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A new class of weight loss drugs has shaken global equity markets, impacting shares in F&B companies in response to potential changes in consumer behaviours. More US consumers are taking prescription drugs like Ozempic and Wegovy, which suppress appetites and consumption. As businesses brace for an explosion in the use of new weight loss drugs, some investors expect the medications to precipitate seismic shifts in how consumers eat, as well as which clothes they buy. Shares in major players in the food and beverage industry have dropped, with many companies citing the potential impact of weight loss and diabetes drugs like Ozempic, as potentially lower indulgence among consumers weighs in on F&B stocks. In a note to clients earlier this month, Bank of America analysts forecasted total US calorie intake to decline between 1% and 3% by 2030. In a recent report, Morgan Stanley Research analysts estimated that 24 million people, or 7% of the US population, will be using the drugs by 2035. Some companies say they are already noticing a difference in how takers of these drugs shop. A Walmart executive told Bloomberg last week that the retailer found people taking drugs such as Ozempic bought slightly less food than other customers. "We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket," Walmart US CEO John Furner told Bloomberg. "Just less units, slightly less calories." Shares of Mondelez International, maker of Cadbury’s and Oreos, fell 7.7% during the following two days. The Hershey Co. and PepsiCo also saw their stocks slide. At the same time, Truist Bank cut its outlook for shares of doughnut chain Krispy Kreme citing the potential impact of weight loss drugs like Ozempic, as potentially lower indulgence among US consumers. Truist analyst Bill Chappell downgraded his rating for Krispy Kreme, attributing the change of heart to the “overhang” on packaged food stocks due to the recent surge in popularity of GLP-1 drugs like Ozempic and Wegovy. He said it is too soon to predict how big of an impact weight loss drugs will have on food consumption. The bank said Krispy Kreme and other comparable stocks’ performance will “be stuck in a holding pattern at best” as the impact of increased usage of the medications becomes apparent, likening the industry outlook to where it stood during the initial surge in popularity of low-carbohydrate diets at the beginning of the century. Other corporate leaders are projecting optimism in regard to how GLP-1 could affect their prospects. Steven Wood Presley, chief executive of Nestle’s North American unit, said at a conference last month that the company was “clearly watching” the impact of the weight loss drugs, adding that they could create an opportunity for its healthier meals. This is a good point, as the hunger suppressors could have the potential to boost desire for healthier and functional foods, offsetting demand.