Conagra is currently studying consumer behavior to anticipate potential changes
Slim Jim beef jerky maker Conagra Brands said on Thursday it may consider changing portion sizes of its snacks if the rising use of weight-loss drugs results in changes to food consumption patterns.
Drugs such as Wegovy and Ozempic belong to a class of drugs known as GLP-1 agonists that were developed to treat type 2 diabetes, but also mimic a gut hormone that suppresses appetite and promotes a feeling of fullness.
Sales of these drugs are soaring, leading to questions about whether greater consumer focus on weight loss could dampen sales for snack producers such as Nestle, Mondelez International and Kraft Heinz.
"If we end up seeing changes in consumer eating patterns, let's say they go to smaller portions ... (then) we design smaller portions," CEO Sean Connolly said on a quarterly conference call.
Conagra, which also makes Act II popcorn, may consider changing the ingredients in some products if consumer preferences change, Connolly said, but added that he did not see such adjustments being necessary in the next six months.
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The company logo for Conagra Brands Inc. is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, on April 10, 2023. (REUTERS/Brendan McDermid/File Photo)
Connolly told Reuters that Conagra's scientists are studying consumer behavior for potential shifts.
"Clearly one of the things that (scientists) can see in the marketplace now are the early days of these drugs that are being used to help people manage their weight," he said. "One of the things that companies will need to do is understand what will be the implications ... if that behavior becomes more broad based."
Adoption of weight-loss drugs could force food companies to reconsider their revenue and profit forecasts, and change recipes, said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
"It is definitely a concern that the weight-loss drugs will possibly have a significant impact on a lot of packaged consumer goods," Schulman said.
CFRA Research analyst Arun Sundaram said some packaged food companies are worried about the drugs' long-term impact since they sell products that are high in sugar and not necessarily healthy.
