Obesity as an Investing Megatrend

fat-world

Merrill Lynch, a subsidiary of Bank of America, released a new report – Globesity — The Global Fight Against Obesity – looking at the growing problem through the eyes of Wall Street.

There are 4 growth areas according to the report:

  • Pharmaceuticals and Health Care – Companies listed are developing drugs for diabetes, procedures for knee and hip implants and manufacturing equipment such as patient lifts, bigger beds and wider ambulance doors.
  • Food – There’s a $663 billion “health and wellness” market, with manufacturers reformulating their portfolios to respond to increasing pressure such as “fat taxes” to reduce sugar and fat levels.
  • Commercial Weight Loss, Diet Management and Nutrition – a $4 billion market in the U.S. and growing globally. Half of Americans are on some sort of plan on any given day.
  • Sports Apparel and Equipment

Let’s focus on food for the sake of discussion. Some of the companies listed include PepsiCo and Kraft whose connection to health is mostly through marketing, not nutrient rich foods. That said, the report is forward looking, and it’s clear that these companies are looking to sell products to health conscious consumers.

Our biggest beef with the investing approach is that reducing obesity is not about a capitalistic opportunity for smart investors to make more money. It’s about a total re-framing of the issue of private vs. corporate responsibility. It’s rethinking about the real cost of a hamburger, including all the externalized fees our bodies, our land, and our farm workers are paying for a 99 cent burger. It’s about strong public policy and regulation that won’t allow marketing of junk foods to kids. It’s about truth in marketing and nutrition labeling. It’s about removing the silly subsidies for corn and soy that then move up the supply chain to become cheap drinks and fast food entrees. It’s about REDUCING calorie intake, not increasing it. The food industry needs to sell us less, not more.

How can we invest in that?

 

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