2016 Health & Wellness Study

Health & Wellness Consumer Analysis
Executive Insights
The 2016 Health & Wellness Study was conducted by Alex Evans and Chris Randall, Managing Directors in L.E.K.
Consulting’s Retail & Consumer practice. Alex is based in Los Angeles and Chris is based in Boston.
For more information, contact consumerproducts@lek.com.
2016 Health & Wellness Study
The 2016 Health & Wellness Study examines consumer
spending preferences for nutritional supplements,
personal care and healthy grocery products among
Millennials, Gen X and Boomers.
The study looks at category engagement, drivers of
channel selection and, the potential for subscription
services, as well as the success factors for private-label
products.

Executive Insights
We investigate three major categories of
health & wellness consumables:
• Functional food & beverage
• Nutritional supplements
• Skin care
Three categories of consumables
Functional food & beverage
• Healthier-for-you snacks
• Functional beverages
Nutrition supplements
• Vitamins, minerals and specialty
supplements (VMS)
• Sports nutrition
Skin care
• Facial cream
• Hand cream/body cream

Executive Insights
While some H&W categories
are more “mature” in terms of
generational penetration (e.g.,
healthier-for-you snacks and
personal care), there appears
to be significant opportunity to
bring Gen Xers and Boomers into
more complex categories such as
functional beverages and sports
nutrition.
Underpenetrated opportunities
Consumables engagement by category and segment (2016)
Percentage of segment who have purchased in the past 12 months (N=1,934)
Note: Q6. Have you purchased any of the following goods/services within the past 12 months?
Source: L.E.K. Health & Wellness Consumer Study (February 2016)
Overall 53% 84% 72% 41% 84%
87
57
72
90
76
87
48
73
85
65
81
28
70
81
32
0
20
40
60
80
100
Functional
beverages
Healthier-for
you snacks
VMS Sports nutrition Personal care
Generation X (1967-1981) Boomers (1947-1966)Millennials (1982-2016)

Executive Insights
With the exception of VMS and facial
care, at present, reported Boomer
spending is roughly half the per capita
rate of Millennials and Gen Xers, once
again suggesting additional opportunity
to drive growth within this segment.
More room for Boomers
Average spend per customer* in the past month (2016)
Note: Q8. In the past month, approximately how much did you spend on the following goods and services? *Among customers who have spent more than $0 in the
past month in the broader category (nutritional supplements, functional F&B or skin care).
87
90
8785
8181
100
Functional F&B
Dollars (N=1,751)
Personal care
Dollars (N=1,364)
Nutritional supplements
Dollars (N=1,434)
Generation X (1967-1981)Millennials (1982-2016)
Healthier-for-you snacks
Functional beverages
VMS
Sports nutrition
Body care
Facial care
Hand care
51 55
44
62 53
34
0
20
40
60
80
100
120
140
160
78
Gen XMillennials
113
Boomers
108
74 70
36
68
67
37
0
20
40
60
80
100
120
140
160
137
Millennials
142
Boomers
73
Gen X
49 49
37
42 44
20
42 44
20
0
20
40
60
80
100
120
140
160
Gen X
138
Boomers
77
Millennials
133

Executive Insights
While online purchases continue to
make gains (currently ranked second
for VMS and third for personal care)
and healthy grocery has become a
core channel for functional F&B, the
FDMC channels remain critical across
all H&W consumable categories (at
around 60%-75% of total sales).
*Food, drug, mass merchant and
warehouse club
Conventional channels are still king…
Share of consumer spend by channel and category*
Percentage of total spend
Notes: Q53. How did your spend on nutritional supplements in the past month break down across each of the following types of retailers? Q63. How did your spend on
facial skin care, personal hand care or body care in the past month break down across each of the following types of retailers? Your best estimates are okay. If you have
not purchased through a particular type of retailer, leave blank or enter “0”- Percent of total spend? Q76. How did your spend on functional beverages and
healthier-for-you snacks in the past month break down across each of the following types of retailers?; 1 Responses are not weighted by total level of food & beverage or
nutraceutical spending; **Other includes multilevel distributors, workout facilities, subscription services and other.
Overall 53% 84% 72% 41% 84%
87
90
8785
8181
100
41 39
35
40
25
24
9
8
14
13
8
6
7
17
9
7
16
18
9
6
6 9
6
6
7
60
80
40
20
0
100
Personal care
(N=701)
3
Functional
beverages
(N=409)
3
Healthier-for-you
snacks
(N=651)
3
1
3
Nutritional
supplements
(N=690)
73% 69% 59% 66% % FDMC
Department store
Specialty store
Other**
Convenience store
Online
Drugstore
Traditional grocery
Mass merchant/
warehouse
Healthy grocery

