Airlines benefit in return: New fat removal injections threaten McDonald’s and Pepsi

Fat burning drugs in Switzerland

However, in Switzerland, those who just want to lose weight have to pay for the medicine themselves, while the expenses of diabetic patients are covered by their health insurance. Diabetes drugs with fat-burning side effects available in Switzerland include Ozempic from the Danish company Novo Nordisk and Mounjaro from the US company Eli Lilly. Wegovy, already approved by Novo Nordisk for the treatment of obesity in the United States, will also be available soon.

Of course, shares of providers Novo Nordisk and Eli Lilly are benefiting from the high demand for these fat-burning drugs. Both Swiss companies profit directly from this. Bachem company can produce the active ingredient of the drug for two suppliers. And Ypsomed can take care of the packaging of products that need to be injected; The pharmaceutical industry is working to offer weight loss pills.

Besides these direct beneficiaries, there will also be many losers from fat burning injections. British bank Barclays even suggests in a study that it may be beneficial to bet on the collapse of McDonald’s and PepsiCo by purchasing credit default swaps (CDS). These are the tools speculators are using to prepare for Credit Suisse’s bankruptcy as early as July 2022.

CDS prices at McDonald’s haven’t really increased (yet) and speculating on bankruptcy seems a bit far-fetched. However, as the world, especially the US world, shrinks, McDonald’s and PepsiCo’s sales will suffer greatly. 70 percent of people there are overweight and 40 percent are obese.

Nine million fewer Big Macs a day

With fat-burning medications like Ozempic, they lose an average of 11 percent weight and consume 24 percent fewer calories. Because the active ingredient in these drugs creates a feeling of fullness more quickly. Additionally, food stays in the stomach longer, which makes the feeling of fullness last longer.

Assuming average calorie consumption is 2,200 calories, a 24 percent reduction would mean almost exactly one less Big Mac per day. If 9 million Americans ate one less Big Mac a day, that would mean billions of dollars less in revenue for McDonald’s.

If everyone who was overweight took Ozempic, it would be difficult not just for McDonald’s, but for the entire fast food industry and snack manufacturers like Mondelez. It also applies to manufacturers of sweet beverages such as PepsiCo and Coca-Cola. This is exactly what the Barclays study predicts.

John Furner, chairman of US company Walmart, is already seeing the first effects on purchasing behaviour. Because his company not only sells food and beverages but also operates pharmacies in 5,200 shopping malls, he can anonymously track whether fat-burning drug users are buying less, meaning fewer products and fewer calories.

While people are injecting themselves with paint thinner, Nestlé needs new business ideas too

From this perspective, it’s no surprise that Swiss food multinational Nestlé is pushing its healthcare division. From the perspective of Swiss investors, it should be borne in mind that Lindt & Sprüngli could also be seriously affected by fat burning drugs.

Losers can go far beyond food and drink. There is at least anecdotal evidence that fat-burning drugs also reduce cravings for alcohol and cigarettes. This could affect alcohol companies Anheuser Busch, Constellation Brands, Ambev and Diageo, as well as tobacco companies Altria, British American Tobacco and Philipp Morris International.

Additionally, some healthcare companies that make a large portion of their sales from obese people may be among the losers. This includes US company Boston Scientific. Healthcare providers are also likely to lose sales because fat-burning drugs are not only effective against diabetes and obesity but also aim to reduce the risk of heart attack, stroke, and cardiovascular problems.

It could also affect parts of the entertainment industry, such as television stations and Netflix. Because research has shown that overweight people watch television more and for longer periods of time. As they get thinner, they will likely move around more and sit on the couch less.

United Airlines would make $80 million more profit if passengers lost 10 pounds

In addition to many losing sectors, there are likely to be winners as well. For example, the aircraft industry. Because this has two big cost blocks: personnel and kerosene. The less weight an aircraft must carry, the less kerosene is used.

An analyst at US investment bank Jeffries calculated that United Airlines could save more than $80 million a year if passengers were 5 kilograms lighter on average. Fat-burning drugs may increase airline stocks.

All of this assumes that fat-burning drug sales continue to grow as strongly as they have over the past three years. Everything points to that right now. Novo Nordisk is currently the most valuable company in Europe, with a market value of approximately $340 billion. And it may become even more valuable. Because those who use fat burning drugs are not only overweight people, but also those who want to lose an extra five or ten kilos.