Will Weight Loss Drugs Like Ozempic Take a Bite Out of Junk Food Sales?

All About America explores American culture, politics, trends, history, ideals and places of interest.

As Americans shed pounds on weight loss drugs like Ozempic, snack food companies could be in for some shrinkage, as well.

“The food, beverage and restaurant industries could see softer demand, particularly for unhealthier foods and high-fat, sweet and salty options,” Morgan Stanley food analyst Pamela Kaufman says in a company report.

A survey of 300 people currently taking semaglutide weight loss drugs such as Ozempic showed the medicine can reduce calorie intake by 20% to 30% a day.

The people surveyed said they cut back the most on foods that are high in sugar and fat, reducing their consumption of sweets, sugary drinks and baked goods by up to two-thirds. The survey found 77% of people on weight loss drugs went to fast food restaurants less often, while 74% reduced their visits to pizza shops.

Approximated 1 in 5 American adults is obese, according to the Centers for Disease Control and Prevention.

“It’s all of these food companies [and] beverage companies that have created the obesity,” says Angelica Gianchandani, professor of marketing at the University of New Haven in Connecticut. “At one time, it was innovation — creating all these different products and being able to put foods in bags and ziplocks [plastic bags] and easy to carry and transport — that was innovation. But all of this food creation in packaged goods, there’s a lot of processed foods, and the impact, if you’re not eating in moderation, has created this obesity.”

Morgan Stanley analysts estimate that 24 million people, roughly 7% of the U.S. population, will be taking this new class of obesity drugs by 2035. They project that overall consumption of soft drinks, baked goods and salty snacks could fall up to 3% by 2035.

But James Schrager, professor of entrepreneurship and strategy at the University of Chicago, says the snack industry continues to grow, and he doesn’t expect the increased use of semaglutides to have a major long-term impact.

“The growth comes from younger users, and younger users may not be the primary target for the drug,” he says. “Younger people — who don’t become obese usually, or at least in many cases — and who aren’t going to be taking the drug.”

Schrager says he’s worked as a consultant with some of the largest processed food companies in the world, and they are already concerned about providing healthier options.

“Way before this drug, [they worried] that the market will go away,” Schrager says. “They very much know that some of these are not good for some people’s health. …They would often say, ‘In a health-conscious world, we realize we may be out of business. How do we fix that?’”

The rise in semaglutide use also could cut into other obesity-related industries. The proportion of people paying for weight loss programs fell from 29% to 20% once they started taking the drug, according to the data. Gianchandani says weight loss businesses will pivot to health and wellness to stay afloat.

“And it will require people to have coaches, people to have nutritionists, to help give them a regimented diet to help them monitor,” she says. “These weight loss companies will encompass all of that, everything from food programs to coaching and support groups to help them maintain their weight and stay healthy.”

The report finds that patients taking the obesity drugs say they’re cutting back on sugary carbonated drinks (65%) and alcohol (62%). Almost one-fourth completely gave up alcohol. But Gianchandani says alcohol producers could benefit from the semaglutide craze.

“It’s going to capture a whole new market share. For them, it’s good,” she says, pointing out that alcohol producers are increasingly developing lower-calorie beverages. “They’re going to have a new product line to target a whole new demographic, and it will be millions of dollars of a market for them to benefit from.”

         

leave a reply: