Medifast Sets To Branch Into Sports Nutrition

Medifast, CEO, Michael MacDonald


Medifast will be announcing its first private-label sports nutrition products very soon, CEO Michael MacDonald said in an interview Thursday. Private labeling has companies licensing products they make to be sold under other companies' names.

Starting with private labeling in the new market is right for Medifast because the company's own brand is strictly associated with weight loss and meal replacement bars, MacDonald said. He expects the strategy to ease Medifast's entry into a new market and expand its portfolio.

You're not going to get the athlete in great shape to be on the meal replacement, MacDonald said. You want to have sports nutrition for them.

Medifast will start with a private-label arrangement with a major university and a sports-oriented brand, MacDonald said. He declined to share further details.

The Owings Mills-based company has been signaling an interest in the sports nutrition market for some time, talking last year about branching out with a new product line. Expansion is a focus after a year in which sales of Medifast's largest line, the direct-selling Take Shape for Life, eroded and it overhauled its board at the behest of activist investors.

The first weeks of the new year aren't as important for Medifast as they are for larger, more visible competitors like Nutrisystem Inc. and Weight Watchers International Inc., MacDonald said. Medifast does roughly 53 percent of its business in the first half of the year and 47 percent in the second half, he said. Its sales are more heavily focused on consumers taking a holistic approach to dieting than those interested strictly in resolution weight loss.

Still, Medifast tries to capitalize on the increased interest in dieting this time of year. A recent high-profile pitch by Oprah Winfrey for Weight Watchers brings attention that can help the entire industry, MacDonald said.

Medifast will be starting a new advertising campaign later in January titled Your Year focused on customers' choices. Company executives were also scheduled to ring the New York Stock Exchange's closing bell Thursday.

The company has yet to release fourth-quarter earnings after executives talked about hitting an inflection point in the third quarter. Medifast is in a stronger position entering the new year after last year's board changes and after the company exited a franchise business, MacDonald said.

I can't talk to you about our fourth quarter, but we expect continued improvement, he said. We're very excited about 2016.

About Medifast

Medifast, Inc. is engaged in the production, distribution, and sale of weight management and disease management products and other consumable health and diet products. Medifast’s product lines include weight and disease management, meal replacement, and vitamins. The Company’s operations are primarily conducted through five of its wholly owned subsidiaries: Jason Pharmaceuticals, Inc. (Jason), Take Shape for Life, Inc. (TSFL), Jason Enterprises, Inc., Jason Properties, LLC and Seven Crondall, LLC.

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