The "miracle drug for weight loss" has set off a global boom, impacting many industry tracks, and triggering enterprises to think about reforming business models. Novo Nordisk and Eli Lilly launched two new diet drugs Ozempic and Wegovy, which are said to help patients lose 20% of weight while also reducing the risk of heart attack or stroke, are considered the most effective and safe weight loss drugs ever. As this miracle drug is accepted and used by more people, its long-term changes in consumer behavior may have an impact on many industries. Some industries will benefit, such as apparel and aviation, while others will be at risk, such as snacks and beverages, tobacco and gaming. At present, a number of US retail giants have warned that diet pills may have an impact on industry operations, and companies may need to adjust their business models to adapt to the changes. The comment generated a strong reaction in the market, pushing the S&P consumer sector lower, is this concern "precautionary" or "overreacting"?
GLP-1 receptor agonist drugs have long been used to treat diabetes, but are now increasingly used to treat obesity and weight loss. Semeglutide, which is regarded as the "miracle drug for weight loss", helps regulate glucose levels and suppress hunger by mimicking the GLP-1 hormone produced in the human body, thereby affecting the body's metabolism and achieving weight loss. Not only that, but it can also help relieve addiction problems such as tobacco and alcohol and reduce heart failure. Similarly, the impact of semeglutide on the industry is not limited to medicine, Bank of America analysts pointed out that the impact of downstream effects on the market is not yet obvious, but in the long run, it may change consumer behavior, some industries will benefit from it, while others will face greater risks, in general, the affected industries include: 1) snacks and beverages; 2) catering; 3) tobacco; 4) Games; 5) clothing; 6) Food retail. In the restaurant industry, a Jefferies survey of GLP-1 users showed that more than 40 percent of respondents said they had reduced eating out. A similar percentage of respondents said they ordered less when eating out. About 70 percent of respondents said they ate less overall, and about the same percentage reported "increased awareness of the nutritional value of food." In addition to food-related industries, the slimming effects brought by GLP-1 may drive wardrobe renovation. Bank of America analyst Geoff Meacham said the 38 million people using diet pills (the midpoint of Bank of America's forecast for 2030) combined with the assumption of buying new clothing could result in $50 billion in spending on new clothing. In addition, for the airline industry, Jefferies Financial analyst Sheila Kahyaoglu estimated in a report that United Airlines Holdings would save $80 million a year if the average passenger lost 10 pounds.
It may be too early to adjust the business model, and with the weight loss miracle drug more accepted and used, American companies are working to solve the problems caused by this:
How will less gluttonous, impulsive consumers affect a company's business model?
Walmart U.S. CEO John Furner recently warned that consumer shopping is indeed declining and calorie consumption is slightly reduced due to the effects of the drug, but added that it's too early to tell. Sean Connolly, CEO of Conagra, told investors that the company's scientists are studying the data and that if people's behavioral preferences change, the company may offer smaller portions of food in the next few years. In the retail restaurant industry, most executives are still taking a cautious approach. Adnan Durrani, CEO of Saffron Road, which makes frozen meals, chicken rolls and crispy pea-packed snacks, said snack makers are talking about things like shrinking package sizes, but it's too early to know how much impact it has on consumer behavior. He recalls the olive oil boom of the 90s of the 20th century, when this fat substitute quickly took over food shelves and was subsequently discarded for its unpleasant side effects. Similarly, the Atkins diet, which restricted carb intake, became popular at the turn of the century, spawning an entire range of products, including low-carb ketchup, ice cream and soft drinks. Donut company Krispy Kreme was hit by the diet, and Interstate Bakeries cited the impact of the trend when it filed for bankruptcy in 2004. But by 2005, due to the lack of evidence that the diet can achieve lasting weight loss, the popularity of this diet gradually declined. Returning to the impact of GLP-1, usage patterns are another unknown, analysts note that about 60% of respondents intend to stop using GLP-1 after reaching their target weight, and the question remains whether the new eating habit will continue once the medication habit disappears, and whether the weight will rebound once the medication is stopped. Today, retail companies face the daunting task of weighing changing data to determine the right strategy. As Durrani puts it:
We are always going through a cycle of new miracle drugs, new miracle food ingredients, and it's too early to tell.
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