A note to listeners. The material in this episode covers the weight loss, industry and diet culture, which could be upsetting for some people, The series originally aired exclusively on wondering, plus in twenty twenty two. the, march. Nineteen, ninety for the world trade center. york city. Conference room on the forty fourth floor of the north tower, heinz chairman tony O. Reilly takes a deep breath and steps up to the podium in front of him are two hundred If the wall street analysts- and they all think he's finished a really turned heinz in one of the biggest corporate success stories of the nineteen eighties, and much of that growth came from wait, watchers, but now way. Watchers is on its knees and heinz is flagging.

I know what you're all wondering is that turn it heinz going to be an enduring problem. My objective today is to show you that its temporary for the next hour awry while he battles for his career. He explained how heinz is fixing its core operations, but he knows that what these analysts really want is behind To offload way watchers and stick to food but a really still believe send the weight loss bran whitewash his attendance drop for four years straight after we bought it in nineteen. Seventy eight We ve seen lows before it took us until eighty three to get the formula right, but once we did this happen, A really brings up a graph showing wait. Watchers attendance, shooter higher and higher until peeking. It Thirty, two million in ninety ninety one attendant sword every year until the recession hit ever.

and attendance has been falling last year was bad nineteen four will be worse, are forecast is wait, watchers profits will fall by one hundred million dollars this year. The analysts field indicated by the ongoing losing streak, but also wondering how o reilly is going to defend this now some say we should sell, wait watchers, I say no, America's getting fat. Her obesity rates among kids are shocking. The euro government says this epidemic will cost the country one hundred forty billion dollars a year. It's a problem that must be done and when it is wait, washers will be there at the forefront of change, and analysed interrupts. So your strategy is to just wait for that moment. Riley smile some of the analysts are nodding in agreement.

But he knows his confident words are just plastering over a cracked wall. He has find a way to truly turned wait. Watchers around ores, captain analyse, could spark and investor defection they could. Leave a weight. Watchers sized, oh and hides the physical office is an ever evolving space is why embedding flexibility in your workplace solutions is so crucial. Foresight, workplace, occupancy sensors, provide data driven in insights into where space optimization is needed, which is key for any organization, especially those with desks and reservation systems by keeping a portion of your assets permanently flexible. You limit exposure and provide employees. Flexibility and choice. Learn more at court, die

calm, slash flexible, that's c, o r t dot com, slash flexible, we get support from audible You know with audible, you get to access an incredible selection of audio books across every genre. From best sellers and new releases to celebrity memoirs, mysteries and thrillers even business. That's right! There are tons of titles, would interest listeners of business wars, including, the art of business wars narrated by yours, truly in it you'll, learn how lessons about determination, ingenuity, patients grid and other traits they contribute to a victorious enterprise are invaluable, whether europe soft slinging freelancer or the ceo of a multinational manufacturer. New members. Can I audible free for thirty days, had on over them audible, dot, com, slash, be double your text, be w two five hundred five hundred

from wondering I'm david brown, and this is business wars, on the last episode, jenny, craig use Australia as a springboard to success in america, a quicker weight loss. plan turn wait: watchers into a billion dollar behemoth, for system, god crushed by an avalanche of lawsuits, claiming its rapid diet, damage gall bladders now These diet boom is over and the weight loss giants are hunting for ways to get people back through their doors. But while Jenny

craig and weight. Watchers are about to turn to celebrities for help neutral. Systems got another remedy for jump starting sales drugs. This is episode three, reaching for the stars. september, nineteen, ninety five were he's new jersey in a room inside the local neutral system centre a doctor and a white coat ways, the late his customer to walk through the doors? Ok, you can see off the scales. Now aged woman, steps off the scale and slips or shoes back on as the doktor inputs her weight into his computer. So here be am, I is twenty seven point, seven nine, which is more than twenty percent. Above your ideal way. That means you can five for our new neutral, our ex programme. That's the one

the weight loss pill. Right, though, when I saw the newspaper that's correct, it's actually to pills together. They are known as spend fan the first pillar, then flew remain. That's an appetite suppressor, oh need that I tried to justice before, but I was hungry the whole time. I just couldn't stick with it. You'll have a very different experience on Van flora mean you, struggle the finnish. What's on your played about and flora mean can cause drowsiness, which is where the second pill centre comes in it counter The drowsiness are their side effects. Well, as with all drugs, there can be was commonly leads dry mouth insomnia? Maybe diarrhea trimly rare, but it might raise the risk of pulmonary hypertension to poland, hypertension. it's a condition where blood vessels to the lungs tighten at forces

