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Mens sana in corpore sano 

"Healthy mind in a healthy body”, the global wellness ideology trend driving growth and business opportunities in apparel, food, wearables and sport equipment industries

The Global Wellness Industry

The closest historical concept to wellness can be attributed to the Roman concept of “mens sana in corpore sano”, which can be translated to “healthy mind in a healthy body”. The idea is that physical exercise shapes a healthy mind and determines overall well-being. Scientific research has shown that regular activity impacts companies’ productivity, employment engagement, and retention rate.

The Global Wellness Institute (GWI) defines wellness as “the active pursuit of activities, choices, and lifestyles that lead to a state of holistic health” which, if compared to what the Romans thought, comes close. Today, the concept of well-being is widespread. It is being promoted by schools, social media, employers, colleagues, friends, and commercial ads. This is a trend that many established brands are tapping into.

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Image 1: Google search for the word wellness.

There are great opportunities in the wellness space for all of society: By promoting wellness and implementing illness and disease prevention programs through public policy, governments can decrease death and healthcare bills worth billions of dollars , with examples such as preventing cardiovascular diseases. According to the World Health Organization (WTO) cardiovascular diseases are the leading cause of death in the world responsible for 32% of total deaths in 2019 (17.9 million people), and it can be prevented by avoiding unhealthy diet and obesity, physical inactivity, and the use of tobacco and alcohol.

As developed countries’ population continues to age, the associated savings get larger for public finances; on the other hand, companies benefit from more creative and productive workers, reducing burnout, employee turnover, and the high costs and attrition associated with it, moreover, it fosters a positive and healthy work culture.

Harvard Business Review recently examined several studies on the net financial benefits to employers who opted for investing in wellness initiatives for their workforce. The report highlights how for every dollar invested in wellness, corporates can save up to $6.0 in healthcare costs per employee. For instance, Johnson & Johnson experienced a $2.71 return for every dollar spent on wellness initiatives from 2002 to 2008, resulting in savings of $250 million in healthcare costs over a decade.

The wellness industry has been benefiting from personal well-being prioritisation. This industry includes products and services spanning fitness, nutrition, mental health activities, and alternative therapies, propelled by a global shift towards healthier lifestyles. The growth trajectory is supported by several key drivers:
● Rising health consciousness among consumers;
● shifting demographics with an ageing population;
● increasing disposable incomes;
● growing awareness of the importance of preventive healthcare measures.

Moreover, technological advancements and digital innovation have revolutionised the wellness landscape, offering new avenues for personalised health services for individuals, and scalable solutions for corporations which want to provide a better work-life balance to their employees. An example of such success is the recent growth of the Wellness SaaS industry; more and more employers have been searching for tools to track data on current wellness initiatives.

According to the Global Wellness Institute, the global wellness economy reached $5.6tr in 2022 and is expected to grow at an 8.6% CAGR until 2027 to $8.47tr. Furthermore, the institute also reported that the wellness market associated with physical activity had a 14.3% CAGR between 2020 -2022 to reach $976bn, highlighting the strong rebound after the Covid-19 global pandemic. The physical activity subsector is projected to increase at a 6.7% CAGR to reach $1.35tr by 2027. From the Global Wellness Institute: “ Consumer spending on sports and active recreation has also grown rapidly, although participation rates are still below their pre-pandemic levels. Supporting sectors (fitness tech, apparel/footwear, and equipment) have all been growing rapidly, exceeding their pre-pandemic levels.“, this implies a higher average spending per capita, especially as sports aficionados place more value on premium equipment and gear.

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Image 2: Basic Apparel peer group..

Fitness was an industry with a strong post-pandemic rebound, with double-digit topline growth, as most companies have surpassed their pre-pandemic revenue highs. Analysts expect revenue to continue to grow at mid-to-low single-digit growth throughout 2026 across the board.

Despite the challenging macroeconomic backdrop, management teams remain optimistic and predict a positive outlook for 2024-2025. Notably, Adidas has underperformed vs its peer group, as the German brand recently shifted its marketing efforts from music to sport.

