1 00:00:02,560 --> 00:00:10,039 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I'm Stephen Carroll and 2 00:00:10,119 --> 00:00:12,560 Speaker 1: this is Here's Why, where we take one new story 3 00:00:12,600 --> 00:00:14,520 Speaker 1: and explain it in just a few minutes with our 4 00:00:14,560 --> 00:00:16,200 Speaker 1: experts here at Bloomberg. 5 00:00:19,360 --> 00:00:22,520 Speaker 2: After decades of research, basically over finds the molecules that 6 00:00:22,600 --> 00:00:25,800 Speaker 2: changes everything in terms of weight loss drugs. 7 00:00:26,000 --> 00:00:28,800 Speaker 1: The potential size of this market is massive. 8 00:00:29,200 --> 00:00:31,400 Speaker 2: Right in the obesity and diabetes market. One of the 9 00:00:31,400 --> 00:00:35,680 Speaker 2: most transformative drugs on the market today are anti obesity drugs. 10 00:00:35,920 --> 00:00:38,319 Speaker 1: They're game changers for those who take them, and they're 11 00:00:38,360 --> 00:00:42,239 Speaker 1: earning millions of dollars for pharmaceutical companies. The demand for 12 00:00:42,280 --> 00:00:45,720 Speaker 1: obesity drugs like ozepic and zep bound, collectively known as 13 00:00:45,760 --> 00:00:49,560 Speaker 1: GLP one, has skyrocketed. A study published in May twenty 14 00:00:49,640 --> 00:00:52,920 Speaker 1: twenty four found one in eight American adults had tried them. 15 00:00:53,040 --> 00:00:55,880 Speaker 1: As that's likely to rise. Food companies have been taking 16 00:00:55,920 --> 00:00:59,600 Speaker 1: notice of shifting eating habits and making changes too. It's 17 00:00:59,640 --> 00:01:03,279 Speaker 1: actually helping business, but in sort of surprising ways, this 18 00:01:03,600 --> 00:01:07,399 Speaker 1: side economy has sort of formed alongside the drugs. So 19 00:01:07,480 --> 00:01:11,000 Speaker 1: when you are under GP one medication, what you need 20 00:01:11,160 --> 00:01:15,160 Speaker 1: is high quality protein. The high pautein low FETL sugar 21 00:01:15,280 --> 00:01:17,640 Speaker 1: is flying off the shed. They've gone into Hummus space, 22 00:01:18,160 --> 00:01:22,360 Speaker 1: peda chips, and also low calorie and diet sodas. They've 23 00:01:22,400 --> 00:01:26,000 Speaker 1: been introducing a lot of low calorie, low sugar products. 24 00:01:26,080 --> 00:01:30,120 Speaker 1: So here's why obesity drugs are changing the food we buy. 25 00:01:32,000 --> 00:01:35,280 Speaker 1: Theatre Hipwell, who leads our team covering consumer and healthcare companies, 26 00:01:35,360 --> 00:01:37,480 Speaker 1: joins me. Now for more, theator, you're perfectly placed to 27 00:01:37,480 --> 00:01:39,880 Speaker 1: tell us about the two sides of this story. First 28 00:01:39,880 --> 00:01:43,840 Speaker 1: of all, how widespread is the use of GLP one drugs? 29 00:01:44,520 --> 00:01:48,200 Speaker 2: Well, certainly in the US, we're talking about hundreds of 30 00:01:48,200 --> 00:01:50,280 Speaker 2: thousands of people. I mean, it's quite hard to give 31 00:01:50,360 --> 00:01:53,240 Speaker 2: an exact number because more and more people are taking 32 00:01:53,320 --> 00:01:56,280 Speaker 2: it in prescription rates are just on the rise. So 33 00:01:56,440 --> 00:01:58,760 Speaker 2: it is a very big market in the US. But 34 00:01:58,920 --> 00:02:02,240 Speaker 2: even in places Europe where the drugs are starting to 35 00:02:02,280 --> 00:02:04,680 Speaker 2: be rolled out, that's you know, we go via Zempeg 36 00:02:04,920 --> 00:02:09,960 Speaker 2: Manjaro as Eli Lilly's drug is known in Europe are 37 00:02:10,040 --> 00:02:12,320 Speaker 2: rolling out. So you know, I think in a few 38 00:02:12,360 --> 00:02:14,920 Speaker 2: years time we could be talking about millions of people, 39 00:02:14,960 --> 00:02:17,000 Speaker 2: but for now we're in the hundreds and thousands. 