who is the wellness consumer? why health and wellness is influencing consumer behavior

IN PARTNERSHIP WITHPRESENTED BY

HEALTH + WELLNESS BREAKFAST 2014 // OCTOBER 7, 2014

agenda • Wellness defined + Consumer Mindset

• Wellness industry size + growth projections

• Health + Wellness Megatrends

• Health + Wellness Sales and Trends by category

> Fitness + Wearables

> Food

> Beauty

> Vitamins + Supplements

• Who is the Health + Wellness Enthusiast

• Key Takeaways

2

what is wellness?

3

The quality or state of

being healthy in body and mind,

especially as the result of deliberate effort.

WELLNESS IS DEFINED AS:


Source: Dictionary.com

4

• Wellness is multi dimensional

• Wellness is holistic

• Wellness changes over time and along a continuum

• Wellness is individual, but also influenced by the environment/community

• Wellness is a self-responsibility

SEVERAL COMMON THREADS STAND OUT ACROSS THE VARIOUS DEFINITIONS OF WELLNESS


Source: National Wellness Institute

5

health + wellness: consumer mindsetMOVING AWAY FROM TOWARDS

illness

QUICK FIX

TREATMENT

reactivehave to…

vitality

LONG TERM

PREVENTATIVE

proactiveexperience


Source: The Hartman Group Inc., 2013

6

Source: McCann

what makes up overall wellness?A MULTIFACETED CONCEPT LED BY PHYSICAL HEALTH


PHYSICAL 28%

MENTAL22%EMOTIONAL

15%

SPIRITUAL 13%

FINANCIAL 12%

SOCIAL 10%

7

wellness industry size + growth projections

8

THE TRENDS ALL POINT IN A SINGLE DIRECTION— MORE AND MORE CONSUMER SPENDING ON HEALTH AND WELLNESS

what’s the net/net? WELLNESS IS THE NEXT TRILLION DOLLAR INDUSTRY GLOBALLY

Source: SRI International

BEAUTY + ANTI-AGING

FITNESS + MIND-BODY EXERCISE

HEALTHY EATING / NUTRITION / WEIGHT LOSS

PREVENTIVE / PERSONALIZED HEALTH

COMPLEMENTARY + ALTERNATIVE MEDICINE

WELLNESS TOURISM

SPA

MEDICAL TOURISM

WORKPLACE WELLNESS

$679 BILLION

$390 BILLION

$277 BILLION

$243 BILLION

$113 BILLION

$106 BILLION

$50 BILLION

$31 BILLION

$60 BILLION


health + wellness

Source: Nutrition Business Journal; IBISworld; Edgars; Capital IQ; Internal & External interviews; Nicolaus Hall

The $240 billion U.S. consumer HEALTH + WELLNESS MARKET encompasses multiple categories, and a wide range of players

NUTRITION

ALTERNATIVE MEDICINE

OTC DRUGS

FITNESS

COSMETIC PROCEDURES

BEAUTY

ADVICE

$125 BILLION

$40 BILLION

$25 BILLION

$20 BILLION

$20 BILLION

$5 BILLION

$5 BILLION


wellness megatrends11

health + wellness megatrendsTHREE MEGATRENDS ARE DRIVING GROWTH OF WELLNESS AS AN INDUSTRY:

• Well-thy

• The Age of Agelessness

• Health Creep


well-thy• Wellness is the new “black”

• “Well-thy” is now a status symbol among consumers.

Source: Trendwatching.com


33% of Americans think THE KEY TO HAVING A SUCCESSFUL LIFE is HAVING A LOT OF MONEY, ranking it 20th on the list of contributors to having a successful life

ONLY

well-thy#1 DEFINITION OF SUCCESS:

