Food Industry Adapts to Long-Term Risks of Weight Loss Drugs

The rising popularity of Novo Nordisk's weight-loss drugs, Ozempic and Wegovy, has sparked fears among investors about the potential impact on food companies. However, experts believe that the initial panic is unwarranted, as the long-term effects on consumer behavior and food consumption are still uncertain. While some categories like medical technology companies and snack businesses may see slower revenue growth due to the increased use of GLP-1 drugs, the impact is expected to happen gradually over many years. Food companies have weathered previous dieting trends and have been adapting by offering healthier options. While decreased appetite and cravings may change snacking habits and impact fast food chains, the overall impact on the industry is projected to be financially immaterial. Retailers with pharmacies, such as Walmart and Target, may benefit from increased foot traffic as more consumers seek prescriptions for weight-loss drugs. The food industry has proven resilient, and the companies' share prices already account for various risk factors.