Weight Loss Drugs: the Black Swan that's Threatening the Wine Industry
A few years ago, nobody had heard of Ozempic, Wegovy or Mounjaro. Now they are part of a growing number of people's daily life. And a possible threat to wine.
(This post had minor edits on 16/07/25 to clarify the last paragraph)
In business, as in life, we would all do well to be aware of ‘Black Swans’ - occurrences defined as rare and unpredictable, with severe consequences.
Trump tariffs and Putin’s most recent invasion of Ukraine are not Black Swans. Anyone who was paying attention to the current US president’s first administration and the Russian leader’s annexing of Crimea, should have seen both coming - at least potentially.
GLP-1 (Glucagon-Like Peptide-1) drugs however, look like being a Big Black Swan for food and drinks businesses.
As ‘veteran investor’ Terry Smith said in January as he divested his £22.5 billion Fundsmith Equity Fund from Diageo
“We suspect the entire drinks sector is in the early stages of being impacted negatively by weight-loss drugs… Indeed, it seems likely that the drugs will eventually be used to treat alcoholism such is their effect on consumption”.
Jamie Ross, a portfolio manager at Henderson EuroTrust, was less certain, but still concerned, asking
“Will people taking weight-loss drugs drink less alcohol? Will they avoid frozen food? Will sugar consumption be hit? These are all questions that inform investment decisions today but the answers will not be visible for several years to come.”
Background
While they have a relatively long history of treatment for diabetes, it was as recent as 2014 that a GLP-1 agonist - a substance that mimics the actions of a neurotransmitter
