This Week in Business History- Episode 18

“Have you ever heard of the “Razor and Blades Business Model”?…King Camp Gillette is widely credited as saying quote: “Give ‘em the razor, sell ‘em the blades”. Gillette would sell the razor itself at a very low cost; which would then ensure that the consumers that owned the razor would continuously buy the razor blades.”

-Scott Luton, Host, This Week in Business History

 

On this episode, Scott W. Luton dives into the story of Weight Watchers International Incorporated and its founders, including Jean Nidetch. He also touches on a variety of other historic business events, including Dictionary Day and the “Razor and Blades” business model, for the week of October 12th.

Scott Luton (00:12):

Good morning, Scott Luton here with you on this edition of this week in business history. Welcome to today’s show on this program, which is part of the supply chain. Now family of programming. We take a look back at the upcoming week, and then we share some of the most relevant events and milestones from years past, of course, mostly business focused with a little dab global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So I invite you to join me on this. Look back in history to identify some of the most significant leaders, companies, innovations, and perhaps lessons learned in our collective business journey. Now let’s dive in to this week in business history.

Scott Luton (01:10):

Hello, and thanks for joining us. I’m your host Scott Luton. And today on this edition of this week in business history, we are focused on the week of October 12th, a one quick programming up before we dive into today’s show big, thanks to our listeners in France. As this podcast recently hit the business news podcast, leadership charts and that country. In fact, we recently cracked the top 50 for podcast focused on business news in France. That’s wonderful news that we celebrate with you, our listeners, and as always, we invite you to join us by searching for this week in business history, wherever you get your podcasts and click to subscribe. So you don’t miss a single thing. And for that, we are greatly appreciative. Thanks so much for listening in today’s episode, we’re focused on the backstory behind one, well known global brand WeightWatchers. So stay tuned.

Scott Luton (02:02):

You might just be surprised with a few aspects of the story behind the brand. Thank you for joining us today on this week in business history and powered by our team here at supply chain. Now, Jean Evelyn Slootsky was born on October 12th, 1923 in Brooklyn. She was the daughter of a cab driver and a manicurist Jean Slootsky would drop out of the city college in New York. When her father died in 1942, that’s when she’d began her professional journey. First, she spent time at Mullen furniture company in Jamaica, New York. Eventually she’d work at the internal revenue service where she’d meet her first husband, Marty night, Jean and Marty Nottage would spend time in Tulsa, Oklahoma, and Warren, Pennsylvania. Before settling back in Queens, New York, specifically, they lived in the little neck neighborhood, which is near little neck Bay, which is where the term little neck clams originated by the way, which has become a size category for all hard clams.

Scott Luton (03:07):

Regardless of origin, Marty would get a job as an airport driver and Jean would work raising funds for a variety of charitable groups, but it was her battle with one thing in particular that would change your life. Jean Nottage. And what started in her childhood was a compulsive eater. In the nineties, fifties, she tried a variety of solutions to control her weight, including pills, fad diets, even hypnosis, not had one particular food addiction that bedeviled her mallow, Mars, a chocolate coated marshmallow cookie. They are delicious she’d later, Wayne that to hide her addiction to the sweet treats, she’d literally had a box of the cookies in her clothes hamper or she’d Gorge on them in the middle of the night with no one looking in 1961, gene Nottage would take several steps that would help her get a better grasp on her weight. First, she invited six friends over to her home to have a serious and Frank conversation.

Scott Luton (04:09):

All six of her friends also were struggling in some way with their health and weight. After several hours of exchanging their secret struggles, they all resolve to go on a group diet and support each other through the rigors and temptations that every human has when trying to lose weight in the ensuing weeks, the group approach again, weight was being shed right and left. And the group of participants began to swell within two months. It grew from seven to more than 40 participants. By October, 1962, Jean nodded, she hit her target weight of 142 pounds, but just as important, she was determined to really help a ton of other people gain control of their weight and health. One of the couples that were or participating in the group weight loss approach was Al and Felice. Lippert Al Lippert was a business leader that was active in the garment industry.

