Despite Ozempic and RFK Jr., Uncrustables and Twinkies believe ‘very strongly that snacking continues’
New York
CNN
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The makers of weight loss drugs and Robert F. Kennedy Jr. are both pushing for Americans to change their diets. But the owner of Twinkies and Uncrustables is predicting that nothing will be able to stop America's insatiable hunger for snacks.
"As it relates to anything in the political domain, we believe very strongly that snacking continues," J.M. Smucker CEO Mark Smucker said on an earnings call with analysts Tuesday. "Consumers are going to continue to look for a way to reward themselves at different times throughout the day."
The food giant's answer came in response to an analyst question about whether Kennedy's "Make America Healthy Again" agenda could hurt the company. Kennedy, who President-elect Donald Trump has picked as his nominee for secretary of the Health and Human Services Department, has advocated for banning artificial food coloring and pesticides. He has also proposed limiting access to soda and processed foods through school lunches and the Supplemental Nutrition Assistance Program. Kennedy has said there are "chemical poisons" in chips, gummy bears and other popular snacks and wants to ban them.
Kennedy "takes a much more hostile view of food companies than previous administrations," Alexia Howard, an analyst at Bernstein, said in a report to clients last week. "Potential policy changes could impact the (food) sector." Pepsi, General Mills, Kellogg, Kraft Heinz and other food giants' stocks fell sharply earlier this month when Trump announced Kennedy's nomination.
Kennedy still has to be confirmed by the US Senate, and it's not clear what his specific plans are, nor whether cracking down on food companies will be a priority for a Trump administration that has promised sweeping deregulation of industries.
Food companies aren't betting on Kennedy and the Trump administration to influence their businesses and Americans' eating habits.
"The food industry ought to be quaking in its boots, but they don't think it's going to happen," Marion Nestle, a leading authority on nutrition and food policy at New York University, said in an interview last week with CNN.
A box of J.M. Smucker Co. Smucker's Uncrustables brand peanut butter and grape jelly sandwiches is arranged for a photograph in Tiskilwa, Illinois, U.S., on Tuesday, June 6, 2017.
Daniel Acker/Bloomberg/Getty Images
Smucker believes that its food brands' appeal and Americans' craving for snacks will outweigh any changes Kennedy may bring. Around half of Americans say they eat three or more snacks a day, according to market research firm Circana.
Smucker also said it has not seen any "material impact" to its business from the growth of GLP-1 medications millions of people are now using for weight loss.
Research shows that 1 in 8 adults in the US has used one of the popular GLP-1 medications, including Ozempic and Wegovy. Millions more senior citizens and lower-income Americans could obtain coverage for costly anti-obesity drugs under a proposal unveiled Tuesday by the Biden administration.
Smucker may start to make changes to some of its food brands to adapt to more people taking GLP-1 medications and any changes in their diets.
"We continue to do an ongoing research on the impact of GLP-1 trends and what that might mean for our business," CEO Mark Smucker said on the call. "We could look at reducing sugar. There's a whole variety of innovations that we will bring to bear."
Other food companies are adjusting their strategies as well in response to the rise of weight loss drugs. That could be a bigger lift for companies that mostly sell unhealthy snacks and sweets.
Nestlé, the Switzerland-based food and supplement manufacturer, announced a new line of frozen meals called Vital Pursuit this summer. The brand includes meals high in protein and fiber that are "intended to be a companion for GLP-1 weight loss medication users and consumers focused on weight management."
