LONDON — The rapid rise of weight loss drugs like Wegovy and Mounjaro is generating a host of new product lines as companies hope to land on the right side of the health care disruptor.
Industries spanning food and beverage to retail and fitness have come under the spotlight amid surging demand for Novo Nordisk and Eli Lilly’s so-called miracle drugs over concerns that they could dramatically shift consumer habits.
However, some companies say they are embracing the newfound market opportunity.
Dutch Bioscience firm DSM Firmenich told CNBC Wednesday that it is exploring nutritional supplements to complement and compensate for some of the impacts of the weight-loss drugs, with CEO Dimitri de Vreeze describing it as the natural progression for the industry.
“If you go to weight loss and you’re successful, you move to the health, nutrition, lifestyle counter, because you basically want to continue what you have. There we come into play,” de Vreeze told CNBC’s “Squawk Box Europe.”
The weight-loss injections, which rely on a group of drugs called GLP-1 receptor agonists (glucagon-like peptide 1), which work by imitating a naturally occurring gut hormone that helps regulate appetite in the brain.
Studies remain ongoing over some of the further health applications — and potential side effects — of the appetite-suppressing drugs. But de Vreeze said his company was also looking at products to boost muscle retention and protein intake.
“There are some side effects of weight loss drugs and that means it’s more difficult to build up muscle, it’s more difficult to keep your protein level up. And here we come into play. We are using ingredients, developing ingredients where that’s being sort of compensated for,” he said.
Novo Nordisk and Eli Lilly did not immediately respond to CNBC’s request for comment on the comments.
Consumer goods to airlines
DSM is not the only company seeking to capitalize on the growing market for weight loss drugs.
Swiss food giant Nestle announced last month that it’s launching a new frozen food range aimed at GLP-1 drug users. The Vital Pursuits range, which will initially feature 12 items including whole grain bowls and pizzas, is designed as a nutritional “companion” to the drugs, the company said.
CEO Mark Schneider told CNBC last week that while weight loss drugs were shifting consumer behaviors, ”nutritional needs don’t go away.”
GLP-1 drugs will “certainly be an interesting addition to all the other needs that we’re trying to meet in the food industry,” Schneider said.
Danone CEO Antoine de Saint-Affrique also told CNBC in April that he sees GLP-1s as “complementary” to the French food company, adding that they would only increase demand for its nutritional products.
Whether weight loss meds will leave consumers more or less likely to reach for healthy products is not yet certain, however, according to Barclays analysts.
“Greater adoption of GLP-1 drugs could be thought of as a substitute for categories of food products that are more attuned to health and wellness,” analyst Andrew Lazar said in a research note last year.
“That said, consumers could also eat more weight management foods as they strive to eat healthier and substitute such products over more indulgent snacking alternatives,” he added.
Such shifts could have similar implications for restaurants, food retailers and delivery companies that “proactively pivot” to embrace the drugs, the bank’s analysts added. It cited fast food companies including KFC’s Yum Brands and Shake Shack as potential beneficiaries if consumers view the drugs as “offsetting” such indulgences.
Airlines could also benefit massively from trimmer passengers as they grow increasingly preoccupied by reducing jet-fuel costs. In a September note cited by Bloomberg, Jefferies analyst Sheila Kahyaoglu said United Airlines would save $80 million a year if the average passenger weight fell by 10 pounds.
Even pharmaceutical packaging companies could stand to gain, Barclays said, with companies like Germany’s Gerresheimer seeing a possible 2-4% revenue boost from the estimated $100 billion weight loss drug industry.
Growing weight loss drug competition
It is not yet clear whether such ancillary products can replicate the meteoric rise of weight loss drug companies like Novo Nordisk and Eli Lilly.
“We think it is too early for investors to take definitive positioning outside of healthcare stocks on the impact of GLP-1 drugs, and the range of potential scenarios is very wide,” Barclays analysts wrote.
Asked whether rising demand for nutritional products was being reflected in his company’s share price, de Vreeze acknowledged it was “too early” to say.
“It’s something which you need to build over time. It’s in the pipeline. But the moment that changes, you will see that being reflected,” he said.
The new products come as other pharmaceutical companies are nipping at the heels of Novo and Eli in a bid to claim a share of the weight loss pie.
In China, a key market for the drug, around 15 generic versions of Ozempic and Wegovy are currently being developed, according clinical trail records cited by Reuters Thursday.
Meantime, some analysts have also voiced caution over the continued rise of the weight loss drug market itself.
“We don’t necessarily think that ‘miracle’ drugs will be miracle drugs forever,” Guillaume Menuet, EMEA head of investment strategy and economics at Citi Wealth, told CNBC Thursday.