Special Report: New Study Defines $230 Billion U.S. Lifestyles of Health and Sustainability Industry
Published: Friday, October 01, 1999
The LOHAS Industry is identified and defined in a breakthrough study backed by extensive market research recently completed by Natural Business Communications in
conjunction with GAIAM Inc., a Broomfield, CO-based provider of information, consumer goods and services. During the past few years, GAIAM has developed the most comprehensive approach to this new industry and the consumers it serves. The study offers an expanded vision of the marketplace for healthy-lifestyle products that encompasses nearly nine times the sales of the current $26 billion U.S. natural products marketplace.
“The creation of the LOHAS industry was the result of an exploration of a whole new paradigm for natural and healthy products, information and services, in which the natural products industry is but a small, better-defined part,” says Frank Lampe, editorial director of Natural Business and a managing partner of Natural Business Communications. “What LOHAS defines is an enormous market that weaves together parts of different industries that serve a common customer.”
The study, conducted over the past six months, defines five key market segments: Sustainable Economy, Healthy Living and Natural Products, Alternative Healthcare, Personal Development, and Ecological Lifestyles. Totaled, the segments conservatively represent $230 billion in sales in the U.S. and $540 billion in sales globally for the year 2000, the LOHAS industry study reveals.
The LOHAS Industry
Market Segments
The five market segments in the study include the following subcategories:
Sustainable Economy
n Environmental Management Services and Solutions: In-depth audits for companies wishing to present to consumers their level of environmental responsibility.
n Renewable Energy.
n Energy Conservation Products/Services: Including resource-efficient products and alternative-energy processes and products.
n Sustainable Manufacturing Processes.
n Recycling and Goods Made from Recycled Materials: Including recycled and recovered products, paper, textiles, plastics, rubber, glass, and ferrous and nonferrous metals.
n Related Information Services: Including websites, CDs and videotapes. The consumer interested in a whole-life wellness lifestyle is demanding quickly accessible information on how to support sustainable goods and services and lower their individual demand on natural resources.
n Related Books, Audiocassettes and Manuals: Educational tools that require time and financial commitment from the consumer.
Healthy Living
n Natural Products: Including natural and organic foods, dietary supplements and personal body care products.
n Related Information: Including websites and the sale of CDs, videotapes, etc.
n Related Books, Audiocassettes and Manuals.
Alternative Healthcare
n Health and Wellness Solutions: Includes air and water filtration, fans, heaters, air purifiers and humidifiers, back care products, allergy care products, vision solutions, injury remedies such as magnets and therapy balls, etc.
n Natural Health Services: Alternative noninvasive treatments such as massage, chiropractic, acupuncture, acupressure, biofeedback, aromatherapy, etc., estimated by The Wall Street Journal and Journal of the American Medical Association (JAMA) at $27 billion in 1997.
n Related Information: Including websites and the sale of CDs, videotapes, etc.
n Related Books, Manuals, Classes and Equipment.
Personal Development
This category includes personal experiences, solutions, products, information and services relating to mind, body and spiritual development, such as yoga, meditation, relaxation, spirituality, and in general to realizing human potential.
n Equipment, Tools and Clothing.
n Studios, Clubs.
n Lectures, Instruction, Seminars, Workshops, and Books: Includes programs and products that enhance life physically, mentally and spiritually.
n Related Information: Including websites and the sale of CDs, videotapes, etc.
Ecological Lifestyles
n Natural and Eco-products: Including environmentally friendly cleaning supplies, natural gardening/lawn care, and natural nonfood products, which includes nontoxic paints, natural fibers, and ecological appliances. LOHAS Industry Study research shows that natural nonfood products may soon become the fastest-growing sector as business-to-business industries and consumer services such as hotels are pressured by consumer demand to incorporate these products and services into their business offerings.
n Eco-tourism: Defined as responsible travel to natural areas which conserves the environment and sustains the wellbeing of local people, according to the World Trade Organization. Out of the $425 billion spent by international travelers in 1997, eco-tourism represented 7%. Domestic travel is approximately twice as large as international travel, and eco-tourism is estimated to be a proportional share of that travel.
n Related Information: Including websites and the sale of CDs, videotapes, etc.
n Related Books, Audiocassettes and Manuals.
LOHAS researchers used extensive literature and database searches to define the key market segments that comprise this new industry. Once the segments were identified, researchers used hard data where available, such as in the case of eco-tourism, alternative healthcare, and recovery and recycling industries, among others. In many cases, estimates on the dollar size of a subcategory were simply unavailable. In these cases researchers extrapolated using estimates based on traditional market sizes where available, weighted averages where appropriate, and in some cases, left the subcategory listed but without a dollar figure.
“The $230 billion estimate for the size of the U.S. LOHAS industry is a conservative figure,” Lampe says. “There is no doubt that the market is much larger. But, when faced with ranges of figures and estimates of figures, we stayed on the low end every time.”
A New Vision for the Marketplace
During the past five years, the natural products industry has seen the channels of distribution diversify and multiply as food and natural products sellers have struggled with how to best serve the consumer’s interest in living a healthier lifestyle. In addition, mainstream retailers recently have developed the Whole-Health Marketing concept.
“It’s clear that the consumer wants a more comprehensive approach to health, one that includes nutritional products such as vitamins and supplements but also products and services that support the values and beliefs held about the environment, spiritual and emotional wellbeing, and physical fitness,” Lampe says. “We undertook the LOHAS industry study to start the process of incorporating, defining and understanding the vast territories that make up these values.”
For marketers, the larger questions posed by the LOHAS industry study are how does a company participate in this market and how does a company in one LOHAS industry market segment successfully enter the other segments? The process, Lampe says, has already begun.
“When we study a store such as the Nature’s Fresh Northwest! ‘Lifestyle’ store in Lake Oswego, OR, it’s clear that retailers have already started the process of integrating these various sustainable and healthy products and services—but the LOHAS industry shows us a substantially vaster marketplace to tap into.”
The Natural Business LOHAS Industry Study will be available in late November for $695. Contact Natural Business Communications at 303.442.8983, info@naturalbusiness.com, or visit naturalbusiness.com for more information.