Your trusted source for the latest news and insights on Markets, Economy, Companies, Money, and Personal Finance.

The Potential Impact of Ozempic and Other Obesity Drugs on Consumer Habits

More Americans are taking prescription drugs like Ozempic and Wegovy, which suppress appetites, and some types of consumption are being affected as a result. However, these hunger suppressors also have the potential to increase demand for healthier foods and activities like going to the gym.

Major food retailers have already noticed a slight decrease in consumption due to the increased usage of these drugs. Walmart U.S. CEO John Furner stated, “We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket. Just less units, slightly less calories.”

A recent report by Morgan Stanley Research analysts estimates that by 2035, 24 million people, or 7% of the U.S. population, will be using these drugs. With the expected widespread adoption, corporations are assessing their potential losses due to the effects of these drugs.

Weight loss drugs Ozempic, Wegovy linked to severe stomach problems, study finds


Reduced demand for “high-fat” options

“The food, beverage and restaurant industries could see softer demand, particularly for unhealthier foods and high-fat, sweet and salty options,” stated Morgan Stanley tobacco and packaged food analyst Pamela Kaufman in the report about the impact of obesity medications on consumer demand and the food ecosystem.

According to the report, the immediate-to-near future impact on consumer spending is likely to be minimal due to the novelty of these drugs. Kaufman noted, “We acknowledge that the impact in the near term is likely to be limited given drug adoption will grow gradually over time, but we could see a longer-term impact as drug prevalence increases. Moreover, we expect companies to adapt to changes in consumer behavior through innovation and portfolio reshaping efforts.”

The increased adoption of weight loss drugs is likely to shift demand patterns rather than universally suppress consumption. Columbia Business School Professor of Healthcare Management Frank Lichtenberg explained, “Conceivably, it might reduce demand for some kinds of food but increase demand for other kinds of foods. There could be an offsetting effect.”

Ability to rebrand

If there is a substantial shift in food preferences, companies can adjust their menu options or even rebrand to cater to changing consumer tastes over time.

“If this was going to come in two to three years, it would be harder to adapt to. If it’s over a decade, companies can shift what items they offer,” said Morgan Stanley analyst Brian Harbour. Restaurants also offer more than just food, as they provide convenience or service. Harbour added, “Restaurants don’t sell just food. They sell convenience in the case of fast food, or service in full-service restaurants, and that element isn’t going away. That’s why this is not an existential risk for these concepts. You may have to shift the menu over time. It may be a taller task for a company tailored to a specific product, like a pizza chain.”

European health officials investigating if drugs like Ozempic may cause suicidal thoughts


Reduced demand for health care?

If more people start eating healthier, weight loss drugs could lead to a reduced strain on the health care system over time. “It seems like the most immediate impact would be on food and also health care,” Lichtenberg said. “If it causes weight loss and improved health, gradually this could reduce demand for health care and so that’s a possible consequence of this as well.” However, it is important to note that drugs like Ozempic and others in the same class have been associated with serious side effects, including a blockage in the intestines.

Could be a plus for gyms, fitness centers

The adoption of these drugs may also result in increased usage of gyms and fitness centers. According to a survey conducted by Morgan Stanley Research analysts, respondents reported exercising more after starting anti-obesity medications. The percentage of respondents who said they exercised weekly doubled from 35% pre-medication to 71% post-medication.

In his research note, Harbour explained the relationship between the drugs and exercise, stating, “… perhaps as patients lose weight, they simply feel both more physically able and more mentally motivated to exercise more to compound the benefits they are seeing from weight loss medications.” If this scenario plays out, gym chains would benefit from increased usage according to his analysis.

Share this article
Shareable URL
Prev Post

Netflix Gains 9 Million New Subscribers in Q3

Next Post

Shares of United Airlines Drop Despite Positive Financial Results

Leave a Reply

Your email address will not be published. Required fields are marked *

Read next
A pocket watch that belonged to the wealthiest passenger aboard the Titanic is up for public sale and will…
What school graduates face as they enter the workforce What school graduates face as they enter the workforce…