Compared to other artificial sweeteners, Stevia is a gift of nature for diabetic and obese people, because it passes through the digestive system without being absorbed. But of course, if big producers are betting on it, there are still two major obstacles to overcome: one, the price is actually higher, and the second – and I can testify for that – is that really Stevia has to sweeten its taste.
It was not that long ago that star investor Jim Rogers used to slip the people he was talking to one of those little sugar packets just like the ones served at all cafes for your coffee. That is because he wanted to draw attention to the immense investment potential of commodities, especially “soft commodities”. This is just the sort of commodity that everyone needs. He was proven to be correct. It is well known, however, after the boom that the time to invest is before the boom. So where could the next major buzz be, the new and upcoming zeitgeist investment? Right at the point where pleasure and health meet.
But let’s start at the beginning: sugar is sweet and therefore popular. Depending on the amount consumed, however, sugar is also unhealthy. Despite this, the World Health Organization claims that a considerable amount of it is consumed without our even being aware of it. A tablespoon of ketchup, for example, contains about a teaspoon of sugar, which in turn contributes to obesity. In the United States, two-thirds of adults and one out of every three children are overweight or obese. It costs the health system $190 billion just trying to cope with the resulting diseases. Stevia, on the other hand, does not cause these negative effects. So, it is hardly surprising if the food industry starts licking its lips at this sweet alternative to traditional sugar.
The world is getting fatter. In 2014, according to a study published in the medical journal ‘Lancet’, there were for the first time more obese than underweight people living. While in 1975 only around 5 percent were overweight, about 40 years later it was 11 percent of all women and around 15 percent of all men.
While the number of obese people in the US has stopped rising, it is growing dramatically in Asia. Also the number of those who have civilization disorders such as diabetes has been rising. In 2000, 24 million people were diagnosed with diabetes in China. In 2030, 131 million Chinese are likely to be affected.
Stevia is seen as the perfect sugar substitute: naturally sweet, with zero calories. The concentrated sweetness obtained from stevia is 200 to 300 times sweeter than ordinary household sugar. The global market value of stevia in 2014 was around 336 million dollars, and is expected to rise to 578 million dollars by the end of 2017.
The global weight loss and weight management market is expected to reach $206.4 billion by 2019 from $148.1 billion in 2014, growing at a compound annual growth rate (CAGR) of 6.9% from 2014 to 2019.
Not just a passing fad
Stevia is obtained from a South American plant and has already developed a sizable market. Between 2008 and 2012, sales figures rose by 400 percent, which was due, among other things, to large conglomerates such as Coca-Cola or Danone relying on Stevia. Subsequently, it was approved by the European Food Safety Authority in 2011. In 2014, the global market value of Stevia was around $336 million, and it is thought it will reach $578 million by the end of 2017. It would not necessarily be a zeitgeist investment, however, to rely solely on Stevia. Rather, only those types of assets and investments that can be established on the slightest hint of a change, often difficult to perceive, can be deemed zeitgeist investments. Let us take the example of increased health awareness. This is reflected, in turn, by greater nutritional awareness as well as the realization that the movement is part of a healthy life. Subsequently, the shift in demand to issues, such as healthy nutrition, increased fitness and the associated service providers, should be catered to. For example, away from sugar, toward the sugar substitute Stevia. Or even just toward services such as the delivery of healthy meals. The more people work from home, the greater the corresponding demand is, precisely because of the change in basic attitude. Weight watchers offers such a program, as does their competitor, NutriSystem.
Everyone knows that you cannot buy health, but you can buy the things and services that allow you to be healthy. They are becoming part of zeitgeist investment, because they are likely to be at the beginning of a prolonged upward trend as a result of a general change in attitudes, and because of the increasing level of global purchasing power.
These are actually not cheap companies. But we do not invest here because of a low valuation, but because of the high growth rates. You have to weigh the pros and cons. Occasionally, low-rated shares in companies with good growth prospects are obtained. But you usually have to pay for good growth opportunities. And this is the case here.
Published on 26.05.2017
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