A health care behemoth from South Dakota is about to gain a toehold in Duluth.
Profile by Sanford, which offers weight-loss plans, will open a franchise in the Denfeld Retail Center on Oct. 1, the company announced.
Profile is a wing of Sanford Health, which had $4.2 billion in revenue for fiscal year 2016, the most recent data available. By contrast, Duluth-based Essentia Health had revenue of just under $2 billion for the 2017 fiscal year.
Will Sanford be the new, and big, kid on the block in Duluth?
"This obviously has to be a concern, I would think, to the local hospitals," said Terry Hill, senior adviser to the Duluth-based National Rural Health Resource Center. "But I don't think it necessarily means that their plan is to move aggressively into the Duluth market."
Don't read too much into the Profile presence, a Sanford Health spokeswoman suggested. The health system has 44 hospitals compared with 154 Profile by Sanford locations (some of which haven't yet opened).
"We're all across Minnesota in areas where we don't necessarily have (other) Sanford Health offerings," Nadine Aljets wrote in an email.
All of that has come about since Profile opened its first company stores in Sioux Falls, S.D., and Fargo, N.D., in 2012. Michelle Lounsbury of Sioux Falls was the second person to open a franchise, in Sioux City, Iowa, two years ago, and since has added franchises in Grand Forks, N.D., and Cedar Rapids, Iowa. She's in the process of opening the Duluth franchise as well as franchises in Cedar Falls, Iowa, and St. Joseph, Mo.
The Profile website's section geared toward potential franchiser owners notes that weight loss is a $200 billion industry and has a ready market with almost 70 percent of Americans overweight.
It has been a successful enterprise for her, Lounsbury said. She has seen her Sioux City franchise grow to 1,800 members. She began there with three "certified Profile coaches" and has seen that grow to nine.
The coaches are a key to the Profile approach, Lounsbury said.
"In our six years of being open, Sanford Profile has found through numbers and data that those of our members who stick to coaching are more successful on the plan," she said.
The $99 annual fee gives members a personalized plan and access to a coach. Lounsbury said. But memberships will be available for $50 on Oct. 2, when Profile has its grand opening in Duluth.
The Duluth store will start out with three coaches, as did the franchise in Sioux City she said.
She and her husband have chosen to locate their franchises in Midwestern cities with populations of between 50,000 and 200,000, Lounsbury said. Such cities can support one or two stores at the most. She doesn't envision a second franchise in Duluth.
That a large health system has developed a niche in the weight loss business is part of a trend of emphasizing health and wellness, Hill said.
"In an accountable care organization, for example, the motivation will be to keep people healthy," he said. "You can see both our local health systems moving in that direction, doing wellness programs, for example. To me, that is a definite trend and we're going to see more and more of it."
But that the name Sanford will have a presence in Duluth health also is a reminder of a trend, Hill said.
"The bigger health systems in the state and in the country are beginning to infringe on each other's traditional territory," he said. "I believe what they see is a more intense competition. We believe there can be more consolidation going on than we've ever seen before."