The Wellness Wave: Why Gen Z and Millennials Are Reshaping the Health and Fitness Economy—and What Investors Must Do Now
The health and wellness sector in the U.S. is booming, and not just in a casual way. With over $500 billion in annual spending and a growth rate hovering between 4% and 5% each year, wellness is no longer a niche—it’s a mainstream economic powerhouse. But here’s the kicker: it’s the younger generations, Gen Z and millennials, who are driving this transformation with an intensity and focus that older cohorts simply can’t match.
According to McKinsey, nearly 30% of Gen Zers and millennials say they are prioritizing wellness “a lot more” than they did a year ago. Compare that to just 23% of older generations, and you see a clear generational shift. Bank of America’s credit card data further validates this trend, showing that these younger consumers are not only spending more on fitness clubs but are also redefining leisure activities altogether. Alexander Perry, a Bank of America analyst, highlights that Gen Z households spend nearly three times more on fitness than baby boomers, and their foot traffic in fitness centers far outpaces visits to bars and clubs.
This shift is more than just a fad—it’s a fundamental change in lifestyle priorities. Younger generations are embracing holistic wellness, including healthy eating, mindful drinking, and anti-aging recovery methods like cold plunges and red light therapy. Google search trends for these wellness practices have surged, signaling growing consumer interest that investors can’t afford to ignore.
What This Means for Investors
- Fitness Clubs with a Pulse on Trends Are Winning
Life Time and Planet Fitness stand out as prime beneficiaries of this wellness revolution. Life Time has been quick to capitalize on emerging trends like pickleball—the fastest-growing sport in the U.S.—by converting club spaces to courts, capturing a new and enthusiastic audience. Their foray into cold plunge tubs also positions them well for the recovery and anti-aging trend. Life Time’s stock carries an overweight rating with about 30% upside potential, making it a compelling buy.
On the other end, Planet Fitness dominates the value segment and is attracting a growing number of first-time gym-goers from Gen Z and millennials. With a buy rating and roughly 7% upside, it’s a solid play for investors seeking exposure to the fitness boom at a more affordable price point.
- Anti-Aging and Recovery Products Are the Next Frontier
SharkNinja’s CryoGlow light therapy mask exemplifies how companies are tapping into the lucrative anti-aging market. Red light therapy is gaining traction as a non-invasive method to promote skin health and recovery, and SharkNinja’s ability to quickly align with this trend signals strong growth potential. Analysts give SharkNinja a buy rating with 14% upside, underscoring investor confidence in wellness tech products.
- Alcohol Stocks Face a Complex Future
The alcohol consumption landscape is evolving rapidly. While total per capita consumption fell 3% year-over-year last year, reaching the lowest levels since 1962 (Bernstein), the story isn’t straightforward. The International Wine and Spirits Record (IWSR) notes a recent uptick in Gen Z’s alcohol participation rates—from 46% two years ago to 70% recently—suggesting some cyclical behavior.
Morgan Stanley warns that Gen Z is unlikely to match previous generations’ drinking patterns as they age, citing wellness trends, health concerns, and the rise of diabetes and weight-loss drugs as deterrents. This points to a continued decline in traditional alcohol consumption but a booming market for non-alcoholic alternatives. Coca-Cola and Anheuser-Busch InBev (BUD) are well-positioned to capitalize on this shift, with strong product lines in zero-alcohol beverages.
However, Bernstein’s Nadine Sarwat offers a contrarian view, noting that economic pressures and social media’s impact on social habits may have temporarily suppressed younger adults’ drinking. Once fully immersed in working adulthood, these consumers might revert to prior generations’ drinking behaviors, suggesting a potential rebound in alcohol sales.
What Should Investors and Advisors Do Differently?
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Prioritize Wellness-Focused Assets: The wellness economy is not a passing trend; it’s a structural shift. Investors should overweight fitness and wellness companies that demonstrate agility in adopting new trends—like Life Time’s embrace of pickleball or SharkNinja’s red light therapy products.
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Monitor Non-Alcoholic Beverage Growth: With non-alcoholic beer projected to surpass ale as the second-largest beer category globally this year (IWSR), beverage companies innovating in this space offer a compelling growth story. Coca-Cola’s strategic positioning in zero-alcohol drinks makes it a must-watch.
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Be Cautious with Traditional Alcohol Stocks: Given the mixed signals on alcohol consumption among younger generations, investors should be selective and favor companies with diversified portfolios that include wellness-aligned products.
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Leverage Data Analytics: Credit card spending data and Google search trends provide real-time insights into consumer behavior shifts. Advisors should incorporate these signals into their market analysis to stay ahead of evolving preferences.
What’s Next?
The wellness wave is poised to intensify as Gen Z and millennials age into their peak spending years. Expect further innovation in fitness, recovery, and health technology, alongside a continued redefinition of leisure and consumption habits. Investors who recognize these patterns early and position themselves accordingly will capture outsized returns.
For example, the rapid adoption of cold plunge therapy—a trend once niche—is now becoming mainstream in upscale fitness centers and home wellness setups alike. This signals a broader shift towards preventive health and recovery, areas ripe for venture capital and public market opportunities.
In conclusion, the wellness economy is not just growing; it’s evolving in ways that demand a new investment playbook. From fitness clubs to anti-aging tech to non-alcoholic beverages, the future belongs to companies that align with the health-first values of the emerging consumer majority. For savvy investors and advisors, the time to act is now—because wellness isn’t just a lifestyle, it’s the next big financial frontier.
Source: Gen Z, millennials embrace health and wellness. These stocks could benefit