Over the past year, the rise in popularity of weight loss drugs has been greeted with joy by many, including celebrities. in Hollywood or NHS patients.
However, while some on social media have welcomed the discovery of the so-called «magic skinny» jabs, others are not so pleased.
There is growing concern among food companies , who are struggling to decide how to respond to a surge in demand for weight-loss drugs, especially after Walmart, America's largest supermarket, said they were causing a decline in grocery sales.
John Furner, the grocery giant's chief executive, said he had seen a «slight decline» in the average basket as consumers of weight-loss drugs bought less.
Weight Gain Leader The weight-loss drug is Wegovy, also known as Wegovy. semaglutide, which was approved for use in the UK last month and is available in the US from 2021.
Ozempic — the same drug but sold under a different brand — is made to treat diabetes but has potential in obesity was found as a side effect.
The surge in sales of these drugs has been heralded as a major victory in the fight against obesity, which kills around 2.8 million adults each year, according to the European Association for the Study of Obesity (EASO). So much so that Morgan Stanley predicts that by 2035, 24 million Americans will use these drugs to control their weight.
However, the prospect of declining retail sales caused by increased demand for the drugs has alarmed investors, fueling a selloff in company stocks. , producing food and beverages for the home.
Shares of Nestlé, which has seen shares in Kit Kat, Aero, Smarties and Haagen-Dazs fall more than 6% over the past month amid concerns that drugs such as Wegovy could cause consumers to buy fewer products.
< p>Mark Schneider, the company's CEO, told analysts on Thursday that the company is closely monitoring the growing popularity of these drugs and which foods people may cut back on.
“As far as we know, the food and snack categories have been hit the hardest,” he said. “In our case, that would be frozen foods, confectionery and, to some extent, ice cream.”
A survey conducted by Morgan Stanley of 300 patients taking weight-loss drugs found that their use can reduce calorie intake people increases by 30% per day.
In countries such as the US and UK, where obesity is widespread, the impact could be enormous.
It is important to note that the investment bank study found that participants would be most likely to reduce their consumption of foods high in sugar and fat, which will serve as an alarm. for junk food makers.
They predict that US sales of soft drinks, baked goods and salty snacks could fall by up to 3% by 2035.
The Morgan Stanley study also found that patients significantly reduced their consumption of both alcoholic and sugary soft drinks, reducing their consumption by 63% and 65%, respectively.
“Anecdotally, we have heard here and there that people may have less of a taste for coffee,» Mr. Schneider said.
However, he added: «It's important to remember that coffee, when it comes to calories, when it comes to obesity, is definitely not to blame, it's the most low-calorie drink.»
Nestlé investors aren't the only ones scared. Shares of PepsiCo, owner of Cheetos and Doritos, fell about 5% in the week following Mr. Furner's comments, while Coca-Cola and Hershey also suffered.
The implications also go beyond just packaged goods. as 77% of Wegovy users surveyed by Morgan, Stanley said they were visiting fast food chains less.
Morgan Stanley analyst Brian Harbor said in September that the rise of anti-obesity drugs was unlikely to pose a real threat to fast food chains but could cause «a decline in mid-market sales.» deadline.»
McDonalds shares have fallen more than 10% over the past six months.
Some companies have downplayed the potential impact of obesity drugs on the $11 trillion global food and beverage sector.
Ramon Laguarta, PepsiCo's chief executive, told analysts earlier this month that the company is «seeing an increase» in drug sales, but said the impact is «not significant at this time.»
Warren Ackerman, head of EU consumer research at Barclays, adds: “These are medicines for people who are morbidly obese. They're expensive and not particularly convenient.»
But that doesn't mean companies aren't taking a proactive approach.
Nestlé's Mr. Schneider said this week that his firm was considering developing new products in response to medications, such as supplements, to help manage people's health while losing weight.
This was despite the firm's spokesperson insisting it had «not seen any impact». for now it's about sales.”
In a conversation with Bloomberg, Mr. Schneider said: “When you eat less, you have certain needs for vitamins, minerals and supplements. You want to be sure that your weight loss will be maintained. You want to make sure you're limiting muscle loss.»
And while snacking may take a hit, there could be growth potential for healthier food producers.
Morgan Stanley research indicated that demand for protein shakes and bars, as well as fresh produce, could increase as people taking weight-loss drugs tend to consume more of them.
Ackerman says this may encourage some to make their products healthier. “These companies have been around for decades, they are not going to just sit back and let this happen to them, they will use this as an opportunity to reformulate and offer [healthier] products.”
< p>In the UK, a lot depends on how widely the drugs will eventually become used. They are currently available through the National Health Service to patients with a body mass index (BMI) of at least 35, or between 30 and 34.9 if they meet special criteria.
There are concerns about potential side effects such as nausea and constipation, and fears that people will gain weight again if they stop taking them.
“Everyone needs great white hope on how to solve a decade-long problem. on obesity and the silver bullet,” says Ackerman.
“The reality is that until the end of 2024, supply will be extremely limited because there is so much demand in the US.”
If demand is similar to what it is in the US, this could create challenges for traditional diet companies such as Weight Watchers.
The weight loss firm said it was already struggling amid «increased competition» in the UK, with sales falling from almost £50 million. up to £43 million in 2022, according to the latest figures.
However, it is too early for many food companies to start planning action.
One fast food executive, who asked not to be named name said that despite all the hype, weight-loss drugs may be just a storm in a teacup.
His investors can hope he's right.
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