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Credit Suisse Publishes Report on the Impact of Global Sugar Consumption

   Credit Suisse Publishes Report on the Impact of Global Sugar Consumption

PR Newswire

NEW YORK, Sept. 11, 2013

NEW YORK, Sept. 11, 2013 /PRNewswire/ -- The Credit Suisse Research Institute
today released a report entitled "Sugar: Consumption at a Crossroads." The
report explores the medical, economic, consumer, corporate and public policy
elements of global sugar consumption and the impact for investors as focus on
this area intensifies.

(Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO )

The fast growth of diabetes type II, metabolic syndrome, obesity and their
related nutritional issues are arguably this century's primary social health
concern. The report explores the impact of "sugar and sweeteners" on our diets
and leverages the expertise of over 20 research analysts and industry experts
to assess the impact on companies as the landscape of consumer preferences and
public policy is potentially redrawn.

To provide new insights on the debate, the report includes a proprietary
survey of general practitioners in the US, Europe and Asia. The survey found
that 90 percent of the doctors surveyed believed that the sharp growth in type
II diabetes and the current obesity epidemic are strongly linked to excess
sugar consumption. "Although causality is difficult to prove in this area,
with such a high percentage of doctors in our proprietary survey confident of
this strong link, we cannot ignore the significance and the implications for
society and our economy," says Stefano Natella, Co-Head of Securities Research
& Analytics and an author of the study.

Among the potential public responses, taxation might be the most effective but
also less likely with the exception of Mexico and some European countries.
However, the risk of public intervention and increasing public awareness will
force companies to adapt as consumers gradually move towards healthier options
that utilize high-intensity natural sweeteners. This provides challenges and
opportunities for both companies and investors.

"The scale and cost of the type II diabetes and obesity epidemic leaves little
question as to the need for change. This change will bring new investment
opportunities with winners and losers," said Giles Keating, Head of Research
for Private Banking and Wealth Management. "This report provides investors
with insight into an emerging megatrend that will help shape the evolution of
the investment world."

Key findings in the report include:

Medical

  oType II Diabetes is growing at 4% a year vs. obesity 1-2% with 370 million
    affected globally: 4.8 million people died of diabetes in 2012 versus 5.6
    million for smoke related diseases. Resulting in a healthcare bill of $500
    billion or over 10% of global healthcare spending.
  oThe response to sugar intake is genetically individual and liquids and
    solids are handled differently by each person. As a result, beverages with
    high caloric content have played major role in the obesity epidemic and
    type II diabetes. 
  o82% of the doctors surveyed in the US and Europe believe that sugar
    calories are handled differently by the body, compared to only 60% in
    Asia. On the question "is sugar addictive," 65% think this is the case.

Consumer

  oThe US, Brazil, Argentina, Australia and Mexico, lead global sugar
    consumption at more than double the world average (17 teaspoons); ranging
    from 40 teaspoons for the US to 35 for Mexico. Significantly more than the
    American Heart Association recommendation of six teaspoons of added sugar
    a day for women and nine for men.
  oAdded sugars now represent 17% of a normal US diet and 43% of added sugars
    come from sweetened beverages.
  oAmong people with higher incomes and higher levels of education there is a
    trend towards "diet" soft drinks away from "full calorie" offerings.
    However, this trend appears to be slowing as amid growing concern related
    to artificial sweeteners.

Corporate

  oSeveral sectors will be affected by the likely changes in the pattern of
    sugar consumption: food and beverage companies, sugar producers,
    manufacturers of artificial and high-intensity natural sweeteners, and
    healthcare companies.
  oAs a result, growth in sugar consumption is expected to slow with a
    potential impact on already quite depressed sugar prices.
  oThe food and beverage industry is beginning to take steps towards
    "self-regulation," for example, launching food and beverages that use
    high-intensity natural sweeteners with zero or minimal caloric content.
  oSoft drink consumption may suffer somewhat in the short term but the
    beverage industry has the tools and marketing expertise necessary to
    embrace the change and better match consumer demand.
  oUltimately, companies that develop or help develop high-intensity natural
    sweeteners are poised to be the primary beneficiaries of the change.

Public Policy

  oWith few exceptions,  regulators around the world have done very little to
    address the impact of excess sugar consumption.
  oAs with alcohol and tobacco, higher taxation on drinks is the best option
    to reduce sugar intake and help fund the fast growing healthcare costs
    associated with diabetes type II and obesity.
  oThe most likely initial path is increased spending on education and
    labeling. However, as we have seen in Mexico a more aggressive approach
    cannot be ruled unless "self-regulation" and softer policy action proves
    successful.

For a copy of the report, please click here: Credit Suisse Research Institute:
Sugar Consumption at a crossroads

Credit Suisse AG
Credit Suisse AG is one of the world's leading financial services providers
and is part of the Credit Suisse group of companies (referred to here as
'Credit Suisse'). As an integrated bank, Credit Suisse is able to offer
clients its expertise in the areas of private banking, investment banking and
asset management from a single source. Credit Suisse provides specialist
advisory services, comprehensive solutions and innovative products to
companies, institutional clients and high net worth private clients worldwide,
and also to retail clients in Switzerland. Credit Suisse is headquartered in
Zurich and operates in over 50 countries worldwide. The group employs
approximately 46,300 people. The registered shares (CSGN) of Credit Suisse's
parent company, Credit Suisse Group AG, are listed in Switzerland and, in the
form of American Depositary Shares (CS), in New York. Further information
about Credit Suisse can be found at www.credit-suisse.com.

SOURCE Credit Suisse AG

Website: http://www.credit-suisse.com
Contact: Perrin Wheeler, Credit Suisse, telephone +1 212-325-8978,
perrin.wheeler@credit-suisse.com
 
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