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Waisting your money: The con behind the diet business

Sunday 1st July 2001

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Millions of dollars are spent on the weight loss industry, and it's growing. But we keep getting fatter. Now government is looking to support weight loss programmes. Fiona Rotherham shows how the diet industry cons its way into your wallet.

Diets don't work. Just ask Carol Plumpton. She has tried them all.

The day Unlimited interviews her, Plumpton looks good, dressed in an elegant blue linen suit and a frilly orange blouse. The important thing about her clothes is not their colour or design; it's the fact that they're a size 12. The Aucklander's weight has yo-yoed from size 16 to size 26 for much of her adult life. The Farmers operations manager has lost 31 kilos since October 1999, after participating in a Weight Watchers At Work programme.

Hang on, didn't we just say that diets don't work?

They don't long-term, Plumpton says. Changing your eating habits and exercising does, but diets? Phooey to those. For 30 years she used to diet, lose weight, feel good, buy new clothes, glory in the new "thin" her, and then rapidly put on weight again - usually more than she had lost. Thanks to weight loss programmes and one fad diet after another, she'd end up out of pocket and miserable. Sound familiar? Plumpton's story is typical of most dieters. The difference this time, she says, is not that she has found a better programme, lucked onto another "wow!" fat-busting product, or joined a women's gym. No, this time the help comes from supportive fellow workers who are also trying to lose weight, and her commitment to a lifestyle change.

Plumpton has seen a light many others haven't. One-third of adult New Zealanders are trying to lose weight by changing their diet. But industry critics say people are being conned into spending big money in the hope the next "magic pill" will be the one that works, the quick fix rather than the harder long-term answer. The failure of diets is obvious, with evidence ranging from scientific studies, to the simple fact that we're getting fatter. Obesity has increased by 6% in the past decade; put another way, we each weigh an extra 3kg on average. A 1997 National Nutrition Survey shows 17% of New Zealanders are obese and a further 35% are overweight.

That generates cost: for us personally, as we keel over with heart failure, and for us all, as we fund the health system. No statistics are kept on the direct health care costs of obesity, but 10 years ago the Heart Foundation estimated it at $130 million. Increase that by the same 6% as above (for a really rough idea) and it goes up to $138 million. No wonder tackling obesity is now part of the government's health objectives identified late last year. The Ministry of Health has started working on a national strategy to improve nutrition, increase physical activity and reduce obesity. It is monitoring which diet companies give good advice on healthy eating and exercise, with a view to working together in some way. The ministry has stopped short of talking about funding them, but it could well steer a lot of business their way. "People need a menu of choices for behaviour intervention," says senior public health analyst Maria Cotter.

But here's the rub. If diets don't work, yet obesity is an increasing health concern, the government stands to be supporting proven failed techniques. And if diets don't work, and obesity is increasingly a problem for us all, why the hell are we spending so much of our own precious money?

Fat, to steal a phrase, is a business issue.

Big business
The diet business is huge. How huge is hard to say as no official statistics are kept. In the United States the industry is estimated at $US100 billion a year when you throw in the over-the-counter diet supplements, the drugs, the diet books, the weight loss programmes, the surgery and low-fat foods. In New Zealand low-fat food sales account for $100 million a year alone.

World and local market leader Weight Watchers says its figures are confidential. However "they are a drop in the bucket, equivalent to the turnover of three to four fast-food outlets", says publicity manager Karen Church.

You only have to look at the high-profile fat-busting prescription drug Xenical to see how lucrative the business can be. Launched in June 1998, Xenical is said to have made $12 million in retail sales in its first year in New Zealand, and is now the best-selling drug worldwide for pharmaceutical company Roche.

In the non-prescription market, Weight Watchers claims an 80% share, followed by fellow international player Jenny Craig, which doesn't disclose sales figures. There are quite a number of smaller players, including those direct-selling through info-mercials and over the internet (see "The main players").

None of these companies will reveal how much repeat business they have - but let's face it, this is an industry made for repeat customers. The health risks and social stigma of being fat means overweight people are under constant pressure to shed those unwanted kilos. You only have to do a quick survey around your own workplace to hear how many people have tried and failed with a plethora of diet products over the years. As Consumers' Institute chief executive David Russell eloquently puts it: "There is so much out there and much of it crap. But hope springs eternal. That's what these characters rely on."

One of the most common forms of weight loss advertising is before-and-after personal success stories. Some of them are even true. Deck Hazen, a product manager with IT outfit Esolutions, has proudly detailed his "slow road back from slobdom" on his own website, His defining moment came in 1994 when he saw photos of himself shirtless, mowing the lawn. The apparently ghastly sight inspired him to join a Les Mills gym and Weight Watchers (only 3% of its members are men). Hazen lost around 18kg and, more importantly, has kept it off for the last seven years. "The key, I'm convinced, is a combination of diet and exercise, and incorporating those new habits into a lifestyle. It works for me, at any rate," he says.

Fat fibs
But behind the hype of advertising campaigns is the stark reality: many consumers fail to lose weight. One critic reckons that makes the weight loss industry one giant con. Professor Jenny Carryer, joint chair of nursing at MidCentral Health and Massey University, says the industry's "testimonial" approach is deceitful. "There is the publication of dramatic stories, 'Here I am at 100kg and now I'm 60kg, god thank Fatburners', but Jenny Craig or whatever [other weight loss programmes] still don't systematically publish data showing where that same person is two to five years later ... I think the diet industry has probably been, and may still be, one of the most lucrative industries there is, and all of these [companies] are selling a product that doesn't work."

Carryer's view is backed by the New Zealand Dietetic Association, representing food and nutrition professionals. The association's position paper on obesity expresses concern about many popular diets, saying they are often imbalanced and lead to nutrient deficiency. Ironically the one thing people feel most guilty about - that they don't stick with these diets for long - is the very thing working in their favour, says the association.

A number of international studies show 95% to 98% of dieters who lose weight do so only short-term and then regain it. One of the reasons, according to evolutionary biology, dates back to our ancestors, whose bodies stored fat in case of famine. Even though we live a much more sedentary lifestyle today, no one has told our bodies. When you reduce the amount you eat, your body protects its fat stores by burning energy at a slower rate, even if you have plenty of spare fat. It does this through changes in your "basal metabolic rate", the amount of energy used when the body is at rest. You may lose weight, but a lot of it will be muscle and water rather than fat. When you return to your old eating habits, you put on weight faster than ever because your body's metabolic rate is still operating slowly.

It may not be socially acceptable. It may not be what the women's magazines want to portray, but there are more body shapes out there than Sex and the City or Jennifer Lopez' buns would suggest, Carryer says. And changing that is a lot harder than we think.

So hard that West Aucklander Lynda Finn simply decided to accept reality: she's size 26 and proud of it. She also started New Zealand Wide and Wonderful, a support group for the obese, and wrote Largely Happy, a book which urges the overweight to flaunt their big bodies. As for diets? Don't get her started. She cites the American Journal of Public Health on the failure rate of long-term weight maintenance. "Short-term follow-ups are now regarded as invalid because triallists can take up to 10 years to regain lost weight. The plethora of studies in the 70s and 80s that appeared to show how easy it was to lose weight and keep it off (some of them funded by the diet and pharmaceutical industry) are now discredited because they simply didn't take a long enough view," the journal says.

Finn gave up dieting 10 years ago, in favour of eating good food and being active. She has not put on weight in that time, an achievement for her. Her book is packed with diets-don't-work material, including a review of 300 clinical trials by two American psychiatrists, David Garner and Susan Wooley. They concluded it was difficult to find any scientific justification for diets, instead recommending a variety of treatments, including increased exercise, "normalising" food intake, aiming for a balanced healthy diet, and improving a negative body image.

Those considered obese are blamed and judged for their "condition", say Jeanine Cogan and Paul Ernsberger in a 1999 article on dieting, weight and health in the Journal of Social Issues. They say an unintended outcome of the current weight-centred approach towards health is that in the US people are literally dying to be thin, through such problems as pulmonary hypertension after prolonged use of the weight loss drug Fen-phen, or eating disorders such as anorexia nervosa.

Flimsy defence
How do weight loss companies respond to their critics? Well, badly. They have produced little hard data of their own to refute the international research. A 1998 Weight Watchers study found that nearly half of the 1002 Americans surveyed (who had all completed its programme) kept their weight off for two years, and more than one-third had done so for at least five years. Just in case you didn't notice, that means two-thirds failed.

Weight Watchers' slim publicity manager Karen Church says the product must be successful, or else people wouldn't keep coming. "Who sells our programme? Our lifetime members. If we weren't successful we would have died long ago. You look at all the products that have come and gone over the years; we have lasted 27 years in New Zealand, 33 worldwide. That is a long, long record. It is adapting to people's needs over time." The key, says Church, is in the peer support.

New Look owner Jacqui Goold says her weight loss programme tries to educate and support people into making smart nutritional choices. But she can't help it if many seek a magic cure instead. "That's human nature. I'm hoping that the more knowledge people get about New Look, the more they can see it is a healthy alternative. A reduction in what you eat doesn't mean you need to starve yourself. The whole family can live this way."

