Danone CEO Assuages Concerns Over Weight Loss Drugs Impact, Sees Opportunity in Healthier Food Trends
Source: The DairyNews
Danone's CEO, Antoine de Saint-Affrique, has minimized the impact of weight loss drugs on the company's food business, suggesting that consumers are likely to gravitate towards healthier options as part of their weight management efforts. In response to the rising demand for drugs like Wegovy and Mounjaro, which belong to the GLP-1 class, de Saint-Affrique emphasized that this trend could actually spur interest in more nutritious products.
"We view ourselves as highly complementary to GLP-1s," de Saint-Affrique stated in an interview with CNBC's Charlotte Reed. GLP-1s, such as Wegovy and Mounjaro, mimic the body's appetite-regulating hormones, reducing hunger levels effectively.
While food producers have expressed concerns over declining sales due to the popularity of these drugs, de Saint-Affrique highlighted Danone's offerings, such as Activia yogurts and Alpro plant-based milks, as essential components of consumers' dietary adjustments. He emphasized the nutritional value provided by their products, particularly in terms of proteins crucial for maintaining a balanced diet.
"We offer essential proteins that are not readily available naturally," he explained. "In diets where these proteins are lacking, our products play a vital role in maintaining gut health."
Addressing apprehensions within the industry, financial analysts at Kepler Cheuvreux suggested that worries about the impact of GLP-1s on the consumer goods market, especially in the realm of nutritional foods, might be overstated. Jon Cox, head of European consumer equities, noted that while GLP-1 users may consume fewer calories, the overall demand for food might not see a significant decrease. He also highlighted potential opportunities for food manufacturers specializing in protein products and dietary supplements.
"Although consumers may shy away from unhealthy ultraprocessed foods, European companies generally boast healthier product portfolios compared to some competitors," Cox remarked.
Kepler Cheuvreux identified Danone and Swiss food giant Nestle as potential beneficiaries in this evolving consumer goods landscape. Additionally, investment firm Jefferies recommended Danone as a buy amidst broader challenges in the food sector, stemming from consumer spending adjustments in response to high inflation.
While food producers have expressed concerns over declining sales due to the popularity of these drugs, de Saint-Affrique highlighted Danone's offerings, such as Activia yogurts and Alpro plant-based milks, as essential components of consumers' dietary adjustments. He emphasized the nutritional value provided by their products, particularly in terms of proteins crucial for maintaining a balanced diet.
"We offer essential proteins that are not readily available naturally," he explained. "In diets where these proteins are lacking, our products play a vital role in maintaining gut health."
Addressing apprehensions within the industry, financial analysts at Kepler Cheuvreux suggested that worries about the impact of GLP-1s on the consumer goods market, especially in the realm of nutritional foods, might be overstated. Jon Cox, head of European consumer equities, noted that while GLP-1 users may consume fewer calories, the overall demand for food might not see a significant decrease. He also highlighted potential opportunities for food manufacturers specializing in protein products and dietary supplements.
"Although consumers may shy away from unhealthy ultraprocessed foods, European companies generally boast healthier product portfolios compared to some competitors," Cox remarked.
Kepler Cheuvreux identified Danone and Swiss food giant Nestle as potential beneficiaries in this evolving consumer goods landscape. Additionally, investment firm Jefferies recommended Danone as a buy amidst broader challenges in the food sector, stemming from consumer spending adjustments in response to high inflation.
