How the World Went Ozempic
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Hello and welcome to the TLDR podcast, a show about the culture, gossip and business of money. And this week, the abstinence economy. My name is Devin Friedman. I'm here with my co-host. Matt Keres is the director of product for WellSimple, our sponsor, and is coming to us straight from London. Matthew, you're at your bachelor party, right? Yeah, I am. Does this mean that I'm not invited? Yeah. Yeah, I'm sorry to break it to you.

Honestly, Matthew, the fact that you are on your bachelor party and recording a podcast for TLDR is...

That's dedication. It's great. Also, I'm not the only one who's doing this. One of my friends, you know, used the bachelor party as an excuse to go visit some companies. My other friend brought all of his monitors. He flew with computer monitors? Oh, he always brings his monitors. You can't day trade on a laptop. Work-life balance means something different to you and your friends. Sarah Rieger is the business and markets correspondent to the TLDR newsletter.

Sarah, everyone wants to know what happened to your car. It is rescued from the mountain. Me and my partner were eventually able to get up there and some snow had melted. So we kind of like dug and pushed it out and finally got it rescued. Country Sarah is learning things every day. Truly.

Well, we have an exciting show today. We're going to be talking about whether people are done drinking and what does that mean. We're going to talk about whether people eat anymore or the GLP-1 economy. And later in the show, we're going to be joined by the economist Armin Jelinizian, who's going to help us answer the question, vibe session or recession? But we're going to start the show with a question that gets...

At the most vital economic underpinnings that form our lives

Matt Keres, who is making or losing money that's interesting to you right now? So Weight Watchers investors have lost all their money. The company just went bankrupt. And it actually reported that one of the main reasons that the business failed was the GLP-1s had changed how people were trying to lose weight. And that got me thinking about just how big of a shift there's been in the world and in business driven by the

this new Ozempic trend. Yeah, I'm old enough to have remembered the advent of Prozac.

Remember that book, Prozac Nation, that came out, anyone? I feel like we're in the Ozempic generation. Like, it's kind of a sea change that's happening. Yeah. You know, it's been a couple years since Ozempic really became a cultural phenomenon. The moment that sticks out to me is that moment at the Oscars when Jimmy Kimmel made the joke about everyone being on Ozempic. When I look around this room, I can't help but wonder, is Ozempic right for me? Yeah.

Right after that happened, there was a burst of news and it was the only thing that people could talk about was how it was. Epic was going to revolutionize the health care industry. And there were these two new giants and it was going to change the food industry and nobody was going to go to the gym anymore. And then the news sort of died. And I can forgive people for losing interest. I mean, there was a trade war and then Trump is, you know, come on the scene and all this other stuff. But, you know, when you actually look at the data, it's it's happening.

Surveys suggest that 10% of the U.S. and Canadian population have used Ozempic or another one of the GLP-1 type drugs, you know, Wagovi, all that kind of stuff. I mean, 10% is a lot. Yeah, one in 10 people. That's a lot.

That's not all for weight loss, though, right? Like, isn't about half of that for diabetics? It's a little bit unclear how much is for diabetics versus for weight loss. But, you know, increasingly it has been used for weight loss. So that's point one is, you know, that's a lot of people.

The second thing is like people now talk about like Eli Lilly and Novo Nordisk, these like massive companies as if, you know, their household names. Eli Lilly is the 15th biggest company in the world. It's like, you know, comparable to like the tech giants. And it wasn't until, you know, it created Wagovi a couple of years ago. So a lot of people are using it. And now increasingly, like you're hearing it on earnings calls and newsletters.

being used to justify like big corporate decisions in the weight loss and food space. Notable examples, the Nestle CEO has talked about how they're launching, you know, different kinds of foods to appeal to people that are on these drugs. Nestle is the world's biggest food maker and maker of like Toll House and Haagen-Dazs. And they, you know, looking at their offerings and are like, maybe we need some other stuff because, you know, people might be having less Haagen-Dazs if they're on these drugs.

The other thing, Matt, is this is one of those things where like there's something revolutionary happens. There are all sorts of proclamations about what it means and prognostications about how much it's going to shift the world. And there are stories about like the snack food industry is over and gyms are over. It's been a while since that sort of opening salvo happened.

