Novo Nordisk A/S (NYSE: NVO) stock is up 38.97% this year on the strength of weight loss drug Ozempic, and diabetes treatment Wegovy.

But does Novo Nordisk’s good fortune translate to lower sales for companies like Walmart Inc. (NYSE: WMT), Coca-Cola Co. (NYSE: KO) and PepsiCo Inc. (NASDAQ: PEP)? 

In the most recent quarter, Novo Nordisk’s obesity care business grew by 158%. 

That’s great news for Novo Nordisk and its shareholders, but in recent weeks, some companies have expressed concern that Ozempic could put a dent in their food sales.

Ozempic mimics a hormone that naturally occurs. As those hormone levels increase, your brain believes your body is full, which curbs appetite. It also slows down the digestion process, further contributing to the feeling of being full. 

A Walmart executive recently said drugs like Ozempic, Wegovy and Eli Lilly & Co’s (NYSE: LLY) Mounjaro could cut into consumer behavior when it comes to snack foods. 

Customers Buying Fewer High-Calorie Foods

John Furner, the chief executive of Walmart U.S., said customers were buying fewer groceries and in particular, slashing their spending on high-calorie items. 

Walmart shares tumbled 1.68% on October 6, following the news, which broke in an interview Furner gave to Bloomberg. He said Walmart can track which of its customers are taking weight-loss drugs, by anonymized data mining of customers’ prescriptions at the company’s pharmacies. It can cross-reference those against those shoppers’ grocery purchases. 

Furner said Walmart had identified a small pullback in overall grocery buying, with customers taking Ozempic purchasing foods with a slightly lower calorie count. 

However, Walmart also said its pharmacy business is benefiting from sales of weight-loss drugs. 

The question of whether appetite suppressants will cut into food sales has been debated for the past couple of months.

Morgan Stanley Sees Americans Cutting Calories

For example, Morgan Stanley estimates that about 24 million Americans will be using weight loss drugs by 2035, resulting in an overall reduction in calorie consumption. Barclays analysts have also said the drugs could threaten fast-food sales.

Walmart is not the only company concerned about the impact of those drugs.

Conagra Brands Inc. (NYSE: CAG) has been studying the potential effects of Ozempic and similar weight loss drugs. The company is taking an optimistic viewpoint. A Conagra executive told the Wall Street Journal that the company’s Healthy Choice and Marie Callender’s frozen meals, along with Birds Eye frozen vegetables, could benefit from shoppers seeking less calorie-laden foods.  

Conagra’s shares didn’t take a hit due to Walmart’s concerns.

However, Coca-Cola and PepsiCo shares both traded lower following the Walmart executive’s comments.

Coca-Cola's fell 4.8% and PepsiCo's shares fell 5.2% after the Walmart news. Coca-Cola’s brand portfolio includes numerous sugary beverages, while PepsiCo’s snack food brands include Frito-Lay, Doritos, Cheetos, Grandma’s Cookies and Rold Gold pretzels, among others. 

PepsiCo Smashes Views 

However, concerns about PepsiCo losing sales from Ozempic users ebbed after the company reported better-than-expected third-quarter results, which you can see using MarketBeat’s PepsiCo earnings data. 

The company boosted its full-year earnings outlook, and added that 2024 earnings and revenue growth should come in near the top of its forecast range.  

Pepsi shares rose 1.88% following the earnings report, which you can see using MarketBeat’s PepsiCo chart. 

PepsiCo analyst ratings show a consensus view of “hold,” with a price target of $182.69, an upside of 12.34%. 

Meanwhile, Mark Smucker, CEO of J.M. Smucker Co. (NYSE: SJM), which recently agreed to acquire snack maker Hostess, best known for Twinkies, said the company is looking into possible effects of weight-loss drugs. However, Smucker told the Wall Street Journal that he’s “bullish” about the future of sweet treats. 

For now, the effects for food makers could be limited, as the weight-loss drugs are administered by a weekly injection, not as convenient as popping a pill. However, it’s expected that these medications will eventually be available in pill form, which will likely increase their popularity.