Interestingly, all fitness brands have renewed their focus on women's apparel. Nike’s management, in its 2Q2024 earnings call, commented on how 40% of Nike’s customers are women, and that they make up a big proportion of new customers and their demand per customer is growing faster, this was the reason for Nike to expand into bras and leggings at higher price points, which Nike was previously not in. In the 3Q2024 earnings call, one of its most positive highlights was women's apparel once again, especially leggings and other more premium fitness apparel: “Women’s fitness footwear grew double-digits, and key apparel franchises, such as $100- plus leggings, continued scaling with strong sell-through.”. This comment showcases the synergies available to sportswear manufacturers from the ongoing casualwear fashion trend, with companies being able to quickly adapt and cater to both markets.

Fitness Apparel: Basic vs. Premium

The post-pandemic reality came to stay, the 2020’s are the era of Instagram stories at the gym, non-dairy soy milk Starbucks coffee, mental health awareness, running and yoga. The wellness and fitness trends that came before were heightened by the pandemic and led to very strong consumer behaviour changes. And for every trend, there are players ready to tackle the next big opportunity.


Whether it's On Running's signature CloudTec cushioning for running shoes, Lululemon's premium yoga wear that effortlessly transitions from studio to street (and is very popular among Instagram fitness influencers), or Sweaty Betty's fashion-forward activewear designed with performance in mind, each brand embodies a commitment to both performance and style, appealing to fitness enthusiasts who prioritise both form and function in their active lifestyles, thus commanding premium pricing and premium margins.

This trend is evidenced by strong results. On Running announced in its FY2023 earnings call a 46.6% y/y net sales increase in CHF. Management expects a further 30% increase in net sales in 2024. The CEO attributed such strong results and positive outlook to a culture and fashion shock: “It's the next revolution. The last pivotal year has made it clear that sports are the new uniform, the new normal that will continue to transcend culture and fashion.”. Also, for being a premium brand, On Running’s management expects higher gross margins, as pricing power and few discounts greatly improve bottom-line results.

Players are also trying to capitalise on these trends through M&A activity. Hoka, the premium running shoes brand, was acquired in 2013 by Deckers, and today it is one of its flagship brands, with Deckers attributing its best quarter’s results to Hoka, accounting for 27.5% of total revenue. In 3Q2024, Hoka sales increased 21.9% y/y to $429.3m, driven by gains in the direct-to-consumer (DTC) channel as well as effective management of the wholesale marketplace to drive market share gains with high levels of full-price sell-through. Deckers recently announced the appointment of Robin Green, former Global Vice President of Men's Running and Fitness for NIKE , as the next president of Hoka, reporting directly to the group’s CEO Dave Powers.

Another example is Lululemon, a Canadian athletic apparel retailer that recently saw 2023 net revenues increase 19% y/y.The company has recorded a FY14-23 CAGR of 18.2%. Analysts still project the company to report low double-digits topline growth up to 2026, way above the low single digits expected for any large fitness retailer such as Nike or Adidas. The company’s performance also hasn’t gone unnoticed by investors, in the past 10 years the company’s stock price has risen from $52 in March 2014 to $390 in March of 2024, a 6.42x increase.

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Image 3: Premium Apparel peer group.

Image 4: Lululemon 2021-2026E revenue.

Differently from the legacy fitness apparel brands, the outlook targets for premium fitness apparel companies target strong double-digit growth, in 2024. Moreover, we see that the tailwinds are not a North American phenomenon: in its latest earnings call Lululemon reported that 2023 revenues grew 67% year-on-year for mainland China and 43% for the rest of the world, compared to lesser, albeit strong 12% growth in the Americas. Even though Lululemon’s international revenues currently only account for 21% of total revenues, Lululemon’s management has a long-term goal of making it ~50%, showcasing how the current trends are a global phenomenon. On Running’s geographical breakdown shows the same trends, with Asia-Pacific leading the podium at a whopping 75% growth yoy, followed by the Americas at 52.2% and EMEA at 29.2% increase.

Moving further within our analysis, we now delve deeper into the interesting intersection between fitness and luxury. For that, we will analyse firms which have specialised in niche corners of the market, catering to a select, yet affluent, consumer base which greatly benefits margins, as is common for the overall luxury industry.

