- 1 State of the Treadmill Industry 2018
- 2 State of the Treadmill Industry 2017
- 3 State of the Treadmill Industry 2016
- 4 State of the Treadmill Industry 2015
State of the Treadmill Industry 2018
Commercial cardio equipment still outsells weightlifting equipment, but not as much as it used to. Cardio comprised 64% of the total exercise equipment market in 2016 compared to 36% of weightlifting. This compares to 71% for cardio in 2008 and 29% for weights, according to Fitness Industry Suppliers Association.
In June 2018 U.S. President Trump announced the imposition of a 25% tariff on some goods imported from China. The specific goods were mostly industrial, as opposed to consumer, but since most treadmill parts are made in China, the move raised the possibility of higher prices for treadmills. The initial list was presented with the possibility that more products would be added. Among those items on the list were sewing machines, dishwashers, and electric motors and parts. Treadmills use electric motors. However, even treadmills made in the USA are assembled primarily from parts manufactured in China, so tariffs could affect the treadmill market more generally. As of September 2018, it looked increasingly likely that China would place tariffs on more categories of exports in the coming months.
Overlaid against the tariff issue is Chinese pricing for steel products generally. One reason Chinese products have been relatively inexpensive is that Chinese companies have had few environmental regulations to comply with. New Chinese policies have resulted in stricter environmental rules. This has resulted in higher costs that are being passed on to customers.
ICON Health & Fitness celebrated its 40th anniversary in October 2017. Forty years previous it introduced the first home treadmill to the U.S. market under the Weslo label.
In January, 2018, A Federal Court ruled that ICON infringed on a Chinese patent related to an elliptical machine and awarded Nautilus Inc. $1.8 million in damages, plus attorney’s fees. Nautilus and ICON entered into a patent licensing agreement in 2004, through which ICON received a license to certain Nautilus patents for a 5 percent royalty on sales of elliptical machines that used the patents.
In May 2018, BH North America, the maker of Bladez and BH Fitness treadmills, moved its entire operation from Orange County, California to Missouri. The move was expected to produce substantial cost savings, as the company continued its emphasis on its BH Fitness commercial brand, which it sells to customers such as hotels. A few months prior to the move, Dan Foust replaced Bob Whip as CEO. BH North America also sells to the consumer market through its Bladez Fitness brand.
It now looks like Yowza Fitness, maker of high end ellipticals and treadmills, has gone out of business. Yowza was founded in 2009 and has sold exclusively direct to consumers through its website. The website hasn’t been undated for over a year and their 800 number no longer works. There hasn’t been an update to its Facebook pages since August 2017 and emails to the company bounced back or were not returned.
New & Different Models
At the International CES show in January 2018, Peloton, widely known for its stationary bikes, introduced its first treadmill. Peloton is still a very young company, but has gotten a lot of attention for its $2,000 bike and online classes. At $4,000, it features a huge 32 inch console, surround sound, and a deck designed not just for running, but for weight training, as well. Instead of a simple running belt, it has fifty-nine aluminum and rubber slats for better flex and cushion. The company appears to believe that enough people want more than just the cardio provided by their bikes and that their new treadmill/weights combination can meet this demand.
Clearly the company aims for the luxury market. It more than doubled its sales in 2017 to about $400 million. It differentiates itself by the level of service and individually catered classes, even so far as having the instructors yell out the names of the home users. There are more than thirty retail stores where prospective customers can try the new machine. The perceived competition for the Peloton treadmill seems to be live classes, instead of other treadmills. The company has raised nearly $450 million from institutional investors, but has been only marginally profitable, if at all.
Blue Goji, a developer of interactive fitness games, introduced its Infinity treadmill prototype at the South by Southwest conference in March, 2018. The Infinity prototype allows for natural torso movement and tracking, bio-feedback, and virtual reality games. Users can play immersive VR and 2D games using a range of body motions. The promise is that users will feel more stable and secure than with other treadmills due to the Infinity’s patented tension-sensing belt, which allows even exercise that require balance, like tai chi. The Infinity will be manufactured by Woodway and is expected to be available for sale in early 2019.
