Profiting From America's Portly Population

Mon Apr 21, 2008 7:00am EDT

* Reuters is not responsible for the content in this press release.

As The Obesity Epidemic Continues, Business Information Analysts At IBISWorld
Reveal Industries That Are Cashing In On Our Lardy Lifestyles

LOS ANGELES, April 21 /PRNewswire/ -- As the nation's rapidly expanding
waistline puts a significant stress on the healthcare system -- causing
headaches for healthcare providers, employers, politicians, and patients
themselves -- health clubs, weight loss centers, and clever fast food outlets
are reaping the rewards from an increasingly overweight America, according to
Mr. George Van Horn, senior analyst with IBISWorld, Inc.  IBISWorld
(http://www.ibisworld.com) is recognized as one of the nation's most respected
independent publishers of business intelligence research.
    The Health of the Nation
    There is no doubt that Americans are beginning to become more health
conscious, but it will be a long road before overweight people tip the scales
toward a more healthy weight. According to IBISWorld, around 34 percent of the
U.S. population is considered to be clinically obese (with a Body Mass Index
greater than 30); while a staggering 60 percent are considered to be
overweight.  The challenge ahead is compounded by the fact that the number of
Americans who are overweight or obese is rising dramatically.
    In fact, according to the U.S. Centers for Disease Control and Prevention
(CDC), obesity has increased 74 percent among U.S. adults in the past 15
years.  Around half of American women are overweight, with slightly higher
proportions among African American, Native American, and Mexican American
females, classified as being overweight.
    It has been reported by the CDC that 48.1 percent of U.S. residents
complete the recommended amount of physical activity -- 30 minutes a day, five
days a week -- while just over a quarter accomplished no leisure-time physical
activity at all.  Direct health costs attributable to obesity are estimated at
around $75 billion a year, and obesity is responsible for approximately
325,000 deaths annually due to heart disease, hypertension, and diabetes.
Around seven percent of total health care expenditure in the U.S. is directly
related to obesity.
    With 27 percent of the children in the U.S. considered to be currently
obese, weight control will remain high on the agenda well into the future,
which is why, as politicians strive to control spiraling health costs and come
up with a strategy to cope with our widening waistlines, a number of
industries are profiting from our lardy lifestyles.
    Gyms Going for Growth
    According to Mr. Van Horn, the health and fitness center sector has
experienced strong membership growth over the past 15 years on the back of
increased awareness of exercise's role in weight control and a healthy
lifestyle.
     Within the industry, he explained that a number of specific trends had
been driving growth. "Lifting free weights is the number one fitness activity
in the U.S., and health clubs offering personal trainers, and adding yoga and
spa services to their programs have been particularly successful in attracting
new members.  Another element of the industry which has emerged into a major
trend is women-only centers, such as Curves -- one of the fastest growing
franchises domestically and abroad -- which have attracted a new clientele who
had previously shunned joining a gym or fitness center," said Mr. Van Horn.
    In the future, IBISWorld believes the industry will shift its focus from
its core market of 18- to 34-year-old middle income earners towards older
patrons, women, and even teenagers.   "The rising number of older people
joining health clubs has been one of the central factors in fitness centers'
growth in recent years," said Mr. Van Horn, "And our aging population means
that those numbers are set to rise exponentially. Already around 20 percent of
the country's 44 million health club members are over 55 -- an increase of 320
percent from the early 1990s."
    One factor that will negatively affect the industry in coming years is the
decline in our leisure time.  According to the International Labor
Organization, Americans work an average 1,820 hours in a year.  Only the
Japanese work as hard, while workers in major European economies put in
between 1,300 and 1,800 hours in a year on average.
    "And with U.S. executives working an average eight hours every weekend,
finding the time to commit to exercise is proving tough. The fitness industry
is hoping that the growing number of people wanting to restore balance to
their lives by spending less time at work will mean more time will be devoted
to exercise, but only time will tell!" said Mr. Van Horn.
    The War on Weight Loss
    Although the obesity epidemic should be good news for weight loss centers,
