Danone CEO downplays threat of weight loss drugs on food producers: ‘We see ourselves as extremely complementary’

The
CEO
of
French
consumer
goods
giant


Danone
downplayed
the
threat
of
obesity
drugs
on
its
food
business,
arguing
that
consumers
were
likely
to
turn
to
healthy
products
as
part
of
their
new
weight
loss
regime.

Antoine
de
Saint-Affrique
said
that
surging
demand
for
drugs
like
Wegovy
and
Mounjaro
would
only
increase
consumer
appetite
for
more
nutritional
products.

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

GLP-1s,
or
glucagon-like
peptide
1
agonists,
are
the
underlying
class
of
drugs
in
weight
loss
injections
such
as
Wegovy
and
Mounjaro.
They
work
by
mimicking
appetite
regulating
hormones
in
the
body
and
effectively
reducing
hunger
levels.

The
rapid
rise
of
such
drugs
has
prompted
concern
among
food
makers,
who
fear
falling
sales
as
consumer
appetite
wanes.
The
CEO
of
Wegovy
maker


Novo
Nordisk
said
in
February
that
he
was
fielding
calls
from
“scared”
food
chiefs
asking
how
the
new
pharmaceutical
class
might
affect
their
businesses.

However,
de
Saint-Affrique
said
that
Danone’s
products,
which
include
Activia
yoghurts
and
Alpro
plant-based
milks,
would
be
an
important
component
of
consumers’
new
diets.

“We
provide
protein
and
protein
that
you
cannot
find
naturally,”
he
said. “You
need
to
have
those
proteins
and
if
you
are
under
the
regime,
you
will
miss
those
proteins.
We
can
bring
them
we
contribute
to
your
gut
health,”
he
said.

“We
are
actually
at
the
heart
of
what
is
needed
when
you’re
using
something
like
GLP-1,”
de
Saint-Affrique
added.

Analysts
at
financial
services
research
firm
Kepler
Cheuvreux
said
in
a
research
note
last
month
that
concerns
over
the
impact
of
GLP-1s
on
the
consumer
goods
market
may
be
overblown,
particularly
in
the
nutritional
foods
space.

“GLP-1
users
may
consume
fewer
calories,
but
we
do
not
see
a
material
impact
on
overall
food
demand,
while
we
see
opportunities
for
food
makers
of
protein
products
and
diet
supplements,”
Jon
Cox,
head
of
European
consumer
equities,
wrote
in
an
emailed
note.

“While
consumers
may
shun
bad-for-you
ultraprocessed
foods
(UPFs),
we
believe
European
companies
generally
have
healthier
portfolios
compared
to
some
rivals,”
he
added.

Kepler
Cheuvreux
named
Danone
and
Swiss
food
maker
Nestle
as
possible
beneficiaries
in
the
new
consumer
goods
landscape.
Jefferies
last
month
also
named
Danone
as
a
buy
amid
a
wider
downturn
in
the
food
sector
as
consumers
cut
back
spending
in
the
face
of
high
inflation.