Wellness Wins
People wanted healthy options before, but it just didn’t sell.
The trend toward consumers valuing health and wellness grew during the pandemic—naturally, given that COVID-19 was a health crisis. But this trend has increased to an unprecedented level, said a C-suite executive at one of the fastest growing wellness and personal care companies in the world. “Especially younger consumers prioritize wellness more than almost anything else.” Discussing a specialty bath products brand, the executive said that engagement has soared. “There’s a huge amount of earned media and organic PR we get from this brand because it’s so top of mind for consumers.”
Healthy menu options, which used to be marketed separately for a small group of customers, are simply becoming a normal part of many menus. For example, Starbucks’ Impossible Breakfast Sandwich has helped the company finally break through the challenge it has had with food sales. “People wanted healthy options before, but it just didn’t sell,” said Tenpenny. “Now we have a product that is relevant to all customers.”
Contactless payment is a perfect example of a trend accelerated by the desire for wellness (or rather, to lessen the risk of contagion). Although the health rationale is no longer as relevant, digital payments have continued to soar because the customer experience is so positive. “Tap to pay has exploded around the world,” said Romina Seltzer, head of product and innovation for Visa Latin America and the Caribbean. In her region, tap to pay has gone from virtually no penetration four years ago to 50% of Visa’s payments today and 72% globally (face to face transactions, excluding Russia and USA). “The better user experience wins.” Ease of use is also leading to a huge increase in what Seltzer called “fast payments”—Venmo and the like. Visa Direct saw a 39% increase in payments in 2022 (excluding Russia), and Seltzer expects this to build.
A not-so-obvious connection to the wellness trend is the surprising surge in pet ownership and spending on pets. Wetteny Joseph, EVP and chief financial officer at Zoetis, said that in one study, 95 percent of pet owners globally consider their pet a part of their family, and 98 percent reported that they have personally experienced health benefits from having a pet in their lives. Pet ownership and spending exploded during the pandemic and has not gone away, not only in Western economies but in all parts of the world. “There’s the influence that Western cultures have on a lot of these emerging markets,” said Joseph, adding that people around the world are increasingly seeing pets as family members. “There’s also this element of people living in more urban spaces, waiting longer before they have children,” he said. “The slower pace of growth of the human population is almost replaced by … pets.”
Just 10 years ago, animal health company Zoetis used to do two-thirds of its business supporting farm animals and one-third for pets, and today the reverse is true based on increased pet adoptions and innovative new products. Although the pace of adoptions has slowed as people have returned to more normal work behaviors, the focus on the pet—and its health—has not changed. “There’s been this trend over time where the humanization … of pets is even more pronounced,” said Wetteny Joseph, EVP and chief financial officer. This is also a global trend. “[People] have a different view of what a pet means and what role it plays in their lives,” he said. Even as vet visits have come down since their height during the pandemic, he said, “What people are spending on a per-visit basis is up significantly.”
To address the growing demand for more products to improve a pet’s health, Zoetis has boosted its R&D spending to its highest level. Joseph cited a recent study Zoetis conducted in which people said they would maintain spending on their pet at the same rate, even if their budget decreased by 20%. Today, Zoetis’ dramatic shift to focus on pets is having a big effect on its innovations going forward.