Fortune from Fat

In late 1961 Mrs. Jean Nidetch, then a compulsive eater and an equally nonstop talker, decided to use one of her characteristics to combat the other. She began holding meetings with overweight neighbors, during which they encouraged each other to stick to diets. As the 48-year-old Mrs. Nidetch never tires of relating, that was the start of a new life that has transformed her from a 214-lb. Queens, N.Y., housewife into a trim 142-lb. career woman. It also was the beginning of a multinational business, Weight Watchers International, that is gaining financial weight as rapidly as its clients lose pounds.

Weight Watchers now franchises 101 operators to run weight-reduction courses in 49 states and some foreign countries, including England, Australia, West Germany and Israel. The franchise holders last year took in $45 million, up $16 million from 1970, largely from registration and other fees; they turn 10% over to the parent company. The parent company in addition distributes a bestselling Weight Watchers cookbook and publishes a Weight Watchers magazine (circ. 550,000) that is crammed not only with recipes for low-calorie meals but with fashion, travel and even astrological advice. For the past four years, the organization has licensed two food companies to market frozen dinners (fish, turkey, chicken and veal) and a line of low-calorie soft drinks and skimmed milk under the Weight Watchers label.

Outdoing G.M. All these activities in 1971 brought Weight Watchers International revenues of $10 million and profits of $1.5 million. The company's stock, issued at $11.25 a share in 1968, after a two-for-one split is now $18 in the over-the-counter market. One result: Founder and President Nidetch, who started out with a $1.56 checking account, now owns Weight Watchers stock worth almost $6,000,000.

Weight Watchers' success is the more remarkable because it is based so largely on talk. The company's high-protein diet for years was essentially the same one that anybody could get free from a New York City Health department obesity clinic merely by walking in and asking for it -- as Mrs. Nidetch herself did in the beginning. Relying on frozen dinners to lose weight is an old bit of dieters' advice, and Weight Watchers dinners are a bit more expensive (990 to $1.65) than those of regular food processors, but the company claims that its dinners have larger portions with lower calorie counts.

The unique mark of the Weight Watchers operation is the weekly class, which combines the atmospheres of a religious revival meeting and a high school pep rally. As they arrive, members weigh in; their weekly gains or losses are recorded on cards and later read off to the assemblage. Under the guidance of a trained lecturer, those who have taken off pounds are loudly applauded; backsliders are sympathetically counseled to show renewed dieting determination.

This approach turns off some sophisticates, but it is a demonstrable success. Some 3,000,000 fatties over the past 81 years have paid to attend one or more sessions; fees now are about $4 to register and $3 for each of 16 weekly classes. Many of those attending overeat out of loneliness and find the camaraderie and understanding of the weekly classes a more important aid to dieting than the injunctions to weigh all their food. Says Mrs. Nidetch: "Compulsive eating is an emotional problem, and we use an emotional approach to its solution."

Weight Watchers is now offering some other inducements. At a splashy Manhattan press reception last month, Mrs. Nidetch announced that the company would now allow in its formerly sacrosanct diet such once "illegal" items as spaghetti, macaroni, potatoes, rice and mayonnaise. The company's nutritional consultants explained that such foods eaten in small portions do not defeat a weight-reduction program--indeed, they enhance It by alleviating the boredom that often makes dieters give up. Mrs. Nidetch last week turned up on the Merv Griffin TV show to promote the new diet and plug the latest addition to the Weight Watchers food line: imitation ice cream (350 for a 41-oz. cup that contains 138 calories). With such innovations, she thinks that the company will have no difficulty increasing its revenues 30% a year.

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