Something completely different is the Mini Walk treadmill from the Chinese company IPO Sports. It’s only a few inches high, sixty-four pounds, and has no console. What’s really unusual is that its motor adjusts the belt speed according to how fast you are running or starting to run. The front, middle, and back of the belt have infrared sensors that measure how long your feet are in each part and deduces your actual and trending speed from those readings. The company says the Mini Walk is the first treadmill to have just twenty-two components and no welding. Suggested price about $250.
You’ve heard the idea of generating electricity through use of exercise machines. There have even been some gyms that have tried to set this up. But now power generating treadmills are available to the mass market, at least in the UK. British company SportsArt has introduced its ECO-POWR line of equipment that includes the Verde treadmill. It purports to convert up to 74% of kinetic (movement) energy into electricity. It uses an inverter to return the power to the electrical grid. So far the machines are available only in the UK, primarily to commercial facilities. See the photo below:
In June 2018 a Fund Me campaign was started on Indiegogo to raise $10,000 to build the World’s First Boxing Training Treadmill, to be called the IMPACT 50-0. It was presented as the combination of self-defense and aerobic training that can burn fat faster than other treadmills. The main differentiating factor is that different color lights suggest different moves. For example, a yellow light may indicate that a defensive move is necessary, while a green light indicates an open shot that the user needs to hit designated pads within a prescribed time limit, and a red light indicates you were too slow and got hit. As of September 2018, over $2,000 had been raised.
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State of the Treadmill Industry 2017
The Numbers are In
According to Grandview Research, the global fitness equipment market is anticipated to grow at 3.6 % from 2015 to more than $13 billion in 2022, as growing health consciousness spread from the U.S. and developed market to developing nations, especially in Asia. Governments in these nations have given incentives to businesses to encourage employees to exercise.
In North America, cardio equipment, which includes treadmills, ellipticals, step machines, and rowers, continued to out sell strength training equipment and was projected to grow at an annual rate of over 2% through 2022, compared to a higher rate for weight training equipment. Asia was projected to grow at a rate more than 7%, but North America still comprises about 45% of the world market. Of the roughly $4 billion of fitness equipment sold in North America in 2016, treadmill sales in the U.S. led the way with about $1 billion, most of which were to health clubs.
According to the Sports & Fitness Industry Association (SFIA), total sales of exercise equipment in North America increased 1.5% in 2016, with institutional exercise equipment gaining 4.2% and consumer sales rising only half a per cent. Sale of treadmills for commercial use jumped 9.9%, but only 2.3% for consumer use. This compared favorably to consumer sales of elliptical machines, which declined 1.8%.
In its 2016 survey, the SFIA) found that more than 50 million Americans said they used a treadmill at least once in the previous year. Retail sales of fitness equipment in North America ranged from $300 home products to commercial treadmills costing more than $10,000. However, the survey found that people in both the millennial and Gen Z age groups said they would rather run outside than on a treadmill.
During 2017 Johnson Health Tech acquired specialty fitness retailers Busy Body Home Fitness, 2nd Wind Exercise Equipment, and Fitness Resource. The addition of the combined 100+ stores of these businesses makes Johnson the largest national fitness equipment retailer. Johnson’s plan is to rebrand all its one hundred retail stores, in the U.S. including the Leisure Fitness brand, as Johnson Fitness & Wellness as part of its three hundred stores worldwide.
In November 2016, Johnson Health Tech announced that it is now marketing Matrix line of cardio equipment to the home market. Previously, Matrix was sold only for commercial uses. Johnson says that Matrix is the fastest growing commercial fitness brand in the world. At prices for treadmills beginning around $3,000, Matrix is one of the more expensive home brands.
We know that professional football is competitive, but do players need special treadmills to work on their speed? Yes, according the XPE Sports Academy in Florida, where they have developed something called the SHREDmill to improve results in the 40-yard dash. The SHREDmill evolved from using regular treadmills with the power turned off so that the user had to develop the power to turn the belt himself. In 2011, the current system of variable magnetic resistance was developed, so that the user still has to provide the power, but can adjust the resistance as well. The resistance is set so that sprinting is specially trained for by pushing off and accelerating.
