What Does The Advent Of GLP-1 Weight Loss Drugs Bode For Fitness Companies Like The Beachbody Company (NYSE: BODI)? The Answer May Surprise You
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By Meg Flippin, Benzinga
From Ozempic to Wegovy, Glucagon-like peptide-1 or GLP-1 injectables are taking the world by storm, helping countless people shed pounds. But taking the drug alone may not be enough to get the weight down and keep it off. That still requires some work which means exercise and healthy eating.
Its also why The Beachbody Company, Inc. (NYSE: BODI) is excited about what these drugs can bring to the world and to its own bottom line. In the wake of the GLP-1 craze, the work-at-home health and fitness company saw subscriptions for its recently launched premium digital health and fitness platform, BODi, rise 27% in the third quarter. It now has over 900,000 subscribers and is still growing. Meanwhile, its month-over-month retention rate stands at 96% that means only 4% of BODis customers dont come back for a workout or nutrition advice the next month.
Seems counterintuitive? Maybe for some but not BODi.
We're actually encouraged about treatments that can help some of the 74% of Americans that are overweight or obese, said co-founder and CEO Carl Daikeler on the companys recent third-quarter earnings call. We also recognize that a chemical solution is only a single step towards sustaining a healthy lifestyle and does nothing to improve skeletal muscle mass, which is critical to health and functioning in the world. One would expect that Daikeler knows a little bit about that BODi has made a name for itself over its more than two decades in business thanks to fitness programs like P90X and Insanity, its superfood nutrition shake Shakeology and a portfolio of health and wellness supplements.
Can GLP-1 Hurt Demand For Fitness Products?
Some investors may worry that GLP-1 pharmaceuticals will reduce demand for at-home workouts and supplements as more people get access to these injectables and pills and the treatment becomes more mainstream. The drugs have proven to be a game changer for people who have tried and failed to lose weight. A 2022 clinical trial of Tirzepatide, the generic name for GLP-1 drug Zepbound, showed people lost as much as 22% of their body weight. To achieve that, the participants also engaged in healthy actions during the 72-week trial including consuming balanced meals with a deficit of 500 calories per day and at least 150 minutes of physical activity per week. It is the latter point that tends to get buried in trial results but is key to the positive outcomes and why BODi is so optimistic. GLP-1, exercise and diet management go hand in hand in the weight loss journey.
It's really vital that people supplement these weight loss drugs with healthier lifestyle choices, including fitness and nutrition, said Daikeler. We don't see GLP-1 treatment as a headwind for us, but rather a very significant tailwind, as it brings the importance of reducing obesity to the forefront and makes lifestyle change an important component of that decision.
BODi In The Drivers Seat
BODi believes its well positioned to capitalize on the growing demand for at-home fitness programs whether its driven by GLP-1 drugs or a desire to be healthy. The online/virtual fitness market is projected to grow at a CAGR of 32.7% through 2032, becoming a $250.7 billion market. In 2022, the market was worth just $14.9 billion. It also comes at a time when obesity in America is a growing problem. As of September 2023 nationally, 41.9% of adults have obesity.
That presents a big opportunity for a company like BODi, which boasts a library of over 120 comprehensive, structured fitness programs and recently overhauled its digital platform. That rework has resonated with users; BODi has been selected as the top fitness and workout app of 2023 by CNN. The annual membership of the new BODi app is 80% more than their previous basic BODi app, and the monthly retention rate has remained around 96%. These metrics potentially serve as evidence that customers are appreciating the overhaul and willing to pay higher prices.
To give potential customers access to BODi workout programs without having to commit, the company recently launched a free preview. Exercisers can try over 120 sample workouts, nutrition plans and personal development content. BODi is also launching a limited version of BODi Previews on YouTube, providing access to a broader audience.
The world is on a weight and health journey whether with the help of drugs or independently. Either way, exercise is an important component of those efforts. BODi has long known that and is confident it can benefit as more people embrace GLP-1 drugs and exercise as a two-pronged approach.
Featured photo courtesy of The Beachbody Company.
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COMTEX_449438358/2655/2024-03-18T08:47:33
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