Scott Luton (05:04):

He saw a business opportunity in the group’s collective success, and he suggested Jean Nottage. They seized the moment in May, 1963 in a loft apartment over a movie theater in that little neck neighborhood WeightWatchers international incorporated was formed. Jean Nottage would serve as president and chief spokesperson and trainer Al Lippert would be in charge of the business details and Felice Lippert would be in charge of recipe, development, nutrition, and food research. It was simple. Jean owl and Felice would rent a public venue. They would charge program attendees, $3 weekly meeting at the meeting. Recipes and ideas will be shared and emotional support offered the program and recommendations that were offered were based on information found via city obesity clinics. So thumbs up to lean meat, fish, skim milk fruits, veggies, thumbs down to alcohol sweets and fatty foods. Key components to the program were also food journaling, establishing realistic dietary goals and motivational communication with speakers, books, events, and more.

Scott Luton (06:16):

The first official meeting in May, 1963 drew 400 attendees. Interestingly enough, the first meeting was held in a venue that sat on top of a pizza joint. The owner of the pizza joint couldn’t figure out why folks were lined up outside, but they weren’t buying any pizza. Later. Jean Nottage would collaborate with that same pizza joint owner to create a weight Watchers milkshake that would go on to be a big seller, blessed be those ties that bond. And in 1964, just months after the first meeting above that pizza joint, a franchise approach was rolled out now for a quick sidebar. Have you ever heard of the razor and blades business model? The model is certainly older than the name, but the name originated with King camp Gillette. Yes. Gillette as in the huge brand of household goods, that is now part of the global Proctor and gamble enterprise King camp.

Scott Luton (07:11):

Gillette is wildly credited as saying, quote, give them the razor, sell them the blades. Gillette would sell the razor itself at a very low cost, which would then ensure that the consumers that own the razor would continuously buy the razorblades. So back to weight Watchers, international incorporated, Jean Al and Felice decided to franchise via the razor and blades model graduates of the weight Watchers program could pay a very inexpensive franchise fee, which would then allow them to access various aspects of the programming by which they could lead their own groups in their own hometowns with only 10% of gross earnings being due to weight Watchers, international inc, as a royalty. And boy did it sell like hotcakes just three years after rolling out the franchise opportunity, there were 102 franchises internationally. The first WeightWatchers cookbook, which was published in 1966, it sold a whopping 1.5 million copies by 1968, just some five years after the company had been formed.

Scott Luton (08:18):

There were over 1 million WeightWatchers members worldwide. So what next WeightWatchers international inc would go public, which would turn gene and Marty Nottage and Al and Felice Lippert all into millionaires. And the company would also roll out a variety of prepared foods and other products by 1973, Jean nodded, she wanted to focus more on the PR side of the business, traveling interviews, keynotes. So she resigned as president also in 1973, the company held a huge party at Madison square garden to celebrate its 10th anniversary, 16,000 people attended, including Bob hope and Roberta Peters. It was a who’s who of stars and personalities at the time the company was owned the move. And by the late 1970s, WeightWatchers international inc would grow into quite the global enterprise, which was becoming tougher and tougher for Al Lippert to manage. So H J Heinz company would come calling. The company would acquire weight Watchers in 1978 for about $72 million.

Scott Luton (09:28):

Al Lippert would remain as chairman and CEO, at least for a few years. And Jean Nottage would serve as a paid consultant and spokesperson WeightWatchers would thrive throughout the fitness craze, 1980s, but things started to change in 1990, as new competitors were making gains. Jenny Craig Nutrisystem slim fast in 1998, weight Watchers would introduce its infamous points system where foods were assigned a points value. And two years later, a more personalized version of the point system was introduced hands would sell the organization to a private equity group. In 2001, the PE firm, our tall Luxembourg would take WeightWatchers public. Again that same year later a website will be launched. And in 2009, WeightWatchers rolled out its first app. All the while Jean Nottage was still preaching the gospel of WeightWatchers throughout the decades. She’d say quote, when you’re trying to lose weight, one of the most important things you can do is eat three decent meals a day, so that you’re not so hungry that you can’t get your food off your mind.

