Six Reasons The Fitness Industry Is Booming
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Ben Midgley, CEO of Crunch Franchise
Publisher's Note: This article was originally published in Forbes on September 26, 2018.
According to the International Health, Racquet & Sportsclub Association (IHRSA), the $30 billion health and fitness industry in the United States has been growing by at least 3 - 4% annually for the last ten years and shows no signs of slowing down anytime soon. If anything, it's accelerating. Currently, about 20% of American adults have a fitness club membership, a number that, in my opinion, could easily double in the next 10 - 15 years. So, what is driving this historic boom?
It's not just because new clubs are popping up everywhere. That's true, but that dynamic is being fueled by a number of important, and potentially unexpected, factors. Here are the key elements at play that investors should be aware of if they are looking to invest in the health and fitness industry:
1. Health insurance costs. Healthy people cost much less to insure, and employers and insurers have finally realized that they can trim insurance costs by incentivizing healthy lifestyles. With spending on health care going up, up, up, that's a big deal for every company's bottom line, and it's great for the people who get to benefit from the incentives.
Many employers and insurers now cover the costs of a health club membership or studio classes, as long as an employee can show they actually use them. This is a very quickly-growing segment of the market; it's generally not large enough on its own to drive the profitability of a health club or studio, but it has become a very valued source of supplemental revenue in the industry.
2. The new demand for healthy foods. In recent years, consumer demand has been moving away from industrial-scale processed food in favor of healthier, more natural and/or organic options. This switch is causing people across the country to be more conscious of the food they eat, which has had the runoff effect of making more people interested in fitness.
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