The desire of consumers to lead healthier, more active lifestyles is fueling a thriving fitness industry, with novel fitness niches exhibiting robust growth and attracting flocks of fiercely loyal followers–and investors.
Broadly defined, the $44.6 billion U.S. fitness sector(1) is highly fragmented and growing, seeing expansion in club memberships and a vibrant at-home market. Industry growth will be driven by an exponential increase in health consciousness among consumers(1), with changing demographics a major factor. Growing public awareness of weight-related health risks has pushed fitness into the spotlight, underscoring that exercise is key to preventative health. Innovative, socially engaging programs are increasingly attracting and retaining customers.
• Approximately 20 percent of the U.S. population will be over the age of 60 by 2030(2), presenting a significant opportunity as older Americans look to exercise to live healthier lives in their golden years.
• More than one-third of U.S. adults and 17 percent of youth were obese or overweight in 2010(2), supporting the movement toward physician prescribed exercise to combat this growing epidemic.
• Nontraditional forms of exercise with broad appeal are drawing in millions of avid enthusiasts. Fused concepts like Zumba, CrossFit, hot yoga, boot camps, and spinning are carving out rapidly growing niches.
The M&A market is seeing renewed vigor with private equity pumping up its investment across the fitness sector. Recent transaction activity is illustrative of the diversity of platforms drawing interest with club franchises such as Fitness Connection (LNK Partners), Planet Fitness (TSG Consumer Partners), and CorePower Yoga (Catterton Partners) and fitness lifestyle brands CrossFit (Summit Partners) and BeachBody (LNK Partners) targets of buyouts or recapitalizations. Investors are attracted to the industry’s size and fragmentation and strong secular trends, as well as recurring revenues and predictable cash flows of certain business models. Innovative players in niche market segments will be attractive targets.
Sources: (1) IBISWorld and (2) Centers for Disease Control and Prevention