“Health” Means More to Today’s Proactive Consumers
We used to regard being free of disease as being “healthy.” Today, we talk more about “wellness,” which goes beyond freedom from disease to encompass emotional and psychological health, energy, happiness and overall quality-of-life.
At the same time, consumers have become more proactive about their health. Not leaving our health solely in our doctors’ hands, we take care of ourselves—taking supplements and eating well; exercising and tracking the results; avoiding environmental sources of toxicity; and cleaning up our environment to protect our health.
This is a major lifestyle shift which goes broader and deeper than popular trends in dieting and exercise of previous decades. Deeply embedded in our thinking, this shift opens significant market-driven opportunities for businesses to diversify and tailor their offerings.
Younger and Older Consumers Are Driving a Global Trend
Millennials are most likely to make buying choices based on wellness. They are the generation that lives on social media, where our social norms are being changed and where looking and feeling great have more cache than owning the latest luxury model. According to studies by market research company Nielsen, Millenials are less willing than previous generations to pay the price for “luxury” and more willing to pay premiums for goods that support a healthy lifestyle.
Baby Boomers also are taking an active role in their health, purchasing products to support longevity and an active senior lifestyle. With decades behind them as the dominant trend-setting generation, they still wield considerable market power.
In addition, health consciousness is quickly becoming a global trend. For example, 2017 research by the Hurun Report and the Shenzhen Catic Wellness Group reports Chinese families are spending up to a quarter of their income on wellness products and services.
88% of Businesses Are Responding to New Opportunities
According to Euromonitor International, the global market for wellness offerings is expected to grow to $815 billion by 2020, from $686 billion in 2016.
A recent Deloitte survey found that 88 percent of companies, from long-established conglomerates to recent start-ups, are introducing products formulated or reformulated to support healthier lifestyles: For example, while General Mills retools its cereal line to remove additives and artificial ingredients, one of our borrowers, Pact Organic (www.wearpact.com), a mid-market clothing manufacturer, serves up 100% organic cotton clothing.
Asset-Based Financing Can Support Market Transitioning
Staying ahead of the curve and taking advantage of health-conscious market opportunities calls for flexibility and speed. For companies in growth mode like Pact, accessing critical capital quickly can be challenging. Non-traditional lenders and asset-based financing are good options.