The wellness market is booming. Consumers intend to keep spending more on products that improve their health, fitness, nutrition, appearance, sleep, and mental wellbeing. Whether you are looking for investment ideas, looking to diversify your business, or simply looking for personal ways to enhance your life, this industry looks to be poised for growth over the next three to five years.
The concept of wellness has been around for a long time. Are you old enough to remember Jane Fonda workout tapes, neon legwarmers? These days, we have a much broader lens, covering not just fitness and nutrition but also overall physical and mental health and appearance. We also have more choice in the types of products and services we can buy and the way we buy them. V
People care deeply about wellness—and their interest is growing. In a 2021 McKinsey survey of roughly 7,500 consumers in six countries, 79 percent of the respondents said they believe that wellness is important, and 42 percent consider it a top priority. The survey found that consumers in every market reported a substantial increase in the prioritization of wellness over the past two to three years.
The global wellness market is estimated at more than $1.5 trillion, with annual growth of 5 to 10 percent. A rise in both consumer interest and purchasing power presents tremendous opportunities for companies. At the same time, we have more choices than ever before. The wellness market is getting increasingly crowded, creating the need to be strategic about where and how companies compete.
How consumers define wellness
Wellness can be split into five categories.
Better health, probably the most traditional category associated with wellness, extends beyond medicine and supplements to include consumer medical devices as well as personal-health trackers. We are increasingly taking our health into our own hands: we use apps to help seamlessly book medical appointments or obtain the prescriptions, and devices that help us monitor our health and symptoms between doctor’s appointments.
Better fitness has been challenging over the past two years, but now gyms are open, and we can participate in sports in the same ways as before. Some people did not return to their previous exercise levels. However, fitness goals persist. Creative offerings (such as Peloton, Mirror, and Tonal) that met the needs of consumers in their homes saw unprecedented growth but now in-person, community and interactive fitness is back.
Better nutrition has always been a part of wellness, and now many of us want food not only to taste good but also to help us accomplish our wellness goals. More than a third of consumers around the world report that they “probably” or “definitely” plan to increase spending on nutrition apps, diet programs, juice cleanses, and subscription food services over the next year.
Better appearance primarily involves wellness-oriented apparel (“athleisure”) and beauty products (such as skincare and collagen supplements). Several service-oriented offerings in this area have sprung up recently for nonsurgical aesthetic procedures, such as micro needling, lasers, and oxygen jets.
Better sleep is a relatively new category popular with consumers—and maybe that’s no wonder, given the stresses of the pandemic. Traditional sleep medications such as melatonin now have company: app-enabled sleep trackers and other sleep-enhancing products (for example, blackout curtains and gravity blankets).
Better mental health has gained mainstream consumer acceptance relatively recently. Meditation-focused apps, such as Headspace and Calm, and relaxation- and meditation-oriented offerings, such as Soothe are new. During the COVID-19 crisis, mental health issues have risen and are more easily talked about.
In overall spending, consumers expect to increase their purchases of both wellness products and services over the next year. There is expected to be a greater shift toward services, especially those (such as personal training, nutritionists, and counseling) that emphasize physical and mental health.
As consumers, we have different preferences in how we choose to spend our money. I hope we all get excited about innovations. As a Wellness enthusiast you might actively follow brands on social media, track new-product launches. If you are more socially responsible you may prefer (and are willing to pay more for) brands that are environmentally sustainable and with clean/natural ingredients. And as a Price-conscious consumer who believes wellness products are important, you may compare features and benefits before purchasing to get the best deal.
Six trends to watch
Consumer wellness-related trends that have been gaining momentum. These trends range from traditional consumer healthcare to fitness offerings and nutrition to beauty, apparel, and retail.
Trend 1: Natural/clean products
Consumers are keen for natural/clean products in skincare, cosmetics, multivitamins, subscription food services, and sleep enhancers. The magnitude of this shift is striking. Consumers overwhelmingly indicate a preference for natural/clean products.
In the case of dietary supplements, consumers around the world said, by 41 percent to 21 percent, that if they had to choose between more natural supplements and more effective ones, they would choose the more natural option. Same with skincare: by 36 percent to 21 percent, consumers said they would choose the more natural option over the more effective one.
Trend 2: More personalization
While privacy is still a concern, many people are more comfortable trading privacy for personalization. Furthermore, a substantial majority of consumers around the world say they prioritize personalization now more than they did two or three years ago. In the United States, the United Kingdom, and Germany, more than 88 percent of consumers report prioritizing personalization more than they did two or three years ago.
Trend 3: Digital channels
The shift to digital channels is happening fast. Research suggests that the change will be sticky: most consumer categories will continue to project more growth in e-commerce than in other channels over the next several years.
Trend 4: Influencers
Influencers are a key part of the wellness market, and one that traditional companies have had to learn how to leverage for connecting with consumers. In the United States, Europe, and Japan, 10 to 15 percent of consumers say they follow social-media influencers and that they have already made a purchase based on an influencer’s recommendation. A much higher percentage say they probably will consider doing so in the future.
Trend 5: Services
Services has been a growing part of the wellness market: experiences are increasingly available as offerings. Consumers are shifting toward services that address physical- and Mental Health needs (for instance, personal trainers, nutritionists, and counseling services). Services are an enhancement to—not a replacement for—the overall wellness space. Products are a main part of the segment, at roughly 70 percent of consumer wellness spending globally.
Trend 6: Category lines continue to blur
With the above trends in mind, companies are considering how to play across the health and wellness categories and channels. It’s critical to identify the areas where consumers are open to giving these companies a try as they extend their brands.
Looking ahead in the wellness market
The global wellness market is healthy and growing. In every category surveyed by the McKinsey study, more consumers said they were going to spend more on wellness than those who said they would spend less. Consumers planning to increase their spending was especially large in some categories, including memory/brain enhancers, anti-aging products, beauty supplements, noninvasive cosmetic procedures, nutrition (sports nutrition, juice cleanses, nutrition coaches, fortified foods), and meditation/mindfulness offerings.
Wellness is here to stay as consumers plan to increase their spending on personal health, appearance, fitness, and more. If the pandemic has taught us one thing, it’s that physical and mental health will remain a priority for millions of people across the globe for a long time to come.