Scott Luton (10:37):

Habit and hunger have long been the basic insidious enemies of the overweight. We can’t fight hunger, but we can fight habit and quote Jean Nottage, the incredible savvy business leader, founder and passionate spokesperson would pass away at her home in Parkland, Florida of natural causes on April 29th, 2015, a few months later, Oprah Winfrey would famously invest in weight Watchers in October, 2015 becoming a 10% owner in spokesperson. Also in 2015, Johns Hopkins reviewed thousands of studies on a wide variety of weight loss programs. And that prestigious organization found that the weight Watchers approach was one of the few that really had a scientific basis. In 2018. WeightWatchers made a shift. Now it’s rebranded as WW. The company shifted to a broader message of overall health and wellness, and it came with a new tagline wellness that works. Now, the company’s comprise of some 4.6 million members worldwide. And at the heart of WW, you’ll find Jean Nottage’s strong sense of empathy, tenacity, compassion, zest for life and immensely strong appreciation for community support.

Scott Luton (12:00):

A few other items to note on this week in business history for the week of October 12th on October 18th, 1648, the Boston shoemakers form, the first American labor organization on October 16th, 1758, American teacher and journalists know Webster was born in West Hartford, Connecticut. He would also become known for compiling the first American dictionary of the English language. And now dictionary day is celebrated on October 16th each and every year on October 18th, 1836, Frederick August Otto Schwartz was born in Germany. He would found the company FAO Schwartz in 1862 in Baltimore, Maryland later opening a location at seven 45 fifth Avenue in New York city where it has operated for 55 years on October 13th, 1872, Leon Leo would being, was born in Greenwood Maine. He’d go on to launch the company L L bean in 1912 in Freeport, Maine, and on October 14th, 1964, Martin Luther King jr. Would be recognized with the Nobel peace prize for battling racial inequalities through nonviolent means that wraps up this edition of this week in business history.

Scott Luton (13:24):

Those were some of the stories that stood out to us, but Hey, what do you think? What stands out to you? Tell us about it. Shoot us a note to amanda@supplychainnow.com or find us on LinkedIn, Twitter, Facebook, or Instagram, and share your comments there. We’re here to listen. Thanks so much for listening to our podcast. I hope you’ve enjoyed our latest edition of this week in business history. Hey, be sure to check out a wide variety of industry thought leadership@supplychainnow.com friendly reminder. You can find this week in business history, wherever you get your podcasts from and be sure to tell us what you think we’d love to earn your review. Hey, be sure to check out the entire family of supply chain now programming, including tequila sunrise with Greg white supply chain is boring with Chris Barnes tech talk digital supply chain podcast with Corinne bursa, veteran voices in a lot more. You can search for them wherever you get your podcasts on behalf of the entire team here at this week in business history and supply chain. Now, Hey, this is Scott Luton wishing all of our listeners, nothing but the best. Thanks so much for listening. We’re grateful for your support. Hey, do good give forward and be the change that’s needed an old that note. We’ll see. Next time here on this week in business history. Thanks.

Would you rather watch the show in action?  Watch as Scott introduces you to This Week in Business History through our YouTube channel.

Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/

 

Resources, Links, and Events Mentioned in This Episode:

Subscribe to This Week in Business History and all Supply Chain Now Programming Here:
https://supplychainnow.com/subscribe
Leave a review for Supply Chain Now:https://ratethispodcast.com/supplychainnow
Connect with Scott on LinkedIn: www.linkedin.com/in/scottwindonluton
AIAG Virtual 2020 Supply Chain Conference: https://tinyurl.com/y8axeflc
Download the Q2 2020 U.S. Bank Freight Payment Index: freight.usbank.com/?es=a229&a=20
WEBINAR- Stand Up & Sound Off: https://tinyurl.com/y4lcahdr
AME Toronto 2020 Virtual Conference: https://www.ame.org/ame-toronto-2020