What do we know about how it's actually going to change things? Yeah, I think whenever there's a big shift like this, there's really two questions. Like, is it actually going to happen? And then if it does, like, what are the impacts going to be? And, you know, throughout history, there's been a lot of these big shifts where they have come about.

but the impacts have been very different from what people thought. Like one big example I like to think about is the telecom boom in the 90s. Like everyone knew that telecom was happening. The internet was going to be a big thing, but they thought the people that were going to benefit were the telecom companies laying the wires. And actually it turned out that like that was not a good business to be in. And it was,

software companies that use the wires. Right. This is one of your favorite examples of, you know, trying to figure out who the winners are going to be, which is like, no one was wrong that the internet was a big deal. They were just wrong about

who was going to benefit from that. Yeah. Is it possible that the drug makers aren't going to be the big winners here? Yeah, that's entirely possible. And I think that's the question that investors are working through right now. The thing we've seen so far is that

It's just been a shift between different drug makers. You know, it's kind of funny, like even though people colloquially call these drugs Ozempic, the maker of Ozempic has actually been innovating less than Eli Lilly. And breaking news today is that Novo Nordisk fired their CEO. The stock price is down 60%.

Why are they doing badly if this is such a big deal? Because there have been a lot of competitors that have made similar drugs that are driving down the price and innovating on the form that it's come out in. Right now, the biggest innovation is the move from these injections, which is the current way you take the drug. And Eli Lilly is the first one to announce an edible version. But, you know, I think there is a question more broadly about whether

Any of these drug makers are going to be winners or if that, you know, all of that is just going to be competed away. And the main people who would win then are just the people who react to the changing tastes of the society after that. Matthew, are your friends on Ozempic?

None of them are, but we did have a conversation last night. It seems like everyone knows at least one person on it. I know tons of people, tons of people who take this. Kate, this is the part that's so interesting to me because it feels like a real like wealth or class indicator right now.

I think my friends and like the average salary, I think, is like around the median in Canada, which is a take home of thirty nine thousand. And if this isn't covered by your drug provider, it's a couple hundred bucks a month. Around 15K a year on average, actually. Yeah, I think we need to take one moment for an important side conversation, which is what do you think the best name is for one of these drugs?

We go V doesn't sound great. It sounds like an exercise class that you use shake weights for. Ozempic is the catchiest, I gotta say. I mean, because it shortens like, everyone could be like, are you on the O? Everyone's on the O. That's what all the cool kids call it these days. I will not say, I would never say that. And I believe Ozempic babies was also the theme of the Met Gala.

Sarah Rieger, who is making or losing money that's interesting to you right now? Non-alcoholic drink makers have really been cashing in. So sales of non-alcoholic drinks in Canada hit almost $200 million last year, which is a 24% increase from the year before, while consumption of alcohol hasn't really risen very much. I have been reading about this a lot.

I will start out the segment, of course, with a personal anecdote. My wife had to take some medicine and she couldn't drink. And so she has been for a month on the non-alcoholic beverage game is extremely strong and also not cheap. Her fancy non-alcoholic wine is the same price as regular wine. Yeah, it's pricey for sure. But this is a trend that's been going on, right? Like people are just drinking less.

Is that right? Yeah, and that's been happening for a while. About 25 years now, younger generations have just been consuming less alcohol. There was this survey from Gallup in the U.S. that found that in the early 2000s, 72% of adults under age 35 drank alcohol. But by 2023, that was just 62%.

And there's a bunch of social theories around why that is. Like, people are socializing less. People might have less cash to spend on booze rather than groceries. People are maybe enjoying stuff like cannabis instead. And there's also just, like, all of the wellness trends. But I think a big part, too, is those health warnings about alcohol that have come out in the last couple of years. Yes. Several people passed the Andrew Huberman podcast episode about alcohol to me. Consumption of zero ounces of alcohol.

is going to be better for your health than low to moderate consumption of alcohol.

Have you ever listened to that hour-long warning about how there's no safe amount of alcohol? Well, that's the big thing, right? In 2023, the World Health Organization put out that statement. And health leaders in the U.S. and Canada have actually been calling for cancer warnings to be put on labels because booze is classed as a group one carcinogen. So that's the same as like cigarettes or having asbestos in your home. This is not what we should be telling Matt while he's at his bachelor party in the drinkingest country in the world, the U.K.,

Sarah, is there an economic story here? If you're like Anheuser-Busch or Molson or Stoli...

Are you screwed? Yes and no. So like alcohol producer stocks are performing below the S&P this year, but winemakers are doing way worse than brewers. And I think that's because brewers have been faster to capitalize on this trend. So many breweries like Guinness, Molson, Budweiser have either bought stakes in non-alcoholic beer companies or they make their own in-house. But they've got to be freaking out. If this is real, if it's like, hey, we're on the downward slope here,

There's only so much like fake booze people want to drink. Doesn't have the same addictive quality as the actual alcohol.

