A "Sweetness Crisis" Triggered by a Weight Loss "Miracle Drug": Sugar Prices Halved, Even Magnum Can't Sell!

GLP-1 weight loss drugs are shifting consumer preferences from “sweet” to “protein,” and this change is rapidly influencing valuations of commodities and consumer goods companies: demand for sugar is being re-priced, protein-related raw materials are strengthening, and high-sugar categories are facing structural pressures.

Raw sugar futures in New York fell below 14 cents per pound on Wednesday, reaching the lowest level since October 2020, halving from the peak at the end of 2023. Traders believe that consumption in affluent economies like the U.S. has slowed more than previously forecast, and demand growth in developing markets has also fallen short of expectations.

The market is linking these demand-side changes to GLP-1 injectable weight loss drugs. These drugs activate receptors to make people feel fuller more easily, thereby reducing cravings for sweetness. Leading products include Novo Nordisk’s Wegovy and Ozempic, as well as Lilly’s Mounjaro and Zepbound. The USDA’s December 2025 supply and demand outlook has lowered the projected sugar usage through 2026 by 23,000 tons to 12.3 million tons, citing decreased human consumption.

This demand shift is also reflected in the stock market. The world’s largest ice cream company, Magnum, saw its stock plunge after reporting sales below expectations, prompting investors to reassess the long-term impact of GLP-1 on high-sugar categories. Meanwhile, prices for protein raw materials like whey are rising amid health trends and GLP-1 influence, forcing food companies to accelerate reformulation and product restructuring.

Sugar Prices Break Below 14 Cents, Slowing Demand as Main Variable

The immediate trigger for the drop in raw sugar prices was a faster-than-expected cooling in consumer demand. According to the Financial Times, broker Marex’s Gurdev Gill said the decline in sugar consumption caught the industry off guard, with signals from Mexico and the U.S. being the clearest, and European demand data also challenging sugar prices.

Market consensus is that demand slowdown in wealthy economies combined with slower-than-expected growth in developing markets has caused sugar prices to fall sharply even without significant supply-demand imbalances.

Stephen Geldart, head of analysis at Czarnikow, noted that GLP-1 has become quite popular in parts of the U.S., which may be one reason for the downward revision of sugar demand forecasts. The key point is that sugar demand is highly sensitive to behavioral changes because consumption is highly concentrated.

He pointed out that about the top 20% of consumers account for roughly 65% of sales of products like cookies and ice cream. If these “super users” start using GLP-1 drugs, sales could decline in a “nonlinear” fashion, amplifying the impact on sugar demand. This also explains why futures prices react disproportionately to marginal changes on the demand side.

Supply Side Short-Term Inflexibility, Sugar Short Positions Near Five-Year Highs

Price declines have not immediately led to supply contraction. Reports indicate that global sugar production has remained roughly stable at around 180 million tons annually in recent years, with Brazil and India maintaining high output, and no major producers signaling significant cutbacks.

Geldart said that overall production and consumption have been relatively balanced recently, with no clear buildup of inventories, but futures prices have halved within two years. The market previously responded slowly to consumption issues in key markets.

Gill added that sugarcane cultivation requires significant upfront investment and has a long cycle. Many farmers receive government support and are insensitive to global prices, making it difficult for supply to quickly respond to low prices. With changing fundamentals, short positions have risen sharply since late last year and are now near five-year highs. Geldart described market sentiment as “extremely bearish.”

Ice Cream Sector Under Pressure, Magnum Plummets, Unilever Guidance Triggers Repricing

Structural concerns have already impacted related stocks. Magnum announced its first post-spin performance on Thursday: Q4 sales fell 3%, well below analyst expectations of 0.5% growth. Jefferies analyst David Hayes said this will “reignite” concerns about GLP-1 posing structural risks to the ice cream category.

As a result, Magnum’s stock in Amsterdam dropped over 14% at one point. The company’s 2025 revenue is projected at €7.9 billion, flat year-over-year, with organic sales up 4.2%, and an expected organic growth of 3-5% this year.

Net profit for the year fell 48% to €307 million, mainly due to costs related to spin-off and restructuring, with operating profit down 21% to €599 million. CEO Peter ter Kulve previously downplayed risks, noting the product portfolio includes low-calorie and high-protein options, as well as portion-controlled products like Magnum Bonbons.

Unilever, the spin-off company, was also affected. Its stock in London fell 1.4% on Thursday. The company expects 2026 underlying sales growth to be at the lower end of 4-6%, with at least 2% volume growth. Bernstein analyst Callum Elliott noted that management had previously targeted a mid-term 5% growth, but this “acceleration” appears delayed until after 2026.

Unilever CEO Fernando Fernandez stated that post-spin, the company will be “simpler, sharper, and faster,” focusing resources on faster-growing businesses. The company’s annual underlying sales grew 3.5%, with beauty and health up 4.3% and 4.7%, and food up 2.5%.

Protein Raw Materials Defy Trends, Whey Prices Near Record Highs

In contrast to sugar, protein chains are strengthening. John Lancaster of StoneX said whey demand has “significantly increased,” with high-protein whey used in protein powders and energy bars seeing “sharp rises” over the past 18 months, reaching “almost record highs” in Europe and the U.S.

Factors include GLP-1 combined with broader health trends. Clinicians warn that without dietary and lifestyle adjustments, weight loss from GLP-1 may largely come from muscle rather than fat, prompting doctors and nutritionists to recommend increased protein intake, further boosting demand for whey concentrates and isolates. Data from Worldpanel by Numerator showed UK cottage cheese sales up 50% year-over-year in January.

Additionally, the first oral GLP-1 formulations approved in December are seen as potentially lowering barriers to use and expanding penetration. Kona Haque, a commodities expert, believes that as prices decline and adoption broadens, the impact will grow “more and more.”

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