David Kirchhoff is being watched, and he knows it. That’s part of the deal when you’re the president and chief executive officer of Weight Watchers International, a $2.5-billion business that depends on convincing people you can help them collar their animal impulses for consumption, and you’ve accepted an invitation for lunch.
So here he sits in the modernist dining room of Toca at the Ritz Carlton Toronto, being good while trying to not make it obvious that it takes some effort. Slowly and deliberately, he works through just over half of his generous portion of chilled yellow tomato soup topped with creme fraiche, at which point he pauses, allows the spoon to slip entirely into the flat bottom of the oversized bowl, pushes it away and offers a slight grin that says: You didn’t think I could stop, did you?
Sigmund Freud might have said we’re over-analyzing this moment, that sometimes a lunch is just a lunch. But when David Kirchhoff breaks bread – or rather, when he refuses the Siren call of its buttery, yeasty pleasures – the medium is also the message.
So as the bread is removed from the table by mutual agreement, he acknowledges it would have been a temptation if it had stayed. “I would have looked at it periodically,” he says. “For something like this (encounter), because I’m with someone else and I’m talking about Weight Watchers things, I’d have my game on enough.” Still, “If I was just with my wife and it was dinner and I was already, you know, into a glass of wine – the bread would be on the plate with a bit of butter on top.”
For Mr. Kirchhoff (pronounced ‘Kir-koff’) is not just the CEO of Weight Watchers, he is also one of its most high-profile members and success stories – albeit one who struggled for years. The company, too, is struggling, beset by declining enrolment in its programs and the proliferation of free weight-loss apps that compete with Weight Watchers’ own proprietary mobile offerings. Still, there are opportunities on the horizon – ones worth billions of dollars, perhaps – if the company continues its slow climb to clinically approved legitimacy within the health-care industry.
As a kid, Mr. Kirchhoff was skinny, gangly. But at age 32, when he went to the doctor for his first check-up in seven years, he was ashamed to discover he’d somehow ballooned to 242 pounds. For the next nine years, he struggled to get his weight under control, eventually hitting and holding at his goal weight of 203 pounds with the help of his company’s programs. And he is not just trim, but evidently fit too, exercising six or seven days a week, even on the road. (He was up this morning at 4:30, he says, to squeeze in a workout before his publicist picked him up at 6:30.)
We know all of this because Mr. Kirchhoff began sharing his personal tale on his blog, Man Meets Scale, in 2009, after he’d achieved success. That led to a self-help book published in the spring, a breezy read weighed down only by the oversized title Weight Loss Boss: How to Finally Win at Losing and Take Charge in an Out-of-Control Food World. The book paints him as likably neurotic and vulnerable, someone for whom merely opening up a carton of ice cream can prompt a “kind of narcotic effect.” Convinced that readers can draw inspiration from his struggle-and-triumph narrative, he writes: “I’m happy to be the comic relief in the drama of your self-reinvention.”
Not in person, however, at least not today, as the conversation moves from yo-yoing weight to Weight Watchers’s yo-yoing share price. In late March, fuelled by a heavily criticized share buyback that led Standard & Poor’s to drop its outlook on the company’s rating from stable to negative, the stock reached a giddy $82.91 (U.S.) and then promptly fell on its ass. Last week, you could snap up shares for $40.60 after the company cut its earnings outlook and Mr. Kirchhoff admitted on a conference call that they expected enrolment at meetings to drop by the high single digits rather than merely holding steady as originally forecast.
Still, the company is cushioned from the full effects of the public market because it has been controlled since 1999 by the European-based investment group Invus, which bought it from food-processing giant H.J. Heinz Co. and still holds 52 per cent of the shares. “They’re not pushovers,” he says. “As far as shareholders go, they’re demanding. But they’re also really smart, and they have encouraged and pushed us to make decisions that are going to build meaningful long-term value in the business.”
And though the company is suffering right now from what it believes are macroeconomic conditions beyond its control, it also sees an extraordinary opportunity on the horizon, as weight moves from being a personal, cosmetic concern to a public health issue. As health-care costs continue to spiral upwards, Mr. Kirchhoff is convinced that curbing obesity will become a primary focus for companies, local governments, and other large organizations faced with ballooning insurance costs.