Proponents of the SHREDmill claim great success for dramatically speeding up linemen, as well as receivers and backs. NFL players Travis Benjamin, Mark Ingram, Eric Berry, and Maurice Poincey have improved their times. Players Anquan Boldin, Kareem Jason, and Jerod Mayo have all bought their own machines. By the time the 2017 season starts, around ten pro and college teams will have a SHREDmill.
In November 2016, ICON Health & Fitness sued an online product review site Consumer Affairs for $10.5 million, claiming it posted fake negative reviews for companies that didn’t pay its membership fees of thousands of dollars per year. ICON claimed that the site wrongly gave negative reviews to its Nordic Track products and that this constitutes a violation of the federal RICO (Racketeer Influenced and Corrupt Organizations) statute. ICON also claimed that the site not only defamatorily damaged ICON’s reputation, but constituted fraud as well.
In October 2016, a group of consumers sued treadmill manufacturer Precor Inc., alleging that the readings of its heart rate monitors give inaccurate and unreliable readings and that the company sold its machines while knowing this. In March 2017, the suit was certified as a class action and limited to nine models of treadmills. Precor’s responses have included that readings depend on whether the user walks or runs, the amount of intensity of exercise, and correct usage.
In a March 2017 ruling in a case with a similar issue to the Precor case, a federal judge ruled that a patent owned by ICON Health & Fitness was invalid after ICON tried to prevent Polar Electro from selling its own heart rate monitor. The patent was ruled invalid because it claimed only abstract ideas, instead of a specific design.
Also in March 2017, a bill was introduced in Congress that would include certain fitness expenses as medical expenses that qualify for tax deductions. Thus, for example, the purchase price of a home treadmill would be subsidized by the federal government in the hope that increased exercise will result in less total spending on healthcare. The bill is known as the Personal Health Investment Today Act and would allow up to a $2,000 deduction.
State of the Treadmill Industry 2016
The treadmill industry completed another year of more than $1 billion in sales in 2015 with no end in sight. As reported in the Wall Street Journal in October 2016, GYMetrix, a company that uses digital tracking and surveys to track what people actually do at gyms, analyzed hundreds of gyms and found that treadmills are the number one choice of women and the number two choice of men, after dumbbells. While retail sales in general continued to be weak throughout 2015 and 2016, sports and fitness stores generally did well. Competition from online stores continues to a challenge for all sporting goods categories.
In December 2015, after outsourcing its manufacturing to China, ICON Health & Fitness auctioned off its remaining plastics processing equipment in its Logan facility. The equipment auctioned included injection molding machines, blenders, granulators, silos, chillers, cooling towers, temperature controllers, hot runners, and remaining parts. ICON cut 400 manufacturing jobs in Logan in October, but continues its FreeMotion treadmills and other equipment at its plant in Smithfield, Utah.
In July 2015, Moody’s upgraded ICON’s bond rating “due to its improved operating performance and enhanced liquidity profile” and the strategy of “streamlining its manufacturing footprint.” This came three months after expressing a negative outlook due to the uncertainty of refinancing bonds that were coming due within three months.
Not all fitness equipment manufacturers are following ICON’s move to manufacturing in China. In January, 2016, Brunswick Corp, maker of Life Fitness equipment, paid $195 million for Cybex Intl, manufacturer of commercial treadmills and other gym equipment. Both companies continue to manufacture in the U.S., but distribute throughout the world. Cybex was a public company that lost about $169 million in 2014. It appears that Brunswick wants to diversify its business from its cyclical core line of manufacturing and selling boats and marine engines. Their stated goal is to double the sales of its Life Fitness division by 2020.
In May, 2016, Sports Authority Inc., a leading retailer of treadmills and other exercise equipment, filed for chapter 7 bankruptcy in order to close its 463 stores and liquidate its assets. A $1.3 billion buyout in 2006 by a hedge fund took on more debt than the company could pay. Sports Authority has been a major seller of ProForm, Stamina, Schwinn, and Yowza treadmills. In 2006, the chain had sales about equal to rival Dick’s Sporting Goods. However, by 2016 Dick’s had hundreds more locations, each with about twice as much revenue as Sports Authority stores. Some analysts have attributed this to Dick’s better presentation and technology in its stores.
