Business

How Zumba still rocks the fitness world

Zumba CEO Alberto Perlman

There’s no cooldown time for Zumba, the dance-fitness company founded in 2001 in South Florida. That’s because co-founders Alberto Perlman, Alberto Aghion and Alberto “Beto” Pérez are busy choreographing Zumba’s future.
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There’s no cooldown time for Zumba, the dance-fitness company founded in 2001 in South Florida. That’s because co-founders Alberto Perlman, Alberto Aghion and Alberto “Beto” Pérez are busy choreographing Zumba’s future.

If it wasn’t for the movie “Grease,” a dot-com failure, a mother’s advice, nearly running out of money, a key change in a business model and a boost by the celebrity Pitbull and his pals, one of the world’s biggest fitness brands may not be what it is today.

Today Zumba Fitness, the popular Latin-inspired dance-fitness company based in South Florida, is in 186 countries. More than 15 million happy, sweaty students take classes every week from a network of thousands of licensed instructors teaching more than a half million classes. Together, they spend millions on colorful Zumba apparel, introduce their kids, parents and grandparents to the classes and maybe even buy a Zumba videogame or hop on a Zumba cruise.

The company is also now a music producer, and some of the world’s biggest stars call on Zumba to launch their latest singles. Zumba’s charity arm [see sidebar below] has contributed more than $10 million to fighting breast cancer and ALS, and its network of instructors use the Zumbathon platform to raise money for causes ranging from gun violence to medical care in emerging markets to PTSD and suicide prevention. In South Florida, the company housed in Hallandale Beach’s Gulfstream Park employs 220 people, including a tech team of 40.

Yet there’s no cooldown time for Zumba, a fitness-dance-music-apparel-tech empire founded in 2001 by three Colombians named Alberto. That’s because Alberto Perlman, CEO, Alberto Aghion, president and chief operating officer, and Alberto “Beto” Pérez, chief creative officer, are busy choreographing Zumba’s future, even as other fitness sensations come and go (remember Tae Bo?).

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From left: Alberto Perlman, Alberto “Beto” Perez and Alberto Aghion, co-founders of Zumba Fitness, at Zumba headquarters in Hallandale Beach on Aug. 17. Roberto Koltun rkoltun@miamiherald.com

“We all agree there’s something bigger than us — it’s not about just making money,” said Perlman last month during the ZIN Convention, Zumba’s annual multiday gathering for instructors that draws 7,000-plus to Orlando to connect, learn new dance routines and get educated on business strategies.

As he walked around the convention greeting enthusiastic instructors, Perlman tried to explain what makes Zumba a movement with apparent staying power — 17 years and counting — even as newer fitness options, particularly high-intensity training workouts, entice consumers.

“Inclusivity is what is special. Everyone is welcome. People in wheelchairs, people from all walks of life, all countries, all ages — that is very unique to Zumba. … If you love dancing, you are welcome here.”

Over the years Zumba expanded its class formats, adding Zumba Gold for seniors, Zumba Kids, Aqua Zumba and Zumba Sentao (chair Zumba), to name a few. To diversify more, in 2015 it launched Zumbini, classes that focus on the connection between parent and baby.

Most notably, the company launched Strong by Zumba, its first nondance fitness program, in 2016. While Zumba dance workouts are mainly cardio (a 60-minute class can burn roughly 500 to 900 calories), Strong by Zumba is high-intensity training — squats, kicks, burpees. High-intensity interval training is the No. 1 fitness trend, according to a 2018 survey by the American College of Sports Medicine.

“We wanted to bring something new to the high-intensity training world. We said what if we used the music to take away the pain,” Perlman said about Strong by Zumba, which developed custom music to enhance the workouts. Indeed, the heart of Zumba’s success is the Latin beat.

But it took a few tries to find the right business model that would power Zumba’s global growth.

HOW ZUMBA BEGAN

It was 2001 and a 24-year-old Perlman was reeling from the dot-com bust and the failure of his venture, an incubator for tech companies. The entrepreneur was contemplating his next move when his mother suggested he talk to “Beto,” her dance-fitness instructor so popular he goes by one name. “Maybe you can start a gym together,” she said then.

Perlman thought that was highly unlikely but he met Beto in a local Starbucks and heard his story. Beto, the son of a single mother, grew up modestly in Cali, Colombia. He found his joy and a livelihood in dance; as a kid, he learned his moves from “Grease” and Michael Jackson videos. Beto developed the framework for early Zumba quite accidentally: He forgot his exercise routine materials for an aerobics class he was teaching and instead improvised a dance workout with his own Latin music. The class loved it. (Perlman isn’t the only person to find Beto’s story engaging. Fox TeleColombia recently produced a telenovela about Beto’s life).

