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The Beachbody Company Co-Founder, Chairman, and CEO Carl Daikeler sits down with Yahoo Finance Live to talk about at-home workout trends, the fitness brand's emphasis on lifestyle choices, and the movement toward workers seeking better physical and mental health management.
- It has been a very tough environment for at-home fitness stocks as millions of Americans return to the gym. But we've got one player in this space that still sees opportunity for growth despite the industry's changing landscape. We want to bring in Carl Daikeler. He's the co-founder, chairman, and CEO of the Beachbody Company. And, Carl, before we get started here, we want to put the camera on Dave because Dave is an avid Beachbody user. He's been doing it for more than a decade. He's a big believer in it. So we challenged him to do push ups during this entire interview.
- How many do you think I can do, boss?
CARL DAIKELER: I'm going to talk really slow. And I bet you-- if we get enough time, I bet you you could probably knock out 75. You might need to take a little break around 50.
- Oh you going to hold me, brother. I'm gonna put you to shame there.
- I told him he had to do 200. So you're much nicer than I am, Carl. All right. So Dave's going to start doing push. Carl, let's talk about the business so far. So, obviously, we've seen this shift in the landscape right now when it comes to at-home fitness players. A lot of Americans are going back to the gym. What does that mean for your business strategy going forward?
CARL DAIKELER: Well, we have never-- Beachbody has never been a company that was reliant on demand for going to the gym in terms of demand for our in-home programs. In fact, our market are people who are looking for a holistic approach. That includes nutrition and fitness and community that is as convenient as going downstairs, taking some pre-workout, and getting the workout done in the basement.
So it's really sort of a different market. However, we did see on the heels of the pandemic that a hybrid model emerged. People who fell in love with the convenience of at home fitness and these short workouts and the combination of being able to go and be with their people at the gym. And in our research, we've seen that people really do love this hybrid model.
- And I'm someone who-- I love variety. So I love that I can sort of get on Beachbody, and if I feel like doing bar one day or something else, I love being able to do that. Now, you talk about this ecosystem, this one brand strategy. Talk about why you're pursuing that route.
CARL DAIKELER: Well, honestly, back in 2018 and 2019, we saw all these people coming up into the market and getting traction with their fitness apps. And we thought we need to have another dog in the hunt so that we can have a different appeal, if you will. Then all of a sudden in the post-pandemic environment, we started to see the tailwinds turn into headwinds.
And it didn't make any sense anymore to try to support two brands and two platforms. And it just made more sense from a capital allocation standpoint to put all of our resources, all of our technology, all of our incredible content into one platform so that all our subscribers could get all the benefit.
- Carl, a lot of times you're compared to the well-known name of Peloton. You have the bike business. What has it been like over the recent months because we certainly have seen a slowdown when it comes to Peloton. What is your company doing that Peloton's not?
CARL DAIKELER: Well, I think that we've never compared ourselves to Peloton, except for truly appreciating their execution and the genre of indoor cycling, whether it's at home or at a studio. But our approach has always been about content first. And what's really specifically different about Beachbody is I'm not trying to get people to intellectually make a commitment for the rest of their lives. I'm trying to get them to intellectually make a commitment to the whole package-- fitness and nutrition-- for a period of time.
People know us for P90X. That was 90 days of extreme fitness and disciplined eating. 21 day fix. 21 days of portion control and half hour a day of workouts. And so we get people into these programs. What happens is the lifestyle change becomes a habit. And then they enjoy the rest of this rich catalog of thousands of workouts that we've created over two decades so that they make it a lifestyle. And that's really what's different between Beachbody and everybody in the space.
- Carl, I'm at 85. So I at least topped your estimate.
CARL DAIKELER: Stunning.
- Not quite to Shauna's yet. And that's thanks to P90X. But the reason I work out is, honestly, it's mental health. And I know you have a survey that you guys have done that looks into the reasons and the benefits of working out. And mental health is of utmost importance today, not just because it's Mental Health Awareness Month, because we are in, honestly, another national crisis when it comes to both teens and adults in the workplace and their mental health. How can fitness help in that capacity?
CARL DAIKELER: Well, look, it makes perfect sense that things have shifted from vanity or even weight loss to stress reduction. I mean, just look at the events of the last two years. A pandemic. You got politics and protests, you know, shootings. I mean, this is a tough environment for people to say, you know what, I'm going to start working out and eating better. It's a time for people to try to reduce stress. 88% of the respondents to this survey reported at least one negative effect on their physical health from increased stress and the economic pressure of these times.
So our job as a company is to respond to that. And we have. We just released a program that I'm so excited about. Two weeks ago, we launched-- actually, last week we launched a program called Fire and Flow. First of its kind. One day, you do intense program, kind of push ups and rigorous training that you just did.
But then the next day, it's about recovery and mental stress relief and helping the whole being cope with the world around us. And then you sort of get psyched up because then on Wednesday, you're going to go back to that intensity, toggling every other day, six days a week to help the body improve, but also help the overall well-being and stress level reduce. And that's where we are now as a holistic fitness company. It's treating the reality of where we are today.
- And speaking of that, obviously, over the last two years, a lot of changes, not just to people's health, but obviously to their work situations. A lot of people either shifting to hybrid work, still working from home, returning to the office. And you said in your findings that Americans see workplace flexibility as a key enabler of a healthy lifestyle. Why is that so important?
CARL DAIKELER: Well, honestly, they talk about the Great Resignation. And I don't think it's that at all. I think what it is people making a move. So that they can be in a position to manage their lives better and not always be in this state of fight or flight. 35% of Americans who reported changing employment in the last two years, of those 35%, 75% say they've got greater time in their day now for exercise and personal wellness.
I believe people are changing jobs to ease stress and to try to-- I wouldn't say get balance in their lives, but get a sense of being at peace with their own existence. And that's what we're trying to service, help make nutrition simple with easy portion control and managing your macros, and particularly your sugar intake so that you're not tense from just the food you're eating, and then making fitness gratifying and not putting all this pressure on just weight loss or building muscles, but actually feeling good in your own skin with the approach that we put in front of people. And I think we'll get better at that.
The one thing that happens when you're in this business for two decades is you see things come and go. And you see trends change. But the one thing that doesn't change or go out of style is health and the desire to feel good. And we launched a program called 4 Week Gut Protocol in March that broke records, totally over indexed on our forecasts because people are trying to find a path to feel better. And that's what Beachbody aspires to be.
- Well, Carl Daikeler, it was great to have you on. CEO of Beachbody. Dave, how many did we get?
- Ah, so you won the bet. All right.
CARL DAIKELER: That's amazing. All right. Well, I'm going to jump off and do some burpees. This is just how we roll.
- Exactly. I know. I feel like I need to do something now too. All right. Carl, thanks so much for joining us. Dave, I owe you a drink now. We're going to give you a few minutes here--
- And a towel.
- --to cool off. All right.
- I'll lend you mine.
- Yeah. He needs a few at this point.