Investing in Weight Loss Companies May Bring Big Gains

Opportunities To Invest in the Weight Loss Industry

Every year, the arrival of summer brings about renewed efforts to get in shape. From the Keto diet to intermittent fasting to signing up for a new Pilates membership, this is the time of year when we find ourselves trying out different health or fitness trends.

This makes investing in weight loss companies a potentially lucrative opportunity.  The surge in new gym sign-ups, food delivery subscriptions, and supplement purchases naturally also means a rise in stock prices.

Beyond the annual fitness resolutions, there is also an alarming rise in obesity rates, which has driven increasing demand for weight management. As such, the weight loss industry is now rife with investment opportunities in various sectors that have seen significant advancements.

The Weight Loss Industry Today

According to the CDC, more than 40% of adults in the US are currently obese.  This trend is only expected to worsen worldwide. The World Obesity Foundation has projected that by 2035, 51% of the world population will be obese. The economic burden of obesity-related health problems will have also snowballed to roughly 3% of the global GDP.

These alarming statistics point to an obesity crisis that places more demand on fitness, health, and weight loss solutions than ever before.

In 2024, the weight loss industry was valued globally at $163 billion. This was largely driven by the US market, which was valued at around $90 billion in 2023.

The weight loss industry covers a number of products and services, including:

• Diet pills, food supplements, diet shakes, nutrition bars, and other meal replacements.
• In-person and digital services, e.g., nutritionists and trainers.
• Subscriptions to meal plans or exercise memberships.
• In-home fitness equipment, including those with virtual workout programs.
• Wearable devices, e.g., smartwatches, fitness trackers.
• Digital products tracking calorie consumption and exercise.
• Weight loss drugs, e.g., GLP-1 medications.

Emerging Trends for Investing in the Weight Loss Industry

The Rise in GLP-1 Medications

GLP-1 agonists such as Ozempic have experienced a meteoric rise in the past few years, and are unsurprisingly the single biggest driver in the weight loss industry. These are highly effective drugs that were initially designed to help patients manage Type 2 diabetes and obesity.

Their relative safety and convenience have seen them increasingly used for weight loss management. Indeed, the brand name Ozempic has quickly become a fixture in pop culture, with its use popularized by celebrities. Despite their popularity, the market for weight loss drugs is still massively underpenetrated, with just 1% of the US population currently using them as of 2023. Globally, the weight loss drugs market is expected to grow from $12.8 billion in 2024 to a whopping $104.9 billion by 2035.

Experts have warned that these weight loss drugs are far from a “silver bullet” and come with various ethical concerns around costs and accessibility. They also come with health effects such as muscle loss, and as a relatively new class of drugs, their long-term side effects are still unknown.

Despite these concerns, studies have also found that these drugs are highly effective in treating obesity and weight loss management. In a time where 1 in 6 deaths in the US can be attributed to excess weight or obesity, weight loss drugs provide a very real, potentially life-saving solution for many people. As more drugs enter the market, it will be interesting to see if costs and side effects will improve over time.

The Digital Health Expansion

Digital fitness solutions represent one of the largest investment opportunities in the weight loss industry. These include smartphone apps, wearable devices, virtual coaches, and online programs. The market is currently valued at over $19 billion with an expected growth of 8.32% CAGR through 2034.

Fitness apps like MyFitnessPal and Noom are now using AI to deliver highly tailored user experiences. These were previously only available through more expensive in-person consultations. Wearable fitness trackers have also improved in their ability to deliver accurate, real-time readings on calorie expenditure, heart rate, and step count.

The increased use of these tools points to growing interest in not just weight loss, but also overall health and fitness. Consumers are moving beyond tracking their weight to also examining their sleep quality, respiratory health, and physical performance over time.

There Is a Buffet of Options for Investing in Weight Loss Companies

With the obesity epidemic continuing to rise, products that can empower us to live healthier, longer, and better lives are more important than ever before.

We recommend talking to a financial advisor to get started. The weight loss industry is highly differentiated with many product and service sectors, some of which are currently experiencing transformational change. Do your homework before you decide where to put your money.

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[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

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This article was originally published on January 4, 2021.]

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