One of the initial consumer principles behind our new Organics™, by elements Weight Loss Supplements was to create a highly effective weight loss brand which was more than simply diet pills.   As we began to study the marketplace from a 10,000 feet view, we discovered a host of new raw materials, ingredients, and delivery systems which were not only better than pills, they were more effective as well.

One good example of this is our concept “protein stick”  - Imagine a “pixie stick” the candy we enjoyed as kids, but this version is easily carried in a purse or bag, and can be put into a small bottle of water to create a refreshing mid-day drink - complete with a serving of protein, Vitamin C, and energy to get through the rest of the day.   Another example is our sure-to-be a bestseller “weight loss taffy,” which combines the craving for a sweet and chewable candy with a safe and effective appetite suppressant.   Our team has gone to great lengths to seek out effective and novel formulations which will take the elements fitness and BalanceD Diet franchises to a whole new level.

I will be discussing more about our highly-anticipated product line in upcoming posts. We are expecting a July launch for the initial 5 items, to be sold within our elements clubs.

Supplements

One of the true marks of maturity for a brand is growing interest from developers to invest and launch your brand internationally.  Top International Developers are usually highly keen on their local markets, and tend to have the resources to launch and operate units in multiple cities simultaneously.   The top international developers seek out category-leading brands, they want to rollout the top concepts locally.   Our steadily growing interest from international developers (Australia, India, England, Canada, Peru, Mexico, Latin America) tells me that elements for women is quickly reaching that status.

Elements employs a unique approach towards international development, as we believe a fitness brand needs to not only be translated physically into the local language, but translated culturally as well. For example, the fitness experience for a woman in Brazil is far different from a woman in India.   Our expert team is widely regarded as leaders in the industry worldwide, and is actively involved with IHRSA (the International Health Racquet and Sportclub Association).  As a truly international brand, elements is well positioned to help spearhead the exploding fitness and wellness movements worldwide.  The worldwide growth also helps to add tremendous resources, credibility, and status to our US clubs.   We have receintly announced our expansion into Canada with a Toronto flagship.  Later this summer we will be making several exciting announcements regarding new flagship clubs in Latin America, as the hub to elements South American expansion.

As the scope and reach of the elements for women brand continues to grow, we find ourselves venturing to more exotic and faraway destinations in search of the “next best thing” to present to our fitness consumers. Having a global outlook not only allows the diet franchise to remain fresh, but puts elements miles ahead of any other fitness competitor.  The depth and breath of our programs are unmatched.

Yesterday I boarded a plane to Costa Rica, for two important meetings. The first was with a potential developer of clubs, an important real estate developer in Central America and the Caribbean.  The second series of meetings was with a potential partner for our new “Organics™, by elements” supplement and weight loss products.  We have been very proactive in seeking unique and highly effective natural ingredients to add to our weight loss products.  Countries with lush rain forest, such as Costa Rica, often yield natural products which are more effective (and healthy!) than the synthetic counterparts so often found in the US.   Although the exact products we were researching must remain secret (for now), I can tell you that I am quite excited for the launch of our line…  the quality and ingredients used are second to none.

In keeping with the quality expectations set by elements fitness clubs, our Organics™ supplements feature a full spectrum of well branded, well packaged products which will be soon be available to our members nationwide.

I am not sure what part of “lets launch a TV network” I glossed over the day I signed the paperwork to begin broadcasting elements. Don’t get me wrong, I am in love with the project, our partners, and what it means for the brand… Its just that (even) I might have underestimated just exactly how much work it takes to launch a network, here on the eve of our 3rd consecutive working weekend!

elements living TV is the next evolution of our acclaimed online magazine, a television network broadcasting within the elements clubs which will bring our articles, personalities and brand “to life” for members, on demand. Upon entering an elements club, the music will be hand selected (according to market, demographic, and time of day), with station breaks and branding segments mixed in to create a true entertainment experience for members and guests, and a emergence as a major media player in the fitness arena.

Behind the scenes the workload is tremendous. Luckily, our partners have already done the heavy lifting of developing the architecture of the network, the video servers and technology, and the media/licensing relationships that are critical to the venture. Add on top of that selecting thousands of music tracks and videos, and having someone screen each word and frame to ensure the content is appropriate. In addition to the music, the network will feature full (and all important) digital signage, cleverly branded station breaks, teasers, and “healthy lifestyle” segments.

The benefit to our elements club and members will be tremendous. The entire experience in any of our facilities will be choreographed in real-time, making the workout experience more memorable and entertaining.  Early Nielsen research has projected this to improve overall member satisfaction rates, and to greatly increase the lifespan of a member, as well as the ancillary revenue per member, again, attributed to the clear and direct messaging from our elements TV network.

Even Oprah is talking about the economy and fitness…. here’s a recent clip from Oprah.com, speaking about the “state of the industry”…

“We’re sweating out stress at the gym, too, which also hits the V-spot: Aerobic exercise and yoga enhance Vagus nerve output — as does meditation. The Equinox fitness club chain, with locations nationwide, reports an 18 percent increase in usage of its gyms since last autumn; attendance at Curves, a women’s-only national chain, was up 22 percent in January 2009 compared with the previous year. Memberships at Life Time Fitness, which has locations in 18 states, are up 14 percent.”

These facts have mirrored our own club numbers at elements, and have taken us onto the path of acquisition of additional company-owned facilities. 2009 is proving to be an excellent year to acquire or start up a new club, the economic factors are all working in our favor… there is a narrow window of opportunity which has seen many entrepreneurs charging ahead. We have announced new club openings in Toronto, Grand Rapids, Cape Cod, Charlotte, Atlanta, and California to date this year.

Many of us were a little surprised to see the recall of all 14 Hydroxycut brands yesterday by the FDA. I say “a little” surprised because supplement industry insiders have seen this coming for quite some time, along with a pending recall of some of the other popular extreme-energy enhancers.

The supplement industry has been teetering on the fence of regulations for quite some time now. As an “insider,” I do believe that regulation is a good thing. We have spent the first part of this year doing research and formulations on our highly anticipated Organics™ Supplement Line. One of our initial mandates to the formulators was to use all natural ingredients. Of course, as a trusted fitness brand, we have a team of top nutritionists and physicians to survey each ingredient, as well as its compound effects. We also use a top formulator, who has scientists on staff to verify and also do testing. As a consumer you might be surprised to know that none of this is actually required… which is quite scary when you really think about it. It is up to each individual company to create and maintain its internal standards.

Now, any consumer products expert will tell you, that the key to a great supplement line is repeat sales, and referrals from happy consumers. To this end, it makes sense to make the best products possible - this is likely one of the reasons the supplement industry has been creating largely beneficial products for the past 100 years - but consumers and resellers of supplements would be better to get all the facts… and to do a little due diligence of their own as to what’s actually inside of the products that they are taking.

Chris Palumbo is the founder of the elements fitness brand and the Chairman of elements group, which includes Organics™ Supplement Line and BalanceD Diet.

We have been focusing our efforts several on initiatives which will add new revenue streams to our elements clubs. One of the unique attributes to our fitness franchise is the ability to drive a great percentage of revenue through multiple streams, such as personal training, diet coaching, supplements, premium classes, and retail.

Holidays (and seasons) make our job easy… it gives the elements branding team an easy reason to put together compelling in-club campaigns.  Our latest is “mom’s the Word!” celebrating women and mothers everywhere. Although elements clubs are for women, the campaign has a dynamic component where members can bring home “gift suggestion cards” to family members, left in a conspicuous place.  The family member can purchase the gift item at the club, via phone, or online for their mom.

As you might imagine, ancillary revenue centers in the fitness industry have a significant impact on a club’s bottom line. It also has a dramatic increase in the percentage of net income on the P&L sheet, because services such as diet coaching and personal training are very high margin. The difficult aspect for many clubs is the creative work and engineering that goes on behind each campaign, which really puts a franchisee with a great brand at a significant advantage - their only focus becomes sales, marketing, and revenue generation.

It has always been a part of my initial vision for elements fitness to create a brand which was “living.” A living brand, Disney, Harley Davidson, Budweiser… is larger than the company itself… it a a part of the consumers life. elements has all of the potential to do this. Sitting in our clubs, I love watching or listening to how the members refer to us - “I have to have my elements today” or “Im going to elements, come with me” - with other health club chains, the member would typically say “Im going to the gym,” this might seem like a small distinction, but to a branding team - this is the foundation of your brand being a rockstar.

To me, this means having consumers, employees, franchisees, and executives tied to the brand, feeling as if it the ownership is theirs. By formally offering stock in elements parent company (to qualified investors) we have done just that… taken our loyal franchise owners, team members, vendors, and “friends,” and have allowed them to share in our tremendous growth and upside.

As we continue our international expansion, this will give select investors the opportunity to share in the growth of the brand, and will allow the company to grow without being burdened with heavy debt.

An initial company valuation makes this an ideal time for investors to get on board with the company, but more importantly- stock gives us another vehicle to make the brand “sticky.” Sticky is a word I use frequently, meaning that people have additonal reasons to revisit the brand, the club, or the website, or to encourage others to do so.

I thought I would share this article that I came across on Bloomberg… it conforms what we have seen nationwide.

April 15 (Bloomberg) — Scott McLin used to hit the gym about once a week. Since losing his job as a marketing analyst three months ago, he goes almost every day.

“I have the time now, so I may as well work on getting in shape,” said McLin, 25, who’s cut back on restaurant meals and clothing purchases instead of his $86-a-month Crunch membership.

Equinox, which runs 48 U.S. gyms, and Town Sports International Holdings Inc., the owner of the New York Sports Clubs, say that’s a growing trend as consumers grappling with the recession seek to relieve stress. In a survey released last week by Rodale Inc., the publisher of Men’s Health and Runner’s World, 84 percent of those polled said there is no better time than now to invest in their health.

