Pattie's Blog: Investing opportunities in the obesity epidemic
Paris Woods has her waist measured as she takes part in her final session of a 20 month obesity prevention study at Rush University Medical Center in Chicago Jan. 20, 2010. (AP / M. Spencer Green)
Published Tuesday, August 7, 2012 10:06AM EDT
Last Updated Tuesday, August 7, 2012 11:06AM EDT
I was reading a Global research report from BofA Merrill Lynch called “Globesity – The Global Fight Against Obesity.”
Obesity may be the most pressing health challenge facing the world today. Obesity is on the rise globally and costs to combat it are skyrocketing.
Fact: Globally there are 500 million people who are obese and 1.4 billion overweight. Obesity is the fifth largest cause of death leading to 2.8 million fatalities each year.
According to the World Health Organization by 2030, 65 million more Americans will be obese if the trend continues. Little doubt there is a problem here in the West however, obesity in Europe has tripled over the last 30 years and it is growing rapidly in the emerging markets as diets become more westernized.
Even Brazil, according to the report, has 16 per cent of its population obese and sadly is on track to match the U.S. by 2020. Here in Canada almost a quarter of our population is obese with men aged 60 to 74 out pacing women aged 20 to 39.
Let’s zero in on costs here in Canada. According to a study by the Canadian Institute for Health Information and the Public Agency of Canada, obesity costs the economy up to $7 billion a year. (Costs split evenly between direct health care costs and lost productivity.)
This is a big problem and as we saw with smoking -- regulations changed and we could see that happening here with food, drinks, schools, work environment, insurers, encouragement for physical activity and the list goes on.
Sadly though this isn’t going to be fixed overnight and is where the investing megatrend comes into play…….
A megatrend is an area that you invest in now and watch unfold over a significant period of time say 25 -- 30 years.
When it comes to dealing with obesity here are a few examples we know of today and investing opportunities will also evolve as more solutions come to light…..
- Pharmaceuticals and health care companies that track diabetes, joint replacements for and even equipment providers for things such wider beds, patient lifts.
- Food -- the health and wellness market is going to get bigger.
- Commercial weight loss companies.
- Sports apparel and equipment.
Word of caution……this type of investing is going to take time. The obesity problem isn’t going to go away soon but investors who get in and are patient, unlock the leaders in this industry and have a broad perspective could be rewarded handsomely.
Final note … there will be evolutions – if you recall first there were ethical funds that told you what not to invest in that evolved into sustainability funds that now focus on what to invest in to save the environment. Many would say this area too is still in its infancy phase.
Again….proceed with caution and conviction and yet something to think about.