Weight-Loss Drugs Weigh on America’s Food Basket

By: Anneken Tappe · October 09, 2023 · Reading Time: 2 minutes

Gone Appétit

Novo Nordisk’s (NVO) weight management medications Ozempic and Wegovy — intended for people struggling with type 2 diabetes and obesity, respectively — have shot to popularity, not least, because celebrities are open about using them.

But these weight-loss drugs might not only reduce waistlines; they could reduce bottom lines, too.

As demand for Ozempic and Wegovy surges, the food and retail industries are on high alert, concerned that the appetite suppressants may put pressure on fast-food menus and snack aisles.

Retail Rumble

Walmart (WMT) added fuel to the fire when its U.S. CEO John Furner said the retail giant was seeing the effects of people taking weight-loss drugs reflected in food shopping. The company noticed the trend by juxtaposing its pharmacy data with grocery trends: fewer units of food, fewer calories.

And this may just be beginning. Analysts at Morgan Stanley (MS) project as many as 24 million Americans — 7% of the U.S. population — will use weight-loss drugs by 2035.

Feasting Forecasts

For investors and industry stalwarts the rise of weight management drugs is a curveball that could reshape the food and retail landscape as high-calorie food products lose appeal.

However, Walmart also noted that overall sales from shoppers on the weight-loss drugs were actually higher. So while food spending might see a dip, it could be a boon to retailers in other sectors.

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