In January 2016, Nautilus, Inc., maker of Bowflex, Schwinn, and other brands of exercise equipment, bought elliptical maker Octane Fitness from private-equity firm North Castle Partners for $115 million. The purchase of Octane, which makes high-end elliptical machines for use in home and commercial gyms, could help Nautilus extend into higher price points and reach new distribution channels. During 2015, Octane had of about $65 million, while Nautilus had sales of about $335 million.
In January 2016, Wahoo Fitness announced its GymConnect System, a device that is sold to treadmill manufacturers or individual users to attach to their treadmills to a wide variety of networks. So not only can the user to control the treadmill and connect to proprietary closed systems, but also to the more widely-installed iFit and other networks and new apps. The module can allow changes in programs and incline, but, for safety reasons, will not change speed.
Star Trac and other manufacturers have started installing the modules on their new models in 2016. Individual units for consumers are available to consumers at about $200 each.
Also early in 2016, Technogym released a new running treadmill that can detect a runner’s rhythm and create a personalized interactive music soundtrack for them based on the speed that they are running. Users log into their exercise account and choose their music along with their other workout parameters. Then the system detects the user’s rhythm and creates a personalized interactive music soundtrack to match that rhythm and speed as they change. TechnoGym calls this “the world’s first music interactive treadmill.”
Life Fitness has announced that it has brought the connectivity of the internet of things to gyms with its new remote monitoring service. It recently rolled out LFconnect Protect to more than 10,600 hotels, residential exercise rooms and fitness clubs using its premium lines of machines. The service attempts to minimize machine downtime by timing repairs before issues become problematic. It also helps gyms plan future purchases based on the machines exercisers use most. As Life Fitness technology develops, the company said, it could one day better help gyms use data to market to their customers.
In August 2016, ICON lost its attempt to save its patent on a virtual personal trainer from cancellation when a federal appeals court ruled that the patent was ambiguous. Therefore, Polar heart rate monitors were found to not violate ICON’s patent.
Have any treadmill news for next year’s report? If so, please send it to [email protected] and we will be happy to include it.
State of the Treadmill Industry 2015
Treadmills remained the most popular form of exercise equipment worldwide in 2015, as fitness continued its popularity and populations become increasingly overweight. Treadmills comprise about 55% of the home fitness market, with ellipticals at about 15%. The remainder is made up of stationary bikes and hybrids of these styles. All this is according to the Sports and Fitness Industry Association.
Robert Braun, VP of Sales at Treadmill World, says “The 2014 holiday season was marked by customers waiting for holiday deals, then finding that what they wanted was out of stock. As shipping costs have risen and free shipping has become more common, the costs of shipping equipment has gone up relative to the value of the machines. Thus, fewer lower end machines are made or sold.” However, Nautilus continued its push into the lower priced home market. Its T616 treadmill incorporates Bluetooth connectivity so users’ workout data can be synced with the Nautilus trainer app. Braun adds “The quality at the lower end continues to rise, along with the prices for those models.”
In November 2014, negotiations between the International Longshoreman Workers union and its employer, Pacific Maritime Association, resulted in labor slowdowns on the west coast, delaying deliveries of exercise equipment and parts to U.S. manufacturers and distributors. This in turn led to these businesses running out of stock on many models and disappointed consumers. The strike was settled March 2015.
In late 2014, Smooth Fitness ceased operations. Its remaining inventory and intellectual property was bought in foreclosure by Treadmill Doctor, which then sold the Smooth website and some other intellectual property to ICON Health & Fitness, while retaining the intellectual property related to parts and service. Smoothfitness.com now offers new Smooth-branded treadmills manufactured by ICON. The former Smooth Fitness is out of business, so is not honoring its warranties on machines bought before the sale. However, Treadmill Doctor still sells parts for these models. The Smooth website is being operated by ICON, selling new models labeled Smooth Fitness, but assembled by ICON. Braun of Treadmill World says “We sold a lot of their stuff, but the word is that they were spending too much for click. Apparently, this caused their profits to thin to the point that their institutional investor didn’t want to put in any more cash.”
