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Danone CEO downplays menace of weight reduction medicine on meals producers

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Pots of Activia yoghurt, manufactured by Danone SA, sit on show.

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The CEO of French shopper items big Danone downplayed the specter of weight problems medicine on its meals enterprise, arguing that buyers have been more likely to flip to wholesome merchandise as a part of their new weight reduction regime.

Antoine de Saint-Affrique stated that surging demand for medicine like Wegovy and Mounjaro would solely enhance shopper urge for food for extra dietary merchandise.

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

GLP-1s, or glucagon-like peptide 1 agonists, are the underlying class of medication in weight reduction injections resembling Wegovy and Mounjaro. They work by mimicking urge for food regulating hormones within the physique and successfully decreasing starvation ranges.

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The fast rise of such medicine has prompted concern amongst meals makers, who worry falling gross sales as shopper urge for food wanes. The CEO of Wegovy maker Novo Nordisk stated in February that he was fielding calls from “scared” food chiefs asking how the brand new pharmaceutical class would possibly have an effect on their companies.

Nevertheless, de Saint-Affrique stated that Danone’s merchandise, which embrace Activia yoghurts and Alpro plant-based milks, can be an vital element of customers’ new diets.

“We offer protein and protein that you just can not discover naturally,” he stated. “You might want to have these proteins and in case you are beneath the regime, you’ll miss these proteins. We are able to convey them we contribute to your intestine well being,” he stated.

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“We are literally on the coronary heart of what’s wanted whenever you’re utilizing one thing like GLP-1,” de Saint-Affrique added.

Analysts at monetary providers analysis agency Kepler Cheuvreux stated in a analysis observe final month that considerations over the affect of GLP-1s on the patron items market could also be overblown, notably within the dietary meals house.

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“GLP-1 customers could eat fewer energy, however we don’t see a fabric affect on total meals demand, whereas we see alternatives for meals makers of protein merchandise and weight-reduction plan dietary supplements,” Jon Cox, head of European shopper equities, wrote in an emailed observe.

“Whereas customers could shun bad-for-you ultraprocessed meals (UPFs), we imagine European corporations typically have more healthy portfolios in comparison with some rivals,” he added.

Kepler Cheuvreux named Danone and Swiss meals maker Nestle as attainable beneficiaries within the new shopper items panorama. Jefferies final month additionally named Danone as a purchase amid a wider downturn within the meals sector as customers reduce spending within the face of excessive inflation.

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