Medifast restyles weight loss line for mass channel sales effort

Drug Store News, July 20, 1998

In fact, it would seem as if the upswing in OTC weight loss business has created more than 286 million reasons why a manufacturer would want a piece of that action-one reason for every dollar the category generated in sales at retail last year, according to figures from Information Resources Inc. More than $210 million of those sales (approximately 73 percent of the total dollars spent on the category) passed through drug chains of no less than 10 locations. In these drug chains, the OTC weight loss category rose more than 10 percent last year.

So, with that kind of market share and aggressive growth, when a new weight loss product comes to market, retailers-particularly chain drug retailers- are willing to at least take a look.

Enter HealthRite, which used last month's NACDS Marketplace as a backdrop for the launch of a product, new to the mass channel but with an 18-year track record with physicians and dieters. The company is taking its Medifast doctor-supervised, clinicial weight loss/meal replacement program from the offices of physicians to the shelves of retail.

Developed by Jason Pharmaceuticals, HealthRite's ethical drug manufacturing division (the Maryland-based company also serves as corporate parent to Montana Naturals, its natural care concern, specializing in bee pollen energy products), the Medifast Take Shape system offers retailers a chance to sell consumers an all-inclusive diet program, concentrated on two essential components: Medifast Take Shape shakes and bars. According to the plan, the Take Shape dieter eats no more than one meal per day that isn't constituted by a Medifast shake or bar, keeping the dieting customer (assuming he or she doesn't cheat) tied to the line until the optimal amount of weight loss has been achieved. The single daily meal is augmented by three shakes or bars, and one to two low-fat snacks per day.

Moreover, as the bulk of new offerings in OTC weight loss have come in the way of natural care products as of late, Medifast Take Shape--despite its many nutritional benefits--is positioned more as an ethical drug product by nature of its history as a physician-supervised program, even if the new product has since shed doctor supervision in favor of OTC status. Even still, the formula combines several important nutrients that have become common names in the parlance of natural care sales, including soy protein, folic acid and key antioxidants, offering several health benefits, especially to the female user.

"It's designed for the buyer looking for fresh inventory and faster turns in the category," noted HealthRite chief executive officer Brad MacDonald. "There are approximately 144,000 chronically obese consumers out there; 500,000 more need to lose as much as 25 pounds. If we can capture 10,000 of them, we'll do $10 million at retail this year."

Such projections are not all that far-fetched when you consider that the physician-detailing initiative required of such a clinical weight loss program has largely been completed. Many doctors, especially those specializing in treating the obese, are already quite familiar with Medifast. In fact, in the past 18 years, the product has been recommended by more than 15,000 physicians for the treatment of their severely obese patients. In addition, more than 500,000 patients have already been through the program since 1980.

From clinics to retail

While Medifast will still be available through physicians, many doctors have stepped back dispensing such products through their offices, finding little incentive in doing so, since several states have set limits on physician profit margins, according to HealthRite president Reed Vordenberg. Anticipating a consequential hit to its Medifast business, the company has moved to bring Take Shape to retail.

However, to acquire OTC status, the company had to tweak its diet plan to bring up the total daily calorie count. The doctor-directed Medifast plan is an 800-calorie per day plan, which is too low by Food and Drug Administration standards for an OTC weight loss product. The Take Shape diet is based on a 1,200 to 1,500calorie plan (female users require fewer calories). Take Shape packages include a guide to weight management, as well as important nutrition tips and a suggested seven-day diet planner.

Although Medifast includes a complete line of soups, teas, bars and shakes, the Take Shape line keeps SKUs to a minimum, offering just three flavors of shakes (chocolate, vanilla and strawberry) and a single bar flavor (chocolate).