Billionaires have long capitalized on America’s love for convenient snacks and guilty pleasures. Stocks offering consumable dopamine hits feature prominently in portfolios from Warren Buffett to Bill Gates and Ray Dalio.

While it’s easy to attribute gains in soda and fast-food stocks to unhealthy consumer habits—potentially threatened by the latest weight-loss drugs—analysts say these brands’ diversification into healthier options will sustain them in an Ozempic-era future.

Warren Buffett exemplifies the patriotic culinary investor. The 93-year-old famously loves McDonald’s and Coca-Cola, often serving their products at meetings. He invests in both through Berkshire Hathaway or its subsidiaries.

The foundation of Bill Gates follows a similar investment strategy—despite the tech titan being famously astonished by Buffett’s diet. The Bill and Melinda Gates Foundation’s Q1 2024 filing shows holdings of $604 million in Coca-Cola shares and nearly $97 million in Kraft Heinz, the maker of Kraft mac and cheese and Jell-O.

Ray Dalio’s Bridgewater Associates also holds significant investments in Coca-Cola, PepsiCo, and Starbucks.

However, these sweet treat stocks haven’t performed in line with the rest of the market in recent years. At the time of writing, the S&P500 is up 83% in the past five years, while Coca-Cola and McDonald’s are up 20% and PepsiCo is up around 30%.

So why have these illustrious portfolios hung on instead of investing in the wider market? The answer lies not in the good news but in the bad, points out Fillipo Falorni, Citi Research’s lead analyst for U.S. beverages, household products, and personal care.

Falorni highlights that in years like the 2008 financial crisis, when the S&P500 tanked around 40%, McDonald’s share price stayed relatively the same. Likewise, Coca-Cola’s share price dropped 25% while the Nasdaq fell 33%.

“The past five years had generally very solid macroeconomic conditions with a few exceptions (e.g. the COVID period),” Falorni told Fortune. “If you look at the performance during the Great Financial Crisis you will see that consumer staples stocks (including Coca-Cola, PepsiCo, etc) outperformed the S&P 500.”

With this in mind, it’s easy to argue that it comes as no surprise that America’s billionaires would be invested in stocks that are dependable in a crisis.

But the fact also begs the question of why so many companies that offer an accessible treat dominate the Fortune 500, while behemoth salad brands are somewhat more scarce.

The analysts Fortune spoke to said these companies quietly dominating Wall Street are no coincidence.

The reason for their success—and why these stocks will likely continue to perform—is that they’re trading on something that sets them apart from other buzzy stock alternatives on the S&P500.

What AI can’t replicate is the dopamine rush of the first swig of coffee in the morning, the bite of a burger after a long day at work, or the fizz of a can of soda opening.

Huge emerging markets opportunity for growth

For Falorni the attraction of ‘sweet treat’ stocks today isn’t derived from where the companies have grown from but where they’re going.

In a 2022 report, for example, Coca-Cola highlighted that in developed markets, only 32% of beverages are non-commercial—basically tap water that is consumed at home. The rest of the market is alcohol, hot beverages and cold drinks like bottled water and fizzy drinks.

This statistic flips in developing and emerging markets, where 69% of drinks consumed are tap water, with just 16% of the market enjoying cold beverages.

This, combined with the fact that the populations in these countries are expected to grow faster than their developed peers, presents a large opportunity.

PepsiCo—which makes products from chips to fizzy drinks—said that while volumes dropped in North America, sales were up 9% in emerging markets (which now represent about 40% of the brand’s net revenue) such as Mexico and Brazil.

Likewise, Coca-Cola highlights that while its retail value in the likes of Latin America (~$120 billion) is smaller than in North America (~$325 million), the number of consumers it has in the former is much larger (~325 million consumers vs ~530 million consumers).

“Every given year, if they can convert 1% or less of the population from non-commercial to commercial beverages, that’s a very long-term tailwind,” Falorni explained.

Patriotic nostalgia for consumers

While Falorni agrees there may be an element of “recognition bias” for American investors, the fundamentals of the business hold far more sway.

On this, he adds: “My view is these are very stable companies… to me, they have demonstrated over decades that they have been able to continue to grow regardless of the macro environment and consumer preference shifts.”

However, according to Pat Tschosik, senior portfolio strategist at Ned Davis Research, the lure of McDonald’s and KFC does have an element of patriotic nostalgia for consumers.

While Tschosik believes the consumer staples market as a whole has not performed as well as others—citing that on a total return basis, the sector has performed at an annualized return of 10.5% compared to the S&P 500’s 10.7% over the past 30 years—he told Fortune: “You know exactly what you are going to get when you order chicken nuggets from McDonalds, open a Hershey bar, a can of Coke, and order a caramel macchiato from Starbucks.

“The U.S. has built so many iconic brands and restaurants that have stood the test of selling everywhere in the world. I believe taste, convenience, consistency of product, and building up of brand image is key and what American food and beverage companies do exceptionally well.”

Is the Ozempic effect overblown?

The biggest current concern for snack and fast food giants is, of course, weight loss drugs like Ozempic and Wegovy.

Concerns that these medications could wipe billions of value off the snack industry isn’t unfounded—the likes of Walmart, PepsiCo and Nestle have already briefed analysts on the effects that the GLP-1s will have on their businesses.

But while it’s easy to assume companies that have historically been associated with unhealthy items would be concerned about these drugs, analysts say it has also opened up an entirely new frontier of business.

“Consumer staples are called staples for a reason,” Tschosik said. “There will always be a need for 1) convenient, low-prep-time meals, snacks and beverages, and 2) treats, indulgences, and self-rewards that include caffeine and sugar. I do not believe Ozempic, and healthy alternatives will ever destroy these demand factors.”

Falorni is of the same opinion, pointing out that at any point in time there will be a portion of society who wants to lose weight. In the future, a larger portion of this group may choose to take Ozempic, but that doesn’t mean more people in the wider population will begin taking the drug.

In addition, Citi research that analyzed 500 people taking GLP-1 drugs against 500 people using other weight loss methods found little difference between their levels of consumption.

Indeed, the difference was so minimal—when applied to a ratio in the coming decades of the total population expected to take GLP-1s—the resulting drop in consumption is approximately a single point per year.

This factor, combined with the fact some users may not want to undergo an injectable treatment—led the analyst to be largely undaunted by the phenomenon.