The Germany Report: Wellness Trends, Growth and Market Opportunities

The largest national economy in Europe and the fastest growing in the G7, Germany is a powerful global business force, and its innovative, tech-heavy wellness industry is no exception. As homegrown fitness tech expands abroad and boutique fitness booms, international operators’ reticence to venture into the market may mean missed opportunities.

Boutique fitness is thriving in a market estimated by Deloitte to be worth €4.8bn a year – with independent operators and larger chains competing to provide innovative, exciting workout experiences while focusing squarely on the performance benefits of such concepts to market them to new users.

According to the consultancy’s 2016 European Health and Fitness report, almost one-quarter of Germany’s 8,332 private health and fitness clubs are micro studios with an area of under 200 square metres. Within this thriving space, offerings include 415-club strong women’s-only chain Mrs.Sporty, and Body Street, which combines Electro Muscle Stimulation (EMS) with personal training. The latter’s footprint has grown from one studio in Munich to 240 across Europe in less than a decade, with the brand opening its third UK site in July 2017.

Tech is at the heart of many of the German firms expanding within the home market and abroad. According to Rainer Beck, Sales and Marketing Director of EMS equipment provider miha bodytec, technical expertise and consistent quality has been key to the company’s growth within Germany. “From the very beginning we emphasised the scientific background behind the technology and spent a lot of time on scientific training,” he explains.

Leading German health club operator McFit, whose million members make it the largest fitness brand in Europe, has leveraged this appetite through its Cyberobics classes, lead virtually by trainers in picturesque locations. “Virtual classes always have the same top-quality, the coach is never sick and always in a good mood,” explains communications manager Andreas Maechler.

Read more: German Fitness Giant McFit Collaborates With Wexer To Launch Virtual Studio Concept

Low tech-innovations like TRX systems, sled tracks and battle ropes have also proved so popular that Fitness First, which has 83 German clubs, launched a concept studio in Cologne in April 2017 which eschewed traditional static cardio machines in favour of such equipment. And McFit’s newest club offering, John Reed Fitness Music Clubs, which the group hopes to expand to 30 sites by the end of 2017, focuses on the power of inspiring design to improve exercise effectiveness.

“We added a strong focus on the right music for the workout because we are convinced that it adds extra motivation,” explains Maechler. “The concept is aimed at lifestyle-oriented people who are interested in fitness as well as music, design, art and lifestyle.”

Despite this relatively high gym membership penetration of 11.6 percent, Beck sees plenty of scope for further domestic growth for his tech company and the industry more generally. “The potential is almost unlimited,” he argues, “despite a great development we’re in the very early stages and there are a lot of different target groups to look at.”

It’s a sentiment Maechler agrees with. “We are constantly working on improving ourselves and finding ways to offer our members new trends and create an environment where they are highly motivated to work out,” he explains. “The challenge lies in identifying and offering new fitness trends early on.”

With Germany already in the top 10 worldwide as a wellness tourism destination, and Berlin a global hub for visitors attracted to its music and nightlife scene, the potential for such experiential fitness concepts to spur further growth in wellness tourism seems strong. Alongside EMS equipment, luxury hotel Aspria Berlin Ku’damm converted an underused car washing space into a studio specifically for interval training workout TribalFit.  At the same time, Germany boasts the third highest number of spas in the world, with medical spas in traditional wellness destinations like the Black Forest competing for the growing number of visitors from the Gulf states. Arab tourists are predicted to spend 2 million nights a year on holiday in Germany by 2020, according to the German tourist board.

The country is leading the way when it comes to vegan product innovation too. Market research data from Euromonitor shows health and wellness food as a whole growing by 1.2 percent a year, while Mintel’s Global New Products Database suggests that almost one-in-five global meatless and dairy-free product launches occurred in the country last year.

Highlighting the country’s pioneering status further still, Veganz, the first supermarket in Europe to exclusively stock foods that are free from animal products, opened in Berlin in 2011. It has since expanded across the city and into the Czech Republic and Austria, an impact investment from Katjesgreenfood doubled its stake in the chain from five to 11 percent in January 2017.

In the same month, the investor acquired a 25.1 percent share in Munich-based Hemptastic, a startup that produces cold-pressed hemp lemonade. At the time, CEO Manon Littek explained in a statement: “For us this is the ideal entry into the future segment of hemp – the brand also has the potential for further product groups.”  

With a further 20% buyout in coffee-based natural soft drink brand Caté in March, Katjesgreenfood’s activity highlights the buoyancy of the country’s healthy beverage market.

When it comes to athleisure, the power of technology is also being harnessed. Long-established sportswear goliaths Adidas and Puma both remain headquartered in their founding country, with the former making headlines in 2016 after announcing it would open a new factory in Ansbach. The plan? To use robots and 3D printing to produce 500,000 pairs of trainers a year.

And the established players aren’t alone. Younger upstarts like Aeance, whose minimalist athleisure collection features bonded non-stitch seams and laser-cut details and have become a hit in both Germany and the UK thanks to their use of cutting-edge technology.

To date, foreign labels have been cautious when it comes to penetrating the German market, though the success of those which have, suggests benefits could accrue to others willing to follow. Lululemon opened its first German store in Hamburg in 2015 and has since expanded across the country with another five. And Australian brand P.E nation was awarded a prestigious Young Designers Award after exhibiting at Berlin’s Premium tradeshow, last year.

With this reticence mirrored across food and fitness, despite German innovations booming in foreign markets, North American, British and Australian brands looking to expand into the continent could be missing a trick by failing to consider innovation-loving German consumers as a potential entry point.