Obesity Industry and the Economy

I have struggled with near obesity all my adult life. Two lessons I gleaned from fifty years of weight watching are that genes and metabolism are key factors in how heavy one is and the daily exercise is important for good health and longevity but a more important factor is what and how much one eats. Unfortunately, limiting what you eat is hard. Humans have a weakness called taste and unlimited capacity to consume. Some like me are basically insecure and eat whatever is around even if they don't like it. A whole industry has developed over last hundred years to capitalize on these frailties and has contributed to obesity. ‘Obesity Industry’ not only includes the purveyors of addictive and unhealthy food and drink producers like Coca Cola, MacDonald’s, and Nestle’s, they also include corporations who sell cure for obesity like Weight Watchers and Jenny Craig. The following table of latest available figures from leaders of three segments of this industry gives an idea of their size and importance to the economy. The numbers are for Coca Cola, MCDonald's, and Weight Watchers separated by a comma:

Total Revenue, billions 31,23,1.4
Gross Profit, billions 19, 7,0.7
Net Income, billions 6.8,4.5,.18
Market value, billions 130,80,2.8
Annual dividend payout, billions 3.0,2.5,.05
Advertising budget, billions 2.4, 1.0,0.2*
Number of employees, thousands 43,400,28

* Estimated

Some of these figures are only partially true. For instance Coca Cola figures do not include the bottlers and franchisees who have additional employees and advertising budgets. To get an idea of their relative scale, sales of Coca Cola represent $100 per American and total revenues of the Federal government of Canada for 2010 is 231 billion and it employs approximately three million people. Total revenues of Coca Cola are greater than total retail sales in Canada in a month.

One can generalize from these figures that several million people earn their living in obesity industries, their direct contribution to the economy is in hundreds of billions and their market value could be as much as a trillion dollars. In addition, they spend tens of billions of dollars in advertising which support your favourite TV channels and magazines even though, unfortunately, a good portion of advertising is focused on children and young adults to get them hooked in a life long addiction. The industry can argue that it pays in taxes much more than what the obesity adds in healthcare costs.

Obviously an industry of this size can not be shut down in a day without catastrophic consequences to the employment situation and the general economy. The transformation of Obesity Industry into 'Healthy Citizens Industry' will have to be gradual also because you can not change the habits of a generation in a few years. To achieve an orderly transition lessons from tobacco industry might be useful although it should be noted that the impact on the economy of controls on that industry was reduced substantially by increased penetration of Western tobacco companies in Eastern Europe and Asia. It is almost useless to reduce bad eating habits by advertising since these companies have the resources to outdo any official campaigns. To achieve the positive results ‘freedom of speech’ granted to the companies whose products have been proven harmful needs to be curtailed. Less advertising by Coca Cola for example will help the sale of milk and unsweetened orange juice and improve the health of young adults. The efforts to improve the health of ordinary Canadians are likely to have a better outcome with reduction, hopefully elimination, of promotion of fatty foods and drinks and no chance at all in the current free for all. Further controls on the contents of these products can be gradually introduced as the new ones gain acceptance among the industry and the consumers. This is the recipe for success.