this sector faces increasingly fierce competition from a large range of
substitute treatments, such as medical procedures (lap band surgery);
consulting dieticians; pharmaceuticals such as appetite suppressants and other
prescription weight loss drugs; herbal remedies; "lite" foods and drinks;
health clubs; and personal trainers.
    IBISWorld estimates that about 70 percent of American's dieting attempts
are of a self-help nature.  Although often short-lived, these diet fads are a
positive trend for this sector as Americans ultimately turn to professionals
to help them meet their weight loss goals.
    Research suggest that between $33 billion and $55 billion is spent
annually on weight loss products and services, including medical procedures
and pharmaceuticals, with weight loss centers garnering between six percent
and 12 percent of total annual expenditure.
    Some factors supporting the industry's growth, other than the rising
number of overweight Americans, are tax deductions for some weight loss
programs. The Federal government offers deductions for participants who have
been recommended by a doctor; as well as employer-sponsored participation in
programs which are on the up as a result of broader recognition of the health
and safety-related issues and higher absenteeism associated with overweight
staff.
    Technology has expanded the number of people able to access weight loss
programs as clients don't need to live near a venue since they can use
telephone and online services to seek advice, order publications, diet-related
materials and pre-packaged foods. It also offers greater client
confidentiality, lowers overheads and improves operator margins.
    "Lower growth in household disposable income this year will have some
impact on industry revenue (expected to grow by about 3.2 percent)," said Mr.
Van Horn, "as it may encourage more people to self-manage their diet and
exercise regimes rather than paying for weight management expertise."
    Mr. Van Horn advised those in the industry to focus on expanding into
servicing men and seniors specifically to further revenue and profit growth
opportunities.
    Future of Fast Food
    Although still profitable, greater awareness of the consequences of a fast
food diet is slowing growth in an industry which generates revenue of $164.8
billion.  Mr. Van Horn said that while the sector will continue to grow, it
will be at a slower rate of around 1.7 percent per annum.
    One company profiting from the heightened health consciousness trend in
the U.S. is Subway.  As consumers have become increasingly concerned about fat
and salt content, fried foods and meat products, the sandwich chain, which
promotes itself as a healthier alternative in fast food, has become the
country's fastest growing franchise.  Many other fast food restaurants have
altered their menus following criticism of the fat content of their products;
including McDonald's which has successfully introducing a range of salads and
other low-fat options.
    The major operators will continue to seek to grow revenue and especially
profit by expanding their product range to include more non-red meat products,
such as chicken burgers, Mexican and Italian foods, and by providing a variety
of healthy choices.
    About IBISWorld
    Founded in 1972, IBISWorld provides a unique and extensive online
portfolio of business research and analysis products designed to serve a range
of business, professional service and government organizations.  Delivered
through enterprise subscriptions, the company publishes in-depth reports
on more than 700 industries and offers profiles on more than 8,000 U.S.
companies.  In addition, the company provides databases of economic analysis,
demographic data, and risk assessment reports relevant to virtually every
business sector.  IBISWorld's materials are valued for the breadth and depth
of the research and analysis covering the entire U.S. economy, incorporating
both financial and non-financial information impacting tracked industries and
companies.  IBISWorld Business Information is well known for its accuracy,
consistency and timeliness. This is why almost all online information
aggregators seek us out to include our reports as part of their global
databases.   Current IBISWorld partners include Hoovers, Valuation Resources,
Superfactory and American Small Business Development Centers.  With U.S
headquarters located in Los Angeles, IBISWorld has offices in New York,
Melbourne, and Sydney.  For more information, visit http://www.ibisworld.com
or call 1-800-330-3772.
SOURCE  IBISWorld, Inc.

Harvey Jones, Senior Vice President of IBISWorld, +1-310-866-5029, fax,
+1-310-496-1596, harveyj@ibisworld.com; or Todd E. Appleman, President of The
Appleman Group, +1-323-850-7664, fax, +1-323-850-7663, cell, +1-213-447-7662,
tappleman@tag-pr.com
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