Is 10 years a long time? It does not feel like it for people in their prime – there is not much difference in what one can do in mid-40-s as opposed to mid-30-s. But it’s enough for a helpless infant to turn into a smart-ass 4th-grader or for a rebellious teenager to become a young ambitious professional or a parent. So, it depends on where we are in the life cycle – dramatic change happens fast early and late in life, while much more gradual development takes place through the adult years.
The same is true about companies and about entire markets. Take-off of cryotherapy in the United States could not be a better example of it. In 10 short years, the infant has grown into a 4th grader, the parents have got some grey hair along the way, but it’s just the beginning - the “dreadful” teenage years are rapidly approaching.
This article is my insider’s look at where we are in the life cycle of cryotherapy industry, what’s happening, and what to expect. It’s based on almost 10 years in cryotherapy business, an extensive data base created over time, and a thorough market research performed a couple of months ago. I would like to offer it as a CONVERSATION STARTER and to initiate a more coordinated action among cryotherapy practitioners, so that we smoothen the ride ahead of us and seize the opportunities.
For those of you who have joined the industry recently, let me take a few steps back and briefly tell the entire story.
In 2010, even less than a decade ago, I was part of a small team introducing cryotherapy to the United States. Although the concept had been around for about 30 years, its application was extremely niche. There were three manufacturers in Europe, all established in the 90-ies and early 2000-s, leading the “world market” in terms of the number of cryosaunas sold – Russian Krion, Polish Juka and Ukrainian Cryomed. In fact, it was the European market they were dominating, as very little was happening outside it. It should also be mentioned that the total number of cryotherapy locations was trivial.
We believed there was a potential to awaken the US market, though. We needed to start somewhere; so, we brought one Cryomed over, opened a little “cryotherapy room” in Dallas, TX, and began inviting people to experience the effects of freezing cold. Most were wondering if we were crazy, and the little office was mainly quiet and empty. Our resources were extremely limited, and the chances for our newborn idea to die were real. The first year, like if we had a prematurely born child, was a desperate battle for survival. We didn’t have a business, we had a job without pay, our baby was barely breathing, but our efforts where making some people curious. There WAS hope, after all.
Like in Walter Knight’s poem about two frogs in cream, one drowning and one swimming to survive, we were not giving up. I felt, it would be embarrassing to return to Europe failed and empty-handed, surrendering without a good fight was not my way (that’s a different story, though). This is what the poem says about the surviving frog:
“Bravely he swam till it would seem
His struggles began to churn the cream.
On the top of the butter at last he stopped,
And out of the bowl he gaily hopped.” 😊
In 2011, two events helped us reach many people at once and brought the market development effort to a new level. One was a segment on Dr. Oz Show in January - “Help or hype?” “Help”, he said after explaining the reaction of a human body to extreme cold, and we sighed in relief. The other one was Dallas Mavericks, one of the first cryotherapy adopters in the US, winning the NBA championship in June. During the finals, the “secret weapon” of the team to recover, whole body cryotherapy, was featured to millions of viewers. It was HUGE! This was when we knew we had made it. Our infant was standing up. We had a reasonably healthy toddler to take care of now.
Before moving on, I must stress that I am telling the story of my own experience here (together with Alex Matorin, I was building Millennium ICE, the first distributor of Cryomed), but we were not fighting alone – our infant had a caring extended family. Numerous other people who were instrumental in development of cryotherapy in the US during the same timeframe should be mentioned. Most of them have truly excelled in the industry and are still among its frontrunners:
Toddler years in business or industry development are very much like toddler years of a child. They come exactly with the same challenges for parents. The kid “walks and talks” on its own. It explores and tries new things. It tends to take poorly calculated risks and gets hurt quite often. It engages in fights with other kids – for the best toy and for “who is the boss”. It cannot be left unattended for long. It needs feeding and craves love and hugs. And… it keeps outgrowing shoes and clothes every few months.
Here are the main traits of the cryotherapy industry in 2019:
Exponential growth continues
Although a few manufacturers of cryotherapy equipment, like Krion, Juka, Cryomed and Mecotec, have been around for much longer, I would refer to 2011 as the true beginning of cryotherapy as an industry. The recently released Industry Intel Report by °CRYO shows the scale of growth between 2011 and 2017 – by about 2,000% in Europe and almost 15,000% in North America. In 7 short years, driven largely by professional sports teams and celebrity endorsement, the United States quickly outgrew all other markets combined and reached 70% market share globally.
