The growing popularity of weight loss drugs like Ozempic is raising the prospect of significant changes in Americans’ eating habits, potentially leading to reduced consumption of high-calorie snacks and fast food. This shift has caught the attention of investors and industry executives, sparking discussions about how it could reshape the food industry.
Ozempic, originally FDA-approved for treating diabetes, has also found off-label use by doctors to combat obesity. John Furner, an executive at Walmart, noted a modest decline in food purchases, with fewer units and slightly fewer calories bought by individuals on Ozempic. However, he emphasized that it’s still early days for assessing the drug’s impact.
Interestingly, Ozempic has influenced sales of other products at Walmart, as those using the drug tend to spend more overall in the store, according to another company executive.
Steve Cahillane, CEO of snack maker Kellanova, which produces popular brands like Pringles and Cheez-It, acknowledged the Ozempic trend but cautioned that it’s too soon to determine if it poses a significant challenge to the food industry.
From a broader perspective, investors are closely monitoring these developments. A team of 17 analysts, strategists, and associates at Morgan Stanley outlined in an 82-page report this summer how the use of obesity medicine might impact food demand and reshape the food ecosystem.
Morgan Stanley’s projections suggest that over the next decade, as many as 24 million Americans, or 7% of the population, could be taking these weight loss drugs. These individuals may consume approximately 20% fewer calories, translating to 1.3% less overall calorie consumption by 2035. The report also considered scenarios where calorie intake could decrease by 1.7% (bullish) or 0.9% (bearish).
The increased use of weight loss drugs has the potential to curtail the demand for high-calorie, high-fat, and sugary foods, whether consumed at home or from fast-food outlets. This shift could have profound implications for the food industry and the choices available to consumers.
