Americans will spend about $3.3 billion on weight loss services in 2011
Los Angeles, California (PRWEB) October 20, 2011
Improving economic conditions and a rising incidence of obesity will likely fuel revenue growth for the Weight Loss Services industry, according to IBISWorld’s latest research report on the industry. Over the next five years, revenue is expected to increase at an average annual rate of 4.5%, to reach $4.1 billion by 2016, according to IBISWorld, the nation’s largest publisher of industry research. Revenue growth for the industry is mainly affected by trends in per capita disposable income, the share of Americans who are overweight or obese, trends in eating habits and competition from substitute products.
According to IBISWorld analyst, Caitlin Moldvay, Americans will spend about $3.3 billion on weight loss services in 2011. “As the percentage of Americans who are overweight or obese continues to rise, the demand for this industry's services strengthens,” says Moldvay. Currently, 68.0% of Americans are either overweight or obese, according to the Journal of the American Medical Association. Lower disposable income decreased consumers' propensity to spend on discretionary weight-loss products and services during the recession, but revenue for the Weight Loss Services industry still experienced an overall increase over the five-year period. Between 2006 and 2011, revenue rose at an average annual rate of 0.3%. As per capita income growth has stabilized with a modest economic improvement, demand for industry services has begun to increase. In 2011, industry revenue is expected to increase 3.3%.
The Weight Loss Services industry is highly competitive; there are currently 24,303 companies in the industry. Weight Watchers is the largest provider of weight loss services in the United States. Other companies who dominate the industry include NutriSystem Inc., Nestle SA (Jenny Craig Inc.) and eDiets.com Inc. During the recession, with adverse demand conditions, some companies were forced to exit the industry or be acquired by competitors. Over the five-year period, the number of operators declined at a moderate rate of 0.8% per year. Profit margins for the industry decreased from 9.0% in 2006 to 8.8% in 2011, due to fewer clients and increased discount pricing, which lowered average profit margins. In addition to industry competition, players faced competition from sales of over-the-counter weight loss pills, such as Alli, which was introduced to the market in 2007 and is one of the few FDA-approved weight loss pills. Furthermore, weight loss surgery has become more common; as clinics and hospitals typically offer similar services, such as nutrition programs, exercise planning and counseling, this factor presents competition for the industry.
The percentage of Americans who are overweight or obese is expected to rise to 75.0% of adults by 2015. Worsening health trends and rising per capita disposable income are expected to increase demand for weight loss services. From 2011 to 2016, industry revenue is projected to increase at an average rate of 4.5% per year to reach $4.1 billion. Over the five-year period, more industry operators will begin targeting men for weight loss programs, since women currently account for the majority of clients. As such, men's weight loss services represent a relatively large untapped market for the industry.
For more information, download the full report from IBISWorld on the Weight Loss Services Industry
Weight Loss Services Industry Report Table of Contents
About this Industry
Industry at a Glance
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Jargon & Glossary
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