Anti-diabetic drugs, including Ozempic and Wegovy, are gaining attention for their weight loss and appetite-suppressing effects. However, these medications are negatively impacting the stocks of beer and snack distributors. Walmart recently reported a decrease in grocery sales due to customers using these medications, causing a decline in stock prices for major companies.
Shares of Swiss snacking conglomerate Nestle dropped by over 2.5% on Friday, while Mondelez International, the company behind popular brands like Oreo and Chips Ahoy, saw a 2.7% decline. The Kraft Heinz Company and JM Smucker Company also experienced drops in their stock prices.
Constellation Brands, the distributor of Modelo Especial, one of the most popular beers in the US, witnessed a 1.3% decrease in stock price. Kellanova, formerly known as Kellogg’s, also saw its share price dip by 1.5%.
The drop in stock prices is directly linked to comments made by Walmart US CEO John Furner on Thursday. Furner stated that customers buying weight loss medications like Ozempic were purchasing fewer items and consuming fewer calories overall. Furner’s remarks were reported by Bloomberg News, causing concern among investors.
Walmart, which sells weight loss drugs at its pharmacies, has access to anonymized data that allows them to study changes in sales patterns. By comparing the shopping habits of customers taking drugs like Ozempic to those not using these medications, Walmart can assess the impact on overall sales.
In the first half of this year, Novo Nordisk, the Danish pharmaceutical company behind Ozempic and Wegovy, reported profits of $7 billion, a 32% increase compared to the same period last year. Eli Lilly, a New York-based pharmaceutical company, generated $1 billion in sales of Mounjaro, another weight loss medication, during the second quarter of this year.
Users of these drugs have reported experiencing unpleasant side effects but have also observed a decrease in their grocery bills by up to 20%. The appetite suppressant qualities of these medications have led to reduced food consumption and subsequently reduced expenses.
Carolyn MacBain-Waldo, a Mounjaro user, shared her experience of not feeling tempted by snack foods despite having chips and pretzels readily available in her fully stocked kitchen. Morgan Stanley predicts that by 2035, approximately 7% of the US population, or 24 million people, will be using hunger-suppressing weight loss drugs. This could result in a reduction of daily calorie intake by up to 30% for these individuals.
According to reports, eliminating a one-ounce bag of potato chips, a bottle of soda, and other similar items from a daily 2,000-calorie diet could be achieved with the use of these medications. This indicates a significant impact on the snacking and beverage industries.
Additional reporting by Shannon Thaler
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