The Indoor Wellness Proposition Is in Retreat, While the Outdoor One Is Exploding
By Thierry Malleret, economist
Peloton – a wellness tale. When it comes to Peloton’s recent decline, rising bike prices, plunging earnings, and investor concerns about the company’s management are cited as the issues. But what needs to be talked about more is that the growth of “indoor” wellness is in decline, while outdoor wellness is rising fast. A year ago (in the midst of the pandemic), Peloton’s stationary bike business was valued at $50 billion. It has since collapsed by 85%: at the beginning of February the company was worth less than $8 billion. The bottom line is this: with the end of the pandemic in sight, the demand for high-end stationary bikes has dropped, signalling that the expansion of high-end wellness services indoors cannot be “infinite.” Meanwhile, the market for road bikes and mountain bikes is expanding fast, forecasted to grow worldwide at a compound annual growth rate (CAGR) of 5.6 and 8.6 percent, respectively, between 2022 and 2026 (and even faster for the high-end segment). Now that the pandemic has revealed the fundamental value of nature in terms of physical, mental, and cognitive wellbeing, the indoor wellness value proposition is in retreat while the outdoor one is expanding.
The “can’t do without nature” principle is made manifest by the fact that the global sporting goods and outdoor industry has already returned to pre-pandemic levels of growth—much faster than most industries. It is expected to grow by 8-10 percent annually in coming years, propelled by China and followed by the US (but the phenomenon is global). The outdoor segment is growing even faster. Reliable global figures are hard to come by, but the success of the Outdoor Sports Valley—a cluster and accelerator of companies and start-ups dedicated to the outdoors located in Annecy, France—is an unmistakable sign that the future is bright for the outdoors and sports markets in general. There are two main reasons: (1) The pandemic has been a wake-up call regarding the importance of physical activity outside. More and more people are aware of the vital importance of nature (and the need to preserve it) and for physical activity in nature. We could call this the “nature/sustainability imperative.” Moving forward, this will form the backbone of everything the wellness industry does. (2) The younger the age, the greater the proclivity to favor sporting activities. Younger generations seem intent on “over-spending” on sporting goods and outdoor activities. This places emphasis on DTC (direct-to-consumer) models and digital ecosystems in which influencers play a leading role. Even though nature is at the core, getting a foot in the metaverse also seems key.
Looking at the preeminence of nature from another perspective: it is at last, and fast becoming the fourth pillar of health and wellbeing, alongside (1) diet, (2) exercise and (3) sleep habits. Prescribing time in nature is not new (the Global Wellness Summit made it one of its global wellness trends back in 2019), but it now seems to have crossed an inflection point. Park Prescription (PP)—the US grassroots movement that encourages physicians to “prescribe” parks to patients is now expanding in Canada while a similar principle and program is also being developed in the United Kingdom.
Asia was out in front: The Japanese health system has been prescribing (and reimbursing) woodland walks (forest immersion) since the early 2000s, rapidly followed by South Korea. For decades, hundreds and hundreds of scientific studies have shown that connecting to nature is one of the best and easiest things we can do to improve our health, but this simple and obvious idea was not being acted upon in policy terms. This is now changing. Prescribing nature is gaining a lot of traction: it contributes to solving our health and wellbeing issues as well as those of Mother Nature (we protect what matters to us). The outcome: increasingly and everywhere, licensed healthcare providers will prescribe nature and greater public efforts to conserve it should follow.