40 00:02:17,320 --> 00:02:19,760 Speaker 1: Erritry and those names evolving as well as you point 41 00:02:19,760 --> 00:02:22,160 Speaker 1: out more of them to add to the list. What 42 00:02:22,240 --> 00:02:25,880 Speaker 1: effect do these drugs have on people's eating habits. 43 00:02:26,160 --> 00:02:29,000 Speaker 2: It's pretty dramatic. I mean a lot of people talk 44 00:02:29,080 --> 00:02:31,760 Speaker 2: about just the removal of food noise. So for some 45 00:02:31,800 --> 00:02:34,400 Speaker 2: people they just completely lose their appetite to the point 46 00:02:34,440 --> 00:02:37,919 Speaker 2: where they actually have to force themselves to eat. People 47 00:02:37,919 --> 00:02:42,520 Speaker 2: are eating smaller portions, They're eating foods that previously may 48 00:02:42,560 --> 00:02:45,920 Speaker 2: not have appealed to them. People are eating less high 49 00:02:45,919 --> 00:02:50,160 Speaker 2: calorie foods. People even report struggling to drink water sometimes 50 00:02:50,200 --> 00:02:52,760 Speaker 2: because the way these drugs work is they slow down 51 00:02:53,320 --> 00:02:55,600 Speaker 2: the movement of the food through the system and they 52 00:02:55,639 --> 00:02:58,640 Speaker 2: reduce your appetite, so you just have a feeling of 53 00:02:58,680 --> 00:03:02,040 Speaker 2: continual fullness, and so sometimes that can actually be quite 54 00:03:02,040 --> 00:03:04,720 Speaker 2: difficult to eat or even drink. And people talk about 55 00:03:04,840 --> 00:03:07,640 Speaker 2: changing taste, for some people saying that they no longer 56 00:03:07,720 --> 00:03:11,480 Speaker 2: like the taste of alcohol, so this is really pretty dramatic. Also, 57 00:03:11,520 --> 00:03:15,320 Speaker 2: these drugs have some quite unpleasant gastro intestinal side effects, 58 00:03:15,480 --> 00:03:18,919 Speaker 2: including nausea, constipation, diarrhea, which, of course, if you're feeling 59 00:03:18,960 --> 00:03:22,040 Speaker 2: those effects, will further reduce your desire to eat. So 60 00:03:22,080 --> 00:03:24,440 Speaker 2: that's why we're seeing such dramatic weight loss. 61 00:03:24,720 --> 00:03:27,600 Speaker 1: Now, food companies have been reacting to this as well, 62 00:03:27,720 --> 00:03:30,440 Speaker 1: some of them announcing some of the changes that they've made. 63 00:03:30,680 --> 00:03:31,680 Speaker 1: What are they doing? 64 00:03:32,240 --> 00:03:34,880 Speaker 2: If we go right back to twenty twenty three, when 65 00:03:34,920 --> 00:03:39,640 Speaker 2: these drugs were really entering the public consciousness, Walmart kind 66 00:03:39,640 --> 00:03:41,360 Speaker 2: of freaked everyone out a bit when they said that 67 00:03:41,400 --> 00:03:47,040 Speaker 2: they could already see reduced demand for food from their data, because, 68 00:03:47,040 --> 00:03:49,760 Speaker 2: of course Walmart has a pharmacy line, so they were 69 00:03:49,800 --> 00:03:52,080 Speaker 2: able to see that people on these drugs were making 70 00:03:52,160 --> 00:03:56,840 Speaker 2: different shopping choices and were buying less. Since then, there's 71 00:03:56,880 --> 00:03:59,800 Speaker 2: been this talk that this is going to affect food companies. 