WeightWatchers 2012 Annual Report Download - page 17

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PART I
Item 1. Business
Overview
We are a leading, global-branded consumer company and the world’s leading provider of weight
management services, operating globally through a network of Company-owned and franchise operations. With
five decades of weight management experience, expertise and know-how, we have established Weight Watchers
as one of the most recognized and trusted brand names among weight-conscious consumers. In fiscal 2012,
consumers spent $5 billion on Weight Watchers branded products and services, including meetings conducted by
us and our franchisees, Internet subscription products sold by WeightWatchers.com, products sold at meetings,
licensed products sold in retail channels and magazine subscriptions and other publications.
The high awareness and credibility of our brand among all types of weight-conscious consumers—women
and men, consumers online and offline, the support-inclined and the self-help-inclined—provide us with a
significant competitive advantage and growth opportunity. As the number of overweight and obese people
worldwide grows, we believe our global presence and brand awareness uniquely position us to capture an
increasing share of the global weight management market through our core meetings business and our
WeightWatchers.com business.
In the 50 years since our founding, we have built our meetings business by helping millions of people
around the world lose weight through sensible and sustainable food plans, exercise, behavior modification and
group support. Each week, over a million members attend over 40,000 Weight Watchers meetings around the
world, which are run by more than 10,000 leaders—each of whom has lost weight on our program. We are
constantly improving our scientifically-based weight management approaches, and we are one of only a few
commercial weight management programs whose efficacy has been clinically proven. Our strong brand, together
with the effectiveness of our plans, loyal customer base and unparalleled network and infrastructure, enable us to
attract new and returning members efficiently. Our customer acquisition costs are relatively low due to both word
of mouth referrals and our efficient mass marketing programs.
Through WeightWatchers.com, we offer Internet subscription weight management products, which include
applications for mobile and tablet devices, to consumers and maintain an interactive presence on the Internet for
the Weight Watchers brand. We believe WeightWatchers.com is the global leading provider of weight
management Internet subscription products. Currently, we provide two Internet subscription offerings: Weight
Watchers Online and Weight Watchers eTools. Weight Watchers Online provides interactive and personalized
resources that allow users to follow our weight management plans via the Internet or on their mobile device.
Weight Watchers eTools is the Internet weight management companion for Weight Watchers meetings members
who want to interactively manage the day-to-day aspects of their weight management plans on the Internet or on
their mobile device. Weight Watchers eTools is offered for free as part of our Monthly Pass commitment plan, or
Monthly Pass, which provides our meetings members with unlimited access to meetings at a discounted monthly
rate. We currently offer our two Internet subscription products in twelve countries, including the United States,
the United Kingdom, Germany and Australia.
The Global Weight Management Market
We participate in the global weight management market. According to Marketdata Enterprises, the weight
management industry had revenue of approximately $62 billion in 2011 in the United States alone. The number
of overweight and obese people has steadily increased around the world over the past 20 years and is estimated to
reach approximately 3.0 billion by 2015, primarily driven by changing eating patterns and increasingly sedentary
lifestyles. Between 2007 and 2008, 68% of Americans over the age of 19 were considered overweight and almost
half of these were obese. Numerous diseases, including heart disease, high blood pressure and Type II diabetes,
are associated with being overweight or obese. We believe the growing population of overweight people who are
1