The Impact of Weight-Loss Drugs on PepsiCo’s Business

The introduction of weight-loss drugs like Ozempic and Wegovy into the market has not had a significant impact on PepsiCo Inc.’s snacks and beverages business. However, there is a noticeable trend towards healthier eating habits among consumers, resulting in a preference for smaller package sizes and reduced consumption of sugar and salt.

PepsiCo’s Chief Executive, Ramon Laguarta, addressed these trends during the company’s earnings call on Tuesday. When asked about the impact of weight-loss drugs, Laguarta stated that, so far, it has been negligible for their business.

Rather than the influence of weight-loss drugs, consumer preferences have shifted towards smaller packages. This change allows for greater convenience, variety, and portion control. As a result, PepsiCo continues to focus on offering healthier snacking and beverage options, including zero-sugar beverages and convenient foods with lower sodium content.

Recently, comments made by a Walmart Inc. executive sparked concerns within the industry. The executive stated that the weight-loss drugs were causing customers to purchase fewer groceries and reduce their consumption of high-calorie products. This led to a significant decline in both PepsiCo’s and rival Coca-Cola Co.’s stocks.

Walmart’s U.S. Chief Executive, John Furner, revealed in an interview with Bloomberg that the company has the ability to track which customers are taking these weight-loss drugs. They have observed a slight decrease in overall purchases and consumed calories among these customers.

The Influence of Anti-Obesity Medications on the Food and Beverage Industry

Analysts have raised concerns regarding the impact of the increasing popularity and use of anti-obesity medications on the food and beverage industry. They suggest that companies may need to adapt their product choices to align with changing consumer behavior.

In August, Morgan Stanley analysts stated that the pool of patients using these medications, which simulate the effects of GLP-1, a gut hormone that regulates blood-sugar levels and curbs appetite, is expected to grow to approximately 24 million people. This accounts for nearly 7% of the overall U.S. population, within the next decade. GLP represents glucagon-like peptide.

Read now: As Ozempic/Wegovy frenzy continues, Morgan Stanley lifts forecasts for weight-loss drugs to $77 billion

For more, read: The dark side of the weight-loss-drug craze: eating disorders, medication shortages, dangerous knockoffs

• PepsiCo’s Focus on Healthy Eating –

PepsiCo PEP, +1.71% recognizes the current trend towards healthier eating choices, according to Laguarta.

He emphasized, “We are observing that urbanization plays a significant role in the increased adoption of our categories. Middle-class development and changing lifestyles, such as snacking habits replacing traditional meals with more mini meals throughout the day, have become primary drivers of our beverage and snack divisions.”

Over the past five to six years, the company has actively expanded its selection of healthier food and beverage options. They have introduced new cooking techniques for snacks while reducing sugar and sodium content.

Laguarta added, “These positive trends position us well for potential adjustments to our portfolio in the future.”

Following the release of stronger-than-expected third-quarter earnings and an improved outlook, PepsiCo’s stock rose by 1.4%.