As Ozempic and Wegovy continue to fly off the selves, a new opponent has appeared — the snack industry's money people, who seems are concerned about the appetite-suppressing drugs' potential effects on revenue.
As the Wall Street Journal reports, investors behind companies including Campbell's Soup and Conagra Brands, which manufactures Slim Jim meat sticks and Orville Redenbacher popcorn, have been asking tough questions of executives amid the rise of semaglutide, which is the active ingredient in the diabetes injectable Ozempic and its weight loss treatment cousin Wegovy.
Semaglutide belongs to a class of drugs known as glucagon-like peptide 1 agonists, or GLP-1 for short, which mimic the natural digestive hormones that control insulin — and, as a side effect, makes you feel full for longer. As such, lots of people who take the medication are reaching for snacks less.
Whether that's resulting in net-positive health outcomes is an urgent health policy question. But in a tragicomic capitalist twist, to corporations that have made bank off America's highly processed food system, it could represent an existential threat.
Campbell's CEO Mark Clouse told WSJ that he's watched as Novo Nordisk and Eli Lilly, the companies behind Ozempic and the similar weight loss injectable Mounjaro, continue to make more and more money.
"That’s a little bit of an 'OK, wait a minute, something is going on here,'" the Campbell's CEO said, though he admitted to the WSJ that he doesn't think the drugs alone could cut into snack food profits.
Clouse's comments seemed to echo those given last week to Bloomberg by Kellanova CEO Steve Cahillane, whose company makes Pringles, Cheez-Its, and Rice Krispy Treats. In his interview, the chief executive said that while it's too soon to tell whether semaglutide drugs are going to take a substantial bite out of his industry's profit margins, he is "by no means complacent" about their jump in popularity.
"Like everything that potentially impacts our business, we'll look at it, study it and, if necessary, mitigate," Cahillane told Bloomberg.
As the Kellanova CEO acknowledged, these drugs are less of a concern now in their "very, very early days," but given that drugmakers are fighting each other to put out an oral semaglutide pill, it's likely only a matter of time before they become even more widely used.
While the drugs are still fairly niche — especially considering that they're currently quite difficult to get one's hands on — Morgan Stanley predicted in early September that by 2035, 24 million Americans, which account for close to seven percent of the total population, will be on semaglutide. The food industry should, the banking giant suggested, start planning accordingly.
And already, as CNN recently reported, a whopping 1.7 percent of Americans, or roughly 5.68 million people, have been prescribed semaglutide drugs in 2023, though it's likely that far less of them are actually taking it because of a massive months-long shortage. Even that small a percentage point is significant, however, and the industry is right to be keeping an eye on it.
While the bottom lines of massive snack manufacturers aren't exactly of concern to the average American, this industrial pushback does indicate that semaglutide has brought about a paradigm shift in its explosive popularity — and we all would do well to watch it.
More on semaglutide: The FDA Says Ozempic Might Block Your Intestines
Share This Article