Looking forward, even though one market report differs from another, the projected per annum growth of the entire industry between now and 2024-2026 is about 10%. It does not look like much compared to the rates above, but this number is misleading. The considerably larger “base” of already open locations drives the percentage growth rate down, while the number of new cryotherapy centers opened every year is not decreasing, it’s growing. Market saturation is nowhere to be seen, and popularity of natural non-invasive recovery methods is on a rise. Cryotherapy remains a great opportunity for pain management, recovery and general wellness businesses.
Competition is rapidly shaping the landscape
The booming demand for cryotherapy equipment not only revived the already established equipment manufacturers in Europe, it also encouraged opening of numerous new production facilities and release of new models and brands, especially in the US. I did a thorough US market research just a few months ago, in December of 2018 and January of 2019 – there were 7 manufacturers based in the US, 14 European manufacturers represented by US-based distributors, and at least 6 manufacturers without established representation, 2 of them in China (for details, download the free Cryotherapy Equipment Guide, available at www.cryoprosunited.com).
In general, the ones who win more often grow bolder and stronger, they get more resources to develop systems and provide better customer support. The ones who are weaker fall more and more behind, as they have no money to invest in improving the product or the service. As a result, like in almost every other industry, the trend is clearly toward smaller number of larger market players who can offer better technology and quality in every step of the supply chain. The workshop-like manufacturing will soon be completely extinct. “If you don’t make your own product obsolete, somebody else will”.
The main shift in technology is safety
It often takes a tragedy to start paying attention. Such event that stressed the growing industry more than anything else was the death of a cryosauna operator in Las Vegas back in 2015. It was a shock to everybody involved with cryotherapy. Even though ALL safety requirements had been violated by the girl who paid for her negligence with her life, it was clear that preventive actions had to follow.
Safety measures that have been introduced by manufacturers since the loss of life in Vegas deserve a separate article. They range from mandatory oxygen sensors to operator engagement checks every 30 seconds, automated timed shutoffs, built-in height and position control throughout the treatment, and even skin thermal imaging. New solutions have also been invented to prevent uneven cold distribution inside cryocabins and related frostbites.
Safety MUST be one of the main factors in choosing equipment for a cryotherapy facility. The older models that were made even as recently as 5 years ago, most likely, do not measure up to today’s standards. If you still own such cryosauna, make sure the employees are well trained and understand the risks. If you are looking into buying one now, think twice before choosing that $5,000 equipment on eBay…
How did we even live without smart touchscreen operation and web-based troubleshooting?
Sensors and skin thermal imaging is just part of the “smart technology revolution”, also influencing cryo equipment. The first cryosauna I operated, the same that was featured on Dr. Oz show in 2011, had a manual keypad. As the person providing cryo treatments, I had to constantly watch the temperature inside the cabin and adjust both frequency and length of nitrogen vapor blasts in order to maintain the desired regimen. Today, you would not only want equipment with a touchscreen and built in automatic temperature controls. You would also expect wireless connection, remote performance monitoring and troubleshooting, and availability of at least some treatment statistics. It’s not the hardware anymore that makes the difference in cryotherapy industry, it’s the software and its capabilities.
As competition increases, efficiency and costs matter more!
As in every other business, cryotherapy entrepreneur’s success depends on the ability to make money. Although many factors chime in here, and, again, most of them deserve a deeper dive, especially because the toddler stage of the life cycle is largely management by crisis that comes with cash flow and other challenges, let’s simplify and bring it down to the price charged for a treatment minus the cost of running it. The market very much dictates the price; so, the cost is what’s left to manage. Ideally, you want to reduce fixed costs that occur regardless of the number of clients to the minimum and choose variable costs, instead. Cryotherapy equipment that consumes no resources while idle would be best in this respect.
Our Equipment Guide addresses the treatment cost factor in more detail and compares it in different types of cryo equipment, yet there really is no “one size fits all”, and all cost numbers provided by the manufacturers are just indicative. All I want to stress here is: PAY ATTENTION to the efficiency and cost factors more than to any good-looking gadgets or distinctive features of minor importance. A few percent difference in resource consumption (power, nitrogen) can easily turn into thousands of dollars lost every month, every quarter, every year.
One of the main dangers of growing into a teenager is becoming overly confident. Growth is encouraging. Experience gained and problems already overcome make the teen think that the next one will also be easily manageable. There is so much temptation to pretend being older and more mature, and to play like an adult. It’s time to start anticipating the future and putting some systems in place, or trouble down the road is imminent.