85% GOOD HEALTH

Source: The Futures Company/American Express Life Twist Study

TOP 10 CONTRIBUTORS

1. GOOD HEALTH // 85%

2. FINDING TIME FOR THE IMPORTANT THINGS IN LIFE // 83%

3. HAVING A GOOD MARRIAGE/ RELATIONSHIP // 81%

4. KNOWING HOW TO SPEND MONEY WELL // 81%

5. HAVING A GOOD WORK/PERSONAL LIFE BALANCE // 79%

6. HAVING A JOB I LOVE // 75%

7. MAKING THE TIME TO PURSUE YOUR PASSIONS AND INTERESTS // 69%

8. BEING PHYSICALLY FIT // 66%

9. EMBRACING NEW EXPERIENCES/ CHANGES // 65%

10. ALWAYS TRYING TO LEARN AND DO NEW THINGS // 65%

HOW WE DEFINE OUR OWN SUCCESS


the age of agelessness• Longer life span means a greater emphasis on “optimal living”;

greater emphasis on quality of life

• Increased leisure time—more time to research and discover products, more time to absorb knowledge, more time to enjoy life

• Staying in the labor force longer—unemployment rate for boomers is lower than their younger counterparts

Source: The Futures Company, MetLife Mature Market Institute Boomers in the Middle


the age of agelessnessOLDER CONSUMERS ARE REINVENTING THEMSELVES AND EMBRACING A YOUTHFUL IDEALISM

• Faced with the challenges of aging but simultaneously seeking to redefine it

• They are bucking the aging trend and redefining what it means to be 40, 50 and 60

• Have an “ageless” image and attitude—as concerned with maintaining a youthful and active lifestyle as looking younger

Source: The Futures Company, MetLife; Mature Market Institute Boomers in the Middle, Mintel

By the same token millennials are taking an active approach to staying young:

40% use anti-aging products

GENERATIONS ARE CO-MINGLING


health creep• The ‘consumerization’ of health means that more CONSUMERS WILL

CHOOSE PRODUCTS WITH EMBEDDED HEALTH BENEFITS that are actually well designed, desirable, accessible, fun, tasty, interesting or storied

• We are experiencing a phenomenon termed “Health Creep”—HEALTH IS CREEPING INTO ALL ASPECTS OF CONSUMER LIFE AND EXPERIENCE

Think you’re not in the health business? Wake up and smell the organic coffee! As people around the world become more active in their pursuit of physical, spiritual and emotional wellbeing, “HEALTH CREEP” IS FORCING EVERY BRAND—YES, EVEN YOURS—TO PLAY IN THE HEALTH SPACE by delivering comfort, wellness or both.

“”Source: Get Wellness Now Study, Iconoculture 2013


health creep examples

PORTION CONTROL FLATWARE

WEALTH MEETS HEALTH

GLUTEN-FREE BEAUTY

FITNESS AT THE AIRPORT

HOTEL WELLNESS

WELLNESS POSTURES WHILE TRAVELING

18

health creeps into all categoriesSales and trends of specific categories:

• Fitness + Wearables

• Food

• Beauty

• Vitamins + Supplements


f itness + wearable sales• Sports & fitness industry is up $10 billion to $81.4 billion in wholesale sales in the U.S.

• 3.3 million fitness bands and trackers were sold, 500% growth, per year, in the past three years

> Sales predicted to jump 40% each year for the next 5 years

• The digital fitness category is now a $330 million market—driven by Fitbit

• Women’s athleticwear sales jumped 9% last year to $11.5 billion and globally will hit $126 billion by 2015

• Health Club membership grew to 52.9 million members in 2013 in U.S.

> Boutique fitness centers are flourishing—representing one of the hottest trends

Source: NPD and Reuters; Branded athletic apparel: Branded sportswear non-performance fabr, not necessarily used for sports i.e. Nike polo shirt.; Branded Active Wear: department store type sports brands like IZOD, Championlines.; Performance apparel : High Performance fabric, specifically targeted at sports usage i.e. Under Armor, Nike Dri-fit, etc.; Fitness apparel: apparel specifically marketed to fitness participants i.e. Lululemon etc.; 2014 SFIA Manufacturers’ Sales by Category Report; International Health, Raquet, & Sportsclub Association (IHRSA)


f itness + wearables trendsSMART TECHNOLOGY EXPANDING INTO MORE PRODUCT CATEGORIES

• Smart Wearables

> A T-shirt outfitted with electrodes to measure breathing, pulse and heart rate

> A bra that tracks calorie intake

> SmartSock tracks how you run to help improve running style

> Apple launching the new Healthbook

• Increase in obstacle and outdoor fitness activities

> Estimated U.S. Non-Traditional Running Event Finishers 2010 = 200,000 2011 = 1 million 2012 = 2 million 2013 = 4 million

• Increase in High-intensity Interval Training (HIIT)

• Fitness studios go online

Source: Running USA; Seven fitness and wellness trends in 2013; American College of Sports Medicine 2014



FITBIT HAS MOTIVATED ME TO ALWAYS MEET MY GOAL!

