As we approach the end of the year, we’re covering trends from key markets in 2022. We’ll recap the state of each industry over the past year, the ad strategies of its biggest players, and what we predict 2023 will hold.
Sixty-four percent of people set health-related New Year’s resolutions for 2022.
It’s impossible to predict the future, but it’s also impossible to imagine that number not being similar this year, especially given the pandemic wake-up call that got many people thinking about their health.
In fact, 77% of people in a recent study said the pandemic has “led them to pay more attention to their health in general.”
The interest in healthy living, coupled with pandemic restrictions, served as kindling that ignited advertisers’ spending in the fitness and health industry.
Here’s how fitness and health advertisers have spent through Q3 2022 and what those strategies can tell us about what they’ll do when the calendars turn.
Insights on Athletics & Fitness Equipment Advertisers
Through Q3 2022, more than 450 advertisers have spent $616mm to promote athletics and fitness equipment, representing a 5% YoY decrease from the $650mm they invested during the same time last year.
The number of advertisers also decreased from 545 (down by 17%) through October 2021; however, two advertisers were responsible for 80% of the spending: Aviron Interactive Inc. and Peloton (~$490mm).
The average monthly spend in 2022 was $62mm—a 4.6% decrease from 2021.
For most of 2022, these advertisers decreased their spending by a sizable amount, which makes sense given waning pandemic restrictions and gym reopenings.
Spending in Q2, for example, declined by a whopping 62% YoY. Meanwhile, Q1 experienced a sizable decrease as well, dropping by 41% YoY.
Beginning in July, advertisers turned on their strategies, with advertisers increasing their spend by 244% MoM from June.
Another noticeable jump came in August, when spending increased by 167% YoY. Much of that spend, however, came from ads promoting Aviron’s rowing machine (92% of the month’s spend).
As the holiday season neared, spending increased.
In Q3, spending from these advertisers jumped by 69% YoY. October, in particular, saw spending rise by 23% YoY and 24% MoM.
It’s been a rollercoaster of emotion for most advertisers in health-and-fitness-related industries. Peloton is the perfect example.
After gyms locked their doors or closed altogether during the pandemic, Peloton’s popularity and sales exploded.
Unfortunately, as gyms reopened and people looked for reasons to get out of the house, Peloton lost some of its shine.
Since May, Peloton has experienced widespread layoffs, leadership changes, and go-to-market pivots, including one that saw it bring its products to Amazon.
Despite the hardships, Peloton advertisers are still spending.
In Q1, for example, advertisers spent nearly $50mm on a variety of digital, print, and T.V. ads.
As we move into 2023, Peloton’s budgets will likely go to the promotion of its core products but also to campaigns aimed at instilling its new identity in the market—a market ripe with competitors that include Bowflex, Echelon, and NordicTrack.
Insights on Healthy Drinks & Food Advertising
Through Q3, advertisers promoting healthy drinks and food, including health drinks, health food, meal replacements, smoothies, and sport performance drinks, collectively spent $319mm, representing a 2% YoY decline from the same time last year.
Although these advertisers’ budgets took an overall hit for much of 2022, early signs indicate they’re ready to head into 2023 with something to prove.
In Q3, healthy food and drink advertisers increased their spending by 25% YoY, thanks mainly to a huge spike in September.
It’s hard to say exactly what prompted this triple-digit increase, but a combination of school sports season returning as well as pushes from the likes of Gatorade to promote new products could have played a role.
Advertisers promoting sports performance drinks—think Gatorade, Propel, POWERade, and Liquid IV—were a driving force in the healthy food and drink category, accounting for 57% ($181mm) of the category’s spend.
Although spending from these advertisers dropped by 5% YoY, household names—and one emerging star—still spent big, especially in Q3 when budgets rose by 30% YoY.
PepsiCo (Gatorade, Propel, etc.) increased spending in the wake of Gatorade’s double-digital growth in Q1.
Ramon Laguarta, PepsiCo’s chairman and CEO, described Gatorade as “a high-margin business for us, clearly growing again at a very fast pace.”
The spending also comes during Gatorade’s evolution.
According to Gatorade CMO Kalen Thornton, “We are trying to go from the notion of being a sports fuel company to a brand that’s fueling sport culture and athletic wellness.”
The Coca-Cola Company
Few things in life are intertwined more than Pepsi and Coke. Unsurprisingly, their ad teams continue to partake in a perpetual battle for market share.
For the Coca-Cola Company (Vitamin Water, POWERade, etc.), ad spending comes during its own evolution.
Vitamin Water, for example, launched its biggest marketing campaign in years, tapping Lil Nas X to woo Generation Z. Coke’s big splash with this campaign could be a tipping point that reignites a marketing resurgence.
A similar Gen-Z-focused strategy comes to light when looking at how the company promoted POWERade.
In March, POWERade launched a campaign that challenges the “win-at-all-costs” mentality.
The campaign, which features Simone Biles, encourages athletes to pause and focus on their mental health—a topic that’s receiving a long overdue spotlight, especially among younger generations.
These two shifts could indicate the audience The Coca-Cola Company will target moving forward.
Regardless, more ad dollars from the Coca-Cola Company are an inevitability as it uses the diversification offered by performance drinks and other non-soda alternatives to stay competitive in a relentless market.
For Gatorade, POWERade, Vitamin Water and others legacy players, the evolution isn’t random; strong pushes from newer entrants, like Liquid I.V., are forcing their hands.
Founded in 2012, Liquid I.V. has experienced steady growth on the back of an advertising strategy that targeted younger generations, e.g., Millennials and Generation Z, on social media.
On the heels of an acquisition by Unilever in 2020 and the appointment of a new V.P. of Marketing, Liquid I.V. is flexing its marketing muscles and taking steps into T.V., OTT, OOH, and media mix modeling (MMM).
Moving forward, it’ll be interesting to see how Liquid I.V. evolves its strategy and if others in the industry steal a page from its playbook to make noise an an advertising world dominated by Coke and Pepsi. Through Q3, these two companies accounted for 93% of spending from the category.
Compounding factors, including a high prevalence of obesity, diabetes, cardiovascular diseases, hectic lifestyles, and long working hours, are accelerating the growth of the meal replacement market.
In fact, the global meal replacement products market size is expected to grow at a compound annual growth rate (CAGR) of 6.5% between 2019 and 2025.
Despite the growth, only one company is spending anything substantial on ads.
Through Q3, Abbot (Ensure and Nestle’s Carnation Breakfast Essentials) spent nearly $83mm or 92% of the spending from meal replacement drink advertisers.
Collectively, advertisers for meal replacement drinks increased their budgets by 6% YoY from the $83mm invested last year during the same time, representing 27% of the spend from the overall fitness and health category. Much of this growth came as a result of a Q3 increase of 23% YoY.
The same factors that have propelled this market thus far will continue to do so in 2023.
In turn, these advertisers will continue to spend, not only to gain market share from existing players but to offset the growth from others, including Huel, which has grown to more than $100mm in revenue since its founding in 2014.
No Cool-down Required for Health & Fitness Advertisers
Fitness- and health-conscientious advertisers, including those for Peloton, PepsiCo, The Coca-Cola Company, and Abbott, have rebounded nicely following a Q1 and Q2 that saw an inevitable post-pandemic decrease.
Although spending has since fallen from an August surge that surpassed $160mm, spending levels from these advertisers are considerably higher than during September and October of 2021—and there’s no doubt why.
With the holiday season fast approaching and millions of people jotting down their New Year’s resolutions, these advertisers will continue to spend—even if most people who started the year with good intentions fall back into their old ways.
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