hard to work harder to pump blood which could cause heart failure. The his eyes widened I know it sounds alarming, but it is extremely rare and remember, losing your excess weight will reduce your risk of cancer, heart disease and diabetes plus you'll. Have regular sessions with our weight loss councillor in check ups with me. Every few months the woman relaxes she, to believe and van fan. The aim of getting slim by popping pills goes all the way back to the eighteen. Hundreds over the deck aids, dieters, have swallowed pills, laced with arsenic, amphetamines and tapeworm eggs, The belief that nurturing a twenty four parasite in their guts will keep them tram. Now, the working women of the nineties are putting their faith and then fan, and that's great news for neutral system, the company

boston. Ninety ninety three: after spending millions of dollars settling hundreds of lawsuits, claiming its weight loss, program damaged customers, gall bladders now its rebuilding under new ownership, but it's a shadow of its old self in nice ninety three there were a thousand neutral system centres nationwide and it was the sec. biggest weight loss brand now Two years later, just five hundred sixty centres remain but and numerous system executives read a study showing that fence fan could people lose and keep off weighed and spied and opportunity for hefty profit by in eighteen. Ninety six neutralises doctors are writing. Thousands of faith and prescriptions and its competitors are playing catch up.

customer exodus causes jenny, craigs stock price to crash fearing it's about to lose its number two position. The company start selling. Then then too, but wait watchers refuses to take the thin fin bait. Instead, market leaders searching for a different way to lure people back to its meetings. Laid ninety ninety six manhattan in his extravagant parliament, pr guru, howard Rubinstein, smoothing with, is a list clients he's Silver, hair, brooklyn native within glasses and tonight he's playing matchmaker in the hallway rubinstein greeks. The latest arrival way watches seventeen year old, co, founder in heinz board member liberate out good. You follow me, there's someone. I really want you to me.

Rubinstein leads liver to a red, haired woman in a pastel, pink dress, leopard record ices her immediately in stein. Does the intro anyway, This is Sarah Ferguson, the duchess of your Sarah. Is our liberate the co founder of way? Watchers delighted to me, you know like I've never met royalty before. Should I vow? Please, don't I've enjoyed enough pageantry Rubinstein moves to steer the conversation before slinking away. I thought you should meet. I think you have a lot in common really. Well, as howard's referring to how I've also struggle with my weight. In fact, that's how we watch your started. I used to wait two hundred sixty pounds until I joined this little weight loss group run by this housewife in queens She helped me loose forty pounds and again we founded way watchers, but that's very friend to your weight loss journey, I'm sure you did in the public eye. You know I think it was

re being that open about it. That's very kind. I'm not sure I'm brave the british me he gave me little choice? Yes, I heard they were unkind, unkind out, they were utterly beastly. They called me the duchess of that's awful. It really did but take an almost laugh about it now, the times lemme anyway enough about me. What about youth? Was his weight? Watches up well we're launching a new weight loss programme. Its call one three success and it makes dieting much easier rainy. How so well, instead of counting calories and measuring portions one. Two three success simplifies that with points every day you get points to spend in each food item has appoints value based on the number of calories plus the fat and fibre content, so that wine drinking is to point a burger king bake,

double cheeseburger cost. Twelve point: how many points does one get each day me too on weak days so that cheeseburger half days allocation, yes, but the important thing is not telling people what to eat. They can either he's burger if they want to sacrifice the point we test It points in britain already and it proves successful if we get the marketing right here. I think liberal stops he's just realized? Why Rubinstein introduced him to the recently divorce duchess? You know we the spokeswoman for the one to three success launching and giving your public struggle with way. I think you'd be perfect would you be interested bird and smiles. Of course she would she's no longer on the royal payroll and she's got multi million dollar debts to pay after try wait watchers for two weeks

