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Times are changing at Life Time Fitness, and now only food, beverage and supplement products that meet the company’s Good Food Rules are sold by the company.
Good Food Rules
Life Time began implementing its Good Food Rules in January 2012. As of August, about 90 percent of all products containing artificial ingredients had been removed from its LifeCafés, Buss says. Extracting brands as large as Pepsi and Powerade took time, but the company had all products containing artificial ingredients out of its clubs by the end of 2012.
Life Time generates about $75 million through its LifeCafés today—and this number is expected to continue expanding, even with the stepped-up product quality standards, Buss says.
“We are not seeing any noticeable reduction in revenue in any of our cafés,” Buss says.
That is important because Life Time’s LifeCafés, along with its spa and personal training services, are integral to expanding the company’s revenues, which surpassed the $1 billion revenue mark in 2011.
“The LifeSpas and LifeCafés have been a big part of Life Time’s growth story over the last few years,” Piper Jaffray’s Naughton says. “The further they can penetrate share of wallet with the member who comes into their doors, the more that is going to help them grow top line earnings.”
During the last 10 years, the average annual amount a Life Time member spends on spa services, personal training and café expenditures grew from $195 to nearly $500, Naughton says.
Life Time’s Good Food Rules align well with many of the Westminster club’s members, particularly parents. Kids are omnipresent at Life Time, which runs summer sports camps and after-school programs and offers its members two hours of day care daily.
“I see kids every day dragging their parents into the café,” Horvath says. “Although they don’t always want to spend more money, they at least are glad that the food we sell is healthy and that we’re providing their children with an opportunity to learn about healthy eating.”
The people who are proving the toughest to convince are the young, male members who come to Life Time to lift weights and buy the sports supplements that will accelerate their physical transformations.
“These guys are here more for aesthetic reasons than for health reasons,” Horvath says. “We have to educate them on the long-term effects of taking something like a drink containing ephedrine.”
This turkey avocado sandwich is one example of the food now served at LifeCafés. Photo courtesy of Life Time Fitness.