Is Sleep The Ultimate Luxury? The $100 Billion Business of Sleep

If the headlines are true, we’re living in the age of anxiety. Beset by burnout, wellness has emerged as the antidote to modern times. And now, more than ever, a good night’s sleep is critical to any self-care routine. As a result, selling sleep has become a billion-dollar business.

Whether it’s falling asleep, staying asleep, or improving sleep quality, getting some shut-eye can be a serious problem. In fact, the federal Centers for Disease Control and Prevention (CDC) said sleeplessness is a public health concern.

“As a nation, we are not getting enough sleep.” – Wayne Giles, MD, CDC

The result? A pivot to wellness. More than ever, a good night’s sleep has become an essential component of any self-care routine. As a result, selling sleep has become a billion-dollar business.

• Humans spend about one-third of their lives sleeping. 
• Sleep deprivation costs the US $411B of lost productivity each year. 
• The global market for sleep aids is expected to reach $101.9B by 2023.

For a time, sleep aid meant sleeping pills. But as the number of startups shipping mattresses in boxes grew, our interest in and accompanying spending on sleep ticked up. Of course, that’s no accident. With $340M in funding and hopes of taking over the $39B global mattress market, Casper helped build the sleep economy.

Now, the mattress is just one item in Casper’s ever-expanding sleep suite that includes bedding, pillows, bed frames, and sleep-enhancing night light.

Bolstered by wellness culture and inspired by Nike, Casper hopes it can live up to its billion-dollar valuation by building the definitive brand in the sleep space. This plan has seen the company build an ever-expanding portfolio of products, including bedding, pillows, bed frames, a sleep-enhancing night light, and, most recently, CBD gummies. 

Casper’s rumored public offering comes at a time when the market has soured on unprofitable, cash-burning startups like Uber and WeWork. Worse, although Casper brought in $400M in 2018 revenue, its competitor Tempur Sealy earned $2.7B. So, while the “Nike of sleep” definitely sounds cooler, it's just another way of saying “we have to make more money.”

“It’s really hard to put a price on getting a good night’s sleep.” – Kathrin Hamm, founder Bearaby

The sleep category expands: Brands like Parachute, Brooklinen, Buffy, Doris Sleep, and Lunya are cornering the market on comfort. Weighted blankets like Gravity and Bearaby are selling for upwards of $250. Equinox recently unveiled “sleep coaching” to help members optimize sleep and achieve their fitness goals. Tim Ferriss has raved about the ChiliPad — a temperature-controlled mattress pad. And there’s an abundance of sleep apps, including Calm and Headspace, the popular meditation apps, as well as options like Pillow and Pzizz.

Predictably, supplement manufacturers are trying to capitalize on this trend. Brands like HUM and OLLY offer “sleep” versions of their vitamin-packs. The same goes for collagen protein maker Vital Proteins and Moon Juice’s Dream Dust. But the practice has also spread to the functional beverage space, with Dirty Lemon, Som, Neuro Drinks, and many others slinging sleep-enhancing drinks. Whether or not the products deliver results is debatable, but there’s no denying the success of their marketing tactics — sleep sells.

More compelling, though, are the high-tech sleep solutions. In 2017, TechCrunch reported some $700M of investment flowing to sleep-related startups. In the time since, sleep-tracking mattress pads and wearables have emerged as the go-to devices. Beddit, a Finnish company acquired by Apple in 2017, offers pads that slip under the sheets, where they collect data like sleep time, heart rate, breathing, and snoring.

When it comes to wearables, Fitbit tracks sleep stages and duration. Meanwhile, Motiv and Oura have introduced rings that track robust health data, with Oura offering a more expansive look at sleep — including total sleep, sleep efficiency, latency, heart rate variability, and more. But it’s WHOOP, a wrist-worn tracker, that has done the most to shape the sleep narrative and reframe recovery in popular culture.

Instead of simply tracking activity, WHOOP measures Recovery, Strain, and Sleep to determine “personal readiness to perform each day.” More specifically, by analyzing heart rate variability, resting heart rate, and sleep, WHOOP provides users with a green, yellow, or red recovery score each day. And here’s where things get interesting.

Whether it’s professional athletes, venture capitalists, or weekend warriors, WHOOP users are sharing screenshots of their personalized recovery score across social media. The goal is to stay in the optimal green zone, and posting your recovery score is a humblebrag that you slept eight or nine hours last night.

That anecdote explains why WHOOP is winning, at least among a highly competitive class. They’re replacing bragging about pulling an all-nighter with sharing social proof that you’re actually sleeping. It’s a shift that’s representative of the broader trend and the same one that explains why we’re spending billions: sleep has become a competitive advantage in everyday life and, damn, do we want to win.

Takeaway. Big business or not, a good night's sleep is an overlooked necessity. Are you sleeping enough? What steps are you taking to get more restful sleep?

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