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Wellness products are having a moment. From traditional retailers like drug stores and supplement outlets to direct-to-consumer brands and health and beauty companies, all are striving to engage consumers who are more mindful of their health than ever before.
Now, according to McKinsey & Company's fourth annual Future of Wellness research project, one commonality among the wellness retail sector is emerging: Younger Americans, notably millennials and members of Gen Z, are "redefining the landscape" in various ways, perhaps signaling that established players in the space could be in need of a pivot point to meet these changing expectations.
Gen Z, Millennials Prioritizing Wellness More Often Than Older Generations
The study underscored a few major statistics. First, the wellness category represents more than $500 billion in annual spend in the United States alone, according to McKinsey estimates, growing at about 4% to 5% each year — and that spend is resilient, even in the face of persistent macroeconomic turbulence.
More specifically, however, younger Americans appear to be outpacing their older counterparts when it comes to prioritization of wellness. Study data indicated that 30% of Gen Zers (born between 1997 and 2012) reported prioritizing wellness "a lot more" as compared to a year ago, compared with 23% of older Americans.
Furthermore, with zoomers and millennials reporting significantly higher levels of burnout and worse health in broad terms as compared to older cohorts, it should come as no surprise that they comprise an outsized proportion of wellness spend. Despite making up just over one-third (36%) of the adult U.S. population, younger Americans belonging to those two generations are responsible for 41% of total wellness spend on a yearly basis. U.S. consumers ages 58 and up account for 35% of the population, but just over one-quarter (28%) of said spend.
Gen Z and Millennial Consumers Lead in Appearance, Mental Health Concerns and Overindex on Discretionary Wellness Categories
The report, which highlighted several key data points, brought a few trends to light.
"Gen Zers place a higher priority on appearance than other generations do. 'Better appearance' shifted from the sixth-most-important dimension of health and wellness for U.S. Gen Z consumers in 2023 to the third-most-important dimension in 2024; Gen Zers in other markets placed a greater emphasis on appearance as well. These consumers are also purchasing beauty-related products at a higher rate than other generations are. Social media has helped drive this trend," the study authors wrote.
Wellness areas that respondents considered to be very important, and in which Gen Z and millennials recorded significantly higher levels than the overall average, included mindfulness and mental health (~59% versus ~54% average), sexual health (~49% versus ~36% average), and skin and hair care (~44% against 34% average).
And while younger consumers in the United States reported sentiments of being "almost always stressed" at a far higher prevalance than other generations (about 40% of zoomers said as much, versus 23% of the rest of respondents), older consumers were more interested in heart health and cognitive-boosting wellness products — perhaps a logical conclusion.
One stark divide: Gen Zers and millennials were far more likely to overindex in terms of purchases of items deemed discretionary in nature, including "health-tracking devices, massage tools, IV drips, and beauty and mindfulness apps," per the report's authors.
On items deemed least discretionary (menstrual-care products, analgesics, oral-care products), younger Americans underindexed on 50% of item purchases (slightly overindexing on 19% and significantly overindexing on 31%). However, when it comes to the most discretionary categories of products (massage devices, beauty apps), zoomers and millennials overindexed on all 14 of the most discretionary subcategories — significantly overindexing in 71% of purchase instances.
When combined with the aforementioned notion that these same younger U.S. consumers are driving an outsized proportion of the spend, what does that imply about the future of the retail wellness category? Will the broader market reshape itself, or will these same consumers adjust course as they, too, grow older?
As the McKinsey authors put it: "A common question arises when analyzing Gen Z spending habits: Will Gen Z’s preferences shift to resemble those of older generations over time, or will they redefine norms for all consumers as they grow older?"