In November 2014, Johnson Health Tech introduced a new line of Horizon and Vision treadmills with its new wireless connectivity system, ViaFit. ViaFit enables the user to share workout data with other fitness apps and devices. The machines connect to your home wifi through a free ViFit account and seamlessly syncs to other devices that you may be tracking workout results on. Johnson also introduced its Passport Player, which improves on the virtual running course programs offered by other manufacturers. In addition to the visual and incline changes that occur along a course, Johnson’s new program provides ambient sounds and a separate, larger screen that provides a more realistic virtual outdoor running experience.
Johnson’s commercial brand, Matrix Fitness, announced a 19 percent global sales growth rate for 2014. The company attributed the growth the new products and repeat customers. In October 2015, Johnson substantially increased its distribution of commercial fitness equipment in Canada by acquiring a leading Canadian commercial equipment distributor, STAK Fitness. However, the Consumer Product Safety Commission fined Johnson $3 million for failing to report defects in its machines. Johnson’s Matrix Fitness Ascent Trainers and Elliptical Trainers apparently allowed a buildup of moisture from perspiration or cleaning liquids in the power sockets of the units. The agency says this buildup caused smoking, sparking, and fires. It seems the company made two design changes to fix the problem, but did not immediately report the incidents or design changes to the agency. Johnson recalled the trainers in January 2014, but it wasn’t until 2015 the fine was imposed.
In July 2015, ICON Health and Fitness announced it will eliminate the U.S. manufacturing of home equipment by cutting 400 employees and moving those operations overseas by the end of the year. The announced purpose was to remain competitive as the company expanded globally.
Most of the parts of ICON equipment have been manufactured in China for years now, with most assembly taking place in Utah. However, now most assembly of home treadmills will occur in China. The company also has plants are located in Taiwan and Pakistan. Assembly of ICON’s commercial brand, FreeMotion Fitness, will continue at the company’s Smithfield, Virginia plant. The company said it would renovate the space vacated by its manufacturing operations in order to “accommodate future growth.” ICON started manufacturing in Utah in 1987, after having been manufactured in other countries since 1977. It will continue its other operations in Utah, such as engineering, marketing, and distributing with about 1,500 employees.
A few weeks after ICON made its announcement, Moody’s upgraded ICON’s corporate bond rating due to ICON’s “improved operating performance and enhanced liquidity profile.” Moody’s said that that ICON’s strategy of streamlining its manufacturing and expanding its distribution network should continue to improve the company’s performance. However, Moody’s also noted that its rating is constrained by the company’s concentration of customers and its limited operations outside of North America
If you’re used to running on a treadmill and then go for a run in the great outdoors, one of the first things you might notice is that the real deal feels quite different. Tread runners often describe the difference as running less upright and feeling like the feet are pushing into the ground with more effort. In short, it’s more challenging.
Those feelings happen to be real. While doing things like changing the elevation grade of the belt will help simulate what it’s like to really run, traditional treadmills fall short of activating and conditioning the lower-body muscles the way they are trained during a sprint or a longer-distance jog.
Woodway introduced its Curve treadmill, a motorless model with a tread belt curved at the front and the back to better simulate the activation of muscle use while running on solid ground. The promise is that, because users need to dig into the front of the belt and push off the back in order to start the belt moving and keep it moving, they are working their lower body harder. See the image below.
Technogym, which calls itself the leading producer of design and technology-driven fitness equipment, introduced the first treadmill to be activated by voice commands. The model is called “Artis.” This user wears Google Glass, which works through UNITY, an android-based console display platform. Users can control the speed of the treadmill with voice commands, as well as see running data on their their headset and communicate with a personal trainer through a webcam. No word yet on availability.
According to an article published in Medicine & Science in Sports & Exercise, Ohio State University has invented a treadmill that actually adjusts its speed to the user’s, instead of the user having to adjust his speed to what he has set the speed of the treadmill to. The purported effect is that using the treadmill feels like running or walking on a steady surface. Apparently, this new machine more accurately measures VO2Max, the commonly-used measure of aerobic capacity. Stay tuned on this one.
Have any treadmill news for next year’s report? If so, please send it to [email protected] and we will be happy to include it.