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Jane Jiang

Worldwide levels of obesity are rising, a trend especially pronounced in the United States. Obesity--both morbid and not--has been linked to a number of serious diseases, especially Type II diabetes and osteoarthritis. About 30% of the U.S. population is currently estimated to be qualified for pharmaceutical anti-obesity treatment, making the obesity trend a potential windfall for drug manufacturers. Increased health-consciousness will also benefit some diet companies while edging out fast food and frozen food companies.

Who wins from increased obesity/awareness?

• NutriSystem (NTRI), EDiets.com (DIET), Medifast (MED), and Weight Watchers International (WTW) are among the diet plan companies that would benefit from an increased drive towards weight loss.
• Nutritional supplement Herbalife (HLF) is a natural weight-loss pill that would also find increased obesity awareness a boon.
• GlaxoSmithKline (GSK), Arena Pharmaceuticals (ARNA), Amylin Pharmaceuticals (AMLN) and Pfizer (PFE) are all pharmaceutical companies with significant resources invested in the research or production of anti-obesity and type II diabetes drugs.
• Zimmer Holdings (ZMH) and Stryker (SYK), major manufacturers of orthopedic equipment, may also see sales rise as the "obesity epidemic" increases--increased weight puts significantly more pressure on joints and bones than they are designed for, making obese patients much more liable to suffer from osteoarthritis and related problems.
• Medtronic (MDT), a major medical device company, which makes external insulin pumps and glucose monitoring (CGM) systems for maintaining control of glucose levels and supporting the treatment of diabetes, may also see sales rise.
• Becton, Dickinson and Company (BDX), a leading hospital supply company, which makes syringes and pen needles for the injection of insulin.
• Casual Male Retail Group (CMRG), the leading specialty retailer of men's big & tall apparel.
• King Size Catalog: This big & tall apparel catalog is owned by Redcats USA, which is a wholly owned subsidiary of French congolomerate, PPR SA (PP-FR).

Who loses from increased obesity/awareness?

• McDonald's (MCD), Yum! Brands (YUM), CKE Restaurants (CKR), and other perceived "unhealthy" fast food restaurants will suffer from obesity increase and awareness, both through possible health liability lawsuits and from decreased consumption/sales. Despite a general industry effort to move towards salads and other "healthy alternatives," a general negative impression of fast food content remains hard to dispel. (And not everyone is moving towards healthier, either--CKE Restaurants remains defiantly on the side of "big, juicy burgers," according to CEO Puzder[1].
• Sara Lee (SLE) and Otis Spunkmeyer are major producers of frozen and packaged sweet, fatty, and semi-sweet foods (including processed meat products, breads, sweet baked goods, and coffee). Otis Spunkmeyer has already reported earnings slowdowns attributed to increasing health-consciousness.