The 2025 Resolution Edition

Good morning and Happy New Year!

To kick off 2025, we resolved to find out what's in store for industries tied to popular New Year's resolutions. Last year, three in ten Americans surveyed by the Pew Research Center said they'd made at least one resolution, and a month later, only 13% had reneged on their self-improvement dreams. Sadly, we don't have the data on the following 11 months, but let's be generous and assume they met their goals, for Auld Lang Syne.

Traditionally, New Year's resolutions to lose weight involve getting to the gym more. In a post-GLP-1 world, that's looking less and less necessary.

Last year, we saw two companies cement their positions as the kings of weight-loss drugs: Novo Nordisk and Eli Lilly. Both had to deal with some investor disappointment over the past year — apparently being one half of a duopoly controlling a wildly in-demand product just doesn't cut it anymore — but they're still in pole position to dominate the lucrative GLP-1 drug market. So the big question is: What's next on the menu for obesity drug development?

A Spoonful of Sugar Helps the GLP-1 Go Down

Other pharmaceutical companies aren't just sitting back and letting Novo Nordisk and Eli Lilly have all the fun: Pharma giants including Pfizer, Roche, and Merck are either developing their own drugs or licensing their way into the field . Smaller biotechs are also pursuing new research into obesity drugs — but drug development is a long, long, long-view industry, and Novo Nordisk and Eli Lilly probably don't have to worry about serious competition for a few years yet. "We do expect more competition in the obesity field towards the end of the decade," Eleni Tokali, drugs intelligence analyst at GlobalData, told The Daily Upside. That means that we can maybe expect to see some price drops in a few years as competitors enter the market, but don't hold out for any discounts this year.

The next big innovation that companies including Novo Nordisk and Eli Lilly are chasing is a weight-loss drug that can be taken as a pill, rather than via an injection:

• Tokali said that 63 oral weight-loss drugs are in active development, with four in Phase III, the penultimate phase in clinical trials which, according to the US Food and Drug Administration, typically takes between one and four years.
• Companies are chasing first-mover advantage on oral GLP-1s, Tokali said, because it will help with patient adherence and marketing: Most people prefer popping a pill to jabbing themselves with a needle.

RFK Jr. Relief: When President-Elect Donald Trump named Robert F. Kennedy Jr. as his choice to head up the US Department of Health and Human Services, it sent a tremor through Big Pharma. Kennedy's public views on pharmaceutical companies have been unflattering and his vaccine-skepticism was troubling to the industry. On the subject of GLP-1s in particular, RFK Jr. was pretty bearish, telling Fox News in October that Novo Nordisk was: "counting on selling it [Ozempic] to Americans because we are so stupid and addicted to drugs." In December, however, he appeared to soften his stance, telling CNBC that GLP-1s "have a place" in healthcare — although he stressed "the first line of response should be lifestyle."

Written by Isobel Asher Hamilton

The odds of an increase in regulation of the massive, and growing, sports-betting industry may be shifting.

The sports betting industry only picked up more steam in 2024. Americans wagered $30 billion in the third-quarter alone, according to the American Gaming Association, and the legal industry generated more than $53 billion in revenue in the US through the first three-quarters of the year — 8% higher than 2023 and placing the industry on track to notch its fourth-consecutive year of growth. But it didn't escape the year without a closer eye from government regulators.

Hedge Your Bets

Is there a greater sign of officially making it as an industry than getting dragged in front of a Senate committee? In mid-December, the Senate Judiciary Committee did just that to the sports betting world, calling in bigwigs across the increasingly entwined sports and gambling industries to discuss the increasingly visible presence, and possible malignancies, of the expansion in sports betting.

While the lame-duck session mostly amounted to a holiday-season airing of grievances, it could foreshadow regulation to come. Some legislation is already sloshing around the halls of Congress, and at least some leaders in sports are calling for more oversight:

• During the hearing, National Collegiate Athletics Association President Charlie Baker called for a ban on "prop bets" — or wagers unrelated to the final outcome of a game — in college sports. Gambling experts have frequently pointed to prop bets, particularly in lower-profile events, as ripe for generating both integrity scandals and harassment of athletes; the NCAA has already successfully lobbied some states for a prop-bet ban. 
• A piece of legislation called the "SAFE Bet Act" has been introduced to do just that — ban college-level prop bets as well as limit promotional "bonus bets," curb advertising during sporting events, create affordability checks, and introduce restrictions on the use of artificial intelligence to set betting lines. While the bill itself dies at the end of the current Congress (in early January), the sponsors of both House and Senate versions will be returning next year.

Problematic: The gambling industry, unsurprisingly, lobbied for regulation to be left up to the 30-plus states that, along with Washington, DC, allow sports betting. Meanwhile, the scale of problematic gambling is becoming clearer as the industry develops. The National Council on Problem Gambling estimates around 2.5 million US adults may have a severe gambling problem, while 5 million to 8 million more may be afflicted with a mild or moderate gambling problem. A full 15% of respondents in a poll from St. Bonaventure University and the Siena College Research Institute released last year said they knew someone with an online sports-betting problem.

Written by Brian Boyle

Welcome to Dry January. We hope your fridge was stocked with Gatorade or pickle juice for the New Year's Day hangover.

There was a time, in the far away days of 2009, when Morningstar analysts asked whether "alcohol stocks are recession-proof." In fairness, their brainy crew determined the answer was that they're more "recession-resilient" than anything, but this gives you an idea of just how sound Wall Street considered the drinks business to be.

Times have changed.

More Than a Resolution

In a 2023 Gallup survey, 62% of American adults under 35 said they drink alcohol, down from 72% twenty years earlier. Younger adults also drink less frequently and in lower volumes than their forebears.

That year, drinks industry data firm IWSR recorded the first decline in the volume of spirits sold in the US in 30 years — the 2% drop at home was accompanied by a 1% decrease in the global total of alcoholic beverages sold. The American beer industry's volume consumption decreased 4.4% as well, according to the Beverage Information Group. Last year (that's 2024 now, remember) didn't offer any reprieve:

• US wine and spirits depletions — that's the amount of sales from wholesalers to retailers — fell 6% in the 12 months to August 2024, according to the Wine and Spirits Wholesalers of America. Wine sales were down 8% and spirits 3.9%.
• The WSWA said it expects the negative trend to pour over into 2025: "Despite earlier optimism driven by factors such as destocking and seasonal shipping patterns, broader consumption trends are cause for concern." IWSR also said relief would depend on realignment of household spending with inflation subdued.

Many of the world's leading publicly traded alcohol firms have had tough innings as a result. Diageo, which owns Guinness, Johnnie Walker, and Smirnoff among dozens of other well-known brands, was down 13% on the year, as of Christmas. Constellation Brands, which has the US rights to America's most popular beer, Modelo, was down 7%. Beer giants Anheuser Bush and Coors were down 22% and 4%, respectively.

Negative Into a Positive: Non-alcoholic beer volumes rose 6% in 2023, non-alcoholic wines 7%, and non-alcoholic spirits 15%, according to IWSR. It's a trend that was forecasted to continue in perpetuity, although these categories still make up a small percentage of revenues.

Written by Sean Craig