbread, pizza crusts and wraps.

That was one example of how Weight Watchers listens to its members in choosing brand partners and creating its own new products.

Weight Watchers Connect app
Weight Watchers Connect which allows members to connect on the company’s mobile app.
 

Products may fit into Weight Watchers plans in three different ways, Mr. Nathan said. One way is members internally posting about foods that help them on their weight loss journey. Connect on average features more than 9,000 posts, 40,000 comments and 200,000 likes each day.

Weight Watchers tracking members every day is the second way. The company, to discover opportunities, collects data on what members consume.

“We have millions and millions and millions of records of what people are tracking every day,” Mr. Nathan said. “So we can see very quickly the shift (in consumer buying patterns.)”

Weight Watchers popped hummus chips
Weight Watchers launched Weightwatchers popped sea salt hummus chips that contain chickpeas for those desiring gluten-free options.
 

The third way is market driven, or noticing consumer trends. Weight Watchers noticed the preponderance of gluten-free items mentioned by its members and then introduced Weightwatchers popped sea salt hummus chips that contain chickpeas. The gluten-free snacks have no artificial flavors or colors.

Skinny Pasta also fit into consumer trends and Weight Watchers’ plans. Skinny Pasta contains fiber-rich konjac and is available in such shapes as noodles and spaghetti. The product is free of sugar, gluten, fat and cholesterol.

Weight Watchers, a scientifically backed company, can look to more than a hundred clinical trials on weight loss, Mr. Nathan said.

Weight Watchers Skinny Pasta
Skinny Pasta contains fiber-rich konjac and is available in such shapes as noodles and spaghetti.
 

“We have to walk a fine balance between the science behind what works on weight loss and food trends,” he said.

Not every product meets the company’s criteria. Bars might be promoted as natural and gluten-free.

“At the same time, if it’s a 280- or 300-calorie snack, it just doesn’t help you on your weight loss journey,” he said.

Sugar-free candy may be aimed at diabetics.

Weight Watchers sugar-free candy
Weightwatchers sugar-free candy may be aimed at diabetics.
 

“They are not necessarily lower points or lower calories,” Mr. Nathan said. “A lot of (the companies) replace sugars with fat, and they create very caloric snacks that don’t necessarily work.”

Weight Watchers as a company has fattened up its profits ever since Oprah Winfrey in October 2015 made an equity investment and joined the board of directors. Later that year Connect was part of the launch of the Beyond the Scale program, which also features new SmartPoints and a FitBreak app. Besides its focus on diet, Weight Watchers now promotes fitness and exercise to its members, too, Mr. Nathan said.

Moody’s Investors Service, New York, in April of this year expressed optimism about the near-term future of Weight Watchers, citing Ms. Winfrey’s investment and a partnership with Apple Inc.

 

“Because the company’s financial results generally lag operating trends by about a year, we believe Weight Watchers will end 2017 with financial metrics that position it more solidly at its rating than has been the case during the past few years,” said Ed DeForest, vice-president and senior credit officer with Moody’s.

Weight Watchers in the fiscal year ended Dec. 31, 2016, had net income of $67.7 million, equal to $1.03 per share on the common stock, which compared with $32.9 million, or 56c per share, in the previous fiscal year.

Mindy Grossman will become the new president and chief executive officer of Weight Watchers on July 1. Previously she was the c.e.o. of HSN, Inc., a $4 billion interactive multichannel retailer.

 

“She built that into an e-commerce powerhouse,” Mr. Nathan said.

The new c.e.o. shows how Weight Watchers has e-commerce plans, he said.

“E-commerce has been a big growth engine for us,” he said. “It is not the core business. Our core business is to sell subscriptions to Weight Watchers on-line and in our meeting rooms.”
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