With Oprah And Their CEO Gone… WeightWatchers is Copying Ozempic’s Homework

Remember when your mom and her friends religiously tracked every bite with WeightWatchers meal plans, calculating points like they were solving a Sudoku puzzle? Yeah, those were the good ole days when dieting was all about self-control and small portions. 

(Source: Bloomberg)

Fast forward to 2024, and no one’s got time for that anymore. Who needs portion control when you can just pop a pill and watch the pounds melt away like ice cream on a concrete sidewalk? That’s exactly why WeightWatchers (now just WW because branding, duh) has found itself in a bit of a situation. And by situation, I mean its stock is down a crushing 90%.

WW was the subscription before subscriptions were cool—long before Netflix binges and monthly boxes of random stuff showed up on our doorsteps. Founded in 1963, it was the go-to plan for anyone looking to drop some weight without having to live on celery sticks. 

The system worked: follow some simple meal plans, eat less, and shed those extra pounds. Heck, even Oprah got in on the action, buying a 10% stake in 2015 and giving the company even more press.

(Source: AL.com)

But then something horrible happened (at least for WW): weight-loss drugs like Ozempic, Wegovy, and Trulicity. These magical injections are supposed to help with diabetes, but rich people quickly figured out they were the weight loss version of a get rich scheme.

As WeightWatchers' customers started turning to prescription weight-loss drugs, the company saw its numbers take a hit. Revenue slipped by nearly 11% last year, reflecting the shift in consumer preferences. The company’s stock has plummeted by over 90%, a stark contrast to its once-dominant position in the weight-loss industry. To add to the challenges, Oprah, who had been a major figure and advocate for the brand, recently stepped down from the board, leaving the company to navigate this rough patch on its own. (Looks like she joined the dark side with all her hollywood friends.)

WW had two choices: fight against the rise of these drugs or join the party. And in March 2023, they picked the latter, dropping $106 million to acquire Sequence, a telehealth platform that provides—you guessed it—GLP-1 prescriptions. Boom, now WeightWatchers is in the drug game, and they’re hoping to make a comeback faster than the third act of a Rocky movie.

They rebranded Sequence as WeightWatchers Clinic and started offering their customers access to those magical GLP-1 meds. And, to be fair, it’s working—kind of. The number of subscribers using the clinic shot up 120%, even though the company’s total subscribers dipped 6%.

Not content to sit on the sidelines while other companies like Novo Nordisk rake in cash from GLP-1 sales, WW has decided to step into the ring with its very own weight-loss pill. That’s right—the former diet company is now a pill company, aiming to compete with the big dogs.

But will it work? That’s the $100 billion question. Novo Nordisk and Eli Lilly are projecting massive sales growth from their weight-loss meds, and WW is hoping to get a seat at the table instead of being kicked to the curb. The diet industry is changing fast, and WW knows that sticking to meal plans alone is a one-way ticket to irrelevance.

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