Danone CEO downplays threat of weight loss drugs on food producers

Pots of Activia yogurt, manufactured by Danone SA, are on display.

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The CEO of the French consumer goods giant Danone has downplayed the threat of obesity drugs to its food business, arguing that consumers were likely to turn to healthy products as part of their new weight loss regime.

Antoine de Saint-Affrique said growing demand for drugs like Wegovy and Mounjaro would only increase consumers’ appetite for more nutritional products.

“We see ourselves as extremely complementary to GLP-1s,” de Saint-Affrique told CNBC’s Charlotte Reed on Wednesday.

GLP-1s, or glucagon-like peptide 1 agonists, are the class of drugs underlying weight loss injections such as Wegovy and Mounjaro. They work by mimicking appetite-regulating hormones in the body and effectively reducing hunger levels.

The rapid rise of these drugs has sparked concern among food manufacturers, who fear a drop in sales as consumer appetite diminishes. The CEO of the manufacturer Wegovy Novo Nordisk said in February that he was receiving calls from “scared” food executives asking how the new drug class might affect their businesses.

However, de Saint-Affrique said Danone products, including Activia yogurts and Alpro plant-based milks, would form an important part of consumers’ new diets.

“We provide proteins and protein that you can’t find naturally,” he said. “You need that protein and if you’re on this diet, you’re going to miss that protein. We can provide that, we help your gut health,” he said.

“We are actually getting to the heart of what is needed when you use something like GLP-1,” 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 overblown, particularly in the area of nutritional foods.

“GLP-1 users may be consuming fewer calories, but we do not see a material impact on overall food demand, while we see opportunities for manufacturers of protein food products and dietary supplements,” he said. writes Jon Cox, head of European consumer equities, in a statement. note sent by email.

“Even as consumers avoid unhealthy ultra-processed foods (UPF), we believe European companies generally have healthier wallets than some competitors,” he added.

Kepler Cheuvreux cited Danone and Swiss food maker Nestlé as possible beneficiaries in the new consumer goods landscape. Jefferies also last month cited Danone as a buy amid a broader slowdown in the food sector as consumers cut spending in the face of high inflation.


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