Harrison signs up. Is the brand spokeswoman for one point, seven million dollars a year and in january ninety? Ninety seven, the duchess introduces america to wait, watchers new points system, rather than having a thin a mother inside of me The duchess of poor is the hardest thing in the world. Staying on a diet introducing one two three six says it's a real that bracelet from late butchers, no complicated county. I like that and no food, the no. No it makes the hardest thing was a lot easier. One two three Working for me, one two: three: six s new from way waters watchers point becomes a sensation attendance, watchers surges sixty six percent in two years. Rest, change, and food manufacturers start noting how many wait watchers points their meals contain and as well. watchers, rebounds

its rivals. Attempts to cash in with thin fan, unravel its fall. Ninety ninety seven and and then dream has become a nightmare before chicago area, women are taking the makers of thin into court. It's been one week since the prescription, diet, drug was pulled off the market that, after studies, linked the drug to heart problems, the class action suit filed tuesday, seeks monetary damages, payment for heart, monitoring and patient updates on any new findings. The suit also alleges the pharmaceutical companies knew, about the drugs dangerous. They should have warned the patients. They should have at least one the doctors to tell their patients that these side effects are real. The study that sparked the law suits, found Fen fan could cause heart valve defects in also promised erica's drug regulator, the fda to ban. Then flora mean

for the diet centres that bet big on fan fan. It's a disaster. Jenny Craig takes a fifteen million dollar hit neutral system watches, have its three hundred franchise diet centres go under neutral system pivots to selling an herbal fan fan made from Saint Johns, ward and ephedrine, but with federal, linked to serious adverse effects, including heart attacks and strokes. The efta orders the company to stop selling the unapproved and unproven drug so neutral system takes radical action. Each its diet centres and real thence itself as neutral stem dot com and online seller of diet plans in meals. But its rush into the new internet, frontier doesn't work out.

its annual sales waste away to a puny twenty million dollars. Ten years before neutral system, was a billion dollar brand. Now it ready to join pan am and woolworth's in their brand boneyard Wait. Watchers is untainted by the fence, then scandal and its point system. attracting millions of new customers. this new ceo decides, this is the perfect I'm too cash out in september nineteen. Ninety nine itself wait watchers to a private equity firm for seven hundred thirty five million dollars, but keeps the right wait watchers branded food, even thou didst food operations wait watcher Future looks healthy, rivals are shrinking. obesity rates are spiralling but in philadelphia,

an ambitious businessman is hatching a plan, one transport neutral system and when he does, true system will go from hovering near dad becoming one of the areas fastest growth, companies. This episode of beer? source is brought to you by this is small business and original podcast from amazon all about what it takes to be. A successful small business owner today hosted by mixing an american podcast producer, andrea, marcus this is small. Business is delivered through the unique perspective of a curious millennial, trying to figure out what it takes to be a successful small business owner today in season want to stand out episode for me was when they talk to max ash. This kid created his first prototype in his second great art class was a mug with a

Ask a ball hoop for many marshmallows into your hot chocolate with help from his parents at seventeen. He now has six patent and he's earning a million dollars a year in sales. You know, every episode is full. A great stuff make sure to take a list season. Two of this is small. Business is out now go check it out wherever you get. Your part, innovative, mrs see every day is an opportunity to create something new del technologies. Advisors are here, with tools and expertise to help you do incredible things, because del technologies believe if there is an innovator in all of us, learn more about smart pcs powered by the intel v pro platform. That's built for business, find tech, that's right for you by calling a dell technologies adviser today, at eight seven seven Ask Del.

in january. Two thousand and jenny Chris It's kicking off. The new millennium, with a seven million dollar, add push during a woman sure to create buzz. Monica lewinsky the war. House in turn, who had an affair with president bill Clinton tied every diet in the world I mean was stand on your head. I tried it if it was you'd only great fruit. I tried it magic diet pills. I tried it. I was thirty one pounds on Janni crag, I'm not there yet, but I can still appreciate and be grateful and proud of. My successor marked jenny craigs lewinsky. Could the advance or to wait. Watchers, Sarah Ferguson, but the company quickly discovers there's a big difference between famous and infamous Angry emails pour into the inbox jenny, craig headquarters, customers war out of centres with posters of lewinsky on the walls,

Franchisees refused runner ads in their markets. Jenny Craig drops lewinsky after just five weeks, and its new year add campaign a flop, a stock price tumbles. by summer, two thousand one jenny, craig star. Is trading it just a dollar seventy become. He is now worth less than the cash it's got in the bank, prompting the new. work stock, exchange to de list, the business in the wake of their companies, humiliating exit from the stock exchange and with their seventieth birthdays approaching the crew eggs decide to step back in january, two thousand to they sell. Control of the business to to private equity firms. for one hundred fifteen million dollars, jenny

Craig, isn't the only diet brand about defined itself under new management fall two thousand to Radner pennsylvania in the office of venture capital, firm, safeguard scientific, Michael, Hagen is chasing millions in front of the square jawed text, Executive you'd have our to venture capitalists to agreed to hear out his plan. My vision is we buy neutral system? It's a company totally lost its way, but its brow. This massively undervalued, we get control for under seven million dollars. That's super cheap for a brand as well known, hagen, rise to read the faces of the venture capitalists to the right is very sceptical pete muster this Five euro founder of safeguard scientific's, which mean higgins. Real task today is to work.

Over the guy was left mike de piano, bald coat. founder of new spring capital, but the piano doesn't look convinced. Isn't this a lot of money to shovel into a company? That's been going from one mess to another since the nineteen eighties it's got as an aging brand that people probably associate with bad food and dangerous diet, pills, I don't see the play here. Hagen square most to win over de piano? It doesn't some tea I'll see the recipe? are ancient, so we make new ones. We fall Are there distributors and sell directly to customers, The distributors are just middle men who were cutting in a neutral systems. Profits I still don't see it. Hagen is about to try again but must holds up a hand to stop it. must now seize higgins vision. He turns to depot I think of neutral system is being like a small stock. Smiles

go up and go down, but by cheap, say it sixty five cents and that's doc? Doesn't have to do much to become a two dollar stock. Others does need to be a long term play if hagen delivers and I think he will you could make it He returned in a very short period. The piano rubs, the salt and pepper stubble on his chin and nods, who that makes sense. All right, I'm in in december, two thousand to hagen dp, Oh and muster by sea, eighty percent of neutral system for six points, six million dollars and now that they ve bought the rack they ve got a fix it but while they get to work, craig is trying to revive its fortunes with a daring ag campaign. On it by cheers and look who's talking star kirsty alley.

jenny, jenny, Craig, please, this is kirstie alley. Theater regards to me being fat, can you hold on a second hey, you're chubby, lose weight together. They have really yummy food that will make it easy for the chicken cheating call one eight hundred jenny. Twenty two lose all the weight you want for. Only forty nine dollars, plus the cost of food that have you called genius jenny, craigs new campaign shred the diet industry, advertising rulebook weight loss? Company said long steered clear of the word fat, but any craig hopes that alleys, taboo busting adds we'll cut through The commercials also ban the usual strategy of showing, before and after shots of successful dieters,

dead of showing alley after she lost weight on its programme. The campaigns airing before she starts dieting potential farmers can even track alleys progress by a blog on the journey. Craig website it's a risky move the valley, fails to lose weight. The whole campaign could backfire and leave people convinced that jenny craig doesn't work, but in them so far. The gamble pays on big time as alley shrinks jenny. Craigs customer numbers grow the first time in years, Jenny Craig is moving up. That return to growth inspires the private equity companies that control to sell the business in kashmir. June. Two thousand six naturally pays

Six hundred million dollars for jenny, craig the idea of the chalk that an ice cream giant selling weight loss programmes raises eyebrows but nestlings betting, that health and wellness or the next big trends and its determined not to miss out kirsty alley. Here. Give jenny Craig badly needed boost neutralises well also use star power, but, with a twist fall. Two thousand six, the nutritive call centre in philadelphia on a wall mounted tv ds, peons Monday night, football is playing and the first step makes closing in The call center manager climbs onto a desk and address This is sales tee everyone at break in twenty seconds, get ready.

