Weight Loss Drugs: Implications for Food & Beverage - Euromonitor International

Semaglutide, diabetic, and weight loss drugs such as Ozempic and Wegovy have been receiving a lot of buzz lately with their promise of being a “quick fix” to weight challenges through the ability to suppress cravings. In response, the food and drink industry has expressed concern on what these craving cutters mean for sales of packaged foods like chocolate, crisps, breads, and even sodas. Will consumers no longer crave cookies? Will soda sales pop?

Specific weight management and wellbeing consumer health product sales are expected to exceed USD20 billion this year, while broader weight management-claimed food and beverages are expected to see fast growth – from soft drinks to breakfast cereals growing at CAGRs above 10%. Clearly, the potential implications of these new interventions could be huge. So, beyond the headlines, what are the facts about these drugs?

The facts about new weight loss drugs

Wegovy, Ozempic and Rybelsus are relatively new – launched as recently as 2017 by Novo Nordisk. The compound semaglutide was designed for diabetic patients but the drugs have expanded to address chronic weight management, in both adults and children. Wegovy and Ozempic are weekly injectables, but similar-class medications are available with different active ingredients and formats (eg tirzepatide and oral tablets).

The semaglutide compound copies the action of a hormone responsible for lowering blood sugar levels and telling the brain that you are satiated and can stop craving food. Given that semaglutide is patented until 2031, generics will not be available in the near term and the drug’s prices and availability are centralised with Novo Nordisk. The semaglutide injectables, Wegovy and Ozempic, are currently available worldwide for prescription in markets like the US, China, and across European markets France, the UK and Germany, with plans for further expansion.

A potential challenge to food and drink sales

Comparing all weight loss consumers (ie people trying to lose weight) to a weight loss consumer taking prescription medication, it is more likely someone in the latter group will consume less food overall – spread across numerous food and beverage categories. Consumption habits

Weight loss consumers taking prescription medication show greater affinity for at-home eating and are more likely to participate in specific diets or eating styles (eg intermittent fasting or eating small amounts more frequently). While the use of the drugs Wegovy and Ozempic are expected to increase in the future, Euromonitor’s experts across food and beverages believe that strong worry about negative impacts on long-term sales can and should be moderated with industry action.

Firstly, a potential reduction in caloric intake or consumption frequency among those taking semaglutide may support efforts to provide healthier foods. In snacks, portion-controlled packs have been expanding in favour of consumer and government demand to limit sugar and salt intake. These smaller pack sizes could see greater demand from those looking to reduce calorie intake while taking the medications.

“Some patients can eat the same, less, or even possibly more. And reducing calories doesn’t always mean reducing volume. We may really start to see the potential of nutritional densification play out.”

^{Carl Quash III, Snacks Industry Expert, Euromonitor International}

Secondly, while near-term interest is skyrocketing, longer-term demand still holds uncertainties – particularly with affordability and lifestyle changes in question. Today, 18% of consumers globally say they are treating their weight problems with prescription medicine, according to Euromonitor International’s Voice of the Consumer: Health and Nutrition survey. And, taking the US as an example, Ozempic costs nearly USD1,000 per month and has varying insurance coverage, meaning that access may be exclusive for consumers in the upper or middle classes.

“…we could see some hard-hitting stories come out much later [on the negative impacts of taking Wegovy or Ozempic], sort of like long-COVID. And some people might say, ‘okay...I lost a lot of weight [on Wegovy], but this lifestyle is not for me'"

^{Matthew Oster, Consumer Health Industry Expert, Euromonitor International}

Thirdly, these drugs are not currently meant to be lifelong solutions. With prolonged use, there is the potential for a patient’s body to adjust to the effects of the drug, leading to decreased results such as weight loss plateaus. Also, dietary gaps may arise if dietary habits are inadequate – which the food industry is equipped to support (eg positive nutritional habit changes such as better for you (BFY) and nutritionally fortified innovations).

”…manufacturers should be able to prioritise what is actually important rather than following the latest hype. [For example], retaining their focus on the low/no segment provides long-term answers to the underlying questions posed by such medication...”

^{Spiros Malandrakis, Alcoholic Drinks Industry Expert}

Brands can adapt to health and wellness concerns

Weight loss solutions like semaglutide can be seen as controversial, a game changer, or just a fad as we wait for the results of longer-term use and adoption. Brands should: