Flipping the calendar to a new year is as tempting a time as any to pontificate about what’s to come. But instead of making sweeping predictions about what the future might hold, we took a slightly different approach in examining the year ahead.
From fitness to food and wellness to wearables, we surveyed the landscape to get a sense for where consumer behavior is tracking. Then, we drilled down into the business implications of what’s happening and why.
The result is something we’re calling the Fitt Insider Outlook for 2019, and it’s an in-depth breakdown of macro trends, mainstream developments, and areas of interest worth following. In an effort to keep the newsletter format intact, what follows is an excerpt of the longer piece that sets the stage for the year ahead. From there, we jump into the headlines, happenings, and money moves we missed over the holiday break.
So, go ahead — check it out. I’m looking forward to hearing your feedback. Also, if you find value in what we put together, consider forwarding this email to a colleague or peer.
|Fitt Insider Outlook 2019 →
Wellness has become omnipresent. It’s such a force that the concept has overtaken health as our ideal state of being. Now, when we discuss health, we’re actually talking about wellness: the presence or pursuit of physical, emotional, social, environmental, and spiritual well-being.
$4.2 trillion reasons
. The proliferation of wellness has created a massive industry that has become known as the wellness economy
. According to the Global Wellness Institute, the global wellness market is now valued at $4.2T, up 12.8% from $3.7T in 2015.
On your mark. Believe it or not, wellness—in all its forms—is still a young category. The industry is starting to break out of its tried-and-true verticals of food, fitness, and beauty, but we’re only toeing the starting line of how wellness will impact and define culture, society, and economics.
. From DTC vitamins
(Care/of, Ritual) to custom-formulated shampoo (Function of Beauty, Prose) and made-for-you beauty products (Curology) to gene-guided nutrition (Habit), personalization is taking over.
Convenience is key. If it isn’t accessible, easy to navigate, or time-saving, consumers aren’t interested — everything needs to be on-demand. Even things that are inherently inconvenient like making time for exercise, meditation, or a spa day will be stripped down, repackaged, and served to us in a more convenient form: i.e., Freeletics, Calm, and Heyday.
Content is king
. From connected equipment
(Peloton, Mirror) and boutique studios
(SoulCycle, AKT) to streaming workouts
(DailyBurn, Zwift), content is the name of the game. Medium and delivery aside—be it editorial, audio, or video, accessed online, via an app, or smart equipment—content is fueling the wellness economy.
|Headlines & Happenings
No Fly Zone
Boutique cycling concept Flywheel Sports is in a tough spot: between SoulCycle and Peloton. The former built a cult-like following by focusing on their brand and the in-studio experience. The latter credits convenience, content, and a better bike for their success. Flywheel’s initial response was to do both, open new studios and launch FLY Anywhere, a Peloton-like streaming service. Now, it looks like the company spread itself too thin. It hired advisers to explore a sale of all or part of the company, but that strategy, too, was short-lived — Flywheel pulled the plug on that plan after failing to garner interest from potential suitors.
With a billion-dollar valuation and hopes of becoming the “McDonald’s of our generation”, Sweetgreen has found its sweet spot. In an interview with Kara Swisher, Jonathan Neman, co-founder of Sweetgreen, recounted the company’s start and explained its plans for the future. “We saw an opportunity to completely create a new type of food system and an iconic brand that spoke to this generation”, Neman said. The long-term vision goes way beyond salad to include hearty dinner plates and using blockchain to trace and track ingredients en route to becoming “the biggest food company in the world.”
Whether it’s plant-based or lab-grown, meatless meat startups are attracting attention from consumers, investors, and Big Food. While Beyond Meat is IPO-bound, their nearest competitor, Impossible Foods, hit another regulatory hurdle that could delay their supermarket launch. Meanwhile, Nestlé has unveiled the Incredible Burger (how original), their take on a plant-based burger that’s made from soy and wheat protein. Not to be outdone, Unilever announced their acquisition of The Vegetarian Butcher, a Dutch maker of plant-based meat substitutes.
MINDBODY is being acquired by Vista Equity Partners for $1.9B. Shareholders will be pleased with an exit, but there’s an obvious risk for MINDBODY: becoming Active Network. Vista acquired Active in 2013 for $1.05B (later sold to Global Payments) and, over the years, Active has become a clunky and crowded platform. Consider this an opportunity for those in the booking, dynamic pricing, and multi-studio membership space to rise.
Interactive indoor cycling platform Zwift raised $120M. Using multi-player races, social rides, and gamified content, the company has added some 800,000 users over the past two years. With this funding, Zwift is moving into new fitness categories like running and eSports tournaments.
Coca-Cola led a $15M investment into Iris Nova, the parent company of functional beverage brand Dirty Lemon. With Coke’s backing and resources, Dirty Lemon hopes to exceed $100M in revenue by 2021. Worth mentioning: discontinued early this year, Dirty Lemon +cbd will remain shelved until regulations on hemp-derived CBD are clarified on the federal and state level.
Speaking of CBD, Anheuser-Busch InBev and Canadian pot producer Tilray, Inc. have formed a $100M joint venture for the research and development of cannabis-infused non-alcoholic drinks for the Canadian market.
Chickpea puff maker Hippeas closed an $8M round of funding led by CAVU Venture Partners.
Peet’s Coffee acquired a majority state in Revive Kombucha. This move comes after Peet’s led Revive’s last round of funding in August 2017.
Ingredion, a leading global provider of ingredient solutions with annual sales of nearly $6B, is making $140M worth of strategic investments to accelerate the production of plant-based proteins.
Unilever is buying The Vegetarian Butcher, a Dutch producer of plant-based meat replacements like vegetarian hamburgers, meatless meatballs, and fish-free tuna.
Denver-based FloWater, a maker of water refill stations, secured $15M in Series B funding.
BrainCheck, a digital neurocognitive testing platform, raised $1.5M in funding to bring AI and personalized medicine to dementia care.
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