Weight Watchers' and New Look's sales pitch may be changing to a more responsible "healthy lifestyle" rather than focusing on weight loss. But these companies are in the minority. The majority of their ilk still sounds something like this: "At last, weight-loss products that really work!" That's the opening line on one website advertising a "breakthrough" cellulite treatment. It's typical of marketing to the overweight; it is easier to sell to people who are almost desperate for a solution.

The Commerce Commission investigates complaints about diet products under the Fair Trading Act. A few years ago, it cracked down on pharmacists selling weight loss products that didn't work. There were products endorsed by people who called themselves doctors who had no medical qualifications, claims supported by studies from research institutions that didn't exist and claims that using a product would cause weight loss without needing to change your diet or exercise. Recent complaints to the Commission centre on people not receiving the diet product they've paid for or delays getting refunds under a money-back guarantee, rather than the products themselves not working.

The Commission is currently investigating one diet company and is prosecuting Bionax New Zealand, the New Zealand distributor of cellulite product Cellasene, for allegedly misleading claims about its product's effectiveness. The promoter's advertising claimed Cellasene would substantially reduce or improve the appearance of cellulite. The trouble is that by the time the Commission had taken action, people had already been queueing in the streets to buy the product, says nutritionist Dr John Birkbeck. "It can take six months before the regulatory authority has done anything. In six months you can make a lot of money, then just take [the diet product] off the market and disappear behind the PO Box that you were selling it from."

There needs to be more control over fringe operators who give the industry a bad name, says Des Ace, the New Zealand franchise owner of diet supplement company The Natural Way. A new system for vetting direct-to-consumer advertising of prescription medicines, including dietary supplements, was brought in last November. It should start to make it more difficult for fringe operators to do business here, Ace says.

Diet plus
Under this sort of pressure, some in the weight loss industry are changing their tune, emphasising lifestyle rather than diet. Roche, for example, is at pains to package its Xenical pill with a holistic programme of exercise, peer support and diet.

Nikki Lamont, for one, believes the message. You would hardly recognise her as the woman she was two-and-a-half years ago. The publicity-shy 31-year-old weighed 155kg before being warned by her doctor that if she did not start losing weight she may not live long enough to watch her three children grow up. Today, 70kg lighter after taking Xenical, Lamont goes swimming and plays cricket with her children. At $180 a month it was an expensive option for a one-income family, but one Lamont considers worthwhile. She had "tried just about everything", but began losing weight as soon as she started on the small blue pills. "People think they can just take the pill and lose weight. You have to do exercise as well, and eat heathily." Lamont has put on 2kg since she stopped taking Xenical a year ago.

Roche says 40,000 people have tried Xenical in New Zealand. Ten kilograms is lost on average, enough for a significant health benefit, says Xenical clinical manager Robin Frogley. Some people suffer side effects such as an urgent, violent need to visit the toilet, but Frogley says this is usually because they fail to reduce the fat in their diet. "These people will never lose weight because they're not prepared to do it. They're relying on something else to do it for them. There is no magic bullet."

Roche is close to announcing partnerships with other weight loss companies and gyms to provide additional motivational support to Xenical customers. It is in negotiation with New Look, a weight loss programme franchised nationwide.

The convergence is going the other way too. Gyms are getting more active in the diet market. Club Physical is one gym heavily targeting this area "because it is such a huge market", fitness director Justin Andrews says with a straight face. Weight loss is always the primary reason people join a gym, he says. Club Physical has run a Waist Watchers club for the past 10 years. The club's programme has just been revamped from one pushing a "lose 6kg in six weeks" theme to one encouraging a lifestyle change. Also promoted are dietary supplements, sold through the gym as suggested meal replacements.

Body for Life is another programme being promoted by gyms. "They've caught on that if more people do it, it will increase their membership, so they're promoting it hard," says New Zealand agent Glen Stollery. Bill Phillips (right) started Body for Life in the United States five years ago; it has been sold here for two years. His Body for Life book has sold two millions copies worldwide - not bad when you consider it costs Kiwi members $49.95. Consumers are encouraged to buy both the book and supplements, designed to replace a couple of meals a day at a cost of $4 to $6 per meal.

Body for Life also runs an annual challenge offering up to $US1 million in prizes for the best body transformation in 12 weeks. Hamilton-based Jared Horomona, a 30-year-old with cerebral palsy, was one of 10,000 New Zealanders who took part in last year's challenge. He ended up as one of 12 Grand Champions, winning $US25,000, a trip to Hawaii and a year's worth of supplements.

