Danone CEO downplays risk of weight reduction medicine on meals producers

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

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

“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 reminiscent of Wegovy and Mounjaro. They work by mimicking urge for food regulating hormones within the physique and successfully lowering starvation ranges.

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

Nonetheless, de Saint-Affrique mentioned that Danone’s merchandise, which embrace Activia yoghurts and Alpro plant-based milks, could be an essential part of customers’ new diets.

“We offer protein and protein that you simply can not discover naturally,” he mentioned. “You have to have these proteins and in case you are underneath the regime, you’ll miss these proteins. We are able to carry them we contribute to your intestine well being,” he mentioned.

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

Analysts at monetary providers analysis agency Kepler Cheuvreux mentioned in a analysis be aware final month that considerations over the impression of GLP-1s on the buyer items market could also be overblown, notably within the dietary meals area.

“GLP-1 customers could eat fewer energy, however we don’t see a cloth impression on total meals demand, whereas we see alternatives for meals makers of protein merchandise and food regimen dietary supplements,” Jon Cox, head of European shopper equities, wrote in an emailed be aware.

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

Kepler Cheuvreux named Danone and Swiss meals maker Nestle as potential 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 in the reduction of spending within the face of excessive inflation.