“Your health-club membership, your cable TV and your cell phone are in the last third of things that you’re going to cut off” in a tough economy, said Anthony Gikas, a leisure analyst at Piper Jaffray & Co. in Minneapolis.

With the unemployment rate at the highest in 25 years, consumers are taking fewer vacations and business trips, and spending less on entertainment, all of which contributes to more trips to the gym, he said.

The gym and fitness-club market will grow 2.2 percent this year to $24.3 billion, according to Los Angeles-based researcher IBISWorld Inc.

‘More Resistant’

“Health and wellness tends to be a little bit more resistant to sharp declines,” said George Van Horn, a senior analyst at IBISWorld in Chicago.

Equinox, which decided not to raise dues for existing members in 2009 for the first time in its 17-year history, has added meditation classes and power-nap sessions that include stretching and end with a 15-minute nap. An Equinox membership costs between $142 and $173 a month in Manhattan.

“Staying in shape is more important than ever,” Chief Operating Officer Scott Rosen said in a telephone interview. “It’s a stress relief for people.”

Gym usage among existing Equinox members grew as much as 15 percent in the first quarter. Participation in classes that are included in the cost of a membership has increased by a similar amount, and the gym is adding more yoga classes to meet demand.

Christopher Stadler quit his job as vice president of marketing at a beauty-care company before the winter holidays and is now looking for a new one. He uses his Equinox membership seven days a week, up from three or four days previously.

Refuge From Headhunters

Once a “wasteland” during the day, the gym has become “completely packed” over the past month or two, he said.

“It’s an escape from headhunters and interviews,” said Stadler, 38, who eats out less during the week to make up for the money he spends on his membership.

Life Time Fitness Inc., the operator of 83 gym facilities in 18 states, is also seeing increases in utilization and class attendance among existing members.

Increased usage doesn’t necessarily mean additional membership revenue for the gyms. About 35 percent of gym members plan to keep their memberships and avoid additional in-club spending, according to a bi-monthly survey by Thomas Shaw, a fitness analyst at Stifel Nicolaus & Co. in Baltimore.

Town Sports, based in New York, fell 5.6 percent to $2.38 yesterday in Nasdaq Stock Market trading, pushing the company’s market value to $53.8 million. The shares fell 67 percent last year. Life Time dropped 11 percent to $14.36 yesterday in New York Stock Exchange composite trading, valuing the company at $568.8 million. Last year, shares of the Chanhassen, Minnesota- based chain lost 74 percent.

‘So Much Better’

Gym usage at Crunch has increased because of the economy, said Chief Operating Officer Keith Worts. Fitness-class attendance at the New York-based chain is also up, he said.

McLin started attending classes at Crunch in San Francisco only recently, viewing them as a free personal training session that would otherwise cost $40 to $60 an hour. They’re “basically full,” even at midday, he said.

“I just feel so much better day to day,” said McLin, who now attends two classes a week and is training for a marathon.

To lure job seekers like McLin, Town Sports is using the slogan “Fact: Physically fit people are more likely to be hired.” Town Sports’ club usage rose more than 15 percent in the fourth quarter, and the trend is continuing into its first quarter, Chief Executive Officer Alex Alimanestianu said on a conference call March 3.

Life Time Fitness said club openings drove a 13.6 percent increase in new memberships in the fourth quarter, compared with a year earlier. The chain has also seen an increase in overall class attendance, said Jason Thunstrom, a spokesman.

“It’s a situation of control what you can control,” Thunstrom said. “Exercise is one of those things that’s proven to make people feel better.”

To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net.

Last Updated: April 15, 2009 00:00 EDT

I laugh each time our publicist suggest that we create an “elements fitness” reality show. Its not that I don’t believe we have all the makings of a great one…. an international backdrop with a spirited (and growing) worldwide team, Miami Beach headquarters where a revolving stream of fitness celebrities and top business minds frequently mix, a New York presence with the sharpest financial and publishing minds (coupled with all of the craziness of the city).

elements for women has grown over the past five years from simply an idea to a leading international fitness brand with 55+ clubs under development, including being names “Best of” Atlanta and Chicago. We have developed an acclaimed online magazine, elements living, with a reach into the millions, and All Stall Fitness Advisory Board, and great customer experiences in our clubs. We are now further developing the elements experience and lifestyle to include a winning supplement and product line (Organics), as well as a full television network in our clubs, elements workout TV (and I want to in no way minimize the task by placing it last! It is one of our most ambitious projects to date!)

Maybe, just maybe, with all of these cool projects, interesting people, and great cities - we do have a story that people would like to see. After all, this blog (which I have been keeping for nearly three years) has thousands of very loyal readers - if a blog can create buzz like that, then surely a reality show might be good for elements…. or would it?

It is becoming apparent that the number of personalities multiplying around the corporate offices and our growing reach into the media space will soon lead to something… will it be workout DVD’s sold in our clubs? Great branded fitness programming airing on a major network? A book deal? Its hard to say…although with elements expansion into California, Hollywood is just right around the corner….