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Profiting From America's Portly Population

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 ( 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 or call 1-800-330-3772.

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