The challenge of staying on top of the game
There was very little change in technology between 1995 and 2015 – the market was small, the number of equipment providers was trivial, and public attention or pressure to put new systems in place was non-existent. A cryotherapy location could keep running the same cryosauna or cryochamber for 10 straight years without looking outdated. Then, several things happened in a very short timeframe:
For manufacturers, this means more investment in smart solutions and software engineering, as well as continuous improvement of design and functionality of the equipment. Like a new cell phone model pushes the previous one off the shelves, this trend will lead to more obsolete cryotherapy equipment faster. The challenge becomes: how to keep clients happy by ensuring their access to the newest model available and what to do with the older versions? I truly believe that equipment providers would benefit from withdrawing their own older equipment from the market through trade-ins or buy-back rather than letting it appear on eBay or leaving it in hands of “used car salesmen” who capitalize on the brand names, yet do not observe their safety standards, and do not maintain the same level of service.
For cryotherapy providers, a shift begins from making self- or 3rd party-financed purchases to preferring relatively short-term leases. Like large number of people choose to never own a car, entrepreneurs will not want to own their cryosauna or cryochamber to avoid looking like dinosaurs in the eyes of their clients a couple of years down the road.
Long story short, not only new equipment, but also new business models are inevitably coming, and this will have an impact on all surrounding industries, such as lenders, too.
A need for a deeper dive
When cryotherapy appeared as a new and exotic offer, it was either added to already established practices (in most cases, integrative health care centers and chiropractic offices, less restricted in their choices and more open minded than strictly medical facilities), or new stand-alone cryotherapy studios were created. It soon became apparent that it’s extremely difficult to have sufficient volume and revenue from offering just cryotherapy. Many of the early adopters went out of business, while the more business savvy ones started adding complementary treatments to their service portfolios to incentivize clients to come back more often and to increase revenue potential per client.
Today, most of the cryotherapy businesses offer bundles for recovery, rejuvenation or relaxation, including local cold applications, compression, floating, infrared sauna, oxygen, light, fat shredding, and vitamin injections. Some employ medical personnel.
In my opinion, with growing popularity of non-medical non-invasive recovery and preventative practices, the process of integrating the respective options under one roof will spread and deepen. Clients will be seeking more than just a treatment, they will want a trusted advisor who can help them with all their wellness needs. It won’t be enough to employ college students part-time to deliver the same story about how the blood rushes to the core under the influence of extreme cold over again. The employees will have to have a better understanding of anatomy, physiology, interaction between and interdependence of processes inside a human body. Elements of health coaching will come in, and only those able to take their services to the next level will truly thrive.
In anticipation of this trend, the International Alliance for Cryotherapy Professionals is planning on partnering up with wellness and health coaching experts to offer continuous education programs to members. Those who have multiple revenue streams and give their clients more reasons to spend money AND to become loyal fans will win.
The emerging markets of Asia
Although born in Japan, cryotherapy remained geographically limited to almost only Europe for 3 decades. Studied and applied by mainly Eastern Europeans, it remained extremely niche. It would probably be there, still, if the United States did not kick in. The size of the US market and the power of the money in professional sports and entertainment made the genie leave the bottle and rapidly grow in size and power. The increasing wave in popularity among influencers caused renaissance of the concept in Europe and revitalized its manufacturers. But there is a new kid on the block.
The US still is the fastest growing market in terms of new locations opened, and it is also the driving force behind the innovation in the field, but the percentage growth is now much higher in Asia. Provided the size of the population, the growing wealth and ambition, especially in China, I see Asian market outgrowing the United States in less than a decade. The demand is already there, I have talked to at least 5 large and influential distribution hubs during last year alone, all seeking solutions for their networks in sports and health care. Currently, it’s a great opportunity for the best established European and US manufacturers to grow their reach and revenue, but there is also an emerging supply from local companies.
Chinese are known for reverse-engineering most everything… Just before Christmas I received an e-mail offering Chinese cryosaunas for less than a half of the ex-works price that would be considered average in the industry. The product looked very much like slightly modernized Juka. This week, an e-mail came from a different company, their walk-in chamber was clearly inspired by the looks of Cryo Science.
It’s hard to believe that these Chinese products, even if significantly cheaper than the cryo equipment made in the United States or in Europe, will significantly shape the market in a year or two, but appearance of their distributors on our soil is just a matter of time. Taking into account the speed of events on the market during the last decade, the eyes and ears on both the supply and the demand side should be open. Again, “if you don’t make your own product obsolete, somebody else will”.
P.S. The “teenage phase” of a human being, business, market, or industry is not the one in which to stay for long. The ultimate goal is to turn from a teen into a young adult as soon as possible, to “settle down and get serious”, and, then, to reach the zone of maturity and maximization. It’s the peak years to reap the rewards and to grow both sales AND profits. CryoProsUnited was created to build win-win partnerships among cryotherapy industry participants and to facilitate faster introduction of processes and systems that ensure the best results for everybody involved. This article is my invitation to start a meaningful forward-looking conversation.
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