72 00:04:00,040 --> 00:04:01,560 Speaker 2: Of course it will, and they're all aware of it 73 00:04:01,560 --> 00:04:03,760 Speaker 2: and they're all talking about it. One thing I would 74 00:04:03,800 --> 00:04:07,320 Speaker 2: say a slight caveat is to be honest, consumer groups 75 00:04:07,320 --> 00:04:10,440 Speaker 2: have faced a lot of challenges in the last few years, inflation, 76 00:04:10,920 --> 00:04:15,560 Speaker 2: returning inflation in some markets, tariffs now dipping consumer sentiments. 77 00:04:15,600 --> 00:04:19,760 Speaker 2: So it's quite hard to necessarily pin this entirely on 78 00:04:19,839 --> 00:04:23,520 Speaker 2: GLP one drugs, but it's certainly something that they have 79 00:04:23,600 --> 00:04:25,840 Speaker 2: to think about, and some see it as an opportunity. 80 00:04:26,240 --> 00:04:28,440 Speaker 2: We have some companies who think that they have products 81 00:04:28,440 --> 00:04:31,159 Speaker 2: that could cater to people on these drugs. 82 00:04:31,320 --> 00:04:32,960 Speaker 1: What sort of products are we talking about what I 83 00:04:32,960 --> 00:04:35,080 Speaker 1: suppose would be of interest to somebody who's taking one 84 00:04:35,080 --> 00:04:35,719 Speaker 1: of these drugs. 85 00:04:35,760 --> 00:04:37,799 Speaker 2: Well, for example, if we look at Nesle, the world's 86 00:04:37,800 --> 00:04:41,479 Speaker 2: biggest food company, they have some products and supplements that 87 00:04:41,520 --> 00:04:44,279 Speaker 2: they think help with areas such as muscle loss, which 88 00:04:44,320 --> 00:04:46,160 Speaker 2: is a problem for people on these drugs. You don't 89 00:04:46,200 --> 00:04:49,160 Speaker 2: only lose fat, you can lose muscle too, So they 90 00:04:49,240 --> 00:04:52,440 Speaker 2: have a product it's like a boost product that you 91 00:04:52,520 --> 00:04:56,600 Speaker 2: take before a meal and it'll help increase apparently the 92 00:04:56,640 --> 00:04:59,359 Speaker 2: absorption of proteins in the food. They also have some 93 00:04:59,440 --> 00:05:02,760 Speaker 2: high protein ten lines. Then you have the French group 94 00:05:02,960 --> 00:05:06,920 Speaker 2: dan On, which makes probiotic yogurts, which obviously they are 95 00:05:07,080 --> 00:05:11,320 Speaker 2: marketing as will help with the gastro side effects. So 96 00:05:11,480 --> 00:05:13,440 Speaker 2: there's a lot of companies that are talking about their 97 00:05:13,480 --> 00:05:16,799 Speaker 2: products and how they could help people who are facing 98 00:05:16,880 --> 00:05:19,680 Speaker 2: quite significant changes to what they like and what they 99 00:05:19,800 --> 00:05:23,360 Speaker 2: like to eat, because people's tastes are changing on these drugs. 