ZINCON INSTRUCTORS
Instructores durante una Convención de Zumba en Orlando el pasado mes de julio. Zumba Fitness

After hearing his story, Perlman visited Beto’s class in South Florida. Packed with more than 120 smiling, dancing students, it looked more like a Saturday night party than a Monday evening fitness class. And that, he thought, was the special sauce.

Perlman had no money, but his brainchild was to sell videos of Beto’s routines through infomercials. Beto and Aghion, Perlman’s childhood friend who had worked with Perlman in his previous venture and is an alumnus of Florida International University, quickly signed on.

They produced their first video on Miami Beach on the cheap. They visited gyms and other potential partners, but as many startup stories go, they endured a lot of no’s before a few doors of opportunity cracked opened. They did everything they could to get the word out, even a deal with Kellogg’s to carry their DVDs inside Special K boxes. To promote it, Beto dressed as Tony the Tiger and danced in the parking lots of Publix.

Meanwhile, Zumba’s call center (Aghion’s cellphone) had been getting inquiries from fans wanting to become instructors. Zumba began training them in 2003, adding some much needed revenue.

“But even with everything we were doing it was never enough to grow or even meet payroll,” Perlman said in the interview.

With the survival outlook bleak, Aghion thought the team should start a medical billing company because they needed the cash. “That seemed very boring coming from Zumba,” Perlman said. “That forced us to start thinking about how we can create something with these instructors we are training. We had 700 at the time.”

The instructors said they wanted forums to talk online (this was long before Facebook), marketing materials, new choreography and education. That crystalized a business model that could work: Turn instructors into entrepreneurs to power the brand forward.

So in 2005, and down to the last $14,000 in the bank, the co-founders decided to spend it all on developing a Zumba Instructor Network (or ZIN) and were ready to invite instructors to join. Recalled Perlman: “When we pressed send on that email, I told [Aghion] if 200 of the 700 instructors joined, we’ll continue with Zumba, otherwise welcome to the world of medical billing.” Result: 450 instructors signed up immediately, and some wanted to pay in advance. “They said, ‘we know you guys need money. We want Zumba to survive. We love this brand so much.’”

In 2006, ZIN was born.

“The new business model helped consumers because they are getting their fitness and therapy in one class. For the instructors, it gives them income and purpose, and they work out while they do what they love. The gyms get new members,” Perlman said.

PERLMAN ADDRESSES CROWD
Alberto Perlman, CEO of Zumba, addresses crowd at kickoff of ZINCon in July. ZINCon — or ZIN Convention — is Zumba’s annual multiday gathering for instructors in Orlando to connect and learn new dance routines as well as business strategies. Zumba Fitness

And Zumba gets recurring revenue and global scale. Nearly all join ZIN for about $40 per month, providing music, new routines, social media materials and a place to connect — everything the instructors requested. Master trainers teach new instructors in markets around the world, and consumers easily find classes near them on Zumba.com; the cost of classes varies widely, but many in South Florida typically are between $5 and $15 each, if they aren’t included in fitness center memberships.

Zumba’s ZIN Play app provides instructors instant access to tools to market and run their businesses and create custom playlists for their classes. Zumba’s tech team is developing new features all the time, including one to make a song faster without sounding like Alvin and the Chipmunks.

“The company’s entire mission is for us as ZIN members to be successful. That’s all they want. Isn’t that the coolest thing ever?” said instructor Kass Martin from Provo, Utah, who has taught Zumba in several countries.

Since ZIN launched, revenue has grown more than 40,000 percent, said Perlman, who won’t reveal revenues; in a 2012 Inc. magazine article, he indicated that at the time, it was “nine figures’’ — $100 million to $999 million.

Perlman also won’t say how many instructors Zumba has. In 2012, The New York Times reported it had more than 100,000 instructors in 125 countries and Zumba has grown a great deal since then.

MASTER TRAINER LEADS SYNC SUMMIT
Strong by Zumba master trainer Al Lee Syarief leads the 2018 Sync Summit, taking place in Orlando at the same time as ZINCon. Zumba Fitness

On a walkabout during ZINCon, instructor after instructor stopped Perlman to relay their stories. Some said Zumba saved their lives — or their students’.

“When we hear these stories, we realize we have a huge responsibility. This is not a business; this is something that helps so many people and it’s so delicate and fragile. We can’t mess it up. We are the stewards of this brand that is [the instructors’], it is all of us together. We have to make the right choices so they can continue what they do.”

