Past Issues

The business of fitness and wellness.

Move Over Millennials


For years, millennials have left marketers and brands feeling perplexed. What do they want? How do they think? And, more importantly, where are they spending money? 

While brands like Nike and Apple are said to have the highest appeal among millennials, entire industries—from alcohol to department stores and milk to soda—are blaming 23–38 year olds for slumping sales. Even as the oldest millennials approach 40, brands are still grappling with how to relate. Meanwhile, as “marketing to millennials” continues to dominate the conversation, Generation Z is set to become the most coveted consumer. Without preparation for the generational jump, many now-popular fitness, health, and wellness brands could age out.

While it’s easy to conflate Gen Z with millennials, the former differs from its predecessor in key areas. Born between 1997 and 2001, Gen Z is currently the largest generation in America, comprising 40% of all US consumers by 2020. More importantly, though, Gen Z is estimated to wield $143B in spending power while influencing another $300B of indirect spending in the US alone. 

"Compared to any generation [Gen Zers] are less trusting of brands… They have the strongest bullshit filter because they've grown up in an era where information was available at all times."
– Emerson Spartz, CEO of Dose

Although this generation doesn’t know a world without smartphones or social media, 67% of Gen Z prefer to shop in brick-and-mortar stores. Having witnessed the student debt crisis and the Great Recession, Gen Z is starting to save earlier than previous generations: 71% are already saving for the future. But despite being conservative with their money, Gen Z is willing to pay a premium for wellness products and healthy foods.

Overall, Gen Z takes a holistic view of health, emphasising physical fitness, healthy eating, and mental well-being. Recognizing the latter segment, having come up in a world of increased anxiety, 72% of Gen Zers say managing stress and mental health is their most important health and wellness concern. And while less than 20% of Gen Z participate in organized religion, more than 80% have a sense of spirituality and believe in cosmic power. Combined, this emphasis on stress management and belief in spirituality could explain the growing popularity of healing crystals, mindfulness, and astrology apps that, despite conclusive evidence of their effectiveness, fall under the expansive umbrella of wellness. 

On the fitness front, research from Les Mills shows that Gen Z accounted for 38% of gym sign-ups globally in 2018. As the most active membership category, 87% of Gen Z reported exercising three or more times per week. A survey from UNiDAYS provides additional context on Gen Z exercisers, with 43% of respondents working out at home, 65% using fitness apps, and 28% depending on wearable technology to track workouts.

When it comes to food, Gen Z wants healthy, convenient options. According to the Nielsen Global Health & Wellness Survey, Generation Z is more willing to pay a premium for healthy products, such as all natural, GMO-free, sustainable, or vitamin-fortified foods. As Packaged Facts noted, Gen Z members are seeking out portable and easy-to-prepare foods, but they’re also choosing healthy items when they do. As a result, there’s a growing opportunity for manufacturers and eateries to launch healthy snack or grab-and-go products that appeal to this demographic. 

In terms of dietary choices, Gen Z is in favor of high-protein, low-carb foods, with 51% saying sugar is an obstacle to a healthy life. And this group is far more likely to consume plant-based products and is open to becoming vegetarian. According American foodservice provider Aramark, nearly 80% of Gen Z plan to go meatless 1–2x per week, citing health and environmental concerns.

Keeping with the current trend in healthcare, Gen Z is dissatisfied with the current care model and, in turn, are seeking out alternative services. Accenture found that younger generations are looking for more “effectiveness, convenience, efficiency, and transparency”, with 53% of the respondents preferring telemedicine to traditional in-person visits. Additionally, Gen Z is more willing to consider Western medicine, like acupuncture and yoga, blurring the line between healthcare and wellness

Finally, with respect to marketing, companies will be well-served by social media and influencer campaigns — 71% of Gen Z discover new fitness opportunities and healthy restaurants on social media, compared to only 25% who find them from television commercials. Additionally, with 70% of Gen Z watching two hours of YouTube each day and the same percentage consulting the platform before making a purchase, a mobile video presence has become mandatory for attracting a younger demographic.

Generation Z’s doubling down on the wellness lifestyle—exercising more, eating well, and prioritizing mental health and sleep—should inspire more brands pivot to join the booming wellness economy. But for those who attempt to take the same tack as what worked with Millennials may find that they’ve lost their cool.

Headlines & Happenings

🙃 High Times  

Speaking of Gen Z, this group is expected to be the “ultimate cannabis consumer”. At least that’s how Bloomberg framed it: “Generation Z is coming of age in a whole new world of weed.” In the US, the legal sale of pot topped $10B last year. Now, as Gen Z turns away from alcohol and toward weed to unwind or alleviate anxiety, this demographic has become twice as likely as the average American to use cannabis. 

