A fundamental shift in consumer behavior is creating compelling investment opportunities across multiple sectors. Americans now spend more than $500 billion annually on wellness, with this market growing at 4-5% each year. What makes this trend particularly powerful for investors is its generational driver: nearly 30% of Gen Z and millennials report prioritizing wellness “a lot more” compared to a year ago, versus just 23% of older generations.
This isn’t merely a passing fad. Credit card spending data reveals that younger generations are fundamentally restructuring their budgets around health and wellness priorities, creating sustained demand for companies positioned to serve these evolving preferences.
The Fitness Club Renaissance
The most visible manifestation of this wellness revolution appears in fitness spending patterns. The average Gen Z household spends 2.8 times more than baby boomers on fitness and allocates more than three times their budget share to health-related activities compared to older cohorts.
Foot traffic growth at fitness centers is significantly outpacing visits to bars and clubs, indicating a structural shift in how younger consumers choose to spend their leisure time. Bank of America analyst Alexander Perry notes this represents “different leisure activities on the weekends” as “leisure-based activities that are seemingly healthy are what these younger generations are gravitating towards.”
Life Time (LTH): Premium Positioning Meets Trend Identification
Life Time stands out as a high-end fitness provider with exceptional ability to identify and capitalize on emerging trends quickly. The company’s strategic pivot to accommodate pickleball – America’s fastest-growing sport – demonstrates this agility in action.
“They were pretty quick to identify the pickleball trend,” Perry observes. “They started repurposing parts of their clubs to pickleball courts, and now are one of the largest pickleball providers in the U.S.”
Beyond pickleball, Life Time is embracing the cold-plunge trend, installing cold-plunge tubs that align with growing interest in recovery and wellness technologies. This positions the company to benefit from multiple wellness micro-trends simultaneously.
The stock carries an average analyst rating of overweight with approximately 30% upside to average price targets, reflecting Wall Street’s recognition of the company’s strategic positioning.
Planet Fitness (PLNT): Democratizing Wellness Access
Planet Fitness represents the accessible end of the fitness spectrum, serving as the largest provider at value-oriented price points. The company maintains high penetration among first-time gym members, creating a natural funnel for younger consumers entering the fitness ecosystem.
“Their penetration in terms of Gen Z and millennials coming into a Planet Fitness has continued to expand and been very strong,” Perry notes.
This positioning proves particularly valuable as wellness adoption broadens beyond traditional fitness enthusiasts to include newcomers seeking affordable entry points. The stock maintains an average buy rating from analysts with roughly 7% upside to consensus price targets.
The Anti-Aging Technology Opportunity
Wellness trends extend beyond traditional fitness into technology-driven solutions for health optimization. Google searches for terms like “cold plunge” and “red light therapy” have surged, indicating growing consumer interest in science-backed wellness interventions.
SharkNinja (SN): Innovation Meets Wellness Technology
SharkNinja has emerged as an unexpected player in wellness technology through its CryoGlow light therapy mask, capitalizing on the intersection of consumer electronics and anti-aging solutions.
The company identified the red-light therapy trend early and developed products addressing this growing market segment. Perry suggests this represents just the beginning: “If their past product portfolio is an example of what they’re going to be rolling out, I think that you’ll continue to see them play in this wellness space in a bigger way.”
Analysts maintain a buy rating on the stock with 14% upside to average price targets, reflecting confidence in the company’s ability to innovate within expanding wellness categories.
The Alcohol Disruption Story
The wellness revolution is simultaneously creating opportunities in some sectors while disrupting others. Per capita alcohol consumption declined 3% year-over-year, reaching a 10% decline from 2021 peaks – the lowest level since 1962.
Non-alcoholic alternatives are gaining substantial market share, with spending on non-alcoholic beer and seltzer averaging 28 percentage points higher than alcoholic equivalents since 2021. The International Wine and Spirits Record projects that non-alcoholic beer will become the second-largest beer category by volume worldwide this year.
Coca-Cola (KO): Positioned for Non-Alcoholic Growth
Coca-Cola emerges as a primary beneficiary of the shift toward non-alcoholic beverages. Morgan Stanley analyst Sarah Simon identifies the company as her top U.S. pick, positioned to capitalize on the zero-alcohol segment that appears “ripe for strong growth.”
The beverage giant’s diversified portfolio and innovation capabilities position it to serve evolving consumer preferences as younger generations maintain lower alcohol consumption patterns even as they age.
Anheuser-Busch InBev (BUD): Adapting to New Realities
Despite facing headwinds from declining alcohol consumption, Anheuser-Busch InBev’s scale and resources enable adaptation to changing market dynamics. The company’s investment in non-alcoholic alternatives positions it to participate in growth segments while maintaining its traditional beer business.
However, structural challenges remain significant. Morgan Stanley’s Simon notes that “heavier drinkers are the older generations who will be physiologically unable to consume as much alcohol as they age,” suggesting continued pressure on traditional alcoholic beverage categories.
Investment Implications and Market Dynamics
Recent data suggests some complexity in alcohol consumption trends. The International Wine and Spirits Record reports that Gen Z participation rates in alcoholic beverage consumption have risen to 70% in the six months leading up to May, up from 46% two years prior.
Bernstein analyst Nadine Sarwat suggests economic pressures and social media’s impact on socializing may have temporarily suppressed younger generation alcohol consumption. “Once they enter full working adulthood, they are reverting back to drinking patterns of previous people in working adulthood,” she observes.
This nuanced picture suggests that while wellness trends are creating new opportunities, traditional categories may not face elimination but rather evolution and market share shifts.
Long-Term Investment Themes
The wellness revolution represents more than a cyclical trend. Fundamental generational preferences are reshaping spending patterns across multiple sectors, creating sustained tailwinds for companies positioned to serve health-conscious consumers.
Key investment themes include:
Fitness and wellness services that combine premium experiences with trend identification capabilities, positioning providers to capture increasing per-capita spending on health activities.
Technology-enabled wellness solutions that merge consumer electronics with health optimization, appealing to younger consumers’ preference for data-driven wellness approaches.
Non-alcoholic beverage innovation that serves evolving social and health preferences while maintaining taste and experience quality.
Accessible wellness democratization that makes health and fitness available across economic segments, expanding market participation beyond traditional demographics.
The $500 billion wellness market’s 4-5% annual growth rate, combined with generational spending pattern shifts, suggests this trend possesses the scale and durability to drive meaningful investment returns for companies successfully positioned within the ecosystem.
