00:00 Speaker a
BFA data shows that Gen Z and millennials are increasingly prioritizing their health, leading to some bullish comments from Bank of America. Let's welcome more to BFA Securities leisure analyst Alex Perry. Alex, we meet you on site.
00:16 Alex Perry
So, well, what we're seeing is that we're seeing a shift towards healthier habits, especially millennials and Gen Z, which we think should drive some, uh, uh, there's some trend toward long-term staying power. So, especially in the data, a few things we see are that we see Generation Z spending 2.8 times more than it has been on older adults (especially baby boomers). So we
00:46 Speaker a
How many more, Alex?
00:48 Alex Perry
In terms of fitness, the baby boomer generation is 2.8 times more. Even more interesting is that the millennials representing the largest spending cohort are suitable for fitness, which costs three times the amount of fitness for baby boomers. So we think you know
01:10 Speaker a
When you say fitness, we mean going to the gym, like how we define fitness.
01:16 Alex Perry
Yes, yes. So we define it as a fitness club. Well, so thinking of lifelong planet fitness, uh, traditional brick and mortar fitness is how we define it. So we are increasingly seeing these young demographic information prioritizing not only fitness but other healthy lifestyles as well. so
01:41 Speaker a
Is that like diet?
01:44 Alex Perry
That's completely correct. So, well, really focus on eating healthy, drinking, aging, healing. So what we're seeing is the drinking of millennials and Gen Z, who drink less and exercise more. So one of the ways we look at the data is that we see spending on non-alcoholic beer and Selzer is equivalent to alcohol equivalent to 28 points since 2021. Therefore, their performance is very interesting. You know, they are doing other things, focusing on other ways of health. They focus on healthy aging and healthy recovery. For example, if you look at Google search trends, for example, the search trend for anti-aging masks will be greatly improved.
02:37 Speaker a
So red light, more red light treatment, fewer bars. Is that right?
02:44 Alex Perry
More, more red light therapy, less alcohol, less bar, more fitness. Well, we think that there is some real staying power, too, that can cover our stocks.
03:02 Speaker a
If Alex, if the economy accidentally fell into a recession, you know, many economists took part in the show and told me the chances that this would increase. This means for some trends, what that means in terms of gym membership and the decline in organic food and frigidity.
03:23 Alex Perry
Yes. No, that's a good question, Josh. So, I think that means, if we look at the historical data, we will find that fitness is actually a relatively recession of retardation. So we can go back to 2008, 2009, and it is actually publicly traded at present. Well, during this period, brick and mortar fitness players and the same store were relatively frankly selling, and profits actually expanded. I think this tells us that fitness is a deeply rooted consumer behavior. Consumers are reluctant to give up on fitness, and other discretionary expenses are reluctant to give up. So we actually think that fitness players are resilience in the recession, maybe you'll ask about tariffs, we think it's a good place for investors to avoid uncertainty related to tariffs. Well, you know, they
04:24 Speaker a
Where tariffs are relatively flexible.
04:28 Alex Perry
Relatively elastic. that's right. So, well, there may be some small fitness equipment purchases exposed, but there are no direct tariffs, suitable for athletes. And we think this is a very interesting investment feature.
04:48 Speaker a
Let's give the audience a way to play this. You are talking about cameras, the top health selection lifelong group.
04:59 Alex Perry
Yes, a lifetime. We, we think they are in the middle of what we think, well, the younger generation prioritizes healthy lifestyles. So they really quickly identified some of the fastest growing leisure and health trends. Well, a good example is kimchi. We have seen an absolute surge in popularity of Pickleball. And I think that the trend was quickly identified in life and they started to roll out kimchi to most clubs. So now more than 80% of clubs own Pickleball, and they are now the largest Pickleball provider in the United States. The cold exposure therapy we talked about earlier is that they quickly got caught up in this trend and they are pushing cold unge bathtubs to many of their clubs. So we think, you know, they've identified these trends, they've pushed them to the club, and then you know, it's worth it, it's a very senior membership, membership experience.
06:00 Speaker a
Have you ever considered data and how do influencers play in these trends? Some of the trends you are talking about, I imagine Andrew Huberman there. They talked about a lot of these trends. I just want to know what roles can be played here?
06:19 Alex Perry
Yes, no, that's a good question. I think this definitely plays a huge role. Well, we've seen an increase in the impact of social media on our stock coverage. Well, tik tok, for example, one of them, the data we really see is Tik Tok social media engagement. One thing I think we found is that increased social media engagement leads to a buzz around different concepts. A good example of what we called up is the Shark Ninja. They are very good.
06:57 Speaker a
Why Shark Ninja?
06:59 Alex Perry
So if we want to think about fitness from the perspective of A, you know, experience, and then from the perspective of consumer products, Shark Ninja does offer an ever-expanding portfolio, then Shark Ninja is always thinking about A, you know, you know, and then from the perspective of consumer products. The most recent example is the Shark Kyro Glow Mask, a red light treatment, anti-aging mask. Well, it’s great to debut and build buzz on its products on social media, especially on Tik Tok.
07:38 Speaker a
Alex, thank you very much for your precious time today. Super interesting trend. Thank you for your time and those selections. That's great. Thanks.
07:45 Alex Perry
Thank you very much, Josh. Thank you for keeping me going.