Which is why he is spending much of his time these days “running around with my new friends in health care.” (In fact, he dropped into Washington just before this Toronto visit.) Obesity is now consistently one of the top three issues “impacting health-care systems around the world, particularly in the U.S.,” he says. “It’s the leading cause of diabetes, increasingly the leading cause of cardiovascular disease, and it now rivals smoking as the leading preventable cause of cancer.”
And with nearly 100 million expected to develop diabetes by 2050, “it could literally cripple the health-care system in the United States.”
So Weight Watchers is pressing hard, arguing that it provides one of the few dependable methods to tackle the challenge. Last fall, the Lancet published a study that suggested people enrolled in the company’s program were more likely to lose weight than those being treated by a physician. The study was funded, and trumpeted, by Weight Watchers. Two months later, the British Medical Journal published a study with similar conclusions.
With research like that in its back pocket, the company is now lobbying insurance companies, large companies that self-insure their employees, and governments to be recognized as a medically legitimate treatment that helps prevent the onset of disease. Last December, Weight Watchers hired away the head of innovation at U.S. drugstore chain Walgreens to create a business unit dedicated to that effort. And last month it learned the U.S. Preventive Services Task Force, a federal agency that decides which treatments should be covered by insurance plans, issued a new set of guidelines that will make Weight Watchers-style programs mandatory under some conditions.
“That’s a big win,” Mr. Kirchhoff says.
Still, for Weight Watchers to fulfill its potential, the mindset among health-care providers has to undergo what he describes as “a tectonic shift,” from management of illness to prevention.
With local governments and large companies alike facing skyrocketing costs for benefits, weight-loss programs begin to seem like a good bet. “We actually see this with cities and states. They’ll say, ‘Why is this school budget increasing another 6 per cent?’ At least half of that is increasing benefit cost, and therefore they have to cut back on other programs to pay for the fact that we’re becoming more sick.”
“Then they’ll say, given all the benefits I provide, having a more-well work force and dealing with obesity feels like a pretty smart bet – as far as a benefit versus other things I might provide my employees, like free chocolate sundaes on Fridays, or whatever it might be.”
Still, the company itself needs to change, too, evolving its focus on marketing from consumers into targeting companies and governments. “It’s about data reporting, it’s about account management, it’s about knowing how to create products that will plug in nicely into insurance plans,” he says. That means learning how to work with federal agencies like the U.S. Centers for Medicare and Medicaid Services (CMS).
“I mean, three years ago, I couldn’t even spell CMS,” he says, then laughs. “Sorry, bad joke.”
45 years old
Lives in Darien, Conn.
Wife (and “my muse”): Sandee
Two daughters: Harley, 14, and Lila, 12
President and CEO, Weight Watchers International, 2006-present
CEO, WeightWatchers.com, 2004-present
SVP and CFO, Primedia Inc.’s Enthusiast Media Group, 2003-2004
Director of corporate strategy and development, PepsiCo Inc., 1999-2000
Manager and consultant, Boston Consulting Group
BSc, Biomedical and Electrical Engineering Duke University
MBA, University of Chicago
“To this day, my palms sweat when I see brand-name food.”
“My freshman year, I majored in smorgasbord.”
“I now treat ice cream a little bit the way ex-smokers treat cigarettes: with close to zero tolerance.”
“I don’t do To-Do Lists. I can’t. I wish I did. I think it’s probably bad that someone made me CEO of a company, because don’t do To-Do Lists and I think I’m the only one … I’ve got an awesome assistant who helps me create days, and then I just kind of follow the flow.”
PIONEERING THE PAYWALL
When David Kirchhoff and a handful of employees launched WeightWatchers.com in 2000, the company was ridiculed for its hubristic belief that it could charge for access to content on the Internet.
“Our feeling was, if this online product actually helps people lose weight, they will see value in it, and they’ll be happy to pay for it,” he explains. “If it doesn’t help them lose weight, and they don’t see value in it, they won’t pay for it and we should be doing something else. What we could never understand was, why would that be advertiser-supported? Why would you ask an advertiser to pay for your weight-management intervention?”
Their conviction was rewarded, as the website proved such a success that it was one of the models studied by The New York Times when that paper set out to develop the metered access system for its website and mobile offerings. And now, the paid Weight Watchers mobile app is bundled as part of clients’ memberships.
“I’m glad we did it when we did, because we didn’t have to retrain the consumer to get used to the idea of paying for stuff,” he says. “But honestly, I worry. I mean if you give someone a free weight-loss tool, to me that’s something you use for a couple of weeks and get bored. Because if it’s free, what does that say about the value of it?”