Rising Use of Semaglutide Drugs Poses Challenges for Food Industry

by Ella

The increasing prescription rates of semaglutide drugs, including Wegovy and Ozempic, are raising questions about potential shifts in people’s eating habits and the ramifications for the food industry.

These drugs, which are gaining popularity, are designed to reduce patients’ appetites. With 1.7% of the US population prescribed a semaglutide drug in 2023, a 40-fold increase over the past five years, the food industry could face significant challenges.


At present, food companies are monitoring these drugs much like they do with dietary fads, keeping a close eye on consumer behavior and considering ways to capitalize on emerging trends. However, industry analysts suggest they may need to take the rise of these drugs more seriously than mere fads.


During a recent discussion with Wall Street analysts, Conagra CEO Sean Connolly acknowledged that his company would adapt as necessary if customers begin eating less or demand different types of food. He emphasized the company’s willingness to evolve its product offerings in response to changing consumer preferences.


This approach is not novel, as large food corporations continuously adapt their products to align with consumer trends. With wellness and health-consciousness on the rise, food companies have already adjusted their offerings to cater to health-conscious consumers. For example, companies like PepsiCo and Coca-Cola offer smaller-sized products for those seeking portion control, and soda companies have rebranded as “zero sugar” rather than “diet.”


However, the impact of drugs like Ozempic on food consumption could be more significant and lasting than previous diet fads. Bernstein analyst Alexia Howard noted that while change won’t happen overnight, the long-term consequences could be substantial.

As these drugs gain traction, companies must be prepared to plan for various scenarios and adapt their offerings accordingly. Walmart US CEO John Furner revealed that internal data suggests customers taking Ozempic purchase slightly less food than the average population, but he cautioned against drawing definitive conclusions from this anonymized customer data.

Morgan Stanley analysts warned in an August research report that the adoption of anti-obesity medications could lead to a broad and lasting behavioral shift among a substantial demographic group, which could significantly affect food consumption.

Companies with a heavy focus on less healthy foods, such as snacks, confectionery, and sweet baked goods, may be particularly impacted. Brands like Hostess, known for products like Twinkies, Ding Dongs, and HoHos, could face challenges.

However, certain circumstances could mitigate the impact of drugs like Ozempic on the food industry, including waning interest in these medications, supply constraints, or limited changes in the diets of those taking the drugs. Additionally, the rise of these drugs might benefit sellers of more nutritious foods, as individuals taking these medications often experience appetite suppression and consume smaller quantities, which may lead to a preference for highly nutritious options over low-quality foods, according to Jody Dushay, an assistant professor of medicine at Harvard Medical School.



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