J.M. Smucker ‘s plan to purchase Twinkies -maker Hostess Brands is a dangerous move, if Morgan Stanley’s latest research is correct. The firm revisited its August call that a recent class of weight reduction medications would hamper growth at some food and beverage corporations . This time it backed up its thesis with additional demographic data about grocery shoppers from Numerator Insights in addition to data from the Centers for Disease Control and Prevention. The outcomes aren’t rosy for Ding Dongs. “Our evaluation reinforces the view that snacking corporations akin to TWNK are prone to be most adversely affected by GLP-1 adoption, while weight management food corporations like SMPL and BRBR may benefit,” Morgan Stanley analyst Pamela Kaufman wrote in a note to clients on Monday. BellRing makes protein shakes and powders and owns the PowerBar brand. Its stock is up a whopping 60% yr thus far. But Simply Good , which owns brands like Atkins and Quest that make ready-to-drink shakes, snacks and frozen meals, has seen its stock fall nearly 15% over the identical time period. In August, Morgan Stanley analysts said they expect increased adoption of GLP-1 medications like Novo Nordisk’s Wegovy will result in a 1.3% drop in calorie consumption within the U.S. by 2035. The estimate was based on the concept patients taking the burden loss drugs typically reduce their every day calorie intake by 20% to 30% as they in the reduction of on every day meals by 20% and snacks by 40%, the analysts said. Additionally they assumed on the time that these same consumers were more prone to buy indulgent snacks and packaged foods sold by brands like Smucker, Hostess and others. The brand new report backs this up. “Across our coverage, Numerator Insights data highlight that almost all center-store packaged food corporations barely over-index to consumers with obesity,” Kaufman said. Also, these same foods are the kinds of items that customers are prone to in the reduction of on once they are getting serious about reducing weight, she said. The evaluation showed Hostess was probably the most exposed to shoppers with obesity and kind 2 diabetes. Individuals with each conditions are also most certainly to qualify for anti-obesity medication, the analysts said. On Monday, Smucker’s stock was down about 7%, and at one point hit a 52-week low of $129.00, after it said it could pay $5.6 billion to purchase Hostess in a stock-and-cash deal. Hostess stock soared 19% on the news. Other food stocks with higher exposure to customers with obesity include Conagra , Kraft Heinz and Smucker, the report said, citing the Numerator data. “Importantly, BRBR and SMPL over-index to consumers who’re addressing their obesity through lifestyle changes and pharmaceuticals, reinforcing their complementary qualities and potential category tailwinds from GLP-1 drugs,” the report said. In Morgan Stanley’s original report, the analysts also emphasized that food and beverage corporations could ease the impact of the trend by reformulating products to have fewer calories and sugar or by shifting product mix to healthier items. —CNBC’s Michael Bloom contributed to this report.
A key step forward for Novo Nordisk’s GLP-1 pill
Novo Nordisk flags flutter outside their office in Bagsvaerd, on the outskirts of Copenhagen, Denmark, July 14, 2025. Tom Little...
