ATFW Reveals Their Fitness Forecast For 2024
Get ready for an in-depth exploration of fitness like never before! Join All Things Fitness and Wellness (ATFW) in their quarterly podcast and video series. In this first edition of the Fitness Forecast, they have gathered some of the brightest minds in the fitness industry. You won't want to miss out on hearing from angel investor Marc Mastrov, the innovative CEO of Fitness World, Chris Smith, and the dynamic CEO of ABC Fitness, Bill Davis. These three industry powerhouses are coming together for an incredible discussion.
In this podcast, they will reveal the future of fitness through an engaging roundtable. They will delve into emerging trends, financial strategies, technological innovations, preventative healthcare, and industry advocacy. Make sure to check out the full discussion on the ATFW podcast. But for now, here are a few highlights that we found particularly interesting.
Krissy Vann, host of ATFW, opens the podcast by discussing Trends in the fitness industry.
Trends in the Fitness Industry
The first topic was emerging trends in the industry and what each guest saw as an area of interest. Krissy asked Marc what trends had recently caught his attention and how they might be shaping the fitness industry.
From an investor perspective- there are a lot of opportunities in the industry, depending on where you want to spend time. From brick & mortar, tech, franchise, domestic, and international, there are areas in each of these sectors performing well. So, in his opinion, it comes down to where you want to invest and what you feel passionate about. He also feels some global markets are more exciting right now than the domestic ones.
Chris Smith, who operates 16 brick-and-mortar gym locations in British Columbia, is seeing a shift from his members into strength training. While at the same time how they can integrate fitness and technology.
Bill Davis was asked how they support these trends from a technological perspective. He quickly replied that consumers are looking for a way to integrate what they are doing outside with what they are doing inside and make that as frictionless as possible.
The fitness world is an ever-evolving industry, and the group was asked how the new trend in AI might make its way into the fitness industry. Bill had some great insights about what his company, ABC Fitness, is doing. He believes that in every aspect of the experience, there are ways to leverage AI, from new member acquisition to customer service, billing, and support, just to name a few areas they are doing smart testing on at ABC Fitness.
They end the first segment recalling a few trends that have come and gone in the industry and some that maybe never should have been.
Finance and Investment in Fitness
What is the current financial landscape of the fitness industry from an investment perspective?
Krissy asked the angel investor Marc Mastrov, who replied that a tremendous amount of capital was available and that he was looking to invest in strong companies with solid cash flow dynamics. Companies with cash flow north of 10-20 million have tremendous traction right now as the industry recovers from the pandemic.
She then asked Chris, who is on a tremendous growth trajectory, what he looks for in gym acquisition. He looks not only for the strong financials of a business but he prefers the club to be in good health, with good equipment and a strong member base making it a simple switchover. He is open to other situations but likes to find clubs where the previous operators are retiring or moving on for other reasons, rather than being forced out. Making it a simple process to rebrand and do a few updates before turning it into a Fitness World location.
Bill mentions that one thing he notices as a technology company is that clubs are consolidating instead of expanding. So, instead of leasing another location, they are buying the buildings they are in now. They are also being asked to solve challenges around the cost of human capital.
Krissy asks the guests what they saw from Q3 of 2023 that sticks out to them.
Mentioning events such as the Planet Fitness shift in CEO and the Lululemon Mirror being sold to Peloton.
Bill mentions since 2020, they’ve observed unprecedented membership growth of almost 2x that of pre-pandemic levels. This has opened up more flexibility and different ways for the industry as a whole to optimize revenue.
Smith says some of these companies that are experiencing big changes or shifts have been on historical runs, and they must be proud of their journeys. These changes indicate that the appetite is still very strong for investment, even from a North American perspective, with several groups looking at the fitness industry.
Krissy discusses technology with them from an investor perspective, and she asks what aspects look attractive.
Being a little biased, Bill Davis thinks club management is an important place to be. It was discussed by Marc earlier, but the insights and ability to oversee numerous aspects of your business. Allowing operators to better manage their overall business from start to finish has improved dramatically over the last few years. This has also opened up some attractive areas of investment.
The Intersection of Fitness and Healthcare
The next segment gets into the intersection and convergence of fitness and healthcare and some exciting things that are happening. The round table discusses the PHIT (Personal Health Investment Today) Act, what it is, and who might oppose such a beneficial piece of legislation. They further discuss how to change this direction, and what is being done.
One trend they see happening is large employers are trying to find ways to reduce their costs. As a large payer community in the insurance space, they are starting to see some influence from that side. But also, they are seeing more employers opt for preventative measures and pay for the gym membership cost for their employee (s).
Another current trend Marc discusses is the use of these GLP-1 Agonists. They are a class of medications that can help manage Type 2 diabetes and obesity. That is emerging as a consumer trend and might change healthcare in the next 1-5 years, how it's being handled, and what else these shots might mean for muscle mass and strength maintenance.
The roundtable conversationally speculated on the mental health impact of this emerging trend. As Krissy mentions, these medications won't help that person with the mental work needed to change their habits and sustain weight loss long-term. This is an important role fitness centres will still have to play.
As we know, physical and mental health are tied together, and as a society, we are moving into a whole health (physical + Mental) mentality vs working out to get shredded and just to look good. The host asks our guests what they have changed or are trying to change in their marketing message(s) to reflect this new consumer trend.
Bill opens and mentions that last year, for the first time, wellness was the highest reason for individuals to join a gym. Chris follows up and talks about how his marketing team is more aware of how an image might be portrayed.
Advocacy
In the final segment, Krissy poses questions about advocacy and how the industry can improve.
Chris was straightforward. The money has to follow the talk if they will ever get the PHIT Act through Congress. This means there is a ton of open support; they need to turn that support into whatever funds are necessary to get this bill in front of Congress. At a local level, club operators need to contact their Congress representatives and demand support. As an industry, there is a lot to be learned from the restaurant industry and how effective they have been in creating a voice.
Marc believes that getting the PHIT ACT to pass in the US might be challenging, but it might be a better strategy to get similar legislation passed in other countries and use that as leverage to get the PHIT Act passed in the US. Also trying to get similar ACTs’ passed at the state level and starting in states with an up-and-coming governor would be strategic.
Wrapping up the podcast, each guest leaves with some great words of wisdom. Ultimately, they were grateful to the host for the time and opportunity they were given to spread the importance of fitness and movement, no matter what that looks like for you.
As a closing remark from the host, Krissy Vann, mentions how impressed she is with the leadership of this industry as she has seen everyone who is in this industry has a deep passion for it. While passing the PHIT Act may be an uphill battle to keep pushing.
The movement is happening from big box to boutique clubs. The message is spreading and encourages the guests to stay on the course.
All Things Fitness and Wellness is on a mission to amplify the voices of fitness, and wellness thought leaders to inspire industry innovation and educate the populous on exercise as medicine. Make sure to check out their channel for informative podcasts on industry challenges, gym tours of unique and inspiring locations, YouTube Shorts, and a fun pop-up event they did for this year, to celebrate Merry Fitmas and spread the joy.
