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The food industry is apparently in a tizzy over Ozempic and its appetite-suppressing qualities — and even the megastore Walmart is feeling the burn.
As Bloomberg reports, a Walmart executive admitted that the company has been looking at anonymized customer data and finding that shoppers taking the diabetes drug and its weight loss management counterpart, Wegovy, are buying less food.
“We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket,” John Furner, the CEO for the massive superstore chain’s US operations, told Bloomberg. “Just less units, slightly less calories.”
Walmart is the latest company in recent days to sound the industrial alarm about the medications, which use the drug semaglutide as their active ingredient. Semaglutide works by mimicking the natural intestinal hormone known as glucagon-like peptide 1, or GLP-1 for short, which alerts the brain to stomach fullness and, essentially, sends signals that stop you from being hungry.
Along with helping diabetics control their blood sugar, semaglutide was approved by the FDA as a weight loss drug in 2021, though reports of side effects ranging from a general loss of interest in food to intestinal blockage and worse have dampened its hype.
This week, we’ve been seeing a grim irony play out in the markets: for those who do choose to take the semaglutide — and are able to get it amid an ongoing national shortage — a lower urge to snack is apparently among its positive benefits, but that could impact the bottom lines for the companies that sell us processed foods and empty calories.
Case in point, a spate of industry interviews revealed just how anxious food retailer CEOs and their investors are about the rise of semaglutide.
The Wall Street Journal reported earlier this week that the investors behind Campbell’s Soup and the makers of Slim Jim meat sticks are already asking tough questions of the companies they own stake in about how they plan to deal with semaglutide. And last week, Bloomberg reported that the CEO of Kellanova, a Kellogg subsidiary that makes Cheez-Its and Pringles, is “by no means complacent” as the drug’s potential to cut into the company’s profit margins grows.
“Like everything that potentially impacts our business, we’ll look at it, study it and, if necessary, mitigate,” Steve Cahillane, the Kellanova CEO, told Bloomberg.
With new data suggesting that a whopping 1.7 percent of Americans, or roughly 5.68 million people, have already been prescribed semaglutide drugs, it’s not exactly surprising that the food industry is concerned — though in the case of the pharmacy and grocery giant Walmart, the company’s ability to play both sides of the field is to its benefit.
In an August analyst call, Bloomberg reported, Walmart CEO Doug McMillon said that because the retailer sells Ozempic and Wegovy through its pharmacies, it actually has seen a boost in revenue as the expensive drug continues to be massively prescribed.
“We still expect food, consumables, and health and wellness primarily due to the popularity of some GLP-1 drugs to grow as a percent of total in the back half,” Macmillan said on the call.
Translation: Walmart is cashing in on the drug’s popularity even as its snack profits suffer. Apparently, that’s the cost of doing business in the age of Ozempic.
More on semaglutide: Google Seems to Be Running a Lot of Ads for Black Market Semaglutide