Nestle SA is working on products that could complement new weight-loss treatments like Ozempic and Wegovy, which sharply reduce food cravings and have spurred concern that food companies may face a drop in demand.
(Bloomberg) — Nestle SA is working on products that could complement new weight-loss treatments like Ozempic and Wegovy, which sharply reduce food cravings and have spurred concern that food companies may face a drop in demand.
A recent share decline in European food stocks has been partly blamed on the meteoric boom in GLP-1 diabetes treatments that have turned into weight-loss cures: namely Ozempic and Wegovy — which have made their Danish owner Novo Nordisk the most valuable company in Europe.
Nestle said the bulk of its portfolio would not be affected by the popularity of the drugs, as users will continue to drink bottled water as well as buy food for their pets. On Thursday Chief Executive Officer Mark Schneider even pointed to potential benefits for the KitKat maker. He said Nestle is already working on a wide number of products that could serve as health aids during the treatment.
“When you eat less, you have certain needs of vitamins, minerals and supplements,” he said. “You want to be sure that the weight loss gets supported. You want to be sure that you limit the loss of lean muscle mass.”
Companion products can also be used to ensure the weight isn’t regained, he added.
Read More: Ozempic Threatens Profits at Food and Beverage Makers Worldwide
Nestle shares have dropped almost 5% in the past month, partly on concern people taking medications like Wegovy might consume less food.
Such complementary products could one day provide a much-needed boost to Nestle’s health science business. It has been one of the worst-performing divisions for Nestle so far this year and the company delayed its 2025 sales and profitability goals by six months. Revenue from vitamins, minerals and supplements fell during the period following an IT snarl in the US.
Schneider said that while there has been no impact on sales from the drugs so far, any further hit would be outweighed by such new opportunities.
Confectionery, dairy products, prepared dishes and cooking aids represent around a third of Nestle’s sales. Shareholder groups this month criticized Nestle this week for not being ambitious enough in making its portfolio healthier.
Read More: Nestle Revenue Growth Ebbs to Weakest Pace Since Late 2020
Some Wegovy users have mentioned in online chatrooms how coffee tastes differently or can make them nauseous — a further threat to Nestle which has said coffee shouldn’t be affected.
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