The team is plenty ready, they earn between forty and one hundred twenty dollars were every color. They sign up the best people here make six figures a year. Your turns up the volume on the tv as neutral systems, new ad, storing, former miami dolphins, quarterback dan marino, airs forty years old. I feel great, I'm damn reno lost twenty two pounds on notices, get real results with me for a system for man I play way now losing ever felt online now, four weeks of also wants to the special offer. You also get an edge. The weaker party meals notices at the moment. The ad ends the call center bursts into life, the authority to nutrisystem. Let me guess: sarah you're interested in learning about nutrisystem for men and getting an extra week of hearty meals free. Am I right the colors

prize. The salesman knows But neutral system uses hundreds of toll free phone numbers in its ass so that it always knows exactly what prompted people to call the food is great. You get to eat six times a day and I don't mean salads, I'm talking burgers beef, tacos, hot dogs. You know man spoon in the next cuba a woman is reading in a customer whose balking at paying three hundred twenty dollars a month for neutral system food, our honey I understand I do, but he asked me this on a scale of one to ten. How important is it to you to lose weight? A ten sounds pretty important. You will that's great honey. You won't regret it now. Can I your credit card number borders?

the system, the dan marino ads, are just the latest touchdown and rapid turn around, but seeing the company's sailed sore from twenty two million dollars to more than five hundred sixty million in just three years since buying control of neutral system. Ceo Michael Hagen and his team have turned the burned out diet brand into a money machine. They started by refreshing, the food for the first time in thirty years. Next, they modernize the call centre and said using data analysis to identify which adds worked and why? the company also mood add buying in house so weak, secure last minute. Deals for cheap adds base on major cable tv networks and in peter magazines like grade and now he's doing what the weight loss business thought was impossible.

Diet programmes to men. the industry had largely given up on man it new thirty eight son of dieters were men, but they preferred to diet alone, then joined formal programmes, so much so The men made up just nine percent of weight. Watchers members, with. Damn Marinos help and a new line of manly meals, neutral, systems breaching the gender barrier. Soon, one in three of its customers will be men and that success is paying off for hagen and his backers. The price of neutral system stock is gone from sixty five cents to sick, d. Three dollars six point six million. They spent buying control of the firm. Is now worth more than six hundred million, but jenny craigs, sticking to the weight loss, industries, core audience of middle age, women and its

to deploy another big name ambassador to help convent mid lifers, they can find happiness feeding into the same genes they wore in their twenties, but its plan to lure him more dieters is about to provoke a legal dust up with wait. Watchers one we'll, put a laser focus on whether weight loss programmes, even work and at what cost I just learned discover credit cards. Do something pretty off At the end of your first year they automatically double all the cash back. You ve earned that's right. Everything you ve earned doubled all the cash back from eating at your favorite soup, dumpling restaurant doubled

all the cash back from that trip were you sort of learned, snowboard also doubled and the best part you don't have to do anything ridiculous to get it now discovered. Does it automatically seriously see terms and check it out for yourself at discovered dot com, slash, Matt,. The. February two thousand seven los angeles inner kitchen valerie bertinelli scoops a handful of sugar coated almonds from a bowl and starts popping them into her mouth. As she does cellphone buzzes. She pigs it up off the counter. And checks who's, calling her heart lifts its a it's more than thirty years since a teenage burden, nellie became american

sweetheart, while starring in the hit tv comedy one day at a time now, she's a Forty six year old, mom and work is scarce. She she's her brunette hair from her ear and answer the phone jack: hey vow, listen! I know you might not be open to this, but we got an inch In car from the people at jenny- craig, oh god, bert nellie feel sick. She know she's overweight, but she was comfy with it being left unsaid. They said, I'm fat, didn't they. Why else which any great car it's a lot of money, they think you'd be perfect because I'm perfectly fat or because I'm sat in a perfect way will at least you're joking about it. I'm trying, but what she really wants to do- is grab that bowl of sugar coated almonds and eat away the pain but Jim

Craig dangles and check big enough to get burden nellie to agree to risk the humiliation of dieting while the world watches burden They tells herself it's not for the money. It's about rebooted, her life by getting thin and to prepare she, seeks guidance from. the alley march two thousand seven us angeles, alleys designer kitchen, nellie runs a hand over the expensive countertop oh jealous, I want this kitchen nell he's been hanging with alley all day. Learning what she and about life as a jenny, craig spokesperson alley pools. packet of jenny, craig food from our freezer and puts it in front of bertinelli pro tip the turkey chili is the best Allie looks Burton nellie up and down half

