Younger generations shift toward health

We believe there is an ongoing generational shift toward healthy habits as younger demographics including Gen Z and Millennials are increasingly prioritizing healthy ways of living and spending increased time and income on fitness, activity-based leisure and wellness-focused discretionary items. Top wellness trends, all supported by recent data, are: (1) increased prioritization of fitness, especially as Millennials and Gen Z are allocating a higher percentage of their budget to fitness while foot-traffic growth to fitness centers is well surpassing that of bars/pubs; (2) proliferation of leisure-based activities such as pickleball; and (3) increased interest in other wellness modalities focused on healthy eating/drinking, aging and recovery, with growth of non-alcoholic beer/seltzer significantly higher than the alcoholic equivalent.

All generations are spending more on fitness, but the propensity to spend as a share of overall budgets is higher with younger generations. The average Gen Z household spends ~2.8X more than Baby Boomers on fitness, spending 3.5x as much of their budget compared to the older generation. Millennials still represent the largest cohort of fitness spend, with over 30% share, and the average household spends ~3X that of Baby Boomers, allocating ~2.5X more of their budget vs. the older generation. Stratifying fitness spend by income, growth continues to be led by higher-income consumers.

We see strong momentum in other wellness modalities focused on healthy eating/drinking, aging and recovery. Spending on non-alcoholic beer/seltzer has averaged 28pts higher vs. the alcoholic equivalent since 2021, while foot-traffic growth at fitness clubs has averaged 22pts higher than at bars/pubs over the same time period. Google searches for popular recovery/anti-aging products such as “cold plunge” and “red light therapy” are up significantly. We also see growth in activity-based leisure activities led by pickleball, with the number of players reaching ~20mm as of 2024 (up 46% vs. 2023). 

Fitness centers, especially those catering to higher-income consumers, that offer a breadth of wellness benefits should be significant beneficiaries. We also believe certain small appliance makers could benefit too, especially those with product offerings catering toward healthy eating/aging (e.g., blenders, air fryers, red light therapy).