Nestle CEO, Mark Schneider, Downplays Impact of Weight-Loss Drugs on Coffee Sales
Nestle (NESN.S) Chief Executive, Mark Schneider, expressed confidence that the increasing popularity of weight-loss drugs, such as Eli Lilly’s (LLY.N) Zepbound and Novo Nordisk’s (NOVOb.CO) Wegovy, poses no threat to the company’s extensive coffee business. Instead, Schneider views potential opportunities for Nestle to expand its health science business by providing protein bars, powders, and drinks for individuals using GLP-1 agonists, a category that includes the aforementioned drugs.
“To dispel the myths, we haven’t seen evidence that GLP-1 patients have a reduced appetite for coffee,” Schneider wrote in a post on LinkedIn, emphasizing the importance of coffee to Nestle, the world’s largest food company. Nestle’s coffee products, including Nescafe and Nespresso capsule coffees, contribute around 20% to the Swiss company’s annual sales, which reached 94.4 billion Swiss francs ($109.53 billion) last year.
The rising popularity of weight-loss drugs has raised concerns in the consumer and retail industry about potential impacts on food and drink sales. These drugs, initially designed for treating type 2 diabetes, have demonstrated the ability to reduce food cravings and slow stomach emptying.
Schneider acknowledged potential side effects for patients taking these drugs, such as the loss of lean muscle mass, and proposed that increasing protein intake and exercise could counteract these effects. He stated, “While GLP-1 patients may consume less sugar-laden or fatty foods, they will need to meet their nutritional needs through other foods, beverages, and supplements.”
Nestle is already witnessing increased demand for protein powders, bars, and drinks, and Schneider highlighted the potential in vitamin and nutritional supplements. “Within Nestle Health Science alone, we already have more than 1.5 billion Swiss francs of revenue coming from products that provide nutritional benefits suitable to GLP-1 patients,” said Schneider.
Although Nestle’s health science business is primarily focused on North America, where GLP-1 adoption is highest, Schneider revealed that the company is exploring a broader geographical rollout of its products. Additionally, new products aligned with this trend are slated to be launched next year, according to Schneider, although specific details were not provided.
