Shifts in Wellness Trends Among Younger Generations
Health and wellness are becoming increasingly important to Americans, particularly among Gen Z and Millennials. In fact, a report from McKinsey highlights that wellness spending in the U.S. exceeds $500 billion, growing at an annual rate of about 4% to 5%. Interestingly, nearly 30% of Gen Z and Millennials claim they prioritize wellness “more” compared to a year ago, while only 23% of older generations feel the same way.
Bank of America’s credit card data supports these trends. Spending at fitness clubs has surged, particularly among younger generations, according to analyst Alexander Perry. He mentioned that these demographics are reimagining fitness priorities in a way that older generations did not. “They focus on fitness, but also emphasize other healthy lifestyle choices, like eating well and mindful drinking,” he explained in a CNBC interview.
For instance, Gen Z households allocate 2.8 times the fitness budget than their Baby Boomer counterparts. The increase in foot traffic at fitness centers also surpasses that at bars and clubs. Perry noted that weekend activities are shifting, with younger people gravitating toward healthier leisure pursuits. This trend is evident as spending on non-alcoholic beers and seltzers is roughly 28 points higher than their alcoholic versions since 2021.
Moreover, data from Bernstein shows a 3% year-on-year decline in per capita alcohol consumption last year, hitting the lowest level since 1962. The International Wine and Spirits Record anticipates that non-alcoholic beers will become the second-largest beer category worldwide this year. Yet, surprisingly, Gen Z’s participation rate in alcohol consumption has seen a rise recently, jumping to 70% from 46% over the past two years, according to Drinks Data and Analytics.
Recovery and anti-aging products are also gaining traction. Perry pointed to a substantial increase in Google searches for terms like “cold plunge” and “red light therapy.” As for fitness clubs, brands like Life Time are identifying rapidly growing trends. They have adapted their facilities to include pickleball courts, recognizing it as the fastest-growing sport in the U.S.
Additionally, Life Time is also examining trends in cold plunge tubs, suggesting they’re set for long-term growth. On the other hand, Planet Fitness is effectively attracting first-time gym-goers, especially from Gen Z and Millennials, which Perry described as a strong upward trend.
In the realm of anti-aging, companies like Sharkninja are well-positioned with products such as light therapy masks. Perry noted their quick response to emerging trends in healthy aging, making them potential leaders in the wellness market. Despite these positive indicators, there’s still uncertainty about what the unexpected rise in Gen Z alcohol habits means for the overall market, particularly as sales of alcoholic drinks continue to drop.
Morgan Stanley provided insights suggesting that Gen Z might not replicate the drinking behaviors of prior generations, indicating that as they mature, their patterns may lean towards moderation. Factors such as negative perceptions around wellness and financial pressures may play a role in these changes.
Essentially, as Gen Z enters the workforce, their drinking habits may shift back to those typical of previous generations, though the reasons behind their previous moderation remain somewhat ambiguous. Health concerns, evolving social dynamics influenced by social media, and economic pressures seem to be significant factors at play.
