Nutrisystem 2014 Annual Report Download - page 8

PART I
ITEM 1. BUSINESS
Overview
Nutrisystem, Inc. (together with its consolidated subsidiaries, “Nutrisystem,” the “Company,” “we,” “us,” or
“our”) is a provider of weight management products and services, including nutritionally balanced weight loss
programs, multi-day kits available at retail locations and digital tools to support weight loss. Typically, our
program customers purchase monthly food packages containing a 28-day supply of breakfasts, lunches, dinners,
snacks and desserts, which they supplement with fresh fruits, vegetables and dairy. Most of our customers order
on an auto-delivery basis (“Auto-Delivery”), where we send a 28-day food supply on an ongoing basis until
notified of a customer’s cancellation. We offer our pre-selected favorites food pack or personalized plans where
customers can hand pick their entire menu or customize plans to their dietary preference. Our meal plans feature
more than 150 menu options at different price points including frozen and ready-to-go entrees, desserts, snacks
and shakes. Additionally, we offer comprehensive individualized counseling options from trained weight loss
counselors, registered dietitians and certified diabetes educators and provide further support through our digital
tools.
Our program is based on the following cornerstones that represent who we are to our customers:
•Real Results.The Nutrisystem program has helped millions of people lose weight successfully over
our 40-plus year history. Our program is portioned for weight loss and is nutritionally balanced to meet
national dietary guidelines. We also offer transition and maintenance plans, which include personalized
menu options selected by our customer (e.g., only dinner entrees) as well as continued counseling
support and access to Nutrisystem’s digital tools. These plans are designed to help our customers keep
the weight off.
•Sound Science.The Nutrisystem program is based on more than 40 years of nutrition research and the
science of the low Glycemic Index, and offers portion-controlled items that include relatively higher
amounts of fiber, contain “good” carbohydrates and zero trans fats. The Glycemic Index is a measure
of the quality of carbohydrates in foods. Foods on the lower end of the Glycemic Index are generally
considered “good” carbohydrates. In addition, as of May 2014, we removed artificial flavors and
sweeteners from all breakfasts, lunches, dessert bars and bakery items.
•Complete Convenience.Nutrisystem sells its weight management program primarily through a direct-
to-consumer sales and distribution approach using the Internet and telephone. Our customers can place
orders 24 hours a day, seven days a week on our website, www.nutrisystem.com, and the food is
shipped directly to our customers’ doors. Our customers can either choose our pre-selected favorites
food pack or personalize their monthly food orders for their specific tastes or dietary needs. Our
program does not require customers to visit centers, measure foods or count calories. The entrees are
individually packaged and food preparation time is minimal. The direct-to-consumer approach using
the Internet and telephone provides the convenience and privacy that our customers value. In addition,
we provide online and telephone counseling and support to our customers using trained weight loss
counselors, registered dietitians and other nutrition and dietary staff, and as a result, our customers do
not need to travel for a face-to-face meeting.
•Value. We believe we are very competitively priced within the weight management industry and
provide a compelling value proposition to our customers which includes a selection of more than 150
food items, expert guides, tools, including NuMi, our digital product that integrates with wearable
fitness devices and health platforms, and access to trained weight loss counselors, registered dietitians
and other nutrition and dietary staff. We do not charge membership fees. Various promotional offers
and pricing are offered throughout the year.
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