Health & Wellness

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Sean Hinton

The term "health and wellness" has become a powerful tool for marketers in various industries. As people decide to change their habits and pursue healthier lifestyles, many different companies stand to benefit. Health food retailers, manufacturers of exercise equipment, and companies that produce vitamins or nutritional supplements could all see increased demand for their products as a result of the health and wellness trend. On the other hand, companies whose products or services are generally associated with poor health would be negatively impacted by an increased public concern about health and wellness. Examples include tobacco companies and fast food restaurants.

Health and wellness are often used interchangeably, but they have slightly different meanings. Health is more of a medical term and describes the physical and mental state of a person. It usually denotes a lack of disease or abnormality. Wellness, on the other hand, is defined as the overall process of maintaining a general state of good health. Wellness involves conscious decisions on the part of the individual, whereas health simply describes a person's condition. In modern usage, however, the combined phrase "health and wellness" has come to mean the pursuit of overall physical, mental, and emotional health. This term is used frequently in various contexts, all aimed at promoting a better lifestyle.

What's driving the health and wellness trend?

Many factors have contributed to the increased public awareness of health and wellness. Higher rates of heart disease, increases in the incidence of cancer, record numbers of clinically obese people, and various other health scares have all drawn attention to the need for healthy lifestyle choices. Additionally, as modern medicine has progressed, doctors and scientists have greatly expanded their knowledge of the human body, exposing many health risks that were previously unknown. One-hundred years ago, doctors touted excessive sun exposure as beneficial, and heroin/cocaine combo sets, complete with syringes and needles, were sold in department stores. It is now common knowledge that too much sun can cause skin cancer, smoking can bring on any number of painful deaths, and eating a bit too much ice cream can pack on the pounds, increasing the risk of diabetes and heart disease.

What does health and wellness entail?

Though the definitions range from the strictly physical to the deeply spiritual, most agree that health and wellness involves making conscious decisions to improve a person's overall state of health. Common components of the pursuit of health and wellness are:

• Healthier food consumption - This is considered to be a crucial part of achieving good health. The health and wellness trend hinges on the belief that food intake is directly related to physical health. As such, maintaining a sensible diet of healthy foods has become a keystone in the health and wellness philosophy.
• Physical fitness - Though it is possible to be both healthy and well without running marathons daily, some physical exercise is generally recognized as an important part of a healthy lifestyle.
• Avoidance of potentially harmful products or behaviors - Cutting down on things that can cause illness or other unhealthy consequences is also key to the health and wellness trend. Avoiding smoking, wearing sunblock, and obeying the speed limit are all examples of steps that people take to keep themselves healthy.

Which companies benefit from increased concern about health and wellness?

Natural food retailers

• Whole Foods Market (WFMI) and Wild Oats Markets (OATS) are the two largest retailers of natural and organic foods in the U.S. These two companies, which are planning a merger, have seen sales increase steadily as a result of the health and wellness trend.
• United Natural Foods (UNFI) is a distributer of natural and organic foods for many retailers across the country.

Diet services

• NutriSystem (NTRI) and EDiets.com (DIET) both offer meal delivery plans that send meals, which are specially planned to fit customers' dietary needs, directly to their homes. eDiets also runs a website that offers diet advice and related products and services.

Exercise equipment manufacturers

• Cybex International (CYBI) manufactures exercise machines and equipment, which are intended primarily for commercial purposes. As people start going to the gym more often, Cybex could benefit from increased demand for gym equipment.
• Nautilus Group (NLS) makes exercise equipment for both home and commercial use.
• Garmin (GRMN) offers a number of portable GPS products designed for outdoor activities to help users to chart their runs and monitor their heart rate.

Nutritional supplements and health care products

• Natrol (NTOL), Chattem (CHTT), and Abbott Laboratories (ABT) all produce nutritional products, including supplements and vitamin-enriched foods.
• Herbalife (HLF) also produces nutritional supplements, but many of its products are designed specifically for weight loss purposes.

Wellness companies

• Principal Financial Group (PFG) offers wellness services to both corporate and individual clients, including advising companies on ways to keep their employees fit and helping individuals understand and manage their health.

Which companies benefit from decreased concern about health and wellness?

Tobacco companies

• Altria Group (MO), Reynolds American (RAI), and Loews (LTR) are the three largest tobacco companies in the U.S. Tobacco use is widely recognized to be unhealthy, and these companies could face further declining demand as health and wellness becomes more popular.
• Imperial Tobacco Group (ITY) and British American Tobacco Industries (BTI), both large tobacco companies, operate primarily in international markets.

Quick Service Restaurants

• McDonald's (MCD), Wendy's International (WEN), Yum! Brands (YUM), Panera Bread Company (PNRA), and CKE Restaurants (CKR) operate large chains of quick service restaurants (QSR), which are not generally known for their healthy options. Though these chains have upped their offerings of healthier alternatives to their standard fare, QSRs still have a reputation for serving unhealthy "fast food". CKR's CEO Andrew Puzder seems unconcerned, however, saying, "And [surveys] show that while consumers say they want to eat healthier, what they actually want is a big juicy burger."[1]

Food manufacturers

• Campbell Soup Company (CPB) dominates the domestic canned soup market. Most of its products are high in sodium, which has been linked to high blood pressure and an increased risk of heart attacks.
• The Coca-Cola Company (KO) is the world's largest producer of carbonated soft drinks, which have seen declining demand as a result of health and wellness concerns. Pepsico (PEP), Coca-Cola's main competitor, is also a major producer of carbonated soft drinks, though it has significantly expanded its non-carbonated options in response to changing consumer tastes.