The growing popularity of weight-loss drugs has investors in food and beverage companies worried that sales will suffer because people taking the drugs tend to eat less. However, some companies are seeing an opportunity to serve this rapidly growing population of weight watchers.
Swiss-based food conglomerate Nestlé on Tuesday announced a new frozen product specifically designed for consumers taking GLP-1 drugs such as Ozempic and Wigovy, or those focused on weight management in general. announced that it will expand its food brand in the United States.
People taking weight loss drugs tend to prefer foods that are lower in sugar and fat. However, as they lose weight, many people worry that they will also lose muscle mass and want more protein in their diet. Weight watchers focus on portion control and nutritional balance while seeking great taste.
Vital Pursuit is Nestlé's first food brand targeted at GLP-1 users and will complement the diets of millions of Americans who are currently prescribed weight loss medications or are actively trying to manage their weight. Nestlé said it aims to
Vital Pursuit products are high in protein, contain lots of fiber and essential nutrients, and are portion-sized to suit the appetite of weight loss drug users. The initial lineup includes whole grain or protein pasta bowls, sandwich melts, and pizza.
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Nestlé plans to sell the product for less than $4.99 starting in the fourth quarter.
Nestle already owns Lean Cuisine, a brand focused on consumers who want to limit calories. Vital Pursuit is more specifically designed for people taking GLP-1 drugs and who want to consume more protein and other nutrients to prevent muscle loss caused by the medication, the company said.
“At Nestlé, we want to be there in every moment of our consumers' lives, now and in the future,” Steve Presley, CEO of Nestlé North America, said in a statement. “As the use of pharmaceuticals to support weight loss continues to increase, we see an opportunity to serve these consumers.”
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Still, food giants expect global growth to slow this year as inflation-weary consumers stop buying their products. The company's stock price has fallen 16% in the past 12 months. Nestlé was recently selected as a stock in Barron's. Stocks fell 0.8% on Tuesday, while the S&P 500 index fell 0.1%.
According to the American Pharmacists Association, one in 60 adults will be prescribed a GLP-1 drug by 2023, and that number is expected to rise. JPMorgan predicts that the total number of GLP-1 users in the United States could reach 30 million by 2030, or about 9% of the population.
Nestlé isn't the only food company eyeing the growing weight-monitoring market. Denver-based Simply Good Foods announced this month that it plans to bring back its Atkins low-carb diet brand in the next 12 to 18 months to meet growing demand from GLP-1 drug users.
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The company recently launched a new product called Atkins Strong, which helps alleviate intestinal issues that sometimes occur with the use of GLP-1 drugs, while providing more protein and hydration. The company says the product has been well received by retailers.
“We believe we are entering a new wave of cultural relevance of weight driven by these GLP-1 drugs,” company CEO Jeff Tanner said in the company's latest financial results last week. He spoke at a press conference. Where is your weight pointing? ”
Tanner said Simply Good Food is ramping up its advertising to position itself as a sustainable way for consumers to continue making the physical and mental gains from weight loss pills.
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The hope is that others will benefit as well.As weight-loss drugs restrict people's calorie intake, energy drinks could become more popular among people looking for an energy boost, Toby David, chief of staff at energy drink company Celsius, said at a March briefing.
“I think we're the perfect company for anyone looking to lose weight,” he told investors.
Email Evie Liu at evie.liu@barrons.com.