Cans of Activia yogurt produced by Danone are on display.
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CEO of French consumer goods giant Danone downplays the threat from obesity drugs to its food business, arguing consumers may turn to health products as part of new weight-loss regimens.
Antoine de Saint-Affrique said the surge in demand for drugs like Wegovy and Mounjaro will only increase consumer demand for more nutritional products.
“We see ourselves as very complementary to GLP-1,” de Saint-Affrique told CNBC’s Charlotte Reed on Wednesday.
GLP-1, or glucagon-like peptide 1 agonists, are the base drug class in weight loss injections like Wegovy and Mounjaro. They work by mimicking appetite-regulating hormones in the body and effectively reducing hunger levels.
The rapid growth of this class of drugs has raised concerns among food manufacturers, who worry that sales will fall as consumer appetite wanes. CEO of Wegovy Maker Novo Nordisk February said he was receiving calls from “Afraid” food CEOs are asking how new pharmaceutical categories might impact their businesses.
However, de Saint-Affrique said Danone’s products, including Activia yogurt and Alpro plant-based milk, will become an important part of consumers’ new diets.
“We provide proteins and proteins that are not found naturally,” he said. “You need these proteins, and if you’re in this state, you miss them. We can bring them, and we contribute to your gut health,” he said.
“When you use a product like GLP-1, we’re actually at the heart of what’s needed,” de Saint-Affrique added.
Analysts at financial services research firm Kepler Cheuvreux said in a research note last month that concerns about the impact of GLP-1 on the consumer goods market may be exaggerated, especially in the nutritional food sector.
“GLP-1 users may consume fewer calories, but we do not believe this will have a material impact on overall food demand,” Jon Cox, head of European consumer equities, wrote in a note. At the same time we see opportunities for food manufacturers of protein products and dietary supplements,” notes emailed.
He added: “While consumers may avoid ultra-processed foods (UPF) that are harmful to the body, we believe European companies generally have healthier product portfolios compared to some competitors.”
Kepler Cheuvreux named Danone and Swiss food maker Nestlé as possible beneficiaries of the new consumer goods sector. Jefferies also named Danone a buy last month amid a broader downturn in the food industry as consumers cut back on spending in the face of high inflation.
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