Anti-diabetic drugs like Ozempic and Wegovy which are being touted for their weight loss and appetite-suppressing benefits are slamming stocks of beer and snack distributors — particularly after Walmart said that the medications were causing shoppers to pare back on groceries.
Swiss snacking conglomerate Nestle’s share price dropped by more than 2.5% on Friday while Mondelez International, the company behind brand names such as Oreo and Chips Ahoy, saw its stock drop by 2.7% as of 2:20 p.m. Eastern time.
The Kraft Heinz Company’s stock was down by nearly 1% while JM Smucker Company, which recently announced that it will acquire Twinkies maker Hostess, was down 0.7%.
The stock price of Constellation Brands, the US distributor of Modelo Especial, which has recently overtaken Bud Light as the nation’s most popular beer, is down 1.3% on Friday.
Kellanova, the cereal company that was formerly known as Kellogg’s before its recent rebranding, saw its share price dip by 1.5%.
Investors reacted to comments made on Thursday by Walmart US CEO John Furner, who told Bloomberg News that Ozempic was the reason customers were buying “less units” and consuming “slightly less calories.”
“We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket,” Furner told Bloomberg News.
Walmart, which sells weight-loss drugs at its pharmacies, is able to study changes in sales patterns using anonymized data on shopper populations, according to the outlet.
With those data sets, the Bentonville, Ark.-based can see how many customers are on diabetes-turned-weight-loss drugs like Ozempic, Wegovy, and Mounjaro and compare their shopping habits to those not taking the medications.
In the first six months of the year, Novo Nordisk, the Danish pharmaceutical company behind Ozempic and Wegovy, has raked in profits of some $7 billion — up 32% from the same time a year ago.
Eli Lilly, the New York-based pharmaceutical company, made $1 billion in sales of Mounjaro in the second quarter of this year.
Users of the drugs, which reportedly cause some unpleasant side effects, have said that the appetite suppressant has cut their grocery bill by as much as 20%.
“I still have a fully stocked kitchen, there’s chips and pretzels in there. I don’t find it tempting,” Carolyn MacBain-Waldo, who takes Mounjaro for weight loss, told The Wall Street Journal.
Morgan Stanley estimated that 7% of the US population, or 24 million people, will be taking hunger-suppressing weight-loss drugs by 2035 — cutting their daily calorie consumption by as much as 30%, according to the firm, which surveyed over 300 patients.
For a person on an FDA-recommended 2,000-calorie daily diet, that could mean eliminating a one-ounce bag of salted potato chips, a bottle of soda, and more each day.
Additional Reporting by Shannon Thaler