Can obesity epidemic help investors pile on the pounds?

The team that manages Norwich Union’s Sustainable Future funds is looking at the risks and opportunities the world’s obesity epidemic poses investors.

As experts claim that the number of overweight people in the world overtakes the number of malnourished for the first time, analysts believe the problem has serious implications for companies in the food production and retailing, healthcare, and leisure sectors.

Key facts:

Obesity has reached epidemic proportions globally. There are more than one billion overweight adults in the world – 300 million of them are obese

Obesity rates have risen three-fold or more since 1980 in some areas of North America, United Kingdom, Eastern Europe, Middle East, Australasia and China

Childhood obesity is epidemic in some areas. An estimated 17.6million children under five are estimated to be overweight worldwide

The Health Select Committee has estimated that the costs of obesity are £3.3-£3.7bn a year

Peter Michaelis, manager of the Norwich Union UK Ethical fund and Norwich Union Sustainable Future UK Growth fund, said: “Obesity is a key theme for Norwich Union’s Sustainable Future funds; we see this as an investment issue because it can affect companies’ long-term profitability.

“We think that rising trends in obesity pose both a risk and opportunity for companies, and it is important to understand to what extent companies are exposed to this issue and how they are managing it.

“Our view, for example, is that those food companies and retailers that produce high quality food and healthy lifestyle ranges will enjoy an increase in demand for their products; those companies that produce poor quality food with high sugar, salt and fat content risk losing market share as consumers switch to healthier options.

“Healthcare companies that produce treatments for obesity-related illnesses such as diabetes, strokes, heart disease and joint replacements are also likely to see an increase in demand.”