From Ayurveda to Theranos: The Business of the Wellness Industry
Can anyone be “well”? What does that mean? Is it to be free of physical or mental illness? Can you achieve wellness by taking dietary supplements, walking 10,000 steps a day, using crystals, or going on ayahuasca retreats? Maybe it’s something more spiritual like being in sync with the world? Ayurvedic and Traditional Chinese Medicine would agree with the latter – holistic health is equivalent to harmony in one’s life. No matter what you choose to believe, our societal idea of wellness has grown into – what McKinsey evaluates as – a $1.5 trillion industry (McKinsey 2021). The Global Wellness Institute even estimated this sector at $4.4 trillion in 2020, growing at 6.6% annually by 2019 (GWI 2021, 2). The discrepancies between the two numbers come from what actually constitutes the “wellness industry”. McKinsey includes six categories: sleep, mindfulness, health, fitness, nutrition, and appearance, but the GWI includes an incredible 11 – each aiding in “enabling consumers to incorporate wellness activities and lifestyles into their daily lives” (McKinsey 2021; GWI 2021, 1). These include: mental wellness; physical activity; wellness real estate; workplace wellness; wellness tourism; spa economy; thermal/mineral springs; healthy eating and weight loss; personal care and beauty; preventive and personalized medicine and public health; and traditional and complementary medicine outside of the Western medical system (GWI 2021, 4). With the rise in obesity, chronic illness, and the spread of COVID-19 these past few years, physical and mental health is definitely something on Americans’ minds. However, the wellness sector fell 11% in 2020, showing that this industry might instead be a luxury, rather than a necessary part of one’s life (GWI 2021, 7).
Wellness is a relatively new commercial sector with the practices gaining Western traction in the 1950s with Dr. Halbert L. Dunn leading a series of lectures in the 1950s about “high-level wellness”. According to Dr. Dunn, this is different from the passive state of “good health”. Instead, this is “an integrated method of functioning which is oriented toward maximizing the potential of which the individual is capable, within the environment where he is functioning” (Dunn 1959, 447). There is no standard at which you are “well”. It’s an active goal to continuously strive for to “live at a fuller potential” (Dunn 1959, 447).
This idea was taken from Buddhist and traditional medicinal practices and given a modern, more scientific spin. Meditation (a buzz word from monks to athletes around the world) was supposed to bring you vipassana, or insight, and was thought of as the path to enlightenment. Trade with Asia in the 1960s brought this practice to the West. Jon Kabat-Zinn then adapted the practice to remove any religious notions and incorporate it into the medicinal field in order to gain more traction (Nisbet 2017). This holistic ideal has since been capitalized on. By 2012, around 2 million Americans tried meditation within the past year. In 2021, leading meditation apps Headspace and Calm produced total revenues of $53 million and $80 million respectively and experienced over 50% growth in 2022 (Ariel 2023). These figures represent the demand for de-stressing and mental wellness in our society, as well as the technological interweavings of this sector. To this point, many influencers and celebrities have created “wellness brands” like Goop by Gwyneth Paltrow and Poosh by Kourtney Kardashian. Goop was valued at $250 million in 2018 with over 8 million subscribers – she was able to do this by branching into eCommerce and plugging different “wellness” products in her newsletters and on her site (McKinnon 2023). Sure, maybe the reason for Goop’s success is that it was the first wellness brand of its kind, but in Paltrow’s business model, selling low-risk products marketed as “holy grails” for holistic health, she capitalized on the new consumer demographic of those interested in “wellness”.
Diving into the two highest grossing wellness categories, healthy eating/weight loss and personal beauty categories, the GWI reported that both generated over $900 billion in 2020 (GWI 2021). These are the exact types of products that wellness brands like Goop are selling to consumers, but they come with a big caveat: the FDA doesn’t actively regulate low-risk products – anything non-invasive, not implanted, and doesn’t impose unsafe technology on the user (FDA 2019, 5). Specifically for dietary supplements, they don’t “have the authority to approve them for safety and effectiveness, or to approve their labeling, before the supplements are sold to the public” (FDA 2022). With that said, the Federal Trade Commission normally stays away from guidelines about advertising. Although in recent years, with false claims of health benefits from companies surfacing, the FTC has changed their guidelines to ensure that claims need to have copious amounts of evidence backing up their “science, as well as at least one human clinical trial” (Dennett 2023).
With previously little regulation to a lot of wellness products, many have snuck onto the markets and caused real harm. The early aughts weight-loss drug “fenfluramine and phentermine” (better known as “fen-phen”) was approved by the FDA in the early stages then shortly taken off the market once side effects arose. In order to get products out quicker, the FDA approves weight-loss drugs after short-term weight loss occurs without waiting for long-term effects to arise. With fen-phen particularly, patients experienced damage to their heart valves because methamphetamine was a main ingredient in the drug. With other low-risk products like dietary supplements, the consumer needs to trust the company on the benefits and side-effects even if hidden ingredients might be harmful to the user (FDA 2021).
