Slim Jim Maker Conagra Brands May Adjust Snack Sizes Due to Weight-Loss Drugs
Conagra Brands, the company behind Slim Jim beef jerky, has announced that it may modify the portion sizes of its snacks if the increased use of weight-loss drugs leads to changes in eating habits. These drugs, such as Wegovy and Ozempic, fall under the category of GLP-1 agonists initially designed to treat type 2 diabetes but also have the effect of curbing appetite and creating a sensation of fullness.
The surge in the sales of these weight-loss medications has raised questions about whether the growing emphasis on weight management might impact the sales of snack producers like Nestle, Mondelez International, and Kraft Heinz.
During a quarterly conference call, CEO Sean Connolly explained, “If we end up seeing changes in consumer eating patterns, let’s say they go for smaller portions, then we will design smaller portions.” Connolly added that while Conagra, also responsible for Act II popcorn, may contemplate altering product ingredients to align with evolving consumer preferences, such adjustments do not appear to be immediate within the next six months.
Conagra has taken a proactive approach, with its scientists studying consumer behaviors to anticipate potential shifts. Connolly stressed the importance of understanding the implications if the usage of weight-loss drugs becomes more widespread in the market.
Weight-loss drug adoption could necessitate food companies to reevaluate their revenue and profit forecasts, prompting alterations to their recipes. Michael Ashley Schulman, Chief Investment Officer at Running Point Capital Advisors, raised concerns regarding the possible significant impact of weight-loss drugs on various packaged consumer goods.
CFRA Research analyst Arun Sundaram highlighted the apprehensions among some packaged food companies, particularly those producing products high in sugar and not necessarily considered healthy.