It depends, right? Because the market is growing, but you have to just look at how small of a piece it is of the overall alcohol market, like $200 million versus $26 billion. It's definitely taking out a chunk, but I don't think there's evidence yet that beer makers need to be running for the hills. That being said, though, new non-alcoholic beer companies are doing super, super well. Athletic Brewing, which only makes alcohol-free beers, is now the 10th biggest brewer in the U.S.,

Matt, how are alcohol companies doing in general? Is it sort of like oil companies where they're like, we're doing okay now, but we sort of know that our time is limited? Or is it like, we're not really worried about this? I'm looking at the charts right now. You do not want the lines to look like this. That's the last line you hear before Dr. Matt diagnoses you with a terminal disease. But no, usually you want the lines to go up and to the right, and these are going down.

But my suspicion is that people are just as intoxicated as ever. They're just taking different drugs. Yeah, it seems to be a mix of factors for sure. And cannabis definitely is playing a part. Like the cannabis drink market even has taken off in the last few years too, especially since legalization. I heard everyone was on lorazepam. Only Parker Posey in this season of White Lotus. She may look great, though, I will say. One thing that's kind of interesting to me is

Bloomberg reported this data from Euromonitor that showed the average price per liter of non-alcoholic liquor is higher than regular liquor, which, you know, often includes alcohol taxes, too. The margins on non-alcoholic stuff are just a lot higher. Yeah, my wife, who bought non-alcoholic champagne for like $45, was like, on one hand, I feel like an idiot, but really it's like, you know, I'm paying this because my health is worth it.

That's legit. You know, you're not doing it for for budgetary reasons. Totally right. Matt, would you invest in a non-alcoholic beverage company at this point? Are you long on people's taste for fake, fancy cocktails? I'm not sure what other people are going to do, but I'm not long on my own taste for it.

This whole conversation is reminding me of that St. Augustine line, make me good, but not quite yet. That's sort of how I feel about this. That's our first St. Augustine quote on the podcast. You should have taken my lorazepam.

So for our next segment, we are going to be joined by a professional economist. She is the Atkinson Fellow on the Future of Workers at the Atkinson Foundation, policy advisor to the federal government, and one of the most well-known progressive economists in the world, definitely in Canada. Armin Jelnesian, thank you so much for coming on the show. It's my great pleasure. Thanks for inviting me. We

We want to talk to you about the most fundamental uncertainty facing Canadians right now, which is like there are a lot of surveys about sentiment and how people are feeling that seem to indicate things are going to get very bad. But on the other hand, we have a lot of data suggesting that maybe things won't get so bad. So my question is, what should we be listening to, the data or the sentiments,

And are we going to have a recession? The data is always looking in the rearview mirror. So our most recent print on the workforce is about six weeks old. Same with retail sales, same with inventories and GDP by industry. All of these stats are quite

quite stale dated by the time they come out. So listening to what more current sentiments are, so long as that survey is more current, is actually really useful. I think everybody is predicting an economic slowdown. And because we are only growing at a rate of close to 1%, it would take nothing to nudge us over into recession. As a progressive economist, what kinds of things are you concentrating on that maybe someone who is not a progressive economist...

would not be looking at? One of the very first things I said when I indicated that I thought a recession was inevitable was that we are not recession-ready. Our unemployment insurance system was so-called reformed, in air quotes, in the early 90s, four rounds of cutbacks to eligibility, with the result that today,

35% of the people who are jobless have any access to jobless benefits. And if this recession is as bad as we think it's going to be, we are not ready for the economic storm. I hope at some point that you get in a fight with Matt, who is one of our co-hosts.

And our resident rabid capitalist. I don't, he doesn't care. Matt, do you care about workers? Of course I care about workers. You know, I think, I think Kyle Scanlon's line that the economy is people is a good one. Okay. That's not as much of a fight as I was hoping for. Yeah. You're not going to get a fight even with the most rabid capitalists. And here's the reason why. You need people to buy your stuff. Robots don't buy your stuff. If even you can figure out

how to have a lights-out factory, you still need people to deploy capital. I mean, that's what we saw in the pandemic. So you have all this capital, you can't use it because you can't get people in to use it. You need people to make the world go round. Insofar as, you know, there's general agreement on the sort of dangers ahead...