100 00:05:23,040 --> 00:05:25,599 Speaker 1: And are they preparing for this trend then to accelerate 101 00:05:25,640 --> 00:05:28,120 Speaker 1: we're talking about the increased development of these drugs. There 102 00:05:28,120 --> 00:05:30,359 Speaker 1: are more brands coming on the market as well. Is 103 00:05:30,360 --> 00:05:32,279 Speaker 1: it something that I suppose is going to be a 104 00:05:32,320 --> 00:05:33,839 Speaker 1: gearshift down the line. 105 00:05:33,960 --> 00:05:36,800 Speaker 2: It's definitely something that that's only going to accelerate. Like, 106 00:05:36,880 --> 00:05:39,400 Speaker 2: these drugs aren't going to go away. There's going to 107 00:05:39,400 --> 00:05:41,800 Speaker 2: be more and more people taking them in Europe and 108 00:05:41,839 --> 00:05:45,080 Speaker 2: in other markets. Plus, the market is getting bigger in 109 00:05:45,160 --> 00:05:47,479 Speaker 2: terms of the drugs available. It's no longer just a 110 00:05:47,560 --> 00:05:50,000 Speaker 2: race between Novo Ordis, the maker of we Govi, and 111 00:05:50,040 --> 00:05:52,880 Speaker 2: Eli Lilly, the maker of zip Bound. We have more 112 00:05:52,880 --> 00:05:56,200 Speaker 2: companies coming with more products, and that will make it 113 00:05:56,240 --> 00:05:58,440 Speaker 2: easier for people to get onto these drugs. So I 114 00:05:58,480 --> 00:06:01,560 Speaker 2: think it's definitely a trend. They're going to have to 115 00:06:01,600 --> 00:06:03,000 Speaker 2: think about what. 116 00:06:02,960 --> 00:06:05,320 Speaker 1: Are the next key changes that we're watching for in 117 00:06:05,360 --> 00:06:05,920 Speaker 1: this sector. 118 00:06:06,880 --> 00:06:09,760 Speaker 2: Moving slightly aside from the drugs, the biggest change in 119 00:06:09,800 --> 00:06:12,000 Speaker 2: the sector, particularly in the US, is probably going to 120 00:06:12,000 --> 00:06:15,479 Speaker 2: be the impact of RFK, you know, and his Make 121 00:06:15,520 --> 00:06:18,240 Speaker 2: America Healthy Again, because in the short term that might 122 00:06:18,320 --> 00:06:22,039 Speaker 2: be more of an immediate challenge for food companies because 123 00:06:22,080 --> 00:06:26,720 Speaker 2: he wants to move away from ultra processed food manufacturing. 124 00:06:26,800 --> 00:06:31,599 Speaker 2: He wants less use of colorant and seed oils and 125 00:06:31,720 --> 00:06:35,680 Speaker 2: high fructose syrup. So those companies are facing an immediate 126 00:06:35,960 --> 00:06:39,000 Speaker 2: challenge there because he's going to be probably pushing for 127 00:06:39,120 --> 00:06:43,040 Speaker 2: some quite significant changes, Whereas what's happening with the GLP 128 00:06:43,120 --> 00:06:46,040 Speaker 2: on drugs is significant, but I think it could still 129 00:06:46,080 --> 00:06:49,440 Speaker 2: take some time before it's really starting to affect the 130 00:06:49,440 --> 00:06:51,520 Speaker 2: bottom line of these companies, because I mean these are 131 00:06:51,520 --> 00:06:54,000 Speaker 2: companies with like tens of billions of revenue, and as 132 00:06:54,040 --> 00:06:55,440 Speaker 2: I said at the start, you know, we still only 133 00:06:55,480 --> 00:06:57,800 Speaker 2: have hundreds of thousands of people on this drug. There's 134 00:06:57,839 --> 00:07:01,240 Speaker 2: still a pretty big addressable market for for the food companies, 135 00:07:01,279 --> 00:07:03,040 Speaker 2: but it's just one more thing that they have to 136 00:07:03,200 --> 00:07:03,719 Speaker 2: think about. 