Walmart, CPG brands weigh Ozempic’s impact on food sales

The sale of appetite-suppressing medications like Ozempic may be benefiting business at retail pharmacies, but it could also be eating away at food sales.

Walmart US CEO John Furner told Bloomberg this week the drugs are beginning to impact the retailer’s food sales, saying the company has been analyzing anonymous shopping data to identify changing buying habits among consumers who are and aren’t using them.

“We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket,” Furner said. “Just less units, slightly less calories.”

A Morgan Stanley report published last month estimated that 24 million people, representing 7% of the US population, will be taking these obesity drugs by 2035. Analyst Pamela Kaufman said that sales of high-fat, salty, and sweet foods and products could take the most notable hit; the firm anticipates a 3% drop in consumption. Alternatively, foods like protein shakes and bars could see a sales uptick.

The JM Smucker Co, which acquired Hostess last month, is skeptical about the potential sales impact. CEO Mark Smucker told the Wall Street Journal he’s “very bullish that that sweet sort of instant reward that some folks are seeking is never really going to go away.”

Other brands that manufacture weight management foods are looking to capitalize. On Simply Good Foods’ earnings call in June, president and CEO Joe Scalzo said the brand plans to market its Atkins brand as a “perfect complement to people thinking about using the drugs.” Conagra CEO Sean Connolly noted in the company’s earnings call this week that its demand scientists have been working to adapt its products to these changing diet trends and consumption patterns.

“You’ve got to study these consumer trends and you’ve got to rapidly design what the consumer is looking for into your products, and that’s what we do every year,” he said.