Throughout the past several years, a newfound optimism has surrounded the development of weight loss drugs designed to help individuals shed unwanted pounds. However, a recent poll conducted by Deutsche Bank sheds light on the hurdles that patients face when they discontinue treatment. The survey found that individuals who ceased taking GLP-1 medications such as Novo Nordisk’s Ozempic or Wegovy experienced an increase in calorie consumption, surpassing even their pre-treatment levels. This information underscores the need for a deeper understanding of the long-term implications of anti-obesity medications on the food and beverage industry.

Deutsche Bank’s research involved surveying 600 U.S. consumers in December. Of the participants, 70% were currently using a GLP-1 drug, while the remaining 30% had stopped taking this type of medication. The survey aimed to explore the effects of GLP-1 medications on calorie consumption. The findings revealed that among those still using the medication, approximately 30% reported eating “a little less,” while 22% reported eating “a lot less.” Surprisingly, 17% stated that they were consuming “a lot more,” and 18% reported eating “a little more.” This means that a net 18% of individuals using GLP-1 drugs were eating less overall. In contrast, among those who had discontinued GLP-1 treatment, a net 30% reported consuming more calories than they had prior to using the medication.

Deutsche Bank’s analysts emphasize that these survey conclusions should not dissuade investors from considering Food and Beverage stocks. The impact of anti-obesity medications on the industry must be evaluated in the broader context of all weight loss programs. GLP-1 medications may cannibalize these programs, limiting their overall effect on food and beverage producers. It’s crucial to consider the complex relationship between pharmaceutical interventions and dietary habits when assessing the future of this industry.

Food and beverage stocks endured a tumultuous period in 2023, with many underperforming the market. The summer months saw the beginning of a downward trend as public awareness of GLP-1 medications like Wegovy increased. Concerns about widespread adoption of these drugs and the subsequent ripple effects raised doubts among investors, leading to substantial declines in stock prices. However, as the year drew to a close, new data emerged indicating that patients who discontinued treatment with Zepbound regained approximately half the weight they had lost during therapy. This finding provided some relief to the affected stocks, restoring some investor confidence.

Amidst these fluctuations, certain food and beverage companies managed to maintain resilience. Mondelez, the manufacturer of popular brands like Oreos and Cadbury, experienced a 16% gain over the past three months, resulting in an overall 8% increase in the past year. Kraft Heinz, on the other hand, faced a 10.2% loss over the previous year but managed to reap a 19% gain during the three-month period. Nestle, a prominent company in the field, saw its U.S.-traded shares rise by more than 5% in the last three months, although it endured a 2% loss over the past 12 months. Unilever shares followed a similar pattern, with a nearly 2% increase over the past three months and a decline of more than 3% over the past year. These fluctuations underscore the challenges faced by food and beverage stocks in an ever-changing market.

Dr. Shantanu Gaur, founder and CEO of Allurion Technologies, affirms that the survey’s results are not surprising. Allurion Technologies, a company focused on developing gastric balloons and behavior modification programs to address obesity, supports the notion that appetite can return vigorously following the cessation of GLP-1 therapy. The human body naturally seeks out a “set point,” a preferred weight to which it will gravitate without external interventions. Semaglutide, the active ingredient in Ozempic and Wegovy, mimics a natural hormone called glucagon-like peptide-1 (GLP-1) to control insulin levels and suppress appetite. Similarly, Zepbound (tirzepatide) emulates GLP-1 and another hormone, glucose-dependent insulinotropic polypeptide (GIP). However, once these hormones are no longer supplemented, hunger signals resurface. Recognizing obesity as a chronic condition, the American Medical Association and drug manufacturers like Novo Nordisk and Eli Lilly anticipate that patients on incretin medications will need long-term treatment for weight management.

Comparable to medications for other chronic conditions like high blood pressure and cholesterol, adherence to treatment is crucial for long-term effectiveness. Unfortunately, compliance with anti-obesity medications tends to be lower than with other medications. Approximately half of individuals taking cholesterol medication discontinue use after a year, and the rate of compliance is even lower for anti-obesity medications. Dr. Gaur highlights the importance of promoting behavior modification programs alongside pharmaceutical interventions to enhance long-term success in weight management.

Deutsche Bank suggests that interest in weight loss programs may be peaking, as evidenced by internet search data. These periods of increased interest often present favorable conditions for investors in the food and beverage industry. Nestle and Unilever emerge as the top European picks according to the bank, while Mondelez and Kraft rank among its favored U.S. staples names. A comprehensive evaluation of the weight loss landscape, including pharmaceutical interventions and dietary modifications, is crucial for investors seeking to navigate this continuously evolving market.

While GLP-1 medications show promise in helping individuals achieve weight loss goals, the challenges associated with ceasing these drugs cannot be overlooked. A careful examination of post-treatment eating habits reveals the potential for a rebound effect, highlighting the need for long-term strategies that combine pharmaceutical interventions and behavior modification programs. The dynamic nature of food and beverage stocks necessitates a comprehensive understanding of the intricate relationship between anti-obesity medications and the industry as a whole.


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