Ozempic Effect: Food Industry Feels The Heat As Weight-Loss Drugs Get Popular, Investors Call For Menu Makeovers

The rising popularity of weight-loss drugs like Ozempic is now pressuring food companies to reevaluate their business strategies. According to a recent Bloomberg Markets Live Pulse survey, investors are urging food companies to revamp their offerings to counter the growing influence of these medications.

What Happened: The survey, conducted by Bloomberg Markets Live, revealed that nearly 75% of the 303 respondents believe that companies selling unhealthy foods should recalibrate their business models. This could involve reducing portion sizes, altering recipes, or even divesting assets. The survey also indicated that the emergence of appetite-suppressing drugs like Zepbound, Ozempic, and Wegovy presents a significant threat to “Big Food.”

Mayssa Al Midani, the lead manager of Pictet Asset Management's nutrition fund, emphasized that the challenge in developed countries is not about increasing calorie consumption but shifting towards healthier foods.

“We need to make sure that we're invested in the companies that have the right category exposures, as well as the ones that have the capability of innovating and adapting to these times,” Midani said.

See Also: Why Is Recursion Pharmaceuticals Stock Trading Higher Today?

Kate Hewitt, an ESG and impact specialist, called unhealthy food “the new coal.”

"There are some important distinctions, but just as the shift away from coal is driven by the urgent need to address climate change, moving away from unhealthy diets is critical in tackling obesity and its associated non-communicable diseases and health costs,” Hewitt explained.

Investors also seek changes from food companies, even if they have not yet adjusted their investment strategies. The impact of these medications on the food industry is becoming increasingly apparent, with Walmart Inc. WMT acknowledging in October that the drugs were already reducing the total calories bought by shoppers.

Why It Matters: The survey’s findings align with recent warnings from industry experts. Jim Cramer, the host of CNBC's "Mad Money," cautioned investors about the potential impact of weight loss drugs, such as Ozempic and Wegovy, on the food and beverage industry. He advised investors to be cautious with food and beverage stocks, as the increasing use of these drugs could lead to a significant decline in the industry.

The introduction of these weight-loss treatments is causing widespread concern among CEOs in the food industry. A couple of CEOs from food companies have reached out to Lars Fruergaard Jorgensen, Novo Group's NVO chief executive, highlighting worries surrounding these treatments’ rapid advancement and adoption.

Read Next: CBD-Infused Tampons Are Real – And Science Says They Are Safe And Effective For Menstrual Pain

Image via Shutterstock