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Analysts are beginning to zero in on the potential impact of weight loss drugs like Ozempic and Zepbound on the food and beverage industry. These drugs work by cutting cravings for crunchy snacks and sugary drinks. No cravings mean no temptations to fill carts with those snacks and sugary drinks. It’s a win for health-conscious consumers but a major threat for the food and beverage industry, valued at trillions.

Jim Cramer didn’t hold back on his CNBC show, grilling food and beverage companies for not accepting the impact and growing influence of GLP-1 weight loss drugs. According to Cramer, these drugs are already making a noticeable dent in the industry’s bottom line.

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“Despite the fact that roughly 20 million Americans are said to be taking GLP-1 weight loss diabetes drugs, no, none of the food and beverage companies are willing to admit that these drugs have hurt them at all. They won’t even hint at it,” Cramer said on his show ‘Mad Money’ on CNBC.

Cramer emphasized that these drugs are incredibly “powerful,” and it’s “insane” to think they won’t affect snack food companies and liquor businesses.

He said that about 20 million people eating and drinking “dramatically less” than before is affecting these companies and their price/earnings multiples are “shrinking.”

Cramer called out a couple of liquor companies, too.

Can GLP-1 weight loss drugs topple these billion-dollar liquor giants that easily? Should the investors of dividend-paying beverage companies be worried? Let’s dive into some key stocks, check out their recent performance, and analyze what they’ve been saying in their latest earnings reports.

Diageo

Jim Cramer highlighted Diageo PLC (NYSE:DEO) on CNBC, noting that the company, which owns popular liquor brands like Johnnie Walker whiskey, Casamigos tequila, and Guinness beer, is experiencing sales declines but does not mention the reason behind this slump.

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“Why is Casamigos down 20%? No one will say anything,” Cramer said.

Cramer was referring to the 20% sales decline for tequila company Casamigos, which Diageo bought back in 2017, during the year ending June 30.

Diageo saw its sales dip for the first time since the pandemic during the quarter. The company pointed to “unfavorable” currency impacts and a more “cautious” consumer environment as the reasons behind the slump. But what’s driving this caution? Is it inflation concerns, or could it be that GLP-1 drugs are curbing people’s cravings for alcohol? Time will tell. Meanwhile, Diageo still offers a decent 3.18% yield and has an impressive 25-year history of growing its dividends.

Constellation Brands

Constellation Brands, Inc. (NYSE:STZ), behind Corona and Modelo, reported fiscal first quarter results last month. Overall revenue jumped 6% from last year, with the beer business seeing high single-digit net sales growth and double-digit operating income growth. However, Constellation’s wine and spirits net sales plummeted 7%.

Wall Street was positive on the stock after the results. Goldman Sachs’ Bonnie Herzog pointed to Constellation’s underlying business strength and visibility on growth targets. He has a $300 price target and a Buy rating on the stock.

For 2025, Constellation continues to see sales growth of 7% to 9% for its beer business and operating income growth of 10% to 12%. That means at least Constellation’s beer business is not facing any short-term problems from weight-loss drugs.

Brown Forman

Cramer also targeted Jack Daniels maker Brown-Forman Corporation Class B (NYSE:BF), calling its sales “horrendous.”

“When you drink Jack Daniels, it is filled with sugar, ok? And that is really being impacted, but they won’t say what is hurting it,” Cramer said.

Brown-Forman has a dividend yield of about 1.9%. It has increased its dividend payouts for 40 straight years. In fiscal 2024, the company saw higher sales for Jack Daniel’s Tennessee Apple and reported a 150 basis point expansion in gross margin. Looking ahead to fiscal 2025, Brown-Forman expects the business environment to stay “volatile,” citing global macroeconomic and geopolitical uncertainties.

With a portfolio of several famous brands, Brown-Forman is better equipped to manage the risks that GLP-1 drugs might pose.

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Molson Coors Beverage

Molson Coors Beverage Co Class B (NYSE:TAP), known for beer brands like Coors Light and Miller Lite, recently reported its second-quarter results. Profits increased 7.9% last year, though revenue dipped by 0.6%. For the full year, the company expects revenue to increase in the low single digits.

With a dividend yield of about 3.2%, Molson Coors isn’t just about beer – it also sells spirits and nonalcoholic beverages. Earlier this year, it raised its dividend for the third year in a row.

Molson Coors acknowledged inflation-related challenges and a slowdown, but not for the reasons Jim Cramer mentioned.

Here is what the company’s CFO said during the call:

“While this guidance implies slower trends for the second half the year, it’s important to remember that this is driven by shipment timing this year, and it does not alter our confidence in our long-term growth expectations.”

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This article Jim Cramer Says People are Drinking ‘Dramatically Less’ Because of Weight Loss Drugs – Alcohol Dividend Stocks in Trouble? originally appeared on Benzinga.com