“”

I am a distance running junkie. I recently purchased a HIIT DVD workout program which opened my eyes to the idea of working out smarter rather than longer. HIIT workouts helped me shed fat while maintaining muscle…it improved my body composition, and also improved my running!

“

”

When I purchased my GPS running watch, I was thrilled…it made me feel like a ‘real’ runner…while it was expensive, the investment I made in the equipment motivated me to use it…it kept me accountable…made me motivated to run harder…that little pink watch is still the best training partner I’ve ever had.

“”

Source: Women’s Health/Prevention Reader Survey, August 2014

22

Source: Euromonitor, U.S. Sales of Health and Wellness 2008-2013

food salesHEALTH + WELLNESS FOOD & BEVERAGE:Sales of health and wellness food & beverage are up 9% in the last 5 years to $160.7 billion

ORGANIC:U.S. sales of organic products totaled $35.1 billion in 2013—up 11.5% from 2012

NUTRITIONAL FOOD & DRINK:Sales of nutritional food and drinks are estimated to increase to $8.2 billion in 2017

HEALTH + WELLNESS BARS:Sales of health & wellness bars are expected to reach $1.9 billion in 2017— a 103% increase from 2012

SMOOTHIES:Sales of RTD smoothies to reach $1.6 billion in 2017


food trendsFood is fuel for looking and feeling your best. Consumers are seeking the tools they need to create a balance of indulgence, convenience, and good-for-you foods that work for their bodies and lifestyle.

• 73% of consumers have switched to healthier versions of food items

• 68% of shoppers read food labels for ingredient information

• 24% of shoppers shop at Natural/Organic stores (e.g. Whole Foods, Trader Joe’s, Wild Oats)—the highest percentage since 2007

• Blenders, juice extractors, and citrus juicers are top-growing small kitchen appliance categories, reflecting consumers’ desire to get healthy

Source: Shopping for Health 2014; NPD Group


Source: Nasdaq.com, 16 August 2013; Iconoculture

food trendsCONSUMERS ARE DEVELOPING A NEW RELATIONSHIP WITH FOOD

• Consuming fewer processed foods

• Consuming less meat or no meat

> 80% of households eat meatless dinners at least occasionally

• Growing and preserving their own food

• Controlling food themselves

> Protein: protein market remains strong, with more than half of consumers looking for protein-rich products

> Gluten-free: Sales of gluten-free products are expected to reach $15.6 billion in 2016

• Proactively seeking non-industrial food – locally sourced, non-GMO, organic

> 15% increase in sales of products labeled ‘non-GMO’—Whole Foods’ president, A. C. Gallo.


food trends

Source: Iconoculture; Modern Farmer (23 Jan, 2014); Cassandra Daily (23 Apr. 2014); Quirk’s Marketing Research Review 28(5):8 (May 2014); Iconoculture, Google Trends explore; IDEA Fitness Journal Feb ’14

Coconut Oil and “Real” fats: Health-conscious consumers alike are recalibrating their attitude toward natural fats.

Prickly Pear Cactus: Prickly pear is high in vitamin C, antioxidants, and fiber and studies suggest it may help manage diabetes, and boost general health.

Savory, Not Sweet Yogurt: Retailers are offering savory yogurt concoctions inspired by everything from Indian and Italian to pizza and Thai cuisines.

The “Free-From” Trend: Consumers are purchasing products free from fat, sugar, salt, gluten, lactose, dairy, and/or nuts. Food manufacturers are responding to this trend by reformulating ingredient lists.

DIY Granola: Home cooks are increasingly making savory granola to add textural crunch to foods, incorporate whole grains into their diets, and keep their sugar intake low.

Nuts: Dairy milk (and soymilk) will take a backseat to nut milks such as almond, peanut and cashew.

Raw innovators are producing raw-food ingredients such as oils, nuts and fruit juices for convenient use in recipes as well as excellent flavor enhancement and health benefits.



I switched to an organic, vegan, non-GMO, gluten-free protein powder and use it to make pancakes, waffles, and shakes.