The recession of 2008 would prove to be a test of staying power.

Zumba, then with about 20 employees, had begun to find its footing and had leased larger offices when the economy tanked. With so many people losing their jobs, Perlman feared gym memberships and Zumba classes would be the first to go. “But every time we posted an instructor training it sold out, and instructors were calling us and saying their classes are packed.”

Zumba passed the test. And today its South Florida headquarters, adorned with country flags and signs like “Be The Change” and “Ego Is Not Your Amigo,” houses its marketing, business development and technology teams, its apparel business, its video studio and a music department, which has become a central part of its business.

THE HEART AND SOUL IS THE BEAT

“The first big artist to come to us was Pitbull,” Perlman recalled. Mr. 305’s song “Calle Ocho” was already an anthem in Zumba classes — in it, “Rumba” sounds like Zumba. “He said, you are like the biggest radio station on the planet ... and I want to launch my music with you guys.”

Then Don Omar, a popular Reggaeton artist, wanted to create a song called Zumba. He told a story about his mom in Puerto Rico who never left the house. When she told him she was leaving to go to “Zumba,” he flew to Puerto Rico to see just what this thing was.

“He created a song called “Zumba” and that song became No. 1 on the Latin charts for months. We produced it along with him,” Perlman said.

Then Daddy Yankee’s song, “Limbo,” featured Zu-Zu-Zumba multiple times. “Limbo” and “Zumba” were fighting for first place.

Other artists followed — Jason Derulo, Meghan Trainor, Shakira, Gente de Zona and Ricky Martin, to name a few — and Zumba started talking to record labels. “Record labels now have a Zumba launch strategy and we are very proud of that,” Perlman said.

Zumba works with artists around the globe, who in turn help to promote the Zumba brand, too.

Take Claudia Leitte, one of the biggest artists in Brazil. Zumba helped Leitte secure the “We Are One” 2014 World Cup song, Perlman said. “We introduced her to Pitbull and they made a song and JLo jumped on. We were the ones who orchestrated the song.”

Zumba has included belly dancing, samba and lately a lot of fusion music, when rhythms collide. At ZINCon, an Afro-beat master class was packed.

“Latin music is where our heart is, and we will never get rid of that,” Perlman said. “But students and instructors love when we take a Reggaeton and we add an Indian rapper and a Russian singer and we mix it all together. They love the globalization of it.”

COUNTRY LAUNCHES

Zumba is in every country, except for ones with embargoes or where dancing is banned. In Iran, in fact, Zumba itself is illegal. Last year, Beto traveled to 30 countries including Russia, Poland, South Korea, India, Japan, Italy and Greece to lead concerts and master dance classes for 2,000 to 3,000 people, make media appearances and in general promote the brand.

In Russia, he was mobbed at the airport by fans chanting “Beto Beto Beto” and appeared on the country’s version of the “Tonight Show.” In an interview at Zumba’s South Florida headquarters, Beto said Zumba partnered with Tatiana Kotova, a singer, actress and former Miss Russia, on a Zumba song. “Russians love salsa, merengue. It’s sexy and exotic,” Beto said.

STAGE & CROWD AT ZINCON
The stage, and crowd, at the ZIN Convention’s Fitness Concert headlined by Gente de Zona in Orlando. ZINCon draws more than 7,000 attendees each year. Zumba Fitness

The USA, Germany and Japan are Zumba’s biggest markets. South Korea, Turkey and Russia are hot for Zumba, and Indonesia is the brand’s fastest-growing market , Zumba’s co-founders said. During Beto’s first class in Malaysia, the women were all wearing burqas so he couldn’t see if they were happy, but at the end of the class, the women all cheered wildly.

Some international launches have been challenging. In China, for instance, Zumba had to develop its registration system on WeChat, which is where Chinese consumers interact with brands, because of the country’s internet firewall. But the potential for the company in China is huge, Perlman said. “It’s our next frontier.”

And ironically, conquering Colombia hasn’t been easy.

“I think it is because no one is a prophet in their land; that’s a saying in Spanish,” said Perlman, adding that the gym culture is not as robust in Colombia as in some of their Latin neighbors. “But we are making inroads.”

Cuba? Beto and Perlman are excited about the potential because some of Zumba’s best instructors are of Cuban heritage. “We are working on getting permission to train people in Cuba,” Perlman said.

