Thinning staples

The last two years have formed one of the toughest periods on record for consumer staples stocks. The emergence of, so-called GLP-1 drugs to treat weight loss pressured share prices in the packaged food space. Drugs like Novo Nordisk’s Ozempic and Wegovy not only help people manage diabetes, but also aid weight loss among patients suffering from obesity. Concern that more widespread adoption of weight loss drugs would cause people to eat less snack food led to a 16% decline in a Morgan Stanley index of stocks thought to be GLP-1 losers, versus an index of GLP-1 beneficiaries which rose 46% during 2023. We discuss prospects for the consumer staples in our recent paper, Consumer trends in 2024: The resilient shopper.

The gap between stocks deemed to be beneficiaries versus victims of GLP-1 drugs

Source: Morgan Stanley, Bloomberg, January 2024