The future of the $1.5 trillion wellness market

The concept of wellness has been around for a long time. Remember Jane Fonda workout tapes, neon legwarmers, and the “cookie diet”? These days, consumers view wellness through a much broader and more sophisticated lens, encompassing not just fitness and nutrition but also overall physical and mental health and appearance. They also have more choice in the types of products and services they buy and the way they buy them.

Our latest research shows that consumers care deeply about wellness—and that their interest is growing. In a survey of roughly 7,500 consumers in six countries,1 79 per cent of the respondents said they believe that wellness is important, and 42 per cent consider it a top priority. In fact, consumers in every market we researched reported a substantial increase in the prioritization of wellness2 over the past two to three years.

We estimate the global wellness market at more than $1.5 trillion, with annual growth of 5 to 10 per cent. A rise in both consumer interest and purchasing power presents tremendous opportunities for companies, particularly as spending on personal wellness rebounds after stagnating or even declining during the Covid-19 crisis. At the same time, the wellness market is getting increasingly crowded, creating the need to be strategic about where and how companies compete.

In this article, we’ll reveal what our survey data tell us about changing consumer attitudes and behaviour toward wellness. We’ll couple these insights with the best strategies for companies—both established players and new entrants—to meet consumer needs and preferences in this strong and growing market.

Since views of wellness are constantly evolving, companies must understand the market from a consumer perspective. 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. Consumers are increasingly taking their health into their own hands: we are seeing a rise in targeted, data-driven care, apps to help consumers seamlessly book their medical appointments or obtain the prescriptions they need, and devices that help them monitor their own health and symptoms between doctor’s appointments.

Better fitness has been challenging over the past year. Many consumers struggle to maintain pre-Covid-19 fitness levels when they can’t go to their gyms as frequently or participate in sports in the same ways as before. For instance, a UK study found that a majority of consumers worked out less after the pandemic lockdowns began, and many did not return to their previous exercise levels even as those lockdowns were eased or lifted.3 However, fitness goals persist. Creative offerings (such as Peloton, Mirror, and Tonal) that meet the needs of consumers in their homes have seen unprecedented growth in the past year.

Better nutrition has always been a part of wellness, but now consumers want food not only to taste good but also to help them accomplish their 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). A number of service-oriented offerings in this area have sprung up recently for nonsurgical aesthetic procedures, such as microneedling, lasers, and oxygen jets.

Better sleep is a relatively new category popular with consumers—and maybe that’s no wonder, given the stresses the pandemic has unleashed. 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). Half of consumers around the world reported a desire for more products and services to meet the need for higher-quality slumber.

Better mindfulness has gained mainstream consumer acceptance relatively recently, in the form of meditation-focused apps, such as Headspace and Calm, and relaxation- and meditation-oriented offerings, such as Travaasa and Soothe. During the COVID-19 crisis, reports of mental distress have increased globally; more than half of consumers in each of our surveyed countries said they want to prioritize mindfulness more. Half of the consumers said they wished that more mindfulness products and services were available, indicating an opportunity for companies.

Each of these six categories is important for consumers across our survey countries. Better health consistently appears as the most important wellness dimension (and the one with the highest level of spending) across every market we researched.

At the same time, relative responses vary in other categories. For example, consumers in Japan prioritize appearance while those in Germany emphasize fitness; respondents in Brazil and the United States are most interested in mindfulness, those in China and the United Kingdom in nutrition. Finally, companies should understand that wellness consumers aren’t a monolithic bloc with lockstep preferences. Our survey showed that they tend to fall into distinct groups that behave very differently. Wellness enthusiasts are high-income consumers who actively follow brands on social media, track new-product launches, and are excited about innovations. The socially responsible prefer (and are willing to pay more for) brands that are environmentally sustainable and with clean/natural ingredients. Price-conscious consumers believe wellness products are important but meticulously compare features and benefits before purchasing to get the best deal.

Loyalists prefer to stick with their current routines and the brands they know, while passive participants are only marginally involved with the wellness category and don’t actively follow brands or new products. We found that wellness enthusiasts and socially responsible consumers are the biggest spenders. The loyalists and passive participants spend far less than people in the other groups.

While consumers in each market are motivated by a unique set of brand-loyalty drivers, all have some motivation that’s connected to price and lifestyle compatibility.

The research unearthed that consumers’ reported improvements in wellness levels have fallen behind their hopes and expectations in every country except China and Brazil, suggesting that the market may be underserved.

Mckinsey.com