Healthy Eating6 Oct 2023 13:43
May be relevant, that we are in a wave/trend at the beginning.
Food Companies May Starve As The Weight-loss Market Expands (1133 Gmt)
The stellar success of weight-loss treatments has taken its makers to new heights, with Novo Nordisk briefly becoming Europe's most valuable company as surging demand for its blockbuster drug Wegovy fatten up the pharmaceutical giant's profits.
Analysts don't see this trend going away anytime soon, with Jefferies expecting enthusiasm for drugs in the same class as Wegovy to snowball into a $100 billion global market over the next ten years or so.
However, this spells trouble for other sectors, particularly for the food and restaurant industry, as Wegovy and Eli Lilly's Mounjaro, which is still awaiting regulatory approval as an obesity treatment, are designed to reduce hunger.
Investors have already started cutting exposure to the packaged food sector, with Nestle shares slumping to a 2-1/2 year low on Friday while peers Danone and Unilever also took a hit.
"It is just that people now started going after food companies – took a while, but this is the stage we are in currently with Wegovy as a game changer in obesity," a Berlin-based trader said.
In the United States, big-ticket retailer Walmart also sounded the alarm, telling Bloomberg it has seen a slight pullback in food consumption due to the appetite-suppressing drugs.
Shares of Walmart are on track for their third straight week of losses while burger chain McDonald's is on track for its sixth week in the red. Cadbury-maker Mondelez is eyeing its biggest weekly percentage decline in over a year.
"There (is) some research that says that there could be a 20-30% drop in hunger for people who are taking these drugs and that certainly means that cravings could come to an end. So all your burgers and pizzas and pastas, those kind of players could be affected," said Charu Chanana, market strategist at Saxo Markets in a video series hosted by Saxo in late September
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