you know when Jenny craig first told me they hired you I was like, is valerie even fat and the jenny craig I guess, while she sort of sort of fat, yeah yeah. But that's not the story, so he says well, she sort of fat, not fat like you were wow what I now right. So your sort of fat- and I'm just plain fact, but seriously, you got to remember it's not the weight loss. That'll make you happy it's! How let yourself be when you lose it so tell me what's happening in your life, that major fats burdening doesn't hesitate. It's how I've dealt with her stress anxiety. Me too. But after this you'll deal with patents, dress differently. I've dated before Why will this time be any different, because wouldn't be dieting before the whole effing world? If you weren't ready to change doing this runs ever than some stupid check

burn nellie drops forty pounds in nine months earning jenny, craig tons of publicity, two thousand eight alley. Quits craig after gaining weight in burden nellie as chief ambassador. Two thousand nine bird nellie loses another ten pounds, so she can fit into a tiny bikini for another jenny craig add, but she does it's not enough, so stars herself for a week before the issued to deliver that each body, image, jenny, Craig craves her bikini, add, makes a big splash but then in january, twenty ten, the brand gets hurt a claim that people lose twice as much weight on jenny, craig then on weight, watchers and all hell breaks, loose, weighty burnt, nellie law, suit way,

yours is suing jenny, craig over their ads, featuring valerie, Bert nellie, calling them deceptive and misleading ordinarily clay in the commercials that a major clinical trial proves that the jenin Craig diet is twice as effective as white watchers way, one claims there's no proof of that. It wants a court order. The ads pole with jenny cry struggling to support its claim weight, archers wins a temporary injunction, forcing the burden. Nellie add off the air within days journey cry. egg settles the lawsuit by agree. Drop the add, but the dust up between the two diet giants brings into focus the lack of rigorous clinical studies showing their weight loss, rams work, Studies that do exist suggests that the vast majority of dieters windup regaining all or much of the weight they lost within a few years and that keeps

in customers coming back time and time again as well watchers former finance chief, richard somber, admitted when question the bbc and twenty thirteen it played a lottery, You know when you play it again. Maybe you'll win the second time even using white watches own statistics, the very best after five years, sixteen percent of people maintain that go. Why I mean that Hardly anyone, it's it's. It's sort of a total failure and I just wonder how on earth it is a business that can be so huge. It can be based on patent failure well, but they're successful, because the other eighty four percent have to come back and do it again. That's where it's business comes from I've gotta take my hat off to have a business where they actually words the business.

Serbia at so they said and ask questions about the success rates of weight, loss programmes grow ever louder than business enter, yet another swamp. The great recession hits and customers curb spending, rather than signing up for diet. Free funded smartphone apps, like my fitness pal and lose it our luring away millions of dieters by reducing the hassle of counting calories newt, system, spectacular, rebound spluttered to a halt, way Watchers membership shrinks and nestle Since Jenny craig, by selling it at a loss to a private equity firm. Once again, the die giants need a way to rekindle interest in their services, but this time

the come back is going to be harder than ever, and that's because a cultural shift is about to deem diet. A dirty word on next episode diet sure goes on trial. Wait, watchers, embraces wellness, encoded, helps and upstart app Take a bite out of the weight loss market, from wondering this is episode three of diet, wars for business wars, acquit note, recreations, you ve been hearing in cases, we can't know exactly what was said. Those scenes are drama but their based on historical research. If you'd like read more about bowery bird nellie work for jenny, Craig. We recommend losing it and enough already by valerie bird nellie I mean those david brown, Tristan, Donovan wrote this story. Voice

Acting by Michel, philippine carry cabin off and nickel a barber. Karen low is our senior producer and editor edited in whose, by Emily frost, sound designed by kyle randal, are produced. is dave schilling. Our executive producers are jenny, lauer, beckman and marshall louis for wandering the makes jail. Evans chills got a oh, a bakehouse house fast car, two kids and a great career jill, has a problem when it comes to love. Joe can never seem to get things right and then allow comes dean, accompany can't believe my the jackpot. It looks like they're, gonna live happen, the ever after, but on halloween night things get a little girl

This is where the shooting happened outside of building society in new gummy, its thought. The forty two euro victim was killed, after he opened fire on police and jails. Life is changed forever. From wondering and novel come stolen hearts, a story about cop who falls in love with a man who is not only seems to be followed, stolen hearts. Wherever you get your pocket ass, you could be in the entire series ad free on amazon, music, download, the amazon music happy now.