It is no wonder that during the pandemic (2019-2020) the GWI categories “public health, prevention, and personalized medicine” and “healthy eating, nutrition, and weight loss” were the only sectors out of the aforementioned 11 to experience market growth: 4.6% and 3.1%, respectively (GWI 2021, 8). The rest, relatively superfluous sectors when the global GDP dropped by 2.8%, all experience drops as well (spas, springs, and wellness tourism all falling by more than 38%) (GWI 2021, 8).
Recently medical start-up founder Elizabeth Holmes was sued due to her fraudulent company Theranos. Theranos was bringing personalized, preventive medicinal tests to the average person through a few drops of blood (EQS 2022). Investors were quick to jump on board. However, Holmes’ “Edison” prototype didn’t actually work and she kept vague credibility tests and third-party equipment hidden from investors which in turn allowed her to falsify the results of patients' bloodwork. She scammed investors like Rupert Murdoch and Betsy DeVos out of hundreds of millions of dollars (EQS 2022).
Theranos is just another example of how the lack of regulations and full-trust in a huge industry can not only hurt investors, but also the patients genuinely needing help. As someone who has grown up in Los Angeles – arguably the center of the “wellness culture” – I have always been surrounded by the latest diet fads, personalized screenings, and beauty tips. Since this industry is growing at an extraordinary rate, I wonder if the new regulations and suspicions around this industry will slow the growth down and make it harder for influencer newsletters and sketchy products to reach the market, or instead, more innovation and studies will be created to verify the efficacy of these products. New creations like Ozempic and Wegovy by Novo Nordisk were initially designed to help people with Type 2 diabetes and obesity, but demand for these drugs has skyrocketed due to their weight-loss effects, blurring the lines between pharmaceutical medicine and “wellness”. Effectively, this works to make it harder for patients that actually fit the criteria to get access to such ground-breaking innovations; Ozempic reportedly cost $25 a month initially, but is now going for $1,600 (Smith 2023)! Will the industry flourish like a consumer’s gut bacteria after drinking kombucha (a $3.53 billion market) or will there be real side-effects to the unregulated market, just like the users of fen-phen faced?
References
Ariel. 2023. “Headspace & Calm Forgo Downloads for Revenue in 2022.” Appfigures, January 6,
Callaghan, Shaun, Martin Lösch, Anna Pione, and Warren Teichne. 2021. “Feeling Good: The Future
of the $1.5 Trillion Wellness Market.” McKinsey & Company, April 8, 2021. https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/feeling-good-the-future-of-the-1-5-trillion-wellness-market
Dennett, Carrie. 2023. “A New Threat to Advertisers Making Sketchy Health Claims.” The Seattle
Times, January 30, 2023. https://www.seattletimes.com/life/wellness/a-new-threat-to-advertisers-making-sketchy-health-claims/
Dunn, Halbert L. 1959. “What High-Level Wellness Means.” Canadian Journal of Public Health, Vol.
50, no. 11 (November): 447-457. https://www.jstor.org/stable/pdf/41981469.pdf
EQS Editorial Team. 2022. “Elizabeth Holmes and the Theranos Case: History of a Fraud Scandal.”
Integrity Line, November 21, 2022. https://www.integrityline.com/expertise/blog/elizabeth-holmes-theranos/#:~:text=Through%20whistleblower%20revelations%20and%20the,handle%20were%20flawed%20and%20unreliable
Food and Drug Administration. 2021. “Dietary Supplements.” Accessed April 2, 2023.
Food and Drug Administration. 2022. “FDA 101: Dietary Supplements.” Accessed April 2, 2023.
https://www.fda.gov/consumers/consumer-updates/fda-101-dietary-supplements
Food and Drug Administration. 2019. General Wellness: Policy for Low Risk Devices: Guidance for
Industry and Food and Drug Administration Staff. FDA, September 27, 2019. https://www.fda.gov/media/90652/download
Global Wellness Institute. n.d. “What is the Wellness Economy?” Accessed April 2, 2023.
https://globalwellnessinstitute.org/what-is-wellness/what-is-the-wellness-economy/
Global Wellness Institute. 2021. The Global Wellness Economy: Looking Beyond COVID. December
2021. The Global Wellness Institute: 1-12. https://globalwellnessinstitute.org/wp-content/uploads/2021/11/GWI-WE-Monitor-2021_final-digital.pdf
McKinnon, Tricia. 2023. “The Growth Strategy Behind Goop, a Brand Owned by Gwyneth Paltrow.”
Indigo9Digital, February 13, 2023. https://www.indigo9digital.com/blog/goopdirectoconsumerstrategy
Nisbet, Matthew. 2017. “The Mindfulness Movement: How a Buddhist Practice Evolved into a
Scientific Approach to Life.” Skeptical Inquirer, Vol. 41, no. 3 (May/June). https://skepticalinquirer.org/2017/05/the-mindfulness-movement/
Smith, Stacey Vanek. 2023. “‘You Forget to Eat’: How Ozempic Went from Diabetes Medicine to
Blockbuster Diet Drug.” NPR, April 1, 2023. https://www.npr.org/2023/04/01/1166781510/ozempic-weight-loss-drug-big-business