Top Line
Nestle is entering the lucrative weight-loss drug market by catering to the “changing” nutritional needs of customers, CEO Mark Schneider told CNBC on Thursday. It's an optimistic about-face by one of the industry's biggest players after facing early dire predictions that wildly popular drugs such as Ozempic, Maunjaro and Wegoby would hurt the food industry.
Nestle CEO Mark Schneider said the popularity of GLP-1 weight loss drugs was… [+] Opportunities for the food industry.
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Key Facts
When GLP-1 drugs like Ozempic and Wegovee started to really take off, the food industry and investors initially worried that people would eat less, hurting industry profits in the process, Schneider told CNBC's Silvia Amaro.
Those fears have since turned into opportunities, Schneider said, explaining that the nutritional needs of clients taking drugs don't disappear entirely, “they just change.”
“Consumers still have nutritional needs, but they may be different from someone not on a weight-loss regimen,” he said, noting that people taking GLP-1 drugs should be careful to get enough nutrients and vitamins from food and to eat enough protein to maintain muscle mass.
Schneider said the different needs of people who use weight-loss drugs create a big market opportunity for companies like Nestle, and the company has big plans to respond to what is quickly becoming a “big consumer trend.”
He said Nestle has an “ambitious goal” to meet this need by promoting healthier “related products”, such as its Vital Pursuit frozen food line due to be launched later this year for GLP-1 users.
Schneider also suggested Nestle would launch further “companion products” targeted at consumers taking obesity medication, but he did not say what they would be or when they would be launched.
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Important Quotes
Schneider said new product lines or services targeted at users of GLP-1 drugs will be an “addition” rather than a future focus for the food and beverage industry. “Remember, there are a lot of consumers out there who are not on a GLP-1 diet,” he told CNBC. “And [sic]
There are a lot of situations where snack foods and chocolate products may still be of great interest.” Many products aimed at GLP-1 drug users are likely to “make a lot of sense for the consumer” on any weight-loss journey, he said. “The same fundamentals apply: you want to lose fat and avoid losing muscle mass and avoid having vitamin deficiencies.”
Main Background
The weight loss industry has always been lucrative, but in recent years the arrival of drugs called GLP-1 agonists has transformed the field, primarily due to their ease of use and unparalleled efficacy. By mimicking the action of a gut hormone involved in regulating appetite and blood sugar levels, GLP-1 drugs can help people lose weight at levels previously unattainable except through surgery, and studies have shown they may also be effective in treating a range of other conditions, including sleep apnea, addiction, anxiety, Parkinson's disease and kidney disease. Currently, GLP-1 drugs are approved to treat diabetes, cardiovascular disease and obesity. Pharmaceutical giants Novo Nordisk and Eli Lilly dominate the field, producing semaglutide, the raw material for Ozempic and Wegovy, and tirzepatide, the raw material for Zepbound and Maunjaro, respectively. Experts expect the two companies to continue to stave off rivals for the foreseeable future, despite chronic shortages. The food and other weight-loss industries were initially concerned that the drugs' growing popularity would reduce sales, but the long-term impact is yet to be seen.
References
ForbesOzempic and Wegobee rivals: Here's who's developing competing weight-loss drugsBy Robert HartForbesHere's why Ozempic and Mounjaro rivals won't beat drugmakers Novo Nordisk and Eli Lilly anytime soonBy Robert Hart ForbesDrugs like Ozempic and Mounjaro could be used to treat other ailments too – here's what scientists are watchingBy Robert HartForbesNestle is developing a companion product to Ozempic-like drugs – amid fears it could cannibalize food salesBy Robert HartForbesNestle launches frozen food brand for Ozempic usersBy Cailey Gleeson
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