If you’re looking to make money, it makes sense that the best areas in which to invest are those which have a constantly expanding target market, and those in which the demand is always there.
Today, there’s a market that is expected to more than double from $147 billion to $344 billion by 2018. This market targets 2 out of every 3 Americans, and that’s only expected to get bigger and bigger. It almost seems like a no-brainer to jump right in, right?
So what is this market? Obesity and weight-loss.
The expanding obesity problem
Obesity is a huge problem not only in the U.S., but also around the world. Domestically, about 200 million Americans are overweight or obese (2/3 of the country), and worldwide, by 2015, there are expected to be 2.3 billion overweight or obese adults.
If that’s not dire enough, obesity has now surpassed smoking as the no. 1 preventable cause of death in the U.S., and by 2018, more than 20% of our health care dollars will be going toward obesity.
Currently there are about 108 million dieters in the U.S. More than half are trying to actively lose weight, while the rest want to maintain their current weight. With such a large – and growing – market, products and services connected to weight-loss are faring incredibly well, despite the worldwide recession in recent years.
Growing companies for whittling waistlines
One company that has excelled over the last decade is Weight Watchers. In 1999, the price of Weight Watchers stock was $2.13 per share. In March 2012 the stock were trading at $82. Today, it’s $48.10 (as of July 2012), still pretty darn high. That’s more than a 2,000% increase in share price! Weight Watchers not only has its centers where it holds weekly meetings, but it also has an online program which now boasts 1.72 million subscribers and it sells diet foods and related products.
Another company that has done very well recently is Arena Pharmaceuticals (ARNA), which just had its weight loss drug Belviq approved by the FDA. This is the first weight-loss drug approval by the FDA in 13 years. ARNA stock increased 600% in the past 6 months.
Fitness centers have also expanded in recent years to what is now an $18 billion industry. This sector has sustained growth of an average of 4% over 30 years, and it continues to grow.
How the government is investing in weight loss
The obesity problem is such an overwhelming concern that even the federal government is getting involved. For example, First Lady Michelle Obama has focused on anti-obesity efforts and created a program called “Let’s Move!” to help kids get fit. Today, 1 out of every 3 kids is obese, and there are a record number of kids with Type-2 diabetes.
Investing in anti-obesity efforts at a young age will hopefully curb the skyrocketing cost of obesity down the road. And researchers say these are smart investments for communities to make. One report says that for every $1 invested in community based programs, they will get $5.60 in returns.
Worldwide investments in weight loss
As discussed, obesity is a worldwide problem, and is rapidly expanding, even in unexpected countries such as China. There, 30% of adults are now overweight or obese, which has risen from 25% in 2004. Currently, 92 million Chinese adults have Type-2 diabetes, and that number could grow to as much as half a billion by 2030.
Companies that are doing well in the U.S. are also starting to fare well in these foreign markets. For example, Weight Watchers has opened several centers in Shanghai and is planning to open more in other locations. Japanese company Otsuka, which makes Soyjoy bars, expects its Chinese sales to top U.S. sales soon. And even health clubs are rapidly expanding, with about 3,000 health clubs across China that boast about 3 million members.
Even pharmaceutical companies are seeing opportunity in the Chinese market. Allergan, which manufactures the Lap-Band for gastric bypass surgery, has applied to the Chinese government to sell the device there.
The best weight-loss investment: You
Experts say you could effectively add thousands of dollars every year to your salary by losing weight. The costs associated with extra pounds are $8,365 for women and $6,518 for men. That includes money spent on extra food, medical costs and even transportation (it costs more money to transport more pounds).
By investing a relatively small amount of money ($20 per month on a gym membership and money on gym clothes) to slim down to a normal weight, you could see an enormous return on investment – more than you could get from nearly any company that you’d invest in.
Jumping into the weight-loss market
The market for weight-loss products will just continue to grow over the years. So what are you waiting for? Investing in companies and projects that target obesity are generally smart investment. Of course the smartest investment you could make is in your own weight-loss efforts, both for your own health and your bottom line.