“” I bought RAW Protein powder that made

a huge difference in the way I feel and it is a great time saver when my schedule sometimes conflicts with being able to get my protein from foods.

“”

I bought coconut oil to incorporate in our diet and it has truly made an amazing effect on my skin, hair, and nails. As well, I feel healthier after eating foods made with coconut oil and I feel better that my family is eating healthier and feeling better.

“”

I bought a NutriBullet about 6 months ago—best decision I ever made! I am now getting more veggies and fruits in my diet, and it’s so easy!

“”


27

beauty sales Sales of beauty products are projected to reach $40 billion by 2018—a 9% growth from 2013

• Nail Color and Care +37%

• Facial Skincare +7%

• Facial Moisturizers +19%

• Organic Beauty Products +74%

Source: Based on Information Resources, Inc., InfoScan Reviews; US Census Bureau, Economic Census/Mintel, Estimated Growth through 2018


beauty trends Organic beauty products are in demand due to changing lifestyles, raised awareness of ingredients and new products:

• 32% of consumers prefer personal care products made with natural or organic ingredients

• 30% of consumers sought organic skin care products followed by hair products and cosmetics

Source: Beauty Packaging.com/Transparency Market Research; Iconoculture


beauty trends

Source: Euromonitor; Iconoculture; GCI Magazine (Nov ‘13 issue); WH Editors

Multi-Benefit Becomes UniversalBeyond BB/CC creams, multi-benefit combinations have become ubiquitous within beauty, from foundations with anti-aging serums to nail polish with UV protection and anti-aging claims

Social Beauty Stars and ‘Selfie’ Beauty Drives InnovationThe rise of images as the key communication tool has increased the importance of picture-perfect skin. Innovation in 2014 will continue to be driven by a range of products that promise to smooth out imperfections, tighten pores and even out skin tone.

Reclaimed BeautyThe conversation around beauty is changing with more confidence, reality, grit and individuality balancing the self-doubt, perfection and sameness that we’ve seen for so long

Hair Care ShiftClaims and ingredients that are traditionally associated with skin care are now crossing over to hair care (i.e., hair vitality and anti-aging, strengthening & fortifying)

Skin Care ShiftAs boomers get older, consumers seek more powerful actives and results.

Younger women are opting for advanced anti-agers at an earlier age.

• 2 in 5 millennials using anti-aging products



Found an organic anti-aging serum that was effective and reasonably priced!

“”

I bought a coconut based face scrub and my skin has cleared up and become so soft and I know it’s all natural so I’m not worrying about chemicals on my face.

“”

I enjoy buying natural and/or organic soap bars. They make my skin feel moisturized and I know that I’m putting good ingredients on my body. Plus, the scent variety is amazing!

“”


31

vitamins + supplements sales

Source: Mintel; Mintel -Homeopathic and Herbal Remedies – US, Mar. 2013 ; NMI 2013 Nutritional Supplement / OTC / Rx Consumer Insight & Market Opportunity Report

Consumer-directed healthcare is taking hold, driving consumers to be more proactive with their health

Homeopathic and herbal remedies: • U.S. sales of homeopathic and herbal remedies totaled $6.4 billion in 2012.

Mintel forecasts sales will continue to climb, reaching $7.5 billion by 2017.

Supplements/vitamins: • Sales will reach $13.9 billion by 2018—a 58% increase from 2008

• Use of nutritional supplements among American adults has increased to 73% in 2013

• Millennials are showing significantly increased engagement in the supplement market and report the highest increases in supplement use over the past several years


vitamins + supplements trends

Source: Journal of Strength & Conditioning Research 28(6): 1751-70 (June 2014); Gale Maleskey, MS, RD via Spry, Aug 2013 ;Journal of the International Society of Sports Nutrition 2014; Cornell Chronicle, March 2014 and Nutraceuticals World, April 2014

Vitamins in new forms:• Gummies and melts

• Bubbly Powders or tablets

• Super-absorbable

• Vegan

• Concentrated Mini-pills

• Topical application


Emerging Supplements:• Maple and Birch waters: Contain minerals to boost

immunity—predicted to be the next coconut water

• Beta-alanine: Appears to increase resistance training performance allowing for greater gains

• Phyllanthus amarus: Ayurvedic herbal remedy, with anti-inflammatory and antioxidant properties may help reduce muscle soreness after exercise

33


Vitamin supplements have significantly helped improve my energy.

