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Pricecheck on Obesity: $2 Trillion Dollars

Posted Jul 21 2008 10:20am


Aspublished in this past Sunday’s Observer,Zoe Woodreports that “the market for products derived from the obesity ‘epidemic’ could be worth £1 trillion within four years”. That is $2 trillion in US dollars.

$2 000 000 000 000

According to theWorld Health Organization, almost 1/3 of the world’s population is overweight, while 400 million are clinically obese. The numbers for “first world” nations are even worse.

2005 WHO obesity estimates pegged the United States as the world’s fattest nation. (see chart below)

However, in a perverse show of nationalistic pride, a recentreport by the Baker Heart Research Institute, claims that Australia has overtaken America as the world’s fattest nation. Damn those Aussies.

To further cloud the issue, the WHO estimates for obesity rates in the year 2020 still show America as #1. And Australia lagging far behind.

Obviously someone has got their numbers wrong.

Here are the WHO estimates.

Let’s move away from obesity for a minute.

What about those individuals that are merely “overweight”.

Not obese; just fat, chubby, big boned, pleasantly plump…

According to the WHO, the world’s most overweight nations, regardless of economic, political or military dominance are:

RankCountry%
1.Nauru94.5
2.Micronesia, Federated States of91.1
3.Cook Islands90.9
4.Tonga90.8
5.Niue81.7
6.Samoa80.4
7.Palau78.4
8.Kuwait74.2
9.United States74.1
10.Kiribati73.6
11.Dominica71.0
12.Barbados69.7
13.Argentina69.4
14.Egypt69.4
15.Malta68.7
16.Greece68.5
17.New Zealand68.4
18.United Arab Emirates68.3
19.Mexico68.1
20.Trinidad and Tobago67.9
21.Australia67.4
22.Belarus66.8
23.Chile65.3
24.Venezuela (Bolivarian Republic of)65.2
25.Seychelles64.6
26.Bahrain64.1
27.Andorra63.8
28.United Kingdom63.8
29.Saudi Arabia63.5
30.Monaco62.4
31.Bolivia62.2
32.San Marino62.1
33.Guatemala61.2
34.Mongolia61.2
35.Canada61.1
36.Qatar61.0
37.Uruguay60.9
38.Jordan60.5
39.Bahamas60.4
40.Iceland60.4
41.Nicaragua60.4
42.Cuba60.1
43.Germany60.1
44.Brunei Darussalam59.8
45.Slovenia59.8
46.Peru59.6
47.Vanuatu59.6
48.Finland58.7
49.Jamaica57.4

Nauru kicks some serious obese butt. Actually, it seems that the entire South Pacific has cornered the market on body-fat. It must be theSpam.

What about the money?

In a report issued byCredit Suisse, analysts said “The global obesity “epidemic” will have a material impact on global business strategy over the next decade. A greater awareness about its costs is not only changing society but infiltrating the business world in health care and other major industries”.

OR

“The larger a problem gets, the more attention and resources it gets” - Credit Suisse analyst Catherine Arnold

Credit Suisse claims that the “companies best placed to benefit from the development are those devising products that either help people to lead healthier lives or that treat the symptoms of obesity”.

So who are these companies best placed to capitalize on our expanding waistlines?

Asreported in the Wall Street Journal, Credit Suisse has assembled an index of 15 stocks that they feel will “experience outsized revenue and earnings growth over the next 5 years compared to their peers.”

This “Healthier Living 15″ includes:

Health Care:

Allergansells a “Lap-Band” used in an increasingly popular type ofobesity surgery.

Novo Nordiskis big in thediabetesmarket

Mercksells drugs for diabetes andhigh cholesterol

CVSmay benefit by selling vitamins and prescription weight-loss drugs

Healthwayscontracts with employers and government entities tomanage preventive care, among other things.

Food:

General Millsshould benefit from a move to “healthier, more convenient foods”

KelloggandDanonealso make the list

Grocery chainSafeway, which is rolling out “lifestyle” stores

If you want a wild card, go forKuala Lumpur Kepong, a Malaysian palm-oil company that may see an uptick in business as food makers look for alternatives to trans fats

Athletics:

Under Armoursells athletic clothing and shoes

Lululemon athleticasells “yoga-inspired apparel”

Nikeis Nike

Dick’s Sporting Goodsis a big U.S. retailer

Life Time Fitness, a chain of health clubs, could outcompete smaller gyms to gain market share.

So what does this mean to me?

If you are looking for a growth market to invest your life savings in, the obesity industry might a good idea.

Think about it. People are getting fatter and fatter with no end in sight.

For years, authors have promised miracle diets while drug and supplement companies have given us miracle pills.

And yet, we get fatter and fatter.

So, we have a marketplace that is eager to believe in miracle solutions and apparently never becomes disillusioned when they don’t work.

The dieters, pill poppers and frantic exercisers just blame themselves, their poor genetics, their lack of self-discipline….and hop right back into their SUV, drive down to the mall and pick up the latest best selling diet book and wash it down with a triple Venti half-caf mocha caramel frappuchino with extra whipped cream and a dollop of irony.

Maybe $2 000 000 000 000 is a gross underestimation.

.

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