It's the early 1990s and the diet boom is over. Weight Watchers is now a millstone around Heinz's neck, Jenny Craig's advance has stalled, and Nutri/System's bankrupt and broken.
Faced with tanking sales, the diet giants home need new tricks to get people back on their weight-loss plans. And soon all three are homing in on the same answer – paying celebrities big bucks to convince the public that they're just a diet away from happiness.
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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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
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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?
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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
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Transcript generated on 2023-04-08.