The health and wellbeing of Australians is of utmost importance to ensure the continued growth and success for current and future generations.
We are now living longer and want to keep living better. A publication released earlier this year, Positioning for prosperity? Catching the next wave identified the preventative health and wellness industry a key growth pocket with the greatest potential to contribute to Australia’s prosperity over the next two decades- a ‘local hero’ of our economy that has the potential to generate billions of dollars in opportunities
Positioning the physical health industry in Australia
Whilst this industry is vast and varied in terms of the services included (think everything from vitamins and supplements to pharmaceuticals; tailored exercise regimes to specialist cosmetic procedures), the underlying message is the same – businesses that can focus on the rapidly growing health submarkets, such as physical health and wellbeing, will be well placed.
In 2012, Fitness Australia, in conjunction will Deloitte Access Economics, published the Australian Fitness Industry Report which estimated the physical health and fitness industry to be worth $1.2 billion. Incidentally, in 2014, IBISWorld estimated the industry to be worth $1.3 billion. This represents a compounding growth rate of more than eight per cent over a two year period. The Report stated that ‘in comparison to other sectors, the fitness industry on the whole, has fared better and continues to grow despite the backdrop of uncertainty that has affected the broader economy’. The Report attributes this to ‘a myriad of factors including cultural and demographic changes associated with the increasing importance accorded to fitness, the recognition that it delivers personal health benefits, and industry innovation in tailoring programs to meet the needs of consumers’. Whilst the impact of Australian-owned health and fitness businesses on the international economy is limited, there is significant potential to ride the wave locally, making this industry one of the local heroes of our country.
Composition of the physical fitness industry
The overall structure of the industry has changed over recent years, allowing for healthy growth and enabling newcomers into the industry to prosper. The majority of industry growth has been stimulated by two key areas – affordable 24 hour gyms, and consumers becoming better educated about the importance of physical health. Recent Government initiatives on obesity, and television programs like ‘The Biggest Loser’, have inadvertently had a positive impact across the fitness industry. There is now more and more emphasis being placed on tailored health and fitness regimes being provided in safe and non-judgemental environments. According to Fitness Australia, traditional full service gyms have also seized the opportunity and are enjoying an uptake in memberships due to increasing health and fitness awareness.
The industry is primarily made up of privately owned health and fitness service providers which are either independent or franchised in nature. The major players in the industry include Anytime Fitness, Fitness First, Jetts Fitness, Goodlife Health Clubs, Fernwood Fitness, and YMCA. While membership fees still account for the majority of the sector’s revenue, there is an increasing trend in personal training fees and the use of specific services, such as physiotherapists, yoga and pilates studios, and group fitness trainers. It is becoming increasingly popular for independently owned businesses, which prosper from organic growth, to offer franchisees the opportunity to be part of their growing brands.
In the new year, we will look at the current issues and trends within the franchise health and wellbeing market. We have called upon three influential contributors to the industry – Di Williams, founder and CEO of Fernwood Fitness, Jason Smith, founder of Back in Motion Health Group, and Ben Fletcher, founder of Listen to Your Body. Each of these successful individuals have, in their own right, been shapers of the industry to date.