Investing in the Mind-Body Connection

What to Watch: The Mind-Body-Soul Model

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Why you should care

Because the granola and vitamin-water economy is more than a cool trend — it’s worth big money too.

Marketing and spirituality might seem like odd bedfellows, but selling people on products that enhance the mind, body and especially the soul is becoming serious business. Let’s put some numbers to it: Last year, global spending on personal health, fitness and sustainable living surpassed $300 billion. Sales of natural and organic foods in the United States alone neared $50 billion — with Whole Foods’ market value pegged at $14 billion — and the yoga industry, having journeyed from ancient spiritual practice to luxury lifestyle, continues to grow at a rate of 20 percent per year, accounting for $27 billion today in America.

But the revelation isn’t what people are buying or how much they’re spending — it’s how they are choosing. In a far-reaching study by PR powerhouse Edelman, consumers reported that when faced with a choice between products of equal quality and price, companies that support a “good cause” with a portion of their profits won out. Forty-four percent of people were even willing to pay a premium for products made by do-gooders.

Living la Vida Coco

Consider coconut water, a low-calorie, potassium-packed drink popular with athletes because of its super-hydrating qualities. Dubbed “Mother Nature’s sports drink” by marketeers, the trendy beverage’s sales have increased eightfold over five years to nearly $400 million. In fact, the craze for coconut water prompted the United Nations’ Food and Agriculture Organization to warn that global demand for coconut products is outpacing the rate of production in Asia, which grows 85 percent of the world’s coconuts.

The near manic popularity of coconut water provides a snapshot of our evolving (and occasionally irrational) conception of what it means to be healthy. In recent surveys, most baby boomers defined healthy living as maintaining the right weight and not getting sick. By contrast, millennials and Gen Xers defined it as eating right and exercising. So today, the holy grail of health depends on crafting a lifestyle based on the right products and activities.

This trend is playing out in our digital lives as well. Health and fitness mobile app usage has grown at twice the rate of apps overall this year, spurred in large part by our obsession with wearable computing devices like Fitbit.

Gluttons for Good

While it would seem that juice bars and farm-to-table vegan cafés are everywhere in the Brooklyns and San Franciscos of the world, it turns out that restaurants catering to the growing demand for locally grown, sustainable food make up a mere 5 percent of the nation’s $683 billion restaurant industry, meaning there’s a huge opportunity to feed consumers what they want — while feeding the bottom line.

LYFE Kitchen, founded in 2012 by a team of former McDonald’s executives, is one such company eager to capitalize on the twin demands for a healthy lifestyle and sustainable products. By offering low-calorie, locally sourced food in a setting that’s more spa than strip mall, LYFE (Love Your Food Everyday) is reimagining fast food as “farm to counter.” The company’s simple motto? Eat good. Feel good. Do good.

To which investors might add “ROI good.” LYFE Kitchen, which tripled its footprint to 10 locations in the past 12 months, generates more than $3 million per store — about 25 percent more than the Panera Bread and Chipotle chains, leading fast-food alternatives with $4 billion and $21 billion market caps, respectively. LYFE expects to open 250 restaurants by 2018. 

What We’re Watching

We’re excited about SoulCycle, the spinning studio that delivers a holistic fitness experience by blending heart-pounding cardio with the spirituality of yoga. Skeptics warned its founders in 2006 that the market wasn’t hungry for another spin offering, but SoulCycle (acquired by Equinox in 2011 for an estimated $25 million) has quickly developed a cultlike following and silenced its detractors.

SoulCycle books roughly 8,000 riders per day (among them Madonna, Chelsea Clinton, Deepak Chopra, Nicole Kidman and J.Crew group chairman and CEO Millard “Mickey” Drexler, nicknamed the “Godfather of SoulCycle”), who shell out $30 per session to work through bike-based exercises in candle-lit studios to build endurance and camaraderie. While there is a fanatical, passionate fan base that has emerged in a few key geographies, today it’s reaching only a minuscule portion of its enormous potential market.

It reminds me of what Starbucks felt like in the early days. With only 25 studios (a figure that’s expected to double by 2015) raking in an estimated $87.5 million, this growth story is just beginning — not to mention the high-end retail products flying off SoulCycle’s shelves, from co-branded Lululemon apparel to luxury brand candles and, you guessed it, dog T-shirts.


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