A woman serves herself deep-fried food at an all-you-can eat restaurant in London
The ambitious scale of Boris Johnson’s anti-obesity drive suggests hedging bets is wise © Getty Images

UK prime minister Boris Johnson’s anti-obesity drive may be horribly timed — the nation’s £74bn food and drink sector is already reeling from lockdowns — but he has a point. Two-thirds of adults and one-third of children in England are overweight, according to the NHS.

The UK out-plumps the rest of Europe. It is not just Brits: half of all Americans are expected to be obese by the end of the decade. Going overweight on obesity plays looks like a no-brainer. The Solactive obesity index is up by two-thirds since the March lockdowns, outperforming the MSCI world index.

There are as many ways to play the obesity trade as there are diets. Like faddy eating regimes, many disappoint. Shares in WW International, formerly Weight Watchers, have shed gains quicker than members and are worth one-quarter the mid-2018 peak. Nestlé canned Jenny Craig, a similar buddy-and-meal supplement shakes regime, selling it in 2013 for less than the $600m it paid.

Line chart comparing the Solactive Obesity Index with the MSCI All World Index plus slope chart showing rise in prevalence of obesity in selected countries from 1980 to 2016

Plus-size clothing is a more straightforward option. The UK market alone was worth £7.5bn in 2019. That has caught the eye of unlikely investors, including German broadcaster ProSiebenSat. 1 Group. Last year it bought into privately held plus-size label navabi.

Bar chart showing % of total healthcare expenditure associated with overweight or obese

Specialised funds prefer healthcare. More than 8 per cent of OECD health budgets will go towards treating the consequences of obesity, according to the Paris-based organisation. The European Commission puts the European bill at an annual €60bn. Choice investments include pill makers, purveyors of insulin pumps and kidney dialysis services. The ambitious scale of Mr Johnson’s drive suggests hedging bets is wise.

The holy grail is a fat-melting pill. Regulatory risk looms large. Novo Nordisk’s Saxenda seemed a winner: sales last year surged 47 per cent to DKr5.68bn ($898m). But a knock-back is on the cards in the UK, where draft guidance suggests the NHS will not foot the bill. Japan’s Eisai in February pulled its weight management Belviq drug from American shelves after the Food and Drug Administration flagged health risks. Investors, like dieters, should give magic cures a wide berth.

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