Issue No. 140: Something to Believe In
The holy grail, fitness brands aspire to build cult-like followings.
Proving that community is a competitive advantage, companies like CrossFit and SoulCycle rose to prominence as a de facto religion for obsessive, fitness-seeking disciples.
Now, a growing number of exercisers worship at the altar of Peloton. Alone in their homes but together in spirit, proponents discovered a new form of motivation and meaning.
Framed through the broader unbundling of gyms, community, and even religion, more than ever, consumers are searching for something to believe in.
Seizing the opportunity, fitness brands hope to fill the void.
The Great Unbundling
Bolstered by the pandemic, digital communities are on the rise. Decades in the making, this acceleration is part of a sweeping cultural shift.
- From media to government, trust in social institutions is at an all-time low.
- Church membership among US adults recently dropped below 50% for the first time.
- About 21% of Americans have no religious affiliation. Among millennials and Gen Z, that number is more than 30%.
According to author and Harvard Divinity School fellow Casper ter Kuile, as institutional affiliation decreases, people are seeking out new sources of meaning and connection.
A step further, ter Kuile describes an unbundling of spirituality from religion, where younger generations are taking a personalized approach to belonging.
Exploring this phenomenon in How We Gather, a 2015 Harvard Divinity School study, ter Kulie and his colleague Angie Thurston identify an interesting development: Millennials turn to fitness classes for meaning, ritual, and community.
More specifically, the study revealed how fitness concepts like SoulCycle and CrossFit play the part of organized religion, abiding by the same tenets: community, personal transformation, social transformation, purpose-finding, creativity, and accountability.
“Strikingly,” they wrote, “spaces traditionally meant for exercise have become the locations of shared, transformative experience.”
“That’s Your Religion”
For Peloton CEO John Foley, the fitness-as-religion phenomenon is no surprise. In fact, back in 2017, he used this premise to pitch his company.
“When I was growing up,” Foley told attendees of Code Commerce, “we were a god-fearing nation.” Today, he notes, religious affiliation is waning, adding:
“The stuff that happened on Sunday morning at church or synagogue is still important to human beings. But they’re not getting as much of it from organized religion… People want fitness and they want something else.
Enter instructor-led, group fitness classes. In the ’70s or ’80s, you’d have a cross or Star of David around your neck. Now, you have a SoulCycle tank top. That’s your identity; that’s your community; that’s your religion.
What are people getting from that? Their guidance, ritual, identification, community, music, ceremony, spirituality, and reflection.”
The new problem, according to Foley, was that people had become too busy. As much as they craved these transformative fitness experiences, they didn’t have time to attend boutique classes.
Peloton, he declared, would bring the experience to them.
The Peloton Pilgrimage
As the gospel of Peloton spread, the power of its virtual fitness community exceeded all expectations, including Foley’s.
In 2015, some 25 members who met on Peloton’s digital leaderboard traveled to New York City for a live class. As luck would have it, the visitors met Foley, chatted with their favorite instructors, and posed for photos.
Soon, other members who learned of the so-called Home Rider Invasion (HRI) descended on the company’s studio. Then, Peloton began organizing annual HRI events. In May of 2019, nearly 3,000 riders from 49 states—plus Puerto Rico, the UK, and Canada—participated in the last HRI before the pandemic.
Of note, when discussing HRI (now known as Homecoming), Foley once again evokes religion:
“It’s a little bit of a pilgrimage to a mecca of sorts that’s really special and really fun… It’s a very powerful part of our business.”
Speaking to the organic nature of the gathering while doubling down on his framing, Foley added:
“This community largely happens on its own. We are shepherds of it, and we give them the tools and social features, high-fives and video chat, and we host this Homecoming event. It is a beautiful thing that is self-organized. HRI came out of the community. We didn’t create HRI; they started pilgrimaging to New York City on their own and we said, ‘Wow, we’ve got a tiger by the tail.”
Discussing community in the internet age, the authors of How We Gather wrote: “Young people are both more globally connected and more locally isolated than ever before.”
In fact, loneliness, depression, and unhappiness are increasing alongside the rise of digital connectivity and virtual communities.
- A Harvard study found 61% of young people (ages 18–25) are reporting serious loneliness.
