April 2022 | News | Vertical Focus

Vertical Focus: Exercise Equipment

Tags: Demand Planning, China, E-commerce, Finance, Retail Logistics, Supply Chain

Planet Fitness is one fitness club company that has thrived in recent years, growing from 918 locations in 2014 to more than 2,200 in 2021.

FISCAL Fitness

Here's a sampling of statistics about the fitness equipment industry, compiled by RunRepeat and other sources, that helps to illustrate its status today.

  • The fitness equipment industry is estimated to be worth $11.3 billion as of 2021, up 11% from 2020.
  • The fitness equipment industry is projected to be worth anywhere from $14.7 to $21.1 billion by 2028.
  • One of the biggest growth markets globally is China, which is expected to have a 16% compound annual growth rate in the industry from 2021 to 2027.
  • Consumer fitness equipment sales grew 68.4% from $3.3 billion in 2010 to $5.6 billion in 2020.
  • At-home fitness equipment sales shot up 218% in 2021.
  • By 2024, cardio equipment such as treadmills, ellipticals, and recumbent bikes will make up 65% of the total fitness market.
  • Online fitness is expected to grow by 33% year-on-year, making it a $6-billion slice of the annual fitness industry by 2027, according to Uday Anumalachetty, divisional vice president at FitnessOnDemand.
  • Planet Fitness is the largest fitness center (in terms of members) in the world, with more than 2,200 clubs, primarily in the United States, Canada, and Australia.

Pandemic Gives Fitness Field a Workout

Like most industries, the fitness equipment field changed dramatically when the pandemic struck. In particular, sales of fitness gear, gadgets, and apparel soared in 2020 as consumers stuck at home and locked out of gyms invested heavily in new equipment for their homes.

"As soon as the lockdowns took effect, the home-fitness business took off like wildfire," Matt Powell, vice president and senior industry adviser for the NPD Group told the Washington Post last year.

Health and fitness equipment revenue more than doubled to $2.3 billion, from March to October 2020, according to NPD data. Some manufacturers, in fact, struggled to keep up with demand, particularly as sales of stationary bikes tripled and sales of treadmills jumped 135%, according to the Post. Dumbbells also saw a sharp sales spike.

The trend also extended beyond exercise-style equipment, leading to increases in the purchases of products such as bicycles, kayaks, and cross-country skis.

Meanwhile, gyms suffered major initial losses and operational challenges amid widespread shutdowns that particularly put pressure on those already struggling. Gold's Gym, 24 Hour Fitness, and Town Sports International, the owner of the New York Sports Clubs and Lucille Roberts chains, all filed for bankruptcy protection in 2020. More than 9,000 gyms, clubs, and studios closed for good as a result of the pandemic, estimates Mark Williamson, co-founder of ClubIntel.

As vaccinations became available and gym doors reopened, fitness center numbers began to rebound. The home gym will never replace retail gyms, which will always offer the advantage of a social environment and a wide assortment of sophisticated equipment, notes Joanna Zeng O'Brien, a Moody's analyst who covers the fitness industry.

For most equipment manufacturers, serving both home and retail gym markets is nothing new. But many gyms extended their presence into the home market as a result of the pandemic with apps that help members work out away from the facility.

"There is the convenience of working out from home, but people also want to go to physical locations. People miss that," O'Brien says. "Fitness companies that want to stay around and not become obsolete have to do both."

Peloton Pedals it Back

Perhaps no home product will be more associated with the pandemic than the stationary bike, particularly the one made by Peloton. The company's fortunes have fallen since demand exploded in the first year of the pandemic, and it has faced an array of challenges.

In one of the latest legal efforts surrounding the competing home-fitness equipment companies, NordicTrack's maker iFit Health & Fitness has filed a U.S. trade complaint seeking to block imports of Peloton Interactive's stationary bikes

The case centers on the Peloton Bike+ stationary bikes that alternate between bicycling and weight lifting. In May 2021, iFit was issued a patent for an invention involving stationary bikes that have free-weight cradles. The company uses the invention in several studio bike models. In its complaint, filed with the U.S. International Trade Commission, iFit says, "The unauthorized use of patented inventions by Peloton is pervasive," reports the American Journal of Transportation (AJT).

Peloton and iFit already have a legal case over patents in federal court, but AJT notes that the U.S. International Trade Commission tends to work faster than district courts and has the authority to stop products from crossing the U.S. border, which could create a major headache for Peloton. The company's Taiwan-based manufacturers, Tonic Fitness and Rexon Industrial Corp., are also named in the complaint.

The case is not the only one before the trade commission involving Peloton and iFit. Both are accused, along with Mirror owner Lululemon Athletica, of infringing patents for streaming video over the internet by Dish Network Corp. and its Sling TV.

In March 2022, CNBC reported on Peloton's efforts to overcome the struggles it has faced since the surge in the pandemic's early days, including declining demand for at-home workout products and heightened supply chain expenses. The company's stock shares dropped 80% over 12 months and it replaced its CEO early in 2022.

Treadmill Market Not Standing Still

Among the oldest exercise equipment categories is the treadmill market, and they remain a popular choice in fitness-minded homes and the health clubs where rows of the machines have long been such a familiar sight, finds a report from Allied Market Research.

The report shows that the global treadmill market was valued at $3.2 billion in 2020 and is forecast to climb to $5.9 billion by 2030, enjoying a compound annual growth rate of 5.1%. Treadmills represent the highest-selling exercise equipment category in the fitness industry, "well ahead of others," according to the Sports & Fitness Industry Association. The treadmill industry now includes hundreds of manufacturers globally, estimates Allied Market Research.

Although the category encompasses both manual and electronic treadmills, the treadmill industry is dominated by the electronic-based products. Users have come to expect treadmills that provide sophisticated measurements and guidance, helping them understand the nuances of their workouts and the effort they are putting into them.

Treadmills were among the fitness categories to see increased demand when the pandemic arrived and pushed many consumers to seek personal pieces of fitness equipment for their homes. Still, the commercial segment of the global treadmill market remains much larger than the residential segment, according to Allied Market Research.

The specialty store segment reigns over franchise and online stores among distribution channels. Allied Market Research points to that segment's advantages in providing consumers with more detailed expert guidance. However, online stores are expected to be the fastest-growing segment through 2030 as e-commerce becomes increasingly popular and simple for customers to use.






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