Consumer goods companies have been a hot topic of discussion amongst investors ever since Goldman Sachs predicted that the global weight loss drug market could become a $100 billion market by 2030. However, after Walmart (WMT) warned these drugs could be impacting its food sales, some investors became concerned about what it could mean for food-related stocks. Arun Sundaram, CFRA Analyst, joins Yahoo Finance to discuss the impact GLP-1 drugs have had on the market and whether investors should continue to be worried about the growing trend in its use.

Sundaram says plainly: "I think the near-term reaction to these GLP-1 drugs are bit overblown, if you look at the stocks for a lot of consumer-related names, a lot of food-related names, they are down significantly ever since that topic became pretty popular a few months ago but, that's something that all companies are monitoring still. It's too early to tell the exact impact in terms of food and beverage consumption."

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Video Transcript

JOSH LIPTON: And Arun, another big theme for the companies you cover, these weight loss drugs, Arun, obviously, a tremendous amount of investor curiosity, interest, in those drugs. You can look at the stock charts of Eli Lilly and Novo Nordisk. How do you think about, Arun, how those drugs are going to potentially affect the companies you cover? Not so much near intermediate term, but even long term, Arun, what's the risk for those companies? And how are those companies responding right now?

ARUN SUNDARAM: Yeah. I mean, I think the near term reaction to this GLP drugs are a bit overblown. If you look at the stocks for a lot of consumer-related names, a lot of food-related names, they're down significantly ever since that topic became pretty popular a few months ago. But that's something that you really all companies are monitoring still. It's too early to tell the exact impact in terms of food and beverage consumption.

It could, over time, it could have a modest impact on food consumption. Maybe 1% to 3% of total food intake could be down over the longer term. But I think the good news for at least food manufacturers and food retailers is that they have time to prepare for this. This is going to be potentially a theme that we'll be talking about for the next decade is these GLP-1 drugs.

And what a lot of food companies will likely do is they'll reevaluate. They'll potentially introduce more smaller pack sizes, for example, or maybe they'll change their ingredients in some of their food products. Maybe some food companies will sell off some underperforming brands and try to acquire some higher performing brands.