- Americans have fewer close friends — one in five US adults reported having no close social connections.
Driving this point home, in the 2019 World Happiness Report, Dr. Jean M. Twenge, professor of psychology at San Diego State University, wrote: “Overall, activities related to smartphones and digital media are linked to less happiness, and those not involving technology are linked to more happiness.”
A number of factors contribute to these troubling developments, but the broader remains: As the great unbundling continues, we have to redefine connectedness.
According to ter Kuile, “meaning-making is a growth industry.” And brands that can offer meaningful, transformational experiences of belonging and becoming will find success.
Looking ahead: As the fitness landscape continues to shift in a post-pandemic world, meaning-making will take on new forms.
Already, we’ve seen a number of brands embrace hybrid offerings, allowing members to connect online and in person. Like Peloton, digital fitness platform obé has made in-person events part of its growth strategy. Expect more digital-first brands to follow suit.
Prior to the pandemic, a number of wellness social clubs, recovery studios, and luxury bath houses gained traction. As the world reopens, health-focused third spaces like The WELL, Remedy Place, and BATHHOUSE could thrive.
A more obvious and accessible alternative to expensive equipment or high-end clubs, recreational activities and team sports could be the answer to ending inactivity and building a real-life community.
👀 Can CrossFit Be Saved?
That’s the question we asked last year in Issue No. 88 as the controversial brand was imploding. Following racist remarks from its founder and former CEO Greg Glassman, CrossFit was in crisis. Today’s guest is trying to engineer a turnaround.
On the Fitt Insider podcast. Eric Roza, the owner and CEO of CrossFit, joined us to discuss his vision for the future of CrossFit, including the challenges and opportunities ahead.
In this episode. We talk about the role of technology in the company’s future, growing the CrossFit Games, and initiatives across eCommerce, healthcare, and digital fitness content. Plus, Eric tells us how a day-long meeting and handshake deal sealed the acquisition.
Listen to the show here.
🎮 Peloton Gets Into Gaming
Peloton is set to launch a video game-inspired workout called Lanebreak.
According to The Verge, in contrast to its instructor-led classes, users will vary their cadence and resistance to control an on-screen wheel, navigating the game’s obstacles.
Detailing the company’s strategy, David Packles, Peloton’s senior director of product on Lanebreak, said:
“Content, specifically our instructor-led content, is the heart of Peloton. We continue to lean on that to push us forward, but the reality is that people want variety… We’ve always wondered, ‘Is that it? What other formats could we actually experiment with?’”
The music-based experience will undergo a members-only beta test later this year, with an official launch set for 2022.
As we detailed in Issue No. 131, Fitness 3.0, more and more, the future of fitness looks like a game.
1.0. Jane Fonda, Bowflex, P90X
2.0. Connected hardware, live/on-demand classes
3.0. Fitness is a game
To date, Peloton has played into the exertainment trend while relying on charismatic instructors to motivate riders.
Now, following in the footsteps of gaming-focused companies like Zwift, Ergatta, and Supernatural, Peloton is eyeing a larger opportunity in interactive content.
🏠 Wellness x Real Estate
Wellness real estate is here to stay.
- Buildings certified under the WELL standard crossed the 1B-square-foot mark in 2021, up 4x from 250M square feet in 2018.
- In LA County, homes over $5M with the word “wellness” have a 72% price premium over otherwise similar listings.
Steel, glass, and well-being. Encompassing homes, multi-family condos, and living communities, wellness real estate blends architecture and design to support holistic health.
Amenities include biophilic design for improved cognitive function, circadian lighting for optimized sleep cycles, and high-end filtration technology for premium air quality.
Not just a fad. Globally, wellness real estate is a $134B industry, growing 6.4% per year since 2015. And while healthy living was a hot trend before 2020, post-COVID health concerns have made it a mainstay.
According to a national survey, over 50% of renters/homeowners would pay extra for touchless building entry or germ-resistant countertops.
Plus, as more employees go remote, network effects around work and capital will weaken, leaving real estate primed to step in as the new center of community and connection.
Developers everywhere are betting big:
- Lake Nona in Orlando serves a wellness-forward community of 17,000, complete with clusters of top-tier medical services and training facilities around wellness-infused homes.
