Tate & Lyle PLC (LSE:TATE) sales face a hit from the rising tide of weight-loss products which could pose a threat to growth for ultra-processed foods.
The food industry has been facing up to the threat from weight loss products which mimic a hormone called glucagon-like peptide-1 (GLP-1), which slows digestion and depresses appetite.
Today, research from Barclays suggested the food ingredients manufacturer was the most exposed to the end-market categories in the US “where GLP-1 impacts on consumption and concerns on terminal growth prospects could be the highest.”
The bank thinks volume-driven packaged food ingredient suppliers are potentially the sub-sector within the broader staples sector that is most exposed to the crescendo in GLP-1 concerns on long-term packaged food industry growth prospects.
“Beyond the GLP-1 debate we think another negative narrative on structural growth for the space could be the growing backlash against ultra-processed foods (UPF) in many developed markets,” it added.
Barclays has moved Tate to equal weight from overweight although it continues to like the “long-term transformation story.”
The broker also cut its financial 2025 EBITDA forecast by a further 3%, leaving it 5% below consensus.
Shares fell 2.8% to 627p.