And if you're right that the country's kind of unprepared to meet those dangers, what should the country be doing that it's not doing in order to maybe have a better or different future? You need to support purchasing power. And so EI is job one, in my view.

the Employment Insurance Program. And continuing to move ahead on the things that demarketize the costs of housing, dental care, pharma care, childcare. I guess the third thing would be is raising the right amount of revenue for this. And there I think there's going to be a bigger fight since, you know, raising taxes has been made a toxic political option for parties of every political stripe at every level of government now.

But we will need to spend more. So I have made the proposal that since we are in a trade war, what we need is a wartime savings vehicle, like the victory bonds that we had during the wars, where people can voluntarily lend their money to the government and get a guaranteed rate of return so that we can do some of the things we need to do. Your proposal on employment insurance is interesting. I think a lot of people

see it mostly as an ameliorator of pain. If you lose your job, you know you're going to be at least a little bit okay. But you're thinking about it from a way to boost demand, right? No, I am looking at it as a way of delimiting recessions, their depth, and their duration. We've got 1.5

6 million people unemployed now. We have 2.4 million people employed in trade-sensitive sectors. We know more people are going to lose their jobs. A bunch of them are going to be people that make close to six figures. They've got mortgages, most of them. They're not going to be able to pay their mortgage or refinance those mortgages if they come due this year, and about half of the mortgages are due this year and next.

And then the people that get shitty wages, minimum wage or close to minimum wage, they can only get 55% of that on EI and they will lose their rental accommodation and there is no place cheaper to move to. So we are looking at a wave of people, millions of people now, that will not only lose their jobs, but they will lose the roofs over their heads. And that will have a cascading effect through every other part of the economy.

Matt, do you want to argue with Armin? That, you know, like that makes good audio. If you can get, you guys can get mad at each other. So feel free. You won't get any fight from me on like whether automatic stabilizers should exist. Like that just seems pretty, pretty clear. You know, the main question that I've been working through, like Armin, I, you know, I hear you making a very compelling case for like why a recession is going to come, but, um,

I've sort of wondered if it's as inevitable as you and a lot of other people have been making it out to be. An alternative reading of the facts would be, it could be that like,

These trade tensions are going to impact the economy like a hurricane versus like a self-reinforcing recession, like a temporary pause in activity that businesses and consumers can look through. You've already seen the trade war start to de-escalate. And, you know, if you look at like companies earnings announcements over the last couple of weeks, you know,

People have continued to signal, like, increased investment, you know, whether in tech or, you know, the oil companies and that kind of thing. So I'm just curious what you think about that.

Well, it is possible that this one won't be bad, but I don't actually see how that is possible when we are talking about decoupling our economy from the United States economy. You know, just a reminder to your listeners that 80% of everything we export goes to the United States. The next closest thing

destination for our exports is China. And they account for 3.7% of our exports. After that, it's the UK. After that, it's Europe. You know, for us to even deal with a 10% decline in exports to the United States, we'd have to double our trade with everybody else. That takes years to do. So we're looking at a process that is not going to be easy to

Because we are so intertwined with the United States and un-intertwining us is like unscrambling the egg. I don't know that you can take a plate of scrambled eggs and deliver poached eggs with it. Before we get to what we learned, we want to remind people that we have a hotline open. We want to know your most pressing economic questions. Send us a voice memo. You can do it on your phone, 226-444-2833.

Or send us a voicemail at tldrpodcasts at wealthsimple.com. All right, Sarah, let's get to it. What did we learn? We learned that people are drinking less. We learned that thanks to Ozempic, 10% of people are also eating less. And we learned that this economic moment is a little scary, but scary times have happened before and we can learn from them. That is it for this week.

This show is sponsored by Wealthsimple. It is made by me, Devin Friedman. Matt Keres and Sarah Rieger with Matilde Erfolino, Leah Fetter, Jared Sullivan. Help from Eva Cruz and Juanita Leon. Research and fact-checking by Brennan Doherty. Theme music by Andy Huckvale. Engineering by Emma Munger. Special thanks this week to Armin Jelnyzian.

The TLDR podcast is offered by Wealthsimple Media Incorporated and is for informational purposes only. The content in the TLDR podcast is not investment advice, a recommendation to buy or sell assets or securities, and does not represent the views of Wealthsimple Financial Corporation or any of its other subsidiaries or affiliates. Wealthsimple Media Incorporated does not endorse any third-party views referencing this content. More information at wealthsimple.com slash TLDR.