- Legacy Hotel & Residences is constructing a $60M pandemic-proof wellness hotel equipped with a 100,000-square-foot medical center.
- In 2021, Be DTLA became the first apartment building in Southern California to attain the WELL Health-Safety seal.
But… the WELL seal, launched by for-profit company IWBI, has undergone criticism. Buildings applying must pay up first—with fees as high as $98,000—and experts have noted that certification hinges upon written health policies, neglecting actual on-site practices.
Punchline: In the past, wellness real estate had catered to the ultra-rich, but the pandemic increased the market for healthier living, accelerating access to options.
Not all wellness claims, however, hold up to expert scrutiny. Challenges aside, this movement is unlikely to reverse.
Next up, wellness tourism wants to punch your ticket.
📰 News & Notes
- Warby Parker enters telehealth.
- A new patent hints at a Fitbit smart ring.
- A new study looks at why people use Zwift.
- Tonal readies a retail location on Fifth Ave. in NYC.
- UnitedHealthcare: 4M members to receive free Peloton app.
- Updated: 750+ job openings at top health and fitness companies.
- GNC teams with and invests in RealEats to offer healthy meal delivery.
- NBA Launchpad is looking for health- & performance-focused startups.
💰 Money Moves
- Wellness supplement maker The Nue Co. landed $25M in a Series B round led by Pamoja Capital.
More from Fitt Insider: In Supplements We Trust
- Nature’s Fynd, a fungi-based food company, raised $350M in Series C funding.
More from Fitt Insider: The ‘Shroom Boom
- Corporate wellness platform JOON secured a $2.3M seed round led by Alpha Edison, with participation from Rock Health, among others. Note: Fitt Insider also invested in this round.
- CITYROW landed $12M in Series A funding for its connected rower and boutique studios.
- DTC femtech startup Evvy secured $5M in a seed round led by General Catalyst.
On the Pod: General Catalyst managing partner Holly Maloney
- Spire Health, a respiratory remote patient monitoring company, added $38M in funding.
- Little Spoon, a direct-to-consumer organic baby food company, secured $44M in Series B funding.
- Genexa, a clean-ingredient OTC pharmaceutical company, closed a $60M Series A led by Monogram Capital, with participation from Unilever Ventures, Northcastle Partners, and celebrity investors like Gwyneth Paltrow.
- Bangalore, India-based HealthifyMe, an AI-powered health and fitness app, raised $75M in a Series C round led by LeapFrog and Khosla Ventures.
- F45 Training, a global fitness franchise with over 2,200 licensed-studios in 63 countries, debuted on the NYSE, reaching a $1.6B market cap.
More from Fitt Insider: F45 Going Public
- Brazilian gym chain Smartfit, operator of nearly 1,000 gyms in 13 countries, is expected to raise at least $445M in an IPO.
- PureGym, a budget fitness chain operating in the UK, Switzerland, and Denmark, is considering going public.
- Palo Santo, a leading US-based investment fund focused exclusively on psychedelic healthcare, launched with $35M in capital.
More from Fitt Insider: Our list of 65 investors backing health & fitness startups
- UK-born plant-based food brand Wicked Kitchen raised $14M in Series A funding to introduce its vegan meals to US retailers.
- LeagueApps, a software platform for youth and local sports, closed a $15M Series B investment.
- French startup Wecasa, a marketplace for in-home wellness services, added $17.7M in funding.
- The Plug, a plant-based recovery drink, received $1.5M in a seed round.
- Next Gen Foods, a Singapore-based food tech company, secured a $20M seed round extension to scale its TiNDLE brand plant-based chicken in the US.
- GOURMEY, a French cultivated meat company, raised $10M in seed funding to scale its lab-produced duck foie gras.
- Leiio, a startup using psychedelic mushrooms for brain performance applications, closed an oversubscribed $5.5M funding round.
More from Fitt Insider: Psychedelic Wellness
- Active lifestyle platform Outside acquired mountain biking-focused media company Pinkbike, along with sister brands CyclingTips and Trailforks. Terms were not disclosed.
On the Pod: Outside CEO Robin Thurston