“”

Using a vitamin for flexibility in my knees and other joints. Helped me feel less pain and more energized while exercising.

“”

I found some vitamins I really love that remind me of the gummy vitamins I always used to steal from my kids! Now I finally remember to take vitamins every day!

“”

I love the gummy vitamins because they are easy to take instead of a pill“ ”


34

the health + wellness enthusiast who is she?

35

Source: GfK MRI Spring 2014. Print


health + wellness enthusiast 27+ million women who are INFLUENTIAL in the healthcare, physical fitness, healthy lifestyle, environmentally-friendly products, Rx, or dieting spaces.

36

she is intelligent + wealthy

Median Age 45

Median HHI $76,521

Married 57%

Graduated College+ 39%

Kids in HH 43%

107

137

110

INDEX


Source: GfK MRI Spring 2014. Target: The Health & Wellness Enthusiast, Base: Adults

37

trusted influentials INDEX 149

INDEX 142

Source: GfK MRI Spring 2014. Target: The Health & Wellness Enthusiast, Base: Adults.

I follow a strict skin-care routine“ ” When I find a food product

I like, I typically recommend it to others“

”INDEX 124

Vitamin supplements improve one’s health AND Herbal supplements are effective

“ ”INDEX 135

I follow a regular exercise routine“ ”

INDEX 135

I am always looking for new ways to live a healthier life“ ”


I am willing to pay more for a product that is environnmentally safe

“ ”INDEX 139

38

Source: GfK MRI Spring 2014. Target: The Health & Wellness Enthusiast, Base: Adults.

Heavy Users/Upper Half Light Users/Lower Half

Radio

Newspaper

TV

she is a heavy internet + magazine user

91

97

116


Internet85

115

109

103

84

Keeps me informed, up-to-date

Gives me good ideas

A good source of learning

Pure entertainment

Keeps me up-to-date with the latest style and trends

A good escape

(Index)

Magazine88

112

39


• Methodology: Online survey fielded to opt-in readers from August 18-31, 2014

• 1,046 respondents


health + wellness enthusiasts from

40

Among the HEALTH + WELLNESS categories

surveyed, Vitamins/Supplements, Healthy Food

& Beverages, and Healthy Beauty products rank

among the top products purchased in the last 6

months.

82% Vitamins/Supplements

80% Healthy food and beverages

72% Healthy beauty products

53% Fitness apparel

30% Fitness accessories

25% Fitness equipment

Q. PLEASE TELL US WHICH OF THE FOLLOWING HEALTH AND WELLNESS PRODUCTS YOU BOUGHT IN THE LAST 6 MONTHS.



higher frequency of shopping for healthy food/beverages and less frequency for fitness equipment + accessories

Q. HOW OFTEN DO YOU SHOP FOR HEALTH + WELLNESS PRODUCTS?

Healthy Food/Beverages

Healthy Beauty Products

Vitamins/Supplements

Fitness Apparel

Fitness Accessories

Fitness Equipment


1+ times per month Once every 2-3 months Less than Once every 3 months

96%

57%

40% 46%

42% 36%

24% 67%

71%21%

14%

11%32%

22%

9%

8%

3%1%


Q. HOW DO YOU RESEARCH AND PURCHASE HEALTH AND WELLNESS PRODUCTS? (MULTIPLE ANSWERS)


research online and buying in-store common with all categories except fitness equipment + accessories

Healthy Food/beverages 81% 13%

Health Beauty products 76% 39%

Vitamins/Supplements 70% 32%

Fitness Apparel 66% 37%

Fitness Equipment 60% 59%

Fitness Accessories 58% 58%

Research online/Buy In-store

Research online/ Buy Online



I bought a sand filled kettle bell…I was able to research Kettle bells online which is the first time I had heard about a non-metal kettle bell…I found it at a store near me.

“ Finding it at a good price online and seeing reviews from other consumers on how they feel about the product. Then I can’t wait to purchase it myself if all the reviews are awesome.

“”

Felt well informed about buying coconut oil thanks in part to the salesperson at Whole Foods and research conducted online.