Try this at home
Through scientific evidence, nutritional critiques and government regulation, the weight loss industry is slowly being knocked into a semblance of good shape. And sensible advice is emerging. It seems that the most effective programmes are those where weight loss is gradual, you're not required to buy add-on products, and you're given some motivational support. Even then, it could take you several attempts to succeed.

Nutritionists say the answer is to eat healthy foods in smaller amounts and get more exercise. All pretty logical, really. The trouble is, it relies on people's own motivation. Nutritionist John Birkbeck's advisory work for fast-food chain McDonald's illustrates how you can lead a person to low-fat but you can't make them eat. McDonald's agreed to trial changes to make some of their burgers less fattening. Birkbeck says they didn't sell. "How do you tell a company it shouldn't sell Big Macs when that's what the customers want?"

However, consumers are becoming more discerning about what they put into their supermarket trolleys, according to Ross Finer, manager of Weight Watchers Foods Australasia. But then he would say that. Half of its branded low-fat product range is bought by ordinary consumers. Finer expects his 1% to 2% share of New Zealand's overall $750 million food market to double in the next two to three years. As for the entire industry, it's expected to grow. Weight loss companies Unlimited spoke to all expect to expand, with New Look forecasting growth of 50% in the next year.

The male market is one that Weight Watchers and others are still struggling to crack, even though 15% of New Zealand men are obese. Only one man braved the latest Weight Watchers At Work session at pharmaceutical company Merck, Sharp and Dohme. He gave a big grin after getting a handclap from his female workmates for making up the required numbers. Weight Watchers meeting leader Helen Bareman says the At Work programmes are more successful when the workers, rather than the company, pay for the meeting. People don't value what they get free. Bareman, who slimmed down nearly 20 years ago, never asks whether people have lost or gained weight after the weekly weigh-in. She asks what changes members have made in their lives that week. "It is not about weight," she says. "It's about behaviour."

If that's true, then perhaps its time to change Weight Watchers' name.

Do-it-yourself weight loss

Don't go on a crash diet: As a rule, the faster you lose weight, the faster you will regain it.

Don't delay: Walk instead of driving to the next place you go. Tomorrow cut out the biscuits with your morning tea. Gradual change is more likely to have a long-term impact than turning your life upside-down with a sudden diet.

Keep up the carbohydrates: Fill up on low-fat, high-fibre carbohydrate foods, especially fruit, vegetables and cereals (including rice, bread and pasta).

Cut back the fat: Grill, bake, boil and microwave without added fat. Choose low-fat foods and dressings. Cut the fat off your meat and chicken. Eat your favourite fatty foods only as treats. (The Heart Foundation has good food guidelines on

Make it a family thing: Good food is good for everyone. Try to get the whole family eating well.

Learn about your food: Read the nutrition labelling when you shop so you know which foods are high in fat and energy. Look for foods with less than 10g fat per 100g.

Drink more water: Experts recommend drinking six to eight glasses of water a day.

Get more exercise: Increase your daily exercise. You don't need to squeeze into lycra and go to the gym. Do at least 30 to 40 minutes of brisk walking or another activity each day. It could take a month before you actually begin to enjoy it.

Take it easy: Start gently. Exercise should not hurt in order to do you good. Increase the amount and intensity gradually as you get fitter.

Set achievable goals: First target: don't gain weight. Second target: lose a little. Measuring centimetres lost around the waist is a better guide than what you weigh. Experts recommend that women maintain a waist measurement of around 80cms, and men under 100cm. Remember not to despair, weight loss should be gradual.

Source: Consumers Institute

Ask yourself

  • Is the promoter or originator of the diet qualified in the field?

  • If this is an unorthodox diet, are the reasons it is not accepted by the establishment reasonable, as far as you can tell?

  • Does this method require you to spend money?

  • Does this programme require you to buy a product available only from the promoters?

  • Does this method mean you have to cook separately for your family?

  • Does this plan mean you can dine out with family and friends?

  • Do you have to eat set meals each day or are there choices?

  • Are there any success stories? Conversely has anyone become ill or died on this diet?


The main players

Weight Watchers
Who: Operating in New Zealand since 1972 (worldwide since 1963), Weight Watchers is the industry leader. The New Zealand operation is owned by Weight Watchers International, with the worldwide meetings business in turn owned by Artel of Luxembourg and the branded food products by Heinz.