“When it comes to alcohol I’m really turned off… If you drink too much you end up in the hospital with alcohol poisoning. If I smoke too much, I sleep really well.”
– Angelica Bishop, UCLA student (via Bloomberg

At the same time, the US market for hemp-based CBD—a non-psychoactive cannabinoid—is estimated to reach $22B by 2022. As Quartz found, a growing number of Americans are turning to CBD as “an antidote to the pressures of modern life”. CBD users consider the compound more of a wellness aid than a recreational drug, with 55% using CBD to relax, 50% looking to relieve stress and anxiety, and another 45% hoping to improve sleep (respondents gave multiple answers).

🗣️ Shots Fired

The direct-to-consumer vitamin wars are heating up. Speaking to Vox, Persona co-founder and CEO Jason Brown came out swinging when he said companies like Care/of and Ritual “did copies of” the personalized vitamin packs his company created. Brown claimed Care/of’s quiz is a crude rip-off of Persona’s technology. As for Ritual, Brown said there’s “nothing unique” about their capsules. 

“If you were looking to make a lot of money selling something that doesn’t do anything at all, supplements would be a great place to go.” 
– Dr. Pieter Cohen, Cambridge Health Alliance

Meanwhile, vitafive’s Nik Hall thinks personalization is overstated, adding, “We’re against the quiz thing, to be honest.” Hall believes bloodwork, not an online quiz, is the best way to determine deficiencies and, thus, vitamin needs. However, vitafive has no such plans to offer blood testing as a prerequisite to purchasing its vitamin gummies. To him, it’s a simpler buying decision: “Why not have this safety net?”

With the lines between self-care and healthcare blurring, 78% of adults older than 55 and 70% of adults 18–34 to take vitamins. But it’s important to note that, even as the vitamin and supplement industry reaches $30B, the medical community cautions against vitamins and supplements, with one group of doctors concluding: “We believe that the case is closed — supplementing the diet of well-nourished adults with (most) mineral or vitamin supplements has no clear benefit and might even be harmful… Enough is enough.” 

Read more: Direct-to-Consumer Vitamins: Instagram, Amazon, & The End Of GNC

🔍 Be on the Lookout

Finally, some news out of the boutique fitness world. After capping its acquisition spree at eight, Xponential Fitness is turning its attention to opening new locations and growing its memberbase. As we detailed in Issue No. 22, over the next five years, Xponential plans to take each of its eight concepts to 900 locations. And recently, CEO Anthony Geisler alluded to a new channel for attracting members...

“I can’t say a whole lot, but we are working toward a pass that will allow consumers to access all of Xponential’s boutique fitness brands for one price, much like an in-house ClassPass.” 
– Anthony Geisler, Xponential Fitness CEO 

When it comes to bookings, the fitness industry runs on MINDBODY. But now, upstarts like Mariana Tek and zingfit are hoping to gain ground. Meanwhile, multi-studio memberships like ClassPass and FitReserve have taken the middleman route to selling excess inventory (empty spots in boutique classes). And now, with Xponential Fitness getting into the mix, the bookings, dynamic pricing, and multi-studio membership scene could be in for a shakeup.

Read More: Discounts, Dynamic Pricing, & Multi-Studio Memberships

💰 Money Moves


Plant-based protein maker Beyond Meat set its IPO terms. The company is seeking to raise $183.8M at a $1.21B valuation, offering 8.75 million shares at $19–$21 per share. To date, the company has raised $142M in VC funding, while reporting a $30M net loss on $88M in revenue for 2018.

Unilever is acquiring OLLY Nutrition, makers of gummy vitamins and wellness supplements. Terms of the deal were not disclosed.

Stryve Biltong, makers of healthy biltong meat snacks, closed $16.5M in Series B funding.

THE WELL, a high-end wellness center and health club in NYC, landed $14M in Series A funding led by NEA.

Kindbody, a mobile clinic for women’s health and fertility treatments, raised a $15M Series A.

SWORD Health, makers of a digital physiotherapy solution, secured $8M in new funding led by Khosla Ventures.

Viome, a wellness startup that analyzes microbiomes to make food recommendations for health or weight loss, raised $25M in funding.

Co–Star, an astrology app co-opting the wellness boom, raised a $5.2M seed round.

North Castle Partners (investors in Barry’s Bootcamp, SLT, Kettlebell Kitchen, and others) closed $400M for its seventh buyout fund, eyeing consumer businesses that promote “Healthy, Active and Sustainable Living”.

Mondelēz made a minority investment in Hu Master Holdings, a paleo-inspired, clean-label snack brand and New York City restaurant called Hu Kitchen. The investment was made through Mondelēz’s innovation and venture hub SnackFutures. Terms of the deal were not disclosed.

Synergy Capital made a growth investment into Fitness Holdings Northeast, operators of 18 Crunch Fitness locations across the Northeast.

Tennis champion Serena Williams has officially unveiled Serena Ventures, her VC firm that has backed a variety of companies including Impossible Foods, Tonal, Daily Harvest, OLLY, and others.

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