Weight-loss drugs Wegovy 0Novo Nordisk) and Mounjaro (Eli Lilly) could be a US$100bn market by the end of the decade sparking huge potential lifestyle changes according to one US bank.
Known as Glucagon-like peptide-1 receptor agonists (or GLP-1s), Jefferies projects that the implications of slimmer consumers will mean major behavioural changes across seven sectors with many winners or also plenty of losers.
Originally diabetes treatments, they act to increase the amount of insulin secreted by the pancreas (which lowers blood sugar) and suppress the release of glucagon (which causes the liver to produce sugars and have been proven to help manage Type 2 diabetes and functionally reduce appetites.
Now with patients shedding weight in trials as well, widespread adoption could cause substantial changes in consumption patterns.
Sectors such as clothing retailers might see an immediate boost — to revamp closets — but particularly those with athletic offerings such as Nike, Lululemon and Under Armour.
Similarly, health & wellness products could see a lift while beauty cos could see a tailwind as more consumers look to combat facial changes.
Better health could lead to lower premiums for insurers though delayed mortality should more than offset that through greater investment returns.
"Meanwhile, lighter load factors could lead to better fuel efficiency for airlines, and increased focus on wellbeing could mean more sales of fitness-related devices and the chips that go into them."
At risk, Jefferies highlights restaurants and certain food products longer term.
Beverage makers such as Diageo too look vulnerable, particularly on the alcohol side.
Downstream from them, we anticipate this could have negative implications for the packaging space & food retailers, as volume trends for certain products flatten or decline.
"Agriculture-levered firms, such as farm equipment, may also contend with mixed headwinds.
"And while many consumers are currently able to at least partially offset the cost of the drugs, they remain quite expensive, which could put a damper on bigger ticket
purchases."