Food giant Nestlé on Thursday said it was working on products to accompany weight-loss drugs like Ozempic, Wegovy and Mounjaro, as the food industry evolves in response to the soaring popularity of the appetite-killing drugs amid fears they will dampen demand and erode bottom lines.
Nestlé CEO Mark Schneider said in an earnings briefing that the company is working on a number of health aids targeted toward the growing number of people using weight-loss treatments like Ozempic and Wegovy.
The treatments, which were initially developed to treat Type 2 diabetes, dampen peoples’ desire to eat by mimicking an appetite-regulating gut hormone.
With people eating less, Schneider said there is an opening for products like supplements to support weight loss and ensure people get the vitamins, minerals and other nutrients they need but may no longer be getting from food.
Such “companion products” could also help “limit the loss of lean muscle mass” and ensure lost weight is not regained, Schneider said.
Schneider, addressing concerns the drugs will eat into the food industry’s bottom line, stressed the bulk of Nestlé’s portfolio “will not be affected” by the growing cadre of weight loss drugs as people will still drink coffee and feed their pets, two of the company’s biggest businesses.
However, he said the company is watching “carefully” to see whether their growing use will eat into demand for its food products.
The stellar successes of Wegovy and Ozempic—which have been shown to help facilitate weight loss and could bestow other health benefits in areas like heart and kidney disease—has transformed drugmaker Novo Nordisk into the most valuable public company in Europe. The firm has struggled to keep up with demand and has acknowledged it will take years for it to do so. They are likely the leading edge of an impending wave of weight-loss treatments that could transform healthcare and help tackle obesity, one of the modern era’s most pressing public health issues, which feeds into a wide variety of other physical and mental health issues and has socioeconomic effects as well. Industry analysts have warned the growing use of weight-loss drugs like Wegovy and Ozempic—both branded names for a medication called semaglutide—could obliterate demand for products and services across a wide variety of industries, including food, fitness and medicine. In October, Walmart’s chief executive John Furner said the drugs already seem to be changing how Americans shop, with a “slight pullback in overall basket.” While Furner stressed it was too early to draw any firm conclusion, his statement weighed on shares of other food and drink firms globally.