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By Ernest Dela Aglanu, Benzinga
The health and wellness industry has seen a surge in recent years, driven by increasing demand for health-focused products and services. Consumer awareness and interest has grown, viewing wellness through a broader lens encompassing fitness and nutrition as well as overall physical and mental health, and the importance of our well-being has been given more attention than ever.
According to Vision Research Reports, the global health and wellness market is expected to expand at a compound annual growth rate (CAGR) of 10.93% from 2023 to 2032.
A recent survey* by Medifast (NYSE: MED), a leader in the health and wellness industry for more than 40 years, showed a shift in U.S. adults' spending habits and a prioritization of their health and well-being. The October 2022 survey of 2,000 adults found that despite changes to the broader macroeconomic environment, 70% of respondents do not plan on letting their health and well-being falter, with 57% saying they would spend more time on their health and well-being in 2023.
Consumers are becoming more aware that daily activities – from eating nutritious foods and exercising to getting enough rest and reducing stress – are key components of a healthy lifestyle, creating an expanding market. This has caused a shift in consumer behavior toward purchasing in this category, and while they are spending a considerable amount of money on health and well-being, they’re also seeking solutions that fit into busy schedules to more easily integrate wellness into their routines.
Additionally, technological advancements have enabled companies to develop innovative services and products, such as tracking apps and wearable devices that allow consumers to automatically monitor activity levels, heart rate and more – providing access to personalized behavioral data.
Personalized Health And Wellness
A closer look at the industry in 2023 and beyond shows consumer preference for personalized health and wellness experiences is likely to continue to grow. Both consumers and companies are continually realizing that physical, mental and emotional health are all interconnected and there is a growing understanding that each person is different, and a one-size-fits-all approach doesn’t always work. This is supported by Vesta, which reports that 58% of consumers are very interested in personalized supplements made just for them, with younger generations like Gen Z and millennials being most interested (71%).
The need for personalized care has driven more Americans to build on conventional medicine and embrace holistic healthcare, be it for alleviating chronic pain, reducing stress or other benefits.
The topic of personalized, holistic health and wellness seems to consistently bring one name to the forefront: Medifast – signaling that Medifast could be the stealth leader that has quietly flown under the radar for many investors.
Medifast: Transforming Lives
Unlike some of the other players, Medifast has been a leader in the health and wellness industry for more than 40 years, historically offering weight loss solutions through various channels, including doctors, e-commerce sites, weight control centers and independent coaches. But as consumers’ needs and the health and wellness industry changed, so has Medifast. Today, the health and wellness company is known for its habit based, coach-guided solution OPTAVIA.
With a strong scientific and clinical heritage, Medifast draws on key insights, like the role of peer support and healthy habits, to evolve how they support people in their journeys – now exclusively through their independent OPTAVIA Coach model. Medifast’s OPTAVIA program offers scientifically developed products and clinically proven plans developed by physicians and scientists, focusing on habit creation in six key areas: weight management, eating and hydration, motion, sleep and energy management, mind, and surroundings. This is all backed by the support of a one-on-one coach and a broader community of people going through similar journeys.
The company reports that it has impacted more than three million lives by helping customers build healthy habits.
Through their community of coaches – about 90% of whom started as customers first – who help teach clients how to develop holistic healthy habits through the proprietary “Habits of Health Transformational System”, the company has disrupted the $8 billion weight management industry and is planning for its expansion into new frontiers and the broader $230 billion health and wellness space. Medifast reports that it has products under development it plans to announce this summer that will triple its addressable market.
The company has grown exponentially in recent years not only because of the lives it has impacted but also due to its unique business model that sets it apart from the competition — boasting low capital expenditures, the potential for growth, a large addressable market, repeat purchases, and the scalability of a model that enables passionate customers to become coaches themselves.
According to Medifast’s website, “Coaches are the lifeblood of our program — most of whom were customers first. Our coaches provide their clients with the education, encouragement and inspiration they need to develop healthy new habits while they potentially build a growing business that can transform their own lives.”
OPTAVIA takes a simple yet comprehensive approach by helping people create habits holistically through small, simple behavioral changes. It is more about lifestyle than just diet – grounding wellness into daily practice with a focus on helping people improve their well-being. It’s a realistic plan that’s not only easy to fit into everyday life but is resonating with millions of people.
A Brief Look At Some Of The Company’s Achievements
● The company has a community of more than 58,000 active earning coaches (reported as of Q1 2023) and has impacted more than three million lives to date.
● Medifast was recognized by the Financial Times as one of the top 500 companies in The Americas, based on its high compound annual revenue growth rate between 2018 and 2021 and was named to Forbes' 2022 list of America's Best Mid-Sized Companies, ranking 23 out of the 100 companies, based on earnings and sales growth, return on equity and total stockholder return for the latest 12 months and over the last five years.
● The company was previously recognized in 2020, 2021, and 2022 as one of FORTUNE's 100 Fastest-Growing Companies, and most recently, the only health and wellness company to make the list.
● Medifast’s annual revenue increased from $275 million in 2016 to $1.6 billion in 2022, a CAGR of over 34%, reflecting the relevance of the company’s offerings coupled with a proven approach of helping consumers build healthy habits for lifelong transformation.
● Medifast has a strong balance sheet with no long-term debt and $124M in cash and cash equivalents (reported as of Q1 2023), limited physical asset and capital expenditure needs, and a stock yield in the top 5% of all S&P 1500 companies. The company has also reduced its shares outstanding, through periodic buybacks, by 7% over the past 2 years.
*This random double-opt-in online survey of 2,000 nationally representative U.S. Adults was commissioned by Medifast and conducted by a market research company, OnePoll, between October 20 and October 24, 2022. All participants are paid an amount depending on the length and complexity of the survey. The survey was overseen and edited by the OnePoll research team, who are members of the MRS and have corporate membership to ESOMAR and AAPOR.
**Source Euromonitor International Limited; based on custom research conducted in Q2/2022; value sales for structured weight loss and meal replacement programs in 2021.
Medifast (NYSE: MED) is the global company behind one of the fastest-growing health and wellness communities, OPTAVIA®, which offers scientifically developed products, clinically proven plans and the support of independent OPTAVIA Coaches and a Community to help Customers achieve Lifelong Transformation, One Healthy Habit at a Time®. As the publicly traded market leader by revenue in the U.S. $7 billion weight management industry, the company has impacted more than 2 million lives through its Community of OPTAVIA Coaches, who teach Customers how to develop holistic healthy habits through the proprietary Habits of Health® Transformational System. Medifast was recognized in 2022 as one of America's Best Mid-Sized Companies by Forbes, in 2020 and 2021 as one of FORTUNE's 100 Fastest-Growing Companies and was named to Forbes' 100 Most Trustworthy Companies in America list in 2017.
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