Firstly, we would like to highlight Marysia. The company was founded in 2009 with a focus on premium women's swimwear, it has been featured in magazines such as Vogue, Forbes, Elle, Marie Claire, among others. Made from Italian fabric, the brand has attracted famous actors such as Lupita Nyong’o and Gwyneth Paltrow. Recently, the company has observed the same trend we have been discussing extensively within this report, as per a 2021 Forbes article: “Now, for the first time, Marysia is expanding her assortment into activewear, maintaining the same chic and feminine sensibility of her swimwear and resort wear. Deciding to launch a sports collection came after she had trouble finding minimalist and thoughtfully-made garments to withstand her active lifestyle...”. This showcases how both big players such as Nike, and smaller and niche coutures like Marysia are all observing the broader direction the industry is heading.

Additionally, we would like to mention some additional up-and-coming brands such as Year of Ours, Ernest Leoty, Sporty & Rich, and Alo Yoga. All of which encapsulate the trend of making sport look and feel premium. Together, these brands exemplify the growing trend of elevating sportswear into the realm of premium fashion, each embodying a unique approach to merging athleticism with luxury. Year of Ours brings a different perspective to activewear, focusing on inclusivity and body positivity. Ernest Leoty’s approach to the niche industry is to fuse French heritage with modern innovation to create performance-driven pieces. Meanwhile, Sporty & Rich captures the essence of effortless chic, blending classic sportswear silhouettes with high-quality craftsmanship.

Finally, we have Alo Yoga, which as of October 2023, was reported to be seeking a $10bn valuation. The company has been in fierce competition with Lululemon and Nike in order to capture the growing consumer base of high-value, younger, health-conscious consumers.

The fitness apparel industry is experiencing a notable shift post-pandemic, with a focus on premium brands gaining momentum. Companies like Nike are redirecting their efforts towards sports-centric marketing, while smaller, niche players such as Year of Ours, Ernest Leoty, Sporty & Rich, and Alo Yoga are capitalising on the trend of blending athleticism with luxury. This shift is not confined to North America but is observed globally, with brands like Lululemon and On Running seeing significant growth in international markets. As the intersection between fitness and luxury continues to evolve, these brands are poised for strong double-digit growth, driven by affluent consumers seeking both performance and style in their activewear choices.

“Hey Siri, how many steps did I take today?”

The fitness industry has witnessed a significant transformation with the integration of wearable technology, particularly in the form of smartwatches. These devices have revolutionised how individuals monitor their health and fitness, providing real-time data and insights to optimise performance and well-being. In this section of the report, we delve into the key highlights and players shaping the smartwatch market within the broader fitness apparel industry.

According to Statista, the wearable technology industry reported revenues of $44 billion in 2023, and it
is projected to grow at a compound annual growth rate (CAGR) of 7.10% to reach $62 billion by 2028. This growth is fueled by increasing consumer demand for wearable devices that offer advanced health and fitness tracking capabilities, either for health benefits (see Apple’s recent drive to integrate the Apple Watch to the Health app on ios in order to send data to healthcare providers in the name of their customers), fitness and performance tracking, or just curiosity. Wearables, particularly smart watches, have become indispensable tools for fitness enthusiasts and health-conscious individuals, driving innovation and competition within the market. Below, as we have done in previous sections, we shall briefly introduce the main players in the market and draw conclusions from recent performance and guidance, and compare it to analysts’ projections on the industry as a whole.

We will first start with Garmin, a prominent player in the smartwatch market. In its FY 2023 earnings call, Garmin highlighted significant growth in its fitness segment, with a notable 21% increase in revenues for that division during 2023. This growth was fueled by strong demand across all product categories, particularly driven by the popularity of its new running watches. Garmin reported gross and operating margins of 56% and 22%, respectively, for the division with operating income reaching $93 million. Garmin’s recent results paired with management’s commentary are a perfect example of where the industry is heading. Demand is strong, demand from two main types of consumers: The sports enthusiasts who after the pandemic increased their interest and look for more premium and sophisticated products to aid them in their goals, and the people new to sports. As we will discuss further, these two types of consumers suffer different, albeit both positive, long-term behavioural trends.

WHOOP, a leading name in wearable fitness technology, has attracted significant investment, raising over $400 million to date. Its latest funding round, a Series F of $200 million led by the Softbank Vision Fund, underscores investor confidence in the company's innovative approach to fitness tracking and data analysis. WHOOP's emphasis on personalised insights and optimization has positioned it as a key player in the evolving smartwatch market. Again, as previously mentioned in this report, we cannot access financial data for private companies, so the next best thing is to analyse the recent capital raises as a proxy for investor confidence and thus, strong performance.