Executive Insights
Though they utilize more diverse
channels than their Gen X or
Boomer counterparts, Millennials
still rely heavily on conventional
FDMC channels (68%, compared
with roughly 75% of older
consumers) when shopping for
H&W consumables.
… even among Millennials
Share of foodspend and beverage consumer spend by channel and customer type
Percentage of total
Notes: Q76. How did your spend on functional beverages and healthier-for-you snack in the past month break down across each of the following types of retailers?
**Other includes multilevel distributors, workout facilities, subscription services and other.
Overall 53% 84% 72% 41% 84%
87
90
8785
8181
100
Drugstore
Convenience store
Other**
Healthy grocery
Traditional grocery
Online
Mass merchant/
warehouse
42
47 47
20
22 20
15
13
11
6
8
7
6 7
5
6
100
40
60
20
80
0
3 4
Generation X
(N=98)
4
Boomers
(N=101)
4
3
Millennials
(N=189)
68% 75% 74% % FDMC

Executive Insights
For many health & wellness
categories, consumers are
unwilling to take a separate
shopping trip and prefer to make
the most convenient use of
channels where they already shop.
This means that FDMC channels
have the potential to capture
the most share as long as they
catch up and provide the right
assortment.
Price, convenience inform channel choices
Reasons for shopping channels, by category
Percentage of responses
Note: Q54. What are the top reasons that you choose to purchase vitamins, minerals, herbals and specialty supplements through these retailers? Q64. What are the top
reasons that you choose to purchase facial skin care, personal hand care or body care through these types of retailers? Q77. What are the top reasons that you choose to
purchase functional beverages and healthier-for-you snacks through these retailers?
Overall 53% 84% 72% 41% 84%
87
90
8785
8181
100
Nutritional supplements (N=690)
Personal care (N=701)
Food and beverage (N=689)
0 5 10 15 20 25 30 35 40 45
Best fits my lifestyle
It’s the go-to store for this type of product
Broadest selection
Convenient: close to my home/office
Highest-quality products
Easy to browse
Helpful customer service
I can’t find the brands I like anywhere else
Lowest prices
Convenient: I already shop there for other things
5
7
7
9
9
14
21
24
36
41
5
7
10
13
26
42
5
8
9
11
11
10
14
19
25
37
5
8
14
23

Executive Insights
When it comes to channel selection
criteria, L.E.K. Consulting’s findings
reveal clear generational distinctions,
with Boomers/Gen X consumers
preferring value (including high quality/a
go-to destination at the lowest possible
price), compared with Millennials, who
seek channels that best match their
lifestyle (both philosophically and in
terms of proximity to home/work).
Channel drivers by age
Reasons for shopping channels, by category
Percentage of responses
Note: Q54. What are the top reasons that you choose to purchase vitamins, minerals, herbals and specialty supplements through these retailers? Q64. What are the top
reasons that you choose to purchase facial skin care, personal hand care or body care through these types of retailers? Q77. What are the top reasons that you choose to
purchase functional beverages and healthier-for-you snack foods through these retailers?
Overall 53% 84% 72% 41% 84%
87
90
8785
8181
100
Nutritional supplements Personal careFood and beverage
19
13
41
45
33
46
25
29
12
36
32
51
38
22
14
19
31
47
0 10 20 30 40 50 60
Lowest prices
Convenient: I already
shop there for
other things
It’s the go-to store
for this type
of product
Convenient: close
to my home/office
I trust the
products sold
at this retailer
Highest-quality
products
4
20
3
12
1
(4)
4
(3)
2
0
(7)
(13)
0
0
0
(3)
(8)
(4)
(20) 0 20
(3)
1
1
(5)
(5)
10
0
0
1
(8)
(6)
3
(4)
(1)
3
(2)
1
0
(20) 0 20
(3)
(2)
(23)
(11)
2
(2)
2
(2)
0
2
9
8
7
2
1
(2)
4
4
(40) (20) 0 20 40
Average of generations Millennials Generation X Boomers

Executive Insights
Supplements notwithstanding,
L.E.K. notes increased interest in
subscription services across H&W
categories. This excludes Boomers,
however, who generally continue to
focus on traditional retail models.
Increased interest in subscription services
Likelihood to purchase a health & wellness product subscription
Percentage
Note: Q80. If this subscription box service were available with items and products that you would be interested in and was priced at a cost that you found reasonable,
how likely would you be to subscribe to a monthly membership program?
Overall 53% 84% 72% 41% 84%
87
90
8785
8181
100
Definitely would not
Probably would
Probably would not
Definitely would
No interest
Might or might not
Personal care products Nutritional supplements
15
24 23
28 27 30
25 28
17
12
33
24
13
30
29
15
33 26
14
32 24
12
19
24
7
14
14
17 13
20 14
8
11
13 11
14
7
18
16
6
13
14
8 76996
1
2
1
70
0
80
10
50
20
60
30
40
90
100
Gen
X
Gen
X
Boom.
4
Mill.Gen
X
Boom. Gen
X
Gen
X
Mill. Boom. Boom.
4
Boom. Mill. Mill. Boom.Mill.Gen
X
5
Mill.
Functional
beverages
Healthier-for-you
snacks
Hand and
body wash
Facial cream VMS Sports nutrition
Functional food & beverage

