The introduction of Novo Nordisk A/S‘s (NYSE:NVO) groundbreaking weight-loss treatments Wegovy and Ozempic are sending ripples through the food industry.
CEOs from across industries are seeking insights from Novo Nordisk, indicating a widespread concern about the potential shifts in consumer behavior these drugs might bring on food appetite.
As Bloomberg reported Thursday, “a couple of CEOs” from food companies have called Lars Fruergaard Jorgensen, Novo’s chief executive, highlighting worries surrounding the rapid advancement and adoption of these treatments.
The GLP-1 class of drugs, to which Wegovy belongs, promises weight loss outcomes that were once only possible through surgical intervention. This medication replicates the action of the GLP-1 hormone naturally produced in the intestines, sending signals to the brain to indicate satiety.
Shares of Novo Nordisk A/S have risen by 72% over the past year, with the Danish pharma giant breaking the $500-billion-valuation milestone.
Shifting Trends In The Food Industry
According to Kiran Aziz, the head of responsible investments at KLP, Norway’s largest pension fund, Novo Nordisk is poised to drive significant shifts, impacting not only the food and beverage sector but also influencing a broad spectrum of health-related stocks within the obesity industry
Walmart Inc. (NYSE:WMT) and Chipotle Mexican Grill Inc. (NYSE:CMG), among others, have already observed changes in consumer purchasing patterns, with the former noting a dip in food consumption among customers on these medications, and the latter adapting its product lines towards healthier products.
A Morgan Stanley’s analysis suggests a possible decline in the consumption of fizzy soft drinks, baked goods and salty snacks by up to 3% by 2035.
A detailed October report by Bank of America analysts, led by Geoff Meacham, sparked significant discussion by projecting potential downturns in sales across industries such as snack foods, dining, tobacco, gaming, clothing and food retail due to diminishing consumer cravings.
This team highlighted that while the substantial weight loss achieved through GLP-1 medications is likely to spur strong demand, there are secondary effects, notably decreased appetite and a reduction in cravings or addictive behaviors, suggesting wide-ranging…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
