You’ve seen the TV commercials for Ozempic, Mounjaro, Wegovy. These and other GLP-1 (glucagon-like peptide 1) agonists help to lower blood sugar for patients with diabetes, and some of the drugs also have led to significant weight loss for some patients by curbing hunger and, adjacently, potentially leading to decreased food consumption.
As a result, some around the food & beverage industry wonder if the growth in use of these drugs could have a detrimental effect on sales, and if so, how soon?
First, only two types of GLP-1 agonists are approved for chronic weight management for people with overweight or obesity (without type 2 diabetes): Wegovy and Saxenda. Ozempic and Mounjaro are approved only for the treatment of type 2 diabetes but, as their commercials attest, users also have lost weight. As a result, they may be prescribed off-label for weight loss in some cases.
Erin Lash, director of consumer equity research for Morningstar Research Services, says the company’s team is keeping tabs on the impact, but hasn’t seen enough to make food & beverage companies worry just yet.
“It’s still a small market in terms of overall penetration,” she says. “But we continue to believe those operators that are well-resourced will continue to innovate, such that they tweak and tailor their portfolio to align with the trends.”
Lash and Morningstar’s health care team believe the high price tag of these drugs, the less desirable side effects and the fact that consumers still need to make lifestyle changes to keep the weight off has slowed the impact on the food industry thus far.
But Lash says the industry shouldn’t be caught flat-footed and likely has research underway on future impacts, based on prior diet trends and fads -- like Atkins and the South Beach diet, for example.
“We did see that firms were able to bring to market products to prevent a material degradation as it pertains to their volume and share performance,” she says. “They found ways to bring to market products that fit consumer demand and continued to be relevant, and we expect that will persist in this instance as well.”