December 20, 2023
©pixelshot via Canva.com
Will Weight Loss Drugs Radically Reshape America’s Diet?
The arrival of GLP-1 weight loss drugs like Ozempic and Wegovy promise to change food consumption patterns, with early analysis indicating the junk food category faces particularly high risks.
The drugs, recently endorsed by Oprah Winfrey and Weight Watchers, have been shown to suppress appetites, with patients ingesting 20% to 30% fewer calories each day, recent Morgan Stanley research found.
Morgan Stanley’s survey of 300 individuals currently taking such “obesity drugs” found that they cut back the most on foods that are high in sugar and fat, reducing their consumption of sweets, sugary drinks, and baked goods by up to two-thirds. Of the respondents, 77% went to fast-food restaurants less often, while 74% reduced their visits to pizza shops.
“The food, beverage and restaurant industries could see softer demand, particularly for unhealthier foods and high-fat, sweet and salty options,” Morgan Stanley analyst Pamela Kaufman said.
Morgan Stanley still suspects the impact will be minimal in the immediate-to-near future, predicting only 7% of the U.S. population will be using such drugs by 2035. Favorable adjustments may also offset negative shifts. Kaufman said, “Companies will likely adapt to changes in consumer behavior through innovation and by reshaping their product portfolios. Brands already offering healthier options will be in the best position to respond to the change.”
Other surveys showed the potential for faster adoption. A survey by STAT and The Harris Poll taken in June found 44% of Americans willing to spend up to $100 per month out of pocket for obesity drugs, 23% would spend as much as $250, and 17% would pay up to $500.
Investment bank Stifel found, according to JustFood, that 15% of Americans over a three-survey average used a GLP-1 drug, with an additional 21% reporting they would be interested in using one if they were universally FDA-approved for weight loss, had proven results, and became widely available.
Stifel stated, “We think the survey supports future growth potential for the convenient nutrition category. Convenient nutrition categories offer consumers convenient and nutrient-dense options, which we believe become increasingly relevant for GLP-1 users that are reducing calories. The potential 4% reduction in calories indicated in the survey is a risk to packaged food.”
A number of food and beverage companies that have portfolios with products deemed to be less healthy — including PepsiCo, Mondelez, and Hershey — have so far indicated they’re unconcerned about the drugs’ potential impact on sales.
Michele Buck, Hershey’s CEO, said on a recent earnings call, “There’s still so many unknowns regarding the rate of adoption, the impact on food choices, the medium- to longer-term impacts on consumers, and we’re doing more work constantly to understand those future potential impacts on our categories.”
Nestle has started work on “companion products” for weight loss drugs, CEO Mark Schneider recently said, which may include supplements to help compensate for the “loss of lean muscle mass” and “rapid regain of weight.”
Additionally, Walmart has sparked a sell-off in shares of packaged food stocks after recently indicating that food consumption dipped when people took the medication. John Furner, Walmart’s U.S. CEO, told Bloomberg, “We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket. Just less units, slightly less calories.”
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Mark Self
President and CEO, Vector Textiles
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Recent Discussions
Discussion Questions
How will weight loss drugs alter America’s diet and food purchases? What opportunities may their arrival create for food brands and grocers?
Poll
Loading …
Walmart tracked the food baskets/carts of a sample of individuals on weight loss drugs and comparing them to the wider basket/carts of all consumers. They recorded a relatively modest shrink in the number of items and the total number of calories.
One of the things not considered by Walmart is the potential pool of people who might access the drugs in the future. The drugs cost a minimum of $900 a month without insurance. Given that lower income consumers will not be able to afford this and may not have insurance to cover it, it seems unlikely that this will become mainstream among all parts of the population.
So the impact could be disproