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Weight Watchers International Inc
Yum! Brands Inc
AllianceBernstein Holding LP
Shortly before Christmas in a 19th century stone building tucked in a tony Paris residential neighborhood, a dietician was advising a client about how to savor her holiday meals without compromising her diet. “Enjoy yourself, but keep portions reasonable and remember to have either cheese or dessert,” but not both, she counseled. Such advice may sound like heresy in a land renowned for its rich food and naturally thin women, but the French public’s embrace of eating habits from abroad has lately taken a toll on waistlines across Gaul.
The dietician’s employer, diet center operator Jenny Craig (NESN), thinks it has a solution for French women intent on losing weight: Let Jenny do the cooking. The California-based chain has found success in France by pushing a diet method that combines prepared meals and regular counseling. The country has become one of the brand’s biggest growth engines less than two years after parent Nestlé launched the weight loss program there.
Its timing was propitious. The number of overweight adults in France climbed about 11 percent from 2006 to 2009, and about one in three people is now overweight, according to a 2009 study by the national health research institute. Sign-ups at Jenny Craig have exceeded expectations each month since the brand opened in France in 2010, says Kurt Schmidt, the head of Nestlé Nutrition. It now has 18 centers in France, and even elegant Parisiennes are signing up. (Rival Weight Watchers International (WTW) has also seen demand pick up in France, where the chain says enrollment growth led all of continental Europe during the third quarter.)
Jenny Craig, which has more than 725 centers mostly in the U.S., Australia, and Canada, has adjusted its program to suit French tastes, offering such meals as beef bourguignon and chicken chasseur. Vevey (Switzerland)-based Nestlé won’t disclose local numbers, but Schmidt says Jenny Craig is growing “very rapidly” in France. “We’re very happy with what we’ve got going there,” he says. That contrasts with Jenny Craig’s global sales overall, which Nestlé says didn’t increase in the third quarter of 2011.
Jenny Craig is part of an effort by Nestlé, the maker of Kit Kat chocolate bars and Häagen-Dazs ice cream, to increase its focus on health and wellness. The world’s largest food company has reduced the salt content in products such as Maggi noodles and Herta frankfurters in Europe, bought companies that develop nutritional options for people with diabetes or heart and kidney disease, and established a health science division last year.
“Nestlé is active in many categories, some of which are good for you and some of which are less good,” says Richard Withagen, an analyst at SNS Securities in Amsterdam. “If you look at units such as health science and Jenny Craig, they’re clear examples of the direction they think the world is heading in.”
Nestlé bought the diet business in 2006 for about $600 million. Founded by Jenny Craig and her husband, Sidney, in Australia in 1983, it provides clients with low-calorie meals delivered to their homes, encourages them to exercise, and offers weekly counseling by phone or in person at its centers. To woo French customers, Jenny Craig offers locally made meals (which can cost up to €98 ($124) per week) and hired a French coach to design more-playful exercise videos spécialement pour les Francais. Clients are encouraged to use the website to try exercises, record their experiences, keep journals, and give feedback. “They’re much more focused on using technology” than in the chain’s other regions, Schmidt says. “We’re learning a lot from the French experience that we’re taking back to the U.S.—the way they use digital and how they reach out to customers.”
The average client in France is a 46-year-old woman and obese, according to Nestlé. (A person is considered overweight if his body mass index, a measure of fat that divides his weight by the square of his height, is 25 or more and obese if the result is above 30, according to the World Health Organization.) One reason may be found just across the street from Jenny Craig’s Paris center: a Pizza Hut (YUM). The growth of such chains and changes in culture and eating habits are bringing about what writer Mireille Guiliano, author of the bestseller French Women Don’t Get Fat, calls “the Americanization of France.”
McDonald’s (MCD) revenue in France rose 79 percent from 2004 to 2009, more than in Germany and the U.K., according to a 2011 report by Sanford C. Bernstein (AB) analysts. “The classic diet has changed,” says Guiliano. “As the number of fast-food [outlets] like McDonald’s grow, it is not surprising that we are growing a generation of people who need to lose some weight by entering formal programs.”
Peer pressure and a culture of seduction mean French women are quick to fight flab, according to David Benchetrit, a doctor at the Clinique du Poids weight loss center in Paris. “Seduction is a national sport here,” he says. “In France when a woman gets married, she wants to stay as seductive as before.” Writer Guiliano adds another, possibly more-compelling reason: “The bikini was invented in France.”
The bottom line: Nestlé’s Jenny Craig is growing fast in image-conscious France, where one in three people is now overweight.