Executive Insights
Generally speaking, H&W
consumers are amenable to private-
label versions of personal care and
nutritional supplement products
(more than 80% have already
purchased or would consider
purchasing such alternatives in the
future).
Once again, however, Boomers
remain skeptical, and instead
continue to favor trusted brands
over private-label substitutes.
Private-label preferences
Willingness to purchase private-label brands, by product segment
Percentage (N=749)
Note: Q65. Have you ever purchased any store-brand or private-label facial skin care, personal hand care or body care products? (e.g., Everyday 365, Sephora,
CVS-branded products)? If not, would you consider purchasing store-branded facial skin care, personal hand care or body care? Q55. Have you ever purchased any
store-brand or private-label nutritional supplements (e.g., Everyday 365, Kirkland, The Vitamin Shoppe or branded products)? If not, would you consider purchasing
store-branded nutritional supplements?
Overall 53% 84% 72% 41% 84%
87
90
8785
8181
100
Have not purchased but would consider purchasing Have purchasedWould not consider purchasing
Skin care products Nutritional supplements
29
19
40
54
636564
42
47
54
4141
48
36
4448
47
52
36
26
30
41
37
35
4141
41
39
37
39
34
81111
56
1716
10
1819
11
25
19
14
10
0
100
50
30
20
40
60
70
80
90
Mill.Mill. Boom. Boom.Boom.Gen
X
Gen
X
Gen
X
Gen
X
Gen
X
Mill. Boom. Mill. Mill. Boom.
Facial skin care Personal hand care Body care VMS Sports nutrition

Executive Insights
While value may be key to
sales of private-label nutritional
supplements and personal care
products, many H&W consumers
believe that the quality of these
alternatives matches or exceeds
their branded equivalents.
To date, the majority of non-
branded purchases have been
limited to basic/staple offering.
However, there appears to
be a broader opportunity for
value-added, higher-price-point
private-label products in health &
wellness.
Price, quality fuel non-branded sales
Overall: Perspectives on private label, by category
Percentage of responses*
Note: Q56. Do you agree or disagree with each of the following statements as they relate to nutritional supplements? Q66. Do you agree or disagree with each of the
following statements as they relate to facial skin care, personal hand care or body care? *Percentage of responses based on respondents who answered they would at
least consider purchasing private labels in Q55/65. **Percentage of responses that disagreed with the following statement: “Name-brand vitamins, minerals, herbal
supplements and sports nutrition products have higher safety and regulatory standards.”
87
90
8785
8181
100
Personal careNutritional supplements
27
59
69
69
71
20
62
64
61
72
0 20 40 60 80
Higher safety
and regulatory
standards than
name brand**
Good value
for money
Same or
better quality
as name brand
Cheaper than
name brand
Buy only for
basic/staple
products
Overall
(9)
9
4
(3)
(1)
(2)
3
5
3
(2)
(10) 100
6
0
3
4
(4)
(5)
(4)
(3)
0
(20) (10) 0 10
(12)
0
8
(5)
(7)
3
(6)
(10)(20) 100
(18)
(19)
(11)
(10)
Millennials Generation X Boomers

Executive Insights
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and rigorous analysis to help business leaders achieve practical results with real impact.
We are uncompromising in our approach to helping clients consistently make better decisions, deliver improved business performance and create greater shareholder returns. The
firm advises and supports global companies that are leaders in their industries — including the largest private and public sector organizations, private equity firms and emerging
entrepreneurial businesses. Founded more than 30 years ago, L.E.K. employs more than 1,200 professionals across the Americas, Asia-Pacific and Europe. For more information, go
to www.lek.com.
L.E.K. Consulting is a registered trademark of L.E.K. Consulting LLC. All other products and
brands mentioned in this document are properties of their respective owners.
© 2017 L.E.K. Consulting LLC
About the Authors
Alex Evans, CFA, is a Managing Director in L.E.K. Consulting’s Los Angeles
office. He focuses on consumer-facing sectors encompassing both retail and
media. He specializes in a diverse set of verticals, including Health & Wellness,
Food & Beverage, Specialty Retail, Sports/Live Entertainment, Television and
OTT/Digital Media.
Chris Randall is a Managing Director and Partner in L.E.K. Consulting’s
Boston office. He is focused on the Retail & Consumer Products sectors,
advising clients on a range of critical strategic issues, including growth
strategy, retail format and network strategy, brand and marketing
strategy, e-commerce strategy, international expansion, and mergers &
acquisitions.

2016 Health & Wellness Study

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