FYI | Dec 12 2013
-Far-reaching implications of obesity
-Chinese waistlines grow substantially
By Eva Brocklehurst
Obesity is a health hazard. That's been established for some time. Obesity levels are also increasing globally. What's not so established is what this means for markets and emerging economies.
Global asset manager AllianceBernstein draws a parallel with modern lifestyle and rising obesity levels and emerging markets, finding this unwanted side effect is having an impact on economic progress. According to Sammy Suzuki, AllianceBernstein's New York-based director of research for emerging market equities, there could be far-reaching implications from the obesity epidemic and investors should pay close attention to obesity as an important indicator of consumer and health-related trends in emerging markets.
The evidence cited is this: In China, 11.4% of men were obese in 2009 compared with 2.9% in 1993, according to a study published by Obesity Reviews. Obesity is rising among Chinese women and children, too. This reflected a sharp decline in physical activity, which has been caused by rapid urbanisation of the Chinese population as well as modernisation of the workplace. The Chinese population now also consumes more processed and packaged foods – hence more kilojoules – than previously. It all adds up to weight gain in a large proportion of the world's population that never used to bother about such things.
It's simple. When countries become richer they consume richer food and burn less energy during their day-to-day activities. The trend has been obvious in developed countries for decades. So which industries benefit? The researcher expects those providing snacks, soft drinks, fast food and prepared meals are likely beneficiaries. As well, smart phones and gaming companies gain benefits from the increasingly sedentary population. Suzuki also believes those offering treatments and solutions for obesity will grow, such as medical companies and drug makers.
The analyst believes it would be good news if the developing countries did not succumb to the US example of growing waistlines but, for now, there is little evidence that the Chinese are taking note and this means the obesity epidemic has potential to influence key sectors across emerging markets.
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