In the space of four weeks this year, diet drug sensation Alli tripled the value of the weight management market and boosted the fortunes of other slimming pills – but is it just a flash in the pan, asks Cathy Relf


Think dieting is simply about eating less? Think again. Slimming aids are big business and this year the UK got its first over-the-counter version in diet pill Alli, a half-strength version of Orlistat, a prescription drug that inhibits the body's absorption of fat and prevents it being digested which means it comes out the other end.

The nasty side effects haven't stopped the GlaxoSmithKline drug being a massive hit since it launched in the big four, Boots and Superdrug in April. Sales in the overall weight management and nutritional foods category tripled in the month after Alli's launch, from £3.8m in April to £11.5m in May [IRI].

Alli itself racked up £16.3m in UK sales in its first five months [IRI 20w/e 5 September 2009]. At £49.95 for four weeks supply or £32.95 for two, that's no mean feat, but the initial sales boom has tailed off sales of slimming products in the four weeks ending 5 September dropped back to £5.2m, less than half their May peak [IRI]. So is the pill-popping frenzy over?

Total category sales remain significantly up on April, so not necessarily. Aids and supplements have one key advantage over their food and drink cousins. The fact they are not calorific is a major attraction for keen dieters, and one that may explain why Alli's arrival has had such a halo effect on sales of appetite suppressants.

Combined sales of Goldshield Healthcare's three diet pill brands Appesat, a natural suppressant also launched this year, Lipobind, which is launching a new version with added vitamins A, D and E later this year, and Zotrim, rose 57.1% this year to £5.9m [IRI 52w/e 5 September].

Goldshield Healthcare marketing manager David Towse is in no doubt that Alli helped stimulate consumer interest in the sector. "The investment behind the launch of Alli has been huge and has helped to increase the market for weight management supplements," he says.

Diet pill Adios, which was launched by Dermal Laboratories in 2001 and joined by the higher-strength Adios Max last year, claims to aid weight loss by speeding up the body's metabolism. It, too, has benefited, says Juliette Luxton, brand manager for Adios. Ironically, Alli may not benefit to the same degree as other brands, she suggests. "Alli has contributed to the growth of slimming pills. However, it can only be sold to consumers whom pharmacy staff feel meet the strict usage criteria. Adios is better suited to consumers who have a more moderate weight-loss target," she says.

Alli's over-the-counter status is problematic in more ways than one. As a product suitable only for those with a BMI of 28 or more, it met with criticism in May over the way it is sold. Which? sent mystery shoppers into pharmacies across England, Wales and Northern Ireland to buy the pills. On four of the 32 visits, researchers with a BMI of below 28 were able to buy the product.

GSK says its guidelines are clear and that it will carry out extra training with pharmacists found not to be complying. But the issues illustrate some of the difficulties OTC products can have, attracting as they do more scrutiny on the health and safety front than food or drink.

This, coupled with its high price tag, means Alli is unlikely to generate sufficient repeat purchases to present a long-term threat to weight loss rivals in the food and drink arena, suggests IRI insight manager Pam Chauhan. "Alli had a huge impact on the sale and performance of slimming aids," she says. "During its May peak, the brand showed enough promise that it may have challenged market leader Slim-Fast." That it didn't and sales tailed off is no great surprise, however, she argues. "Products may experience this scenario because they cannot secure repeat rates," she says. "They cannot transform from new kid on the block to a long-term player able to challenge leading brands."

Especially when those leading weight loss food and drink brands continue to perform relatively strongly. Despite losing share to GSK and Dermal Laboratories, Unilever's Slim-Fast remains the overall category leader. Its value sales have increased 4.3% to £26.9m this year, a significant improvement on the previous year, when sales fell 1.2% [IRI].

Products range in price from 59p for bagged snacks to £5.99 for a 12-portion tin of milkshake powder, and this is an important point of difference, according to Slim-Fast brand development manager Louize Khan. "Our research suggests there is no overlap between the two consumer bases the price set for Alli is too high for our consumers in the first place," she says.

The loss of share is not of great concern, says Khan. "As Alli is a high-price product, Slim-Fast's market share did initially drop. However, Slim-Fast is now back on market share recovery and holding strong against Alli."

Unilever is planning to relaunch the Slim-Fast brand in 2010, with new packaging and new snacking products, although details are currently under wraps.

The price differential is not enough to protect the food and drink brands, however. Innovation is key, as the brands are all too aware and NPD is thriving. This year saw the arrival of Skinny Cola, a drink that claims to boost metabolism and help break down fatty acids. Existing brands have also been busy. United Biscuits has added Oat Squares and Fruit Crunch Bars to its Go Ahead! range, while PepsiCo has extended its Snack a Jacks range with two new flavours. WeightWatchers, meanwhile, has revamped its ready meals range and launched low-fat pies. There has been plenty of action in yoghurts, too, with Danone adding a fat-free version to its Activia range, while its Shape brand, relaunched last year, is performing well.

Meanwhile, Atkins Nutritionals has had a turnaround year, achieving 37.2% value growth to £2.8m, compared with a 5.1% slump last year [IRI 52w/e 5 September 2009]. In May, it launched a range of low-carbohydrate foods, including muesli (rsp: £3.25), wholegrain bread mix (rsp: £3.49) and wheat and rye crackers (rsp: £1.99).

Another brand to watch next year is Prolibra, a dairy whey protein complex that supplier Glanbia Nutritionals claims promotes fat loss while retaining lean muscle mass. The company is negotiating with several food companies about incorporating Prolibra into new products, such as ready-to-drink weight-loss shakes. It plans to make at least three launches in Europe in 2010, with at least one in the UK.

Come 1 January following the festive excesses consumers will be eyeing up weight-management products. Whether they turn to tried and tested brands such as Slim-Fast or splash out on something new such as Alli remains to be seen.

Focus On Dieting