Pots of Activia yoghurt, manufactured by Danone SA, sit on display.
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The CEO of French consumer goods giant Danone downplayed the specter of obesity drugs on its food business, arguing that customers were more likely to turn to healthy products as a part of their recent weight reduction regime.
Antoine de Saint-Affrique said that surging demand for drugs like Wegovy and Mounjaro would only increase consumer appetite for more dietary products.
“We see ourselves as extremely complementary to GLP-1s,” de Saint-Affrique told CNBC’s Charlotte Reed Wednesday.
GLP-1s, or glucagon-like peptide 1 agonists, are the underlying class of medicine in weight reduction injections similar to Wegovy and Mounjaro. They work by mimicking appetite regulating hormones within the body and effectively reducing hunger levels.
The rapid rise of such drugs has prompted concern amongst food makers, who fear falling sales as consumer appetite wanes. The CEO of Wegovy maker Novo Nordisk said in February that he was fielding calls from “scared” food chiefs asking how the brand new pharmaceutical class might affect their businesses.
Nonetheless, de Saint-Affrique said that Danone’s products, which include Activia yoghurts and Alpro plant-based milks, could be a crucial component of consumers’ recent diets.
“We offer protein and protein that you simply cannot find naturally,” he said. “It’s worthwhile to have those proteins and when you are under the regime, you’ll miss those proteins. We are able to bring them we contribute to your gut health,” he said.
“We are literally at the guts of what is required if you’re using 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 over the impact of GLP-1s on the patron goods market could also be overblown, particularly within the dietary foods space.
“GLP-1 users may devour fewer calories, but we don’t see a cloth impact on overall food demand, while we see opportunities for food makers of protein products and weight loss plan supplements,” Jon Cox, head of European consumer equities, wrote in an emailed note.
“While consumers may shun bad-for-you ultraprocessed foods (UPFs), we consider European corporations generally have healthier portfolios in comparison with some rivals,” he added.
Kepler Cheuvreux named Danone and Swiss food maker Nestle as possible beneficiaries in the brand new consumer goods landscape. Jefferies last month also named Danone as a buy amid a wider downturn within the food sector as consumers in the reduction of spending within the face of high inflation.
