I love stories that tell about new things happening in our country. This story tells me several things, demographics still rule the day, ie LOHAS, are over 45,female,and loyal. a must read article

AOL founder’s latest lifestyle choice
Case invests $20 million in firm that markets healthful living
By Annys Shin

Updated: 4:51 a.m. ET Aug. 9, 2005
WASHINGTON – America Online Inc. founder Steve Case is investing $20 million in a producer and distributor of yoga and Pilates videos, part of his ongoing bet that activities once associated with a new-age lifestyle are going mainstream.

Case is going into business with Jirka Rysavy, chief executive of Gaiam Inc., who lives in a cabin outside Boulder, Colo., with no running water and an outhouse for a master bath. Rysavy said he and Case had “an alignment in mission.”

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Gaiam, based in Broomfield, Colo., is pursuing a market defined as “lifestyles of health and sustainability,” known as LOHAS. The Natural Marketing Institute says that market includes 50 million Americans, about a sixth of the population.

That shopper is more likely to be female, over age 45, and with a high level of education, though not necessarily a higher-than-average income, the NMI reports. According to the LOHAS Journal, which is owned by Gaiam, those buyers spend $226.8 billion a year on feel-good products such as organic produce, hybrid cars and acupuncture sessions.

Case met Rysavy at the annual LOHAS conference in Marina Del Ray, Calif., in April, Rysavy said.

‘Nearing a tipping point’
“We believe we’re nearing a tipping point as more and more people seek healthier, more balanced lives,” the vacationing Case said in a press release, commenting on the deal with Gaiam.

Gaiam is the latest investment Case has made through his new investment vehicle Revolution LLC, which he launched earlier this year with $500 million of his own money. Since then, Case has spent most of his time scouring for deals in the healthful lifestyle market. To date, Revolution has spent roughly $145 million in the health and wellness field, buying controlling stakes in Miraval — Life in Balance, a Tucson, Ariz., resort and spa company, and Wisdom Media Group Inc., a radio and television company focused on health and wellness that was recently relaunched under the name Lime: Healthy Living With a Twist.

Lime has 6.5 million cable subscribers, a Web site and a 24-hour channel on Sirius Satellite Radio. It plans to roll out wireless alerts consisting of reminders and daily inspirations, said chief executive C.J. Kettler. As part of Revolution’s deal with Gaiam, Gaiam will provide programming to Lime and produce videos of Lime shows.

Rysavy said the company does not accept advertising and sells items online such as composting toilets, a bat conservatory made of western red cedar, and a zafu — a large beanbag-style seat filled with natural buckwheat hulls designed to support the body while in the traditional lotus position.

Gaiam DVDs are distributed by major retailers such as Target and Wal-Mart, and Rysavy estimated that the company has more than 50 percent of the market share in yoga and Pilates videos. Last year, the company reported revenue of $96.7 million.

In addition to DVDs, the company sells its yoga bricks and balance balls through high-end retailers such as Whole Foods Markets and Bed Bath & Beyond, but keeps them out of discount stores such as Sam’s Club in order to avoid, as Rysavy puts it, “polluting the brand.”

The infusion of capital from Revolution will help Gaiam boost its core DVD business by financing the company’s planned $40 million acquisition of video and DVD company GoodTimes Entertainment Ltd., Rysavy said.

While Rysavy is optimistic about the LOHAS market, Case knows a sure thing is rare when it comes to investing. The 2000 merger of AOL and Time Warner Inc. proved to be ill-fated after AOL became the subject of multiple investigations and shareholder lawsuits. Case, who was forced to step down as chairman, remains on the board of Time Warner.

However, LOHAS consumers offer something snarky bloggers and fickle investors don’t, Rysavy said: “Once they’re introduced to the lifestyle, they’re very loyal.”

© 2005 The Washington Post Company