The economics of healthy diets

Developed nations are fighting a worldwide epidemic against obesity. As the Economist(April,2006 edition) notes, about 50% of kids in England could be obese by 2020. The percentage of Americans with BMI over 25 grew to 62 around 2003 and has reached a plateau since.

When such numbers hit a 'tipping point' they drive a mass consumer shift towards health diets. People become inundated with reports that highlight the dangers of being overweight and as a result health diets, fitness centers, and weight loss scams start having a field day. Advertisers that specialize in demonizing the McDonalds of the world sprout out of nowhere with strident rhetoric against unhealthy eating.

As a result, large corporations that serve fast-food on a mass scale have to make significant investments to alter the mix of foods they offer. New-age, nimble juice stores and health food outlets burgeon in areas populated with weight-conscious denizens.

For an investor, this is important information as such societal changes causes shifts in demands for various underlying commodities - sugar, oils, orange juice, corn, cocoa etc. It also opens up new franchising opportunities.

Next time you think of commodity investments, keep in mind these social trends. Will help you make better investing decisions.

Cheers.