Nestle CEO says weight-loss drugs no threat to coffee business
Reuters
Published Dec 20, 2023 07:01AM ET
ZURICH (Reuters) - Nestle sees no threat to its huge coffee business from the rising popularity of weight-loss drugs like Eli Lilly (NYSE:LLY)'s Zepbound and Novo Nordisk (NYSE:NVO)'s Wegovy, Chief Executive Mark Schneider said on Wednesday.
Instead the executive sees opportunities for Nestle to expand its health science business, providing protein bars, powders and drinks for people taking the drugs, known as GLP-1 agonists.
"To dispel the myths, we haven't seen evidence that GLP-1 patients have a reduced appetite for coffee," Schneider wrote in a post on LinkedIn.
Coffee is critical for Nestle, the world's biggest food company which includes Nescafe Nespresso capsule coffees among its brands.
The category makes up around 20% of the Swiss company's annual sales which last year reached 94.4 billion Swiss francs ($109.53 billion).
The popularity of the new drugs has prompted concerns in the consumer and retail industry over whether food and drink sales will be impacted.
The drugs, originally designed to treat type 2 diabetes, have been shown to reduce food cravings and cause the stomach to empty more slowly.
Patients taking the drugs could lose lean muscle mass, a situation which could be countered by increasing protein intake and exercise, Schneider said.
"While GLP-1 patients may consume less sugar-laden or fatty foods, they will need to meet their nutritional needs through other foods, beverages, and supplements," said Schneider.
Nestle was already seeing increasing demand for protein powders, bars and drinks, he said, while vitamin and nutritional supplements had potential.
"Within Nestle Health Science alone, we already have more than 1.5 billion Swiss francs of revenue coming from products that provide nutritional benefits suitable to GLP-1 patients," Schneider said.
Although the business was mainly focussed on North America, where GLP-1 adoption was highest, Nestle was examining a broader geographical rollout of its products, Schneider said.
New products would also be launched next year to exploit the trend, Schneider said, without giving details.
($1 = 0.8619 Swiss francs)
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Written By: Reuters
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