Novo Nordisk Fends Calls About Ozempic from “Scared” Junk Food Makers

Novo Nordisk Fends Calls About Ozempic from “Scared” Junk Food Makers

Ozempic has become a weight loss phenomenon with high demand spurring shortages and now reported fear among food companies.

With the frenzy around Ozempic (semaglutide) not stopping any time soon, maker Novo Nordisk has been fielding calls from junk food suppliers with concerns about how the blockbuster diabetes and weight loss version of the drug, Wegovy (semaglutide), could potentially make a dent in their businesses.

Novo CEO Lars Fruergaard Jørgensen told Bloomberg that he’s been receiving calls from the “scared” bosses of food companies who are feeling threatened by the current new weight loss culture driven by GLP-1 agonists like Ozempic and Wegovy.

“A couple of CEOs from, say, food companies have been calling me,” Jørgensen told Bloomberg. “They are scared about it.”

Novo’s boss did not disclose which specific companies had called him.

Given some comments from some food makers in recent months, there is speculation about who some of the companies could be.

Walmart is a potential suspect as US head John Furner said in October that the company was already beginning to see a material impact on its sales thanks to Ozempic-using customers.

“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.”

On the other hand, some companies have come forward to rule themselves out, such as Ben & Jerry’s. Hein Schumacher, the head of Ben & Jerry’s maker Unilever, told Bloomberg on Tuesday that it was not among the companies contacting Novo.

GLP-1 agonists work to regulate blood sugar and induce weight loss by suppressing appetite. As a result, people eat less overall and are less inclined to eat junk food in particular on their weight loss journey.

Related: Are Wegovy and Ozempic a Threat to the Food Industry?

A survey by Deutsche Bank found that calorie consumption goes down when an individual takes a GLP-1 medication like Ozempic or Wegovy. But when the drug is stopped, the number of calories a patient consumes will rise again. In some instances, it could even be higher than what the individual was consuming before treatment began, according to the survey.

As Novo fends calls from the CEOs of some food companies, others are reassuring investors that they could adapt to a changing junk food industry if Ozempic keeps up its intensity.

Since individuals using appetite suppressants like Ozempic will likely change their dietary preferences in favor of more nutritious, lower-calorie alternatives, KitKat maker Nestlé sees this as a trend that it can capitalize on. Nestlé CEO told Bloomberg in October that it was working on “companion products” loaded with vitamins, minerals and supplements.

“You want to be sure that the weight loss gets supported. You want to be sure that you limit the loss of lean muscle mass,” Mark Schneider said.

Analysts at Barclays said a company like Danone could double the annual sales of €500 million ($539 million) earned from its protein yogurts and yogurt drinks if Ozempic users start going for more healthy options. Of note, Barclays is a bank that encouraged a shorting of junk food credits so it is being bullish on more healthy food makers like French maker Danone.

Since October, there has been a noticeable selling off of stocks of foods like candy and beer, according to Fortune. While many have speculated that the Ozempic phenomenon could be a contributor, some analysts say it could be a general effect of high levels of inflation being experienced around the world.

Ozempic has been touted as a cultural breakthrough ever since its unintended weight loss effects were discovered. This kickstarted skyrocketing demand for the drug about a year and a half ago, bolstered by personal endorsements and testimonies from people like Tesla CEO Elon Musk to influencers on social media who used it, or Wegovy, for weight loss.

And in this short period of time, Novo’s valuation has blown past $500 million.

The Danish drugmaker isn’t bothered by the calls as the company is focused on meeting the immense demand for its semaglutide products. The company has announced manufacturing expansions to cope with the demand and resulting shortages. There have been significant shortages of Ozempic, Wegovy and GLP-1 rivals from Eli Lilly Mounjaro (tirzepatide) and its newly approved weight loss version Zepbound (tirzepatide) since last year.

Ozempic and Wegovy have been on the US Food and Drug Administration (FDA)’s drug shortages list since May 2023. Despite some brief relief in the fall, more shortages are being announced. Eli Lilly’s Mounjaro is in short supply once again, with limited availability of higher doses of the drug through early March, according to the FDA.

The off-label prescribing of Ozempic and Mounjaro for weight loss seemingly exacerbated the shortages with concerns that diabetic patients wouldn’t be able to access them for their conditions. Some countries have limited exports of Ozempic so they can be delivered to diabetic patients who need it.

As part of efforts to increase manufacturing capacities, Novo announced this week that it spent $11 billion to purchase three sites in New Jersey from pharma contract development and manufacturing organization (CDMO) Catalent to help boost its US operations.