137 00:07:04,040 --> 00:07:06,520 Speaker 1: And what we're thinking about the development of the GLP 138 00:07:06,600 --> 00:07:09,520 Speaker 1: one drugs as well, the next generation of these drugs 139 00:07:09,520 --> 00:07:11,280 Speaker 1: is a lot to talk about. The pill form of 140 00:07:11,320 --> 00:07:14,240 Speaker 1: these versus an injection that they are currently. Is that 141 00:07:14,280 --> 00:07:16,720 Speaker 1: seen as another big game change or a shift coming 142 00:07:16,760 --> 00:07:17,560 Speaker 1: down the line? 143 00:07:17,720 --> 00:07:21,840 Speaker 2: Definitely, I think the obesity pill will be a big, 144 00:07:21,920 --> 00:07:24,160 Speaker 2: big shift in the market. For the first reason is 145 00:07:24,480 --> 00:07:26,679 Speaker 2: easier to take. I mean, at the moment, these drugs 146 00:07:26,680 --> 00:07:29,280 Speaker 2: aren't necessarily pleasant to take right you're having to inject 147 00:07:29,320 --> 00:07:32,880 Speaker 2: yourself weekly, whereas a pill, you know, it's something you 148 00:07:32,880 --> 00:07:36,200 Speaker 2: could take with your your morning breakfast. It's easier to take. 149 00:07:36,240 --> 00:07:39,480 Speaker 2: But there's also a growing view that the pill format 150 00:07:39,680 --> 00:07:43,360 Speaker 2: has fewer side effects, which I think is a big 151 00:07:43,520 --> 00:07:45,920 Speaker 2: factor because the one other point to mention on these 152 00:07:46,000 --> 00:07:49,040 Speaker 2: these drugs are transforming the way we eat and the 153 00:07:49,040 --> 00:07:51,800 Speaker 2: way we treat obesity, but there is for some people, 154 00:07:51,840 --> 00:07:54,240 Speaker 2: there can be quite a high drop off rate from 155 00:07:54,240 --> 00:07:57,120 Speaker 2: these drugs because it's so unpleasant to be on them. 156 00:07:57,440 --> 00:08:00,320 Speaker 2: So I think that's why the moment, I I still 157 00:08:00,360 --> 00:08:02,160 Speaker 2: think food companies are in a kind of wait and 158 00:08:02,240 --> 00:08:05,280 Speaker 2: see before they make any dramatic shifts, because these drugs 159 00:08:05,320 --> 00:08:07,840 Speaker 2: are still relatively new phenomenon. I mean, it's really only 160 00:08:07,880 --> 00:08:09,920 Speaker 2: been in the last two or three years, So I 161 00:08:09,960 --> 00:08:12,680 Speaker 2: think in the coming years we'll see exactly how many 162 00:08:12,720 --> 00:08:15,840 Speaker 2: people are staying on these drugs and if these shifts 163 00:08:15,880 --> 00:08:19,240 Speaker 2: that the companies are seeing now are permanent. But definitely, 164 00:08:19,280 --> 00:08:22,720 Speaker 2: if I was a food company CEO and the obesity 165 00:08:22,760 --> 00:08:25,400 Speaker 2: drugs keep coming out with easier to take and to 166 00:08:25,880 --> 00:08:27,520 Speaker 2: handle drugs, I'd be a bit worried. 167 00:08:27,720 --> 00:08:29,880 Speaker 1: Deeter here, well, thank you for bringing us your expertise 168 00:08:29,880 --> 00:08:33,600 Speaker 1: on the consumer and healthcare sectors. For more explanations like 169 00:08:33,640 --> 00:08:36,040 Speaker 1: this from our team of three thousand journalists and analysts 170 00:08:36,080 --> 00:08:40,000 Speaker 1: around the world, go to Bloomberg dot com slash explainers. 171 00:08:40,320 --> 00:08:42,960 Speaker 1: I'm Stephen Carroll. This is here's why. I'll be back 172 00:08:42,960 --> 00:08:44,760 Speaker 1: next week with more. Thanks for listening.