Fitbit, a pioneer in wearable fitness trackers, made headlines with its acquisition by Google. This strategic move signifies Google's commitment to expanding its presence in the wearable technology space and leveraging Fitbit's expertise and user base. The acquisition has the potential to reshape the competitive landscape of the smartwatch market, with Google poised to integrate Fitbit's technology into its ecosystem of products and services, something that Apple is also doing, overall the big tech players are all in an arms race to include as many wearables to their ecosystem as possible, and smartwatches are the perfect additional item for a suite of data-powered electronics.

Apple Watch, an iconic product within Apple's wearables segment, continues to dominate the smartwatch market with its comprehensive health and fitness tracking features. With seamless integration with Apple Health, the Apple Watch appeals to a broad audience seeking a premium smartwatch experience.

The smartwatch market, fueled by technological advancements and increasing consumer demand for health and fitness tracking solutions, presents significant opportunities for growth and innovation. With key players like Garmin, WHOOP, Fitbit, and Apple driving competition and shaping the industry's trajectory, the future outlook for smartwatches within the fitness apparel industry remains promising. As wearable technology continues to evolve, it will undoubtedly play a pivotal role in shaping the future of fitness and well-being.

Protein is at the base of the food pyramid for a reason...

Now, let’s turn our attention to nutrition. This report has extensively covered all industries related to the wellness and fitness trend we have been seeing for the past decade, and nutrition products are no different. We will delve deeper into the nutrition segment in the chapter below, focusing mainly on protein powder, the love of all gym enthusiasts:

Glanbia PLC, a leading global nutrition group based in Ireland, has garnered attention as the owner of Optimum Nutrition, a renowned brand in the sports nutrition sector, which currently has the best-selling whey protein powder selling in Amazon worldwide. In 2023, Glanbia reported a 5.1% revenue growth in its Performance Nutrition segment, with Optimum Nutrition boasting an impressive 17.0% Like-For-Like revenue growth. With such strong performance, Glanbia projects a 4 - 7% revenue increase for its Performance Nutrition business line in 2024, underscoring its continued prominence in the industry.

The Hut Group (THG), headquartered in the UK, has established itself as a major player in the e-commerce and digital retail space, with its THG Nutrition division leading the charge in the sports nutrition market. Led by the Myprotein brand, THG Nutrition underwent a global rebrand in 2023, resulting in a remarkable 60% revenue increase from 2019 to 2023, and increasing the number of active users (defined as customers who purchased at least once within the period) from 4.3mn in 2019 to 6.7mn in 2023. This strategic marketing shift was made to appeal to a broader audience, and not only gym goers, positioned THG Nutrition for further growth and market penetration in the coming years.

Meiji Holdings, a Japanese conglomerate with a diverse portfolio ranging from food and beverages to pharmaceuticals, has made significant strides in the sports nutrition market. In its Nutrition division, Meiji reported a notable 7.7% overall net sales increase, driven by a robust 15 - 16% growth in the sports protein market during the first three-quarters of FY2023. These results underscore Meiji's growing presence in the nutrition sector and its ability to capitalise on evolving consumer preferences for health and wellness products, a common trend among different companies and industries


Image 5: Google search for protein powder.

The increase in interestin nutrition drinks goes in line with the latest results from the wellness, fitness apparel, and gym & Health Club

Besides the individual growth of the main players of the industry, the graph above showcases the increase in interest in nutrition sports drinks, apart from the seasonality with big jumps at the end of the year (how is your New Year's resolution going?), we can notice the long-term trend of increasing interest over time. 

The increase in interestin nutrition drinks goes in line with the latest results from the wellness, fitness apparel, and gym & Health Club industries (which we will showcase next), showcasing how the wellness and health-conscious consumer acts very similarly across various different industries, so these new consumer trends are not specific to any given industry.

In conclusion, the collective performance of Glanbia PLC, The Hut Group, and Meiji Holdings reflects a positive outlook for the sports nutrition industry. As consumers increasingly prioritise health and fitness, the demand for nutritional supplements and related products continues to rise, these results are in line with what we had noted further on the fitness apparel industry in the previous section. With each company poised for further growth and innovation in their respective markets, the sports nutrition sector is positioned for sustained expansion and market relevance in the foreseeable future.

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