If there's one thing that's always bothered me, it's how little thought people put into their diet and exercise routines. I've seen a man walk into a workout holding a 42-ounce soda from Burger King. I've seen a man walking on the treadmill while eating a slice of pizza, courtesy of the weekly -- now monthly -- free pizza day at Planet Fitness. (Don't worry, it still has free Tootsie Rolls regularly.) I've seen people hand money to personal trainers who look like they've never worked out in their lives, and come out the other end virtually unchanged.
I've seen men contorting their bodies in the most gruesome ways to lift weights that are too heavy for them. I've seen people of all ages come into gyms for sporadic leisure walks on the treadmill, expecting to be fit and fab for the summer season. Then there's the New Year's resolution people, who pop up for a few days in the beginning of the year.
It all makes me wonder -- how much money do these starry-eyed fitnessistas waste annually? I find the numbers staggering. About 45.5 million Americans hold gym memberships, generating $19.1 billion of revenue for the industry every year. Only about 20% of these members actually frequent their gym for the entire subscription term. Since 2005, the amount of money spent on these vastly underutilized gym memberships has grown by $3.28 billion, proving incontrovertibly that, despite stifling recessions and record unemployment, people have money to throw away.
The diet and supplement industries are doing even better. The diet industry, which includes companies like Nestle's Jenny Craig, Unilever's Slim-Fast, and Weight Watchers (NYSE: WTW), generated $60.9 billion of gross revenue in 2010. The supplement industry, which includes the makers of various protein powders, diet pills, multivitamins, and energy drinks, reports about $27 billion of annual revenue.
But what's good for the goose has hardly been good for the gander. According to Gallup, 62.1% of Americans were overweight or obese in 2011. On the bright side, this number fell from an all-time high of 63.1% in 2009. Unfortunately, that only brings us back down to 2008 levels. Baby steps, though, right?
The goose, as might be expected, has some interesting percentages to look at, too. Many health and fitness companies reported impressive growth in 2011. Shares of Weight Watchers, which has a market cap of $5.545 billion, soared 81% in the past year. Town Sports International (NYSE: CLUB), which owns and operates Sports Clubs in New York, Boston, Washington, and Philadelphia, has a market cap of only $206.3 million. But its stock climbed more than 129% in the past year.
Two supplement chains -- the $3.2 billion GNC (NYSE: GNC) and the $1.28 billion The Vitamin Shoppe (NYSE: VSI) -- reported four consecutive quarters of growth, though their success could be threatened by looming FDA regulations, which I'll discuss in a forthcoming article.
Still, JP Morgan analysts wrote in a recent report that the vitamin industry is expected to grow 4% to 5% domestically. "Americans love 'magic in a bottle' and [the industry] can be viewed as an inexpensive offense/defense to health challenges."
The moral of the story is to look before you leap. If you just know where to look, the health and fitness industry has opportunities for both the exercise and investment savvy. You can be fit and financially secure, or you can be out of shape and out a couple hundred dollars annually. It seems like an easy choice.