Products: It holds 400 meetings weekly and has over 40,000 life members who achieved goal weight. Under its "1,2,3, Success" plan, introduced in 1997, food is measured in points and members are given a number of points to spend daily, depending on their current weight and how much exercise they do. Weekly meetings and weigh-ins are held to provide motivation.

Cost: $30 joining fee and $15.50 for weekly meetings. Optional products such as recipe books and a points guide cost extra.

Jenny Craig
Who: Founded in the United States in 1983, Jenny Craig is thought to be number two in the NZ market. Run out of Australia, the company refused to talk to Unlimited. It has 656 franchised or company-owned locations in the US, Canada, Australia, New Zealand and Puerto Rico. The listed company is considering a possible sale after announcing a $US477,000 loss in the March quarter, compared with a $US1.7 million profit in the same quarter of 2000.

Stephen Koffler, of investment banking firm Koffler & Co, says there should be interest from a number of other well-known companies, considering recent reports that more than 100 million people in the United States are overweight and that more than $US35 billion a year is spent on products and services relating to weight management. Jenny Craig executives have blamed the poor financial performance on increased competition, new market entries and an unusually high level of competitive advertising.

Products: Jenny Craig prescribes a meal plan and sells packaged food and a multivitamin supplement.

Cost: Joining fee ranges between $100 and $200, depending on the type of membership you choose. The average weekly cost for delivered meals is $105.

New Look
Who: It claims to be third in the New Zealand market, with more than 40,000 members and 46 franchised clinics nationwide. New Look started in Wanganui in 1991 by franchisees Barbara Young and Jacqui Goold of Taupo.

Products: It has a three-phase weight loss programme. Phase One is a three-week introduction, where members select a goal weight and are given a diet to follow. Phase two increases food selections and gradually retrains eating habits until this goal weight is achieved. Phase three involves weight maintenance. Weekly support meetings are limited to a maximum of 15 people to keep it personal.

Cost: $38 joining fee and $8 per weekly meeting.

Natural Way
Who: The New Zealand master franchise was started in 1994 by husband and wife team Des and Theresa Ace, although it originated in Australia in 1979. It also claims third place in market share, with 35 franchised clinics nationwide.

Products: Clients get a one-on-one weekly visit with a consultant and come away with one of 30 meal plans and some diet formulations. There is no scientific evidence that the supplements work, though its website is packed with customer endorsements.

Cost: Consultations free. The Australian-made vitamin, herb and mineral formulation cost on average $30 to $40 a week.

Who: Founded by American Mark Hughes in 1980, the Nasdaq-listed company has operated in New Zealand since 1988. It claims to be one of the world's most successful direct selling companies, with worldwide retail sales of $US1.8 billion dollars last year for its weight loss, nutritional and personal care products.

Products: It has one million distributors on-selling its products. Under the weight loss programme you replace two meals with a milkshake-style drink and can also buy a host of vitamin and mineral supplements.

Cost: Four monthly packs to choose from Shape Up for $148, Quick Start for $246, the Advanced pack (including a fat-burner) at $326 and the Ultimate, recommended for beginners at $420.

The Diet Factory
Who: Operates only in Auckland. It was started in 1985 by Dr Tony Benjamin.

Products: The Diet Factory supplies all food to the customer, delivering one week's worth at a time (in unmarked vehicles). People can opt to buy just the dinners, though this is not recommended for those starting out.

Cost: From $98 to $108 a week, depending on the calories in each meal.

Kiwi Kiss
Who: Operates in Auckland only. Started in 1984 as the Weigh-In Slimming Club by psychologist Carolyn Gibson. Holds 21 meetings a week.

Products: The Kiwi Kiss Diet is based on a "keep it simple for success" philosophy, using normal foods. The weekly meetings are held as an adjunct to her series of dieting books. The New Kiwi Kiss Diet book is a best-seller in New Zealand, selling 15,000 copies.

Cost: $30 joining fee and $10 per weekly meeting.

What: The fat-busting drug is now Roche's biggest seller, with some 8.5 million people worldwide having taken it. Sold by prescription only, Xenical claims a 98% share of New Zealand's diet prescription market.

Product: The drug stops your body absorbing as much fat as usual: around a third of consumed fat passes straight through your body. Side effects can include oily stools, faecal urgency and flatulence. Patients stay on the drug for an average of three to six months. It is considered suitable only for the obese those with a body mass index of 30 and over. Body Mass Index is the most frequently used measure of body size and is determined by dividing weight (in kilograms) by height squared (in metres).

Cost: $5 to $7 per day on average, or around $180 per month.

Fiona Rotherham

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