“”


”44

health + wellness consumers shop both brick and mortar, and online

Q. WHAT BEST DESCRIBES THE WAY YOU SHOP FOR HEALTH + WELLNESS PRODUCTS?


In Store Both Online



Fitness Apparel


Fitness Equipment

Fitness Accessories

90%

67%

67% 20%

25%

13%

14%

16%

9%

17%

61%

36% 31% 33%

32% 27% 41%

1%

• Nearly all Food/Beverages purchases are In-Store• Fitness Accessories and Equipment purchases are more evenly split



Mass Retail Stores/Websites (i.e., Amazon.com, Walmart, Target, etc.) Specialty Stores/Websites (i.e., Sephora, Body Shop, etc.) Natural/Organic Grocery Stores/Websites (i.e. Whole Food, Trader Joe’s, etc)


Q. WHAT TYPES OF STORES/WEBSITES DO YOU VISIT TO SHOP FOR . . .?

TOP 2 RETAIL VENUES MASS RETAIL OTHER

MASS RETAIL IS THE GO-TO PLACE FOR HEALTH + WELLNESS SHOPPERS.Healthy Food & Beverages is the exception

Fitness Accessories 80% 62% (Sporting Goods)

Fitness Equipment 76% 62% (Sporting Goods)

Healthy Beauty Products 70% 56% (Specialty)

Fitness Apparel 66% 56% (Sporting Goods)

Vitamins/Supplements 54% 44% (Drug Stores)

Healthy Food/Beverages 64% 61%

TRADITIONAL GROCERY NATURAL/ORGANIC GROCERY

46

Q. ARE THE PRODUCTS YOU BUY TYPICALLY IMPULSIVE OR PLANNED PURCHASES?


Planned Impulsive


Fitness Equipment


Fitness Accessories


Fitness Apparel

97%

87%

17%

17%

13%

83%

83%

82% 18%

59% 41%

health + wellness consumers plan their purchases3%


Q. WHAT INFLUENCES YOUR PURCHASING DECISIONS FOR HEALTH + WELLNESS PRODUCTS?


Magazine Articles 53%

Friends/Family 44%

Magazine Ads 32%

Online Articles 37%

In-Store Displays 18%

Online Ads 15%

Blogs 15%

Social Media 13%

TV Shows 8%

Celebrities 4%

Apps 3%

TV Ads 13%

health + wellness consumers most influenced by magazine articles and friends/family


shopping experience varies from in-store to online


Q. THINKING ABOUT SHOPPING IN GENERAL, PLEASE SELECT 3 PHRASES FROM THE LIST BELOW THAT BEST DESCRIBE YOUR IN-STORE/ONLINE SHOPPING EXPERIENCE

IN-STORE SHOPPING EXPERIENCE ONLINE SHOPPING EXPERIENCE


33% Allows me access to coupon codes and discounts

30% Offers me a greater selection of merchandise, brands, styles, etc.

29% Fits my schedule

26% Saves me money

25% Is easy to find items to purchase

23% Is immediately gratifying upon purchase

21% Is where I make impulsive purchases

38% Offers me a greater selection of merchandise, brands, styles, etc.

36% I can easily compare prices across retailers

34% Saves me time

32% Fits my schedule

29% Is where I can find unique items

21% Saves me money

21% Allows me access to coupon codes and discounts

49

how do health + wellness consumers describe their purchase experiences . . .


Q. WHAT 3 WORDS WOULD YOU USE TO DESCRIBE A MEMORABLE EXPERIENCE YOU HAD BUYING A HEALTH AND WELLNESS PRODUCT?

50

how do health + wellness consumers feel about their product purchases . . .


Q . WHAT 3 WORDS DESCRIBE HOW USING THIS PRODUCT MAKES YOU FEEL?

51

key takeaways • Wellness is the next trillion dollar industry globally

• Three Megatrends Driving Growth: > “Well-thy” Wellness is the new black

> The Age of Agelessness > Health Creep into multiple categories

• Health + Wellness Enthusiasts are intelligent, wealthy and influential

> Heavy Magazine and Internet users

> They research online and buy in-store

> Their purchases are influenced by media as well as friends & family

> Buying wellness products makes them feel “happy,” “healthy” and “excited”

• Wellness is a way of life and a rich opportunity for brands
