Not only are all of us making big changes and plans for the new year, but eDiets is doing so, too. One of the more familiar names in dieting, and one of the first to take the industry online, is finalizing a merger with the As Seen on TV brand. The initial announcement was made last fall and will soon complete a stock-for-stock buyout that will remove eDiets as a public company and make it a wholly owned subsidiary of the direct marketing giant.
“It’s an intriguing business acquisition, for a TV company to own a diet company” said Steve Rogai, CEO of As Seen on TV, when we spoke him this week about the merger. He explained that with eDiets being a direct marketing company that sells a food product and As Seen on TV selling a variety of consumer goods direct to consumer, it makes this new business a “synergistic fit.”
eDiets’ performance in recent years hasn’t been remarkable. When the initial report was made in August, InvestorPlace.com reports that eDiets was being purchased “for 80 cents a share — roughly double what the micro-cap stock had been selling for.”
Rogai commented that eDiets has had its ups and downs, “sometimes more down than up.” He also described this merger as a smart business move that would save eDiets more than one million dollars a year by no longer being a public company.
As for the meal delivery industry as a whole, it’s profitable and will continue to be so. Per a May 2011 report by John LaRosa’s Marketdata Enterprises, he told us they had “identified approximately 30 companies participating in the meal delivery business. We estimated the market’s value at $925 million.” At that time he also projected this segment of the diet market to reach $1.09 billion in revenue by 2014.
What can we expect to see for eDiets in this new year? Not only are they working to introduce a more competitive meal delivery option, but they’ve already signed and announced an endorsement deal with entertainer CeeLo Green. A judge on the Voice and soon be the face of his own Las Vegas show, Loberace, CeeLo made it known late last year that he wanted to get healthy in 2013.
Jennifer Hartnett, CEO of eDiets, said that the conversation between eDiets and CeeLo happened quickly.
“He chose eDiets to help him on his path to a healthy lifestyle,” she told us after the brand approached the singer. Since debuting CeeLo as the face of the brand, she cites increased interest in their product and they expect to see that climb as 30- and 60-second TV commercials featuring CeeLo start airing.
Nothing is being released by the company about the specifics of the endorsement deal, that Rogai calls a natural fit, but CeeLo is being paid a royalty fee and has a two year contract with the brand. It’s likely to be a multi-million dollar deal when you look at similar contracts in the industry. Jessica Simpson was paid $3 million for her post-pregnancy weight loss by Weight Watchers. According to ABC News, Valerie Bertinelli was paid an estimated $60,000 per pound that she lost; other celebrity endorsers can be paid $33,000 per pound.
How much weight can we expect to see CeeLo lose?
“If I’m effective enough, I could lose 50 pounds,” the star told CNBC. He, nor the company, are revealing what his starting weight is.
“The real focus is on health,” said Hartnett, explaining that CeeLo’s personal goal is to get healthier for himself, family, friends, and fans. They’ll measure success based on how he feels and looks.
“This isn’t going to be ‘remain to be seen,'” she said, unlike many of their competitors do.
Instead of a big weight loss reveal, eDiets and CeeLo will share his weight loss in real time. “It’s going to be progressive,” said Hartnett. Fans can follow him each step of the way through videos on the site, new quarterly TV commercials, and through social media.
“We’re not waiting to see. This is real life,” she said.
How does the eDiets plan work? It’s a fresh delivery of food each week; meaning eDiets’ chefs assemble pre-portioned, calorie-controlled meals designed by a dietitian with fresh, whole foods and ship it out immediately to you (a flash-frozen option is available). Each customer gets made-to-order meals of 120 menu items that include a daily breakfast, lunch, dinner, and dessert.
Hartnett said that not only can eDiets deliver meals to CeeLo each week no matter where he is on the road, they can do that for any customer. “The convenience factor is a big selling point,” she said.
“We’re so excited to have someone of CeeLo’s stature partner with us at eDiets,” said Rogai. “And that he’s made the choice to embark on a healthy lifestyle for 2013.”
It’s something that CeeLo is wholeheartedly committed to, and he’s been vocal about getting started while inviting his friends and fans to join him, saying, “Let’s get healthy together.”
— CeeLo Green (@CeeLoGreen) December 20, 2012
“You can be a better version of yourself,” said CeeLo. And he’s getting his start with eDiets.