6. Aqua Zumba master class at ZINCon
Aqua Zumba class at ZINCon. Over the years, Zumba has expanded its class formats, adding Aqua Zumba as well as Zumba Gold for seniors, Zumba Kids, and Zumba Senteo (chair Zumba), to name a few. Zumba Fitness

To be sure, there’s plenty of room to grow globally. The global health club industry revenue totaled $87.2 billion in 2017 and served more than 174 million members, with the U.S. leading the way, according to the 2018 IHRSA Global Report: The State of the Health Club Industry. Yet the top 10 markets across the globe account for more than two out of three health club members and 71 percent of total industry revenue, the report by one of the largest global fitness industry trade groups found. Most of the opportunity is seen in Asia, where health club penetration rates are in single digits. While the U.S. health club membership has grown 33 percent in total since 2008, the report found, China’s market is expected to grow 20 percent annually over the next few years.

Even so, Zumba may have already passed its popularity heyday, and diversifying with Strong by Zumba may have been a smart business strategy. Zumba’s signature dance fitness fell out of the top 20 worldwide fitness trends in 2014, when it was 28th on the list that year, according to the annual American College of Sports Medicine ranking. Zumba was No. 13 on the survey in 2013 and reached a high of No. 9 in 2012. In 2017, Zumba fell to No. 39 and remained there in 2018. The authors suggested it may have been more of a fad than a trend, while high-intensity training — Strong by Zumba’s domain — has recently topped the list of worldwide fitness trends.

THE FUTURE LOOKS STRONG

As high-intensity training workouts were gaining in popularity around 2014 and 2015, Zumba’s co-founders were intrigued. But Perlman and Beto took classes during trade shows, and Beto said the music didn’t match the routines and wasn’t motivating. For example, specific sounds in the music should motivate people to punch or kick, Beto said.

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Practicantes de Zumba durante una Convención en julio en Orlando. Zumba Fitness

To solve that problem, Zumba created workouts and then went to producers such as Timbaland and Steve Aoki to score these workouts with music and sounds, in the same way they would score a movie.

And now, less than two years after Strong by Zumba started, about 400,000 people are taking part in more than 18,000 classes weekly. Strong by Zumba is growing much faster than Zumba did in its first few years.

“I see a lot of people not wanting to try it in the beginning, but once they do, they fall in love with it and stick to it,” said Cathy Medina, an instructor in the Miami area. “You are using your own body weight to strength train, so it’s beautiful.”

While about 65 percent of the Strong instructors also teach Zumba, like Medina, the other 35 percent is the fastest-growing segment right now, Perlman said.

“We are seeing a lot of people from outside of Zumba discovering it because it is not dance. We are getting personal trainers, martial artists, kick-boxing instructors, cross-fit instructors, ninja warrior types.”

E-COMMERCE HEATS UP, TOO

People may not think of Zumba Fitness as an e-commerce player, but it is.

Zumba Wear, Zumba’s multimillion dollar online apparel business, comes alive once a year at ZINCon, where hundreds of instructors wandered the aisles of the 73,000-square-foot pop-up store, eyeing colorful fashions bearing slogans such as “Zumba For All By All,” “RESPECT” and “I Sweat Glitter.” New lines have launched throughout the year — including hip-hop and unicorn-inspired styles.

Perlman won’t say how much of the business is supported by apparel sales except that it’s “significant.” “We sell millions of units a year,” he said. Instructors come to Zumba.com to buy clothing to wear and also resell to their communities and consumers buy directly, too.

Zumba plans to release a video game on Nintendo Switch by the end of 2019, where up to four players can compete with their dance moves. It’s not Zumba’s first foray into video games. It has sold 14 million copies of its Wii and Xbox games.

And if that is not enough, how about a Zumba-themed vacation? Zumba cruises and now a Club Med experience are among the offerings.

WHAT’S NEXT?

Since Zumba received its first and only significant funding from venture and private equity firms Insight Venture Partners and Raine Group in 2012, rumors of an IPO have swirled from time to time. But Perlman quashes that talk: “That’s not our world.”

At the time of the investment, Zumba was valued at about $500 million, according to a New York Times report. Zumba’s co-founders hold controlling interest. An exit strategy is not part of their thinking.

“I don’t need to exit,” Perlman said. “I’m 41 years old, and I am having a great time. And if I were to sell Zumba, I would buy Zumba, a company that makes a difference in the world, that is fun to run, that has entertainment and music and great people. …

“And if we did go public, would it hurt our ability to make the right decisions for our instructors? I would always put our instructors above the Wall Street shareholders and there would always be a tension there.”

Cathy Medina, Zumba instructor from Miami
Cathy Medina, an instructor in the Miami area.

Medina, the Miami instructor, is a beneficiary of that instructor-centric strategy. The 27-year-old leads 13 to 16 fitness classes a week (mainly Zumba, but also Strong by Zumba and some cycling) at Equinox and the Biltmore, drawing 20 to 40-plus participants, depending on the facility. She charges a rate per class (more for Strong) and receives a paycheck every other week from each facility. She also gets booked to lead classes around the world, including Japan, South Korea, Argentina and the Dominican Republic.

Medina attends ZINCon and Zumba jam sessions to learn new choreography and uses the ZIN Play app to create her custom playlists, rather than paying a DJ. She started out teaching a nightly class — finding it a stress reliever — but about three years ago, she quit her full-time job in international trade and began teaching fitness full time.

“It was a very big decision. My parents weren’t too happy because they paid for my school,” said Medina, 27, who majored in business administration. But she doesn’t regret it:

“I don’t work a day, I don’t work. I have fun. It’s a party in my class and I get to change lives.”

Follow Nancy Dahlberg on Twitter @ndahlberg and email her at ndahlbergbiz@gmail.com

Zumba by the numbers

15 million: Number of people taking Zumba classes weekly worldwide.

186: Number of countries where Zumba classes can be found.

40,000: Percentage growth in revenue since Zumba pivoted to an instructor network business model in 2006.

26 million: Number of playlists that have been created using the ZIN Play app in the past year.

551,000: Number of Zumba classes per week worldwide.

400,000: Number of weekly Strong by Zumba participants.

Through its Zumbathons, Zumba helps change the world through charity

Zumba is a global fitness sensation, a technology company employing hundreds in South Florida, an apparel retailer and music producer. It is also a platform for charity.

On the main stage at the ZIN Convention in Orlando last month, a group of instructors, all recent breast cancer survivors, performed to bring attention to Zumba’s charity arm. Several other instructors were honored for their work raising money for and bringing attention to the prevalence of suicides and PTSD. Another instructor, 19-year-old Marc Ntouda, told about how he has used Zumba to raise money for an orphanage in Cameroon, where he helps support 45 children with beds, food and medication.

They all use Zumbathon, Zumba’s charity platform to raise money for causes they care about.

Started in 2006, the first Zumbathon raised $25,000 for breast cancer survivors. Today, in partnership with Susan G. Komen, Zumba has funded its own $3 million grant for breast cancer research, said Alberto Perlman, Zumba’s CEO. “We chose to study something that pharmaceutical companies wouldn’t fund. We are doing a study on breast cancer prevention [with] flaxseeds.”

Zumba as a company also supports ALS research, and funds a supportive organization called Augie’s Quest.

In total, Zumba corporate has raised and donated more than $10 million to breast cancer and ALS research, its spokeswoman said.

In Miami, Zumba has adopted CARE Elementary, a nonprofit school set up by the Miami Rescue Mission for under-resourced children in Overtown. “A lot of the kids that go to the school live way below poverty level, but the school gives them everything they need – supplies, clothing, meals,” Perlman said. “We fund the afterschool program – Zumba classes and a STEM program.”

The kids in the school performed at Zumba’s annual convention last year.

When the school opened a couple of years ago, Perlman said, “we asked the students what do you want to be when you grow up, and they all said musicians or football players. Now they are saying lawyers, doctors, veterinarians. Amazing, these kids are unbelievable. We’re really proud.”

The school now serves students through sixth grade but that will expand, Perlman said. “We have committed to help them throughout their journey. So the school will continue to expand the grades.”

NANCY DAHLBERG

Key dates in the Zumba fitness story

2001: Zumba Fitness founded by Alberto Perlman, Alberto “Beto” Perez and Alberto Aghion in South Florida.

2003-2004: Zumba begins pivot from video sales to its instructor business model.

2006: ZIN, its Zumba Instructor Network, is launched.

2007: Zumba launches Zumba Wear

2008: First ZIN Convention, an annual conference for instructors, kicks off in Orlando with about 1,000 participants.

2010: Zumba launches video game series on Wii and Xbox and sells 14 million copies.

2012: Insight Venture Partners and Raine Group invest, valuing the company at $500 million, The New York Times reported at the time.

2012: Named Company of the Year by Inc Magazine.

2016: Strong by Zumba, a high-intensity training workout program, launches.

2017: ZIN Play app launches

2018: Zumba attracts more than 7,000 to four-day ZIN Convention in Orlando in July.

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