Surge in Obesity Drugs Shakes Up Food Industry Dynamics

The obesity drug market, driven by GLP-1 receptor agonists like Novo Nordisk's Wegovy and Eli Lilly's Mounjaro, is set to see over a dozen new therapies by 2030. However, this surge is adversely impacting the food and beverage industry, as GLP-1 users purchase less food, particularly snacks and high-carb products, reports J.P. Morgan.

Ken Goldman, Lead Equity Research Analyst, J.P. Morgan, notes that GLP-1 users have purchased 8% less food, including snacks and high-carb products, over the last year. “We have seen many trends come and go, but none quite like GLP-1s,” Goldman said.

Food intake in North America could decrease by 3% by 2030, with a more significant impact on packaged foods. European food companies, which derive 30-40% of their sales from North America, might mitigate potential headwinds due to their broad category and regional exposures. In Mexico, however, ultra-processed goods dominate over 60% of the market, highlights MBN. So far, according to the Pan American Health Organization, Mexico leads in both the sale and consumption of ultra-processed goods, with severe health implications.

Goldman states that grocers might be less affected than packaged food companies, as they sell higher-margin fresh food, which could offset the impact on the center store and snacking in particular. 

Evolution of the Obesity Drug Market

Jasper Morley, Analyst, Global Data, forecasts 13 new obesity treatments to hit the market within the next five years, making it one of the largest pharma markets in history. “Starting in 2024, we expect significant increases in launches each year, peaking with four in 2027 and 2028,” Morley said, highlighting a 333% increase compared to the previous five years.

Novo Nordisk is leading the charge with six upcoming launches, including CagriSema, a combination injectable therapy anticipated to reach the market next year. This drug alone is projected to generate US$7.4 billion in annual sales by 2029, reports the company. Lilly is also in the race, developing a combo drug, retatrutide (GGG), and an oral GLP-1, orforglipron, expected to debut in 2026.

The competition also includes major players like AstraZeneca and Roche, both investing heavily in oral GLP-1 drugs to overcome manufacturing constraints associated with injectables. AstraZeneca acquired rights to Eccogene’s oral GLP-1 candidate for US$185 million, while Roche intends to buy Carmot Therapeutics for US$2.7 billion, acquiring its incretin franchise, reports Medical Marketing And Media (MMM).

Biotech giant Amgen is also diversifying its obesity treatment portfolio with both oral and multispecific products. Pfizer, despite recent setbacks, remains interested. Emerging companies like Structure Therapeutics and Viking Therapeutics are also entering the market, though their results have yet to match industry leaders, reports MBN. 

The obesity drug market’s growth is driven by a rising target population. Data from the 2020 National Health and Nutrition Survey (ENSANUT) shows that 72.1% of Mexicans over 20 years old are overweight or obese. If this trend continues, over 40% of Mexican children aged five to 19 will be obese by 2030, reports MBN. In the US, 42% of adults suffered obesity in 2017-2018, up from 31% in 1999, with CDC projections indicating a 50% obesity rate by 2030.

GlobalData estimates the GLP-1 agonist market will grow at a 19.2% compound annual growth rate, reaching US$105 billion by 2029. The broader GLP-1+ market is expected to hit US$158 billion, according to a Leerink Healthcare Team report.