I have previously written about Bigger Meals, Bigger People and how increased portion sizes are causing increased people sizes. For example, there has been 1,233% increase of size of a chocolate bar since early 1900s!
I’ve also written about Bigger Meals, Bigger People, Bigger Problems and the impacts of obesity on our precious planet and its resources.
Well, now it is time for part 3 of my Bigger Meals, Bigger People series…
Bigger Meals, Bigger People, Bigger Profits
Could the nation’s growing waistline lead to supersize profits on pensions and investments?
According to a report in The Telegraph, Bank of America Merill Lynch identified the “global fight against obesity” as a “mega-investment theme”.
Over the coming decades this obesity epidemic will shape thinking by policy makers and in boardrooms around the world, according to Sarbjit Nahal, at equity strategist at BoA Merrill Lynch Global Research.
Tougher regulation could present problems for some companies – in particular those who now make their millions selling high-fat high-sugar foods. But it could present opportunities for others, particularly those selling pills, weight-loss programmes or health foods to Governments looking to cut health care costs, and individuals encouraged to fight the flab.
According to he World Health Organization, 500m people worldwide are obese, with a further 1.4bn classified as “overweight”. Obesity levels has doubled in the past 30 years, and tripled over this period in Western economies, like Europe.
If current trends continue 65m Americans will be obese by 2030. But numbers are also rising in many emerging markets, as diets westernise. In Brazil for example 16pc of the population is obese and obesity in Brazil is on track to match US obesity levels by the 2020s. From personal experience, it appears pretty much everyone in Brazil has a sweet tooth and hence even fresh healthy juices are offered with sugar!
Few people would dispute that obesity is a growing social problem, but there is a less agreement on what the knock-on effects will be for corporate profits. The BoA Merrill Lynch report suggests investors should look at companies in four key areas – pharmaceuticals, food companies, diet management and sports clothing and equipment.
It isn’t just companies developing weight loss pills that could benefit. BoA Merrill Lynch said companies tackling related medical conditions, including diabetes, kidney failure, and knee implants are likely to see greater demand for their products. It adds that those who are manufacturing products for a larger population – be it patient lifts, bigger beds and wider ambulance doors could also benefit.
There has been frenzied speculation around a “wonder-drug” for obesity; In the US the share price of Arena Pharmaceuticals went up 500pc when it received approval for its new anti-obesity drug. However, Damien Fahy of Weller Dennehy pointed out firms such as these don’t typically make drugs for other conditions, and many of these “pipeline drugs” never see the light of day.
Those that alter their food lines to tap into the $663bn “health and wellness” market should benefit the most, as they are less likely to be hit “fat taxes” in future, according to Mr Nahal.
But advisers admit second-guessing which food companies will profit is harder. Global food conglomerates are adapt at changing to circumstances. Companies like Nestle, Unilever, Proctor & Gamble, Kraft, and Tesco, manufacture and sell a wide range of products, so while one product line might lose sales if a “fat tax” is ever introduced, this is likely to be balanced by a marketing push of its more “healthy” lines. McDonalds, for example, now also owns Pret a Manger.
Mr Lowcock added that many global food companies will simply concentrate sales of less healthy products in emerging markets. “Look at the cigarette companies,” he said. “Despite regulation and lawsuits, most are still making handsome profits.”
Diet Management and Sports Equipment
The last two areas that are likely to see a surge in profits are the firms that operate in the “diet management” industry – which is now a $4bn market in the US – and those making sports clothing and equipment.
Year Without Beer
Never mind the Olympics, 2012 is my Year Without Beer! I am spending all 366 days of this leap year alcohol free in an attempt to raise money for 2 charities that are both very close to my heart.
If giving up all alcohol for a year isn’t enough of a challenge to make you dig deep and show your support, maybe a quarter marathon, 10 mile road race (Great South Run) and 8 mile off road challenge (The Grim Original) will inspire you to sponsor me!
If you want to show some love them please donate to my year without beer and give your support to one of these fantastic causes:
- To donate to Cancer Research UK please click here to visit my just giving page or donate by text – send AYWB66 and the amount to 70070. For example, texting “AYWB66 £5″ will donate £5.
- To donate to the Cystic Fibrosis Trust please click here to visit my just giving page or donate by text – send AYWB55 and the amount to 70070. For example, texting “AYWB55 £5″ will donate £5.