Changing taste buds and healthy priorities: Will leisure look to health and wellness for growth?
Changing taste buds and healthy priorities
It’s no secret that consumer tastes and preferences are changing. This becomes particularly prevalent at the start of the year when the ‘new year, new me’ mentality kicks in, and consumers’ focus turns to achieving their new year’s resolutions. However, what was once a January resolution to eat well, keep fit and stay healthy has extended to a lifestyle choice for many consumers across generations. Some 55% of Americans say that they lived a healthier lifestyle in 2017 compared to 2016, and 45% say that they made significant changes to improve their health.
The global wellness industry was a $3.7 trillion market in 2015, and is still gaining tremendous momentum today. This is due to a convergence of factors including the size of the aging baby boomer population, longer life spans, greater access to information by consumers, higher discretionary spend on wellness products, and experiences that help consumers to feel good. Millennials are now the largest segment of the population with a heightened focus on living in the present, and are using their purchasing power on experiences that they can share via social media platforms with their networks.
With health and wellness increasingly in the spotlight for many consumers, it is important to consider how these preferences and desires for a healthier lifestyle influence their decisions to eat out (or not), travel, and ultimately create brand preference and loyalty.
Is M&A the new R&D?
Large consumer packaged goods (CPG) companies are seeking new product streams to stay relevant, shifting their portfolios towards a greater focus on health and wellness due to the demand for healthy and organic products. This is forcing them to reshape their portfolios to expand into this fast growing segment and create new brands that meet the ‘authentic’ criteria desired by consumers. Innovation, on the other hand, is a slower process; in addition to coming up with new products, these large conglomerates are speeding things up through merger and acquisition (M&A) activity.
The US casual dining sector has had high M&A activity for the past few years due to its potential for high returns, and it is predicted that this trend will continue throughout 2018. Additionally, international buyers have been lured into this space because it is less exposed to disruption, particularly in the UK and other countries where organic growth is harder to come by – M&A can drive inorganic growth instead. Consolidation and restructuring could continue as a key theme for the next few years as the growth hubs shift to the US and China.
The article “Changing taste buds and healthy priorities: Will leisure look to health and wellness for growth?” by Rob Ernst, KPMG in the US, was taken from the publication entitled Leisure Perspectives.
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