How are we embracing the change?
Change occurs over very different timescales: glacial in the case of demographics shifts, and overnight in the case of policy action. Whatever the pace however, the direction of travel is clear. The impact of these trends will be deep, with the potential to be highly disruptive for sleepy incumbents, but highly supportive for companies that are on the front foot of sustainability – these companies will benefit from multiyear tailwinds.
Health and Wellbeing starts with healthcare. An older population that is living longer will require better treatment for a number of growing ailments. Oncology has attracted substantial investment, but there appears to be a clear winner: AstraZeneca, the global pharmaceutical company, has focused its R&D to target areas like lung cancer and pancreatic cancer where they are bringing new generation drugs to the market, leapfrogging competition. The growth is very well underpinned and secure because of the patents that confer protection – a significant component of the economic ‘moat’ for Astra. Cancer treatment however is also reliant on radiation therapy where Elekta has a dominant position. Elekta is one of only 2 global radiotherapy equipment manufacturers, and it is using its reach and technology to introduce innovative and more accessible linear accelerators (or linacs) to the market. Low income countries that have the lowest penetration of linacs will benefit from their new affordable product. But with growing pressure on healthcare systems, there is a need to make hospital visits more efficient and more cost effective. Philips, the global leader in ultrasound and image guided therapy, helps hospitals reduce costs and improve diagnosis quality by providing equipment like their image guided cardiovascular therapy which allows early intervention, enables minimally invasive surgery, and reduces time in hospital. This not only saves costs but also materially improves the lives and wellbeing of patients.
Obesity is a ticking time bomb. Growing at an alarming rate in emerging markets, it is also the bane of western governments, and one of the main causes of type 2 diabetes. Novo Nordisk has the best and most innovative diabetes drugs on the market and is pushing the envelope on obesity treatment, which has yet to be recognised as a disease, but given its significance, is in our opinion a large potential market longer term.
Nutrition is naturally the answer. Whilst over the very long term, industrialisation has made bad nutrition more accessible, the shorter-term trend has seen a strong reversal of these bad habits. Egged on by regulation, consumer trends are changing, championed by younger more environmentally and health conscious generations. The hunt for cleaner, healthier, more nutritious and natural foods has been accelerating for several years and we have seen the proliferation of new products on the market aiming to address these growing needs. Specialty ingredient companies like Ireland based Kerry Group, or German Symrise provide solutions to some of the complex challenges faced by the food manufacturers. Consumers want products that are tasty yet nutritious, whilst regulators are mandating strict label transparency, and specialty ingredient companies make this possible by acting as R&D outsourcers and partners to the food manufacturers. As owners of the technology and IP3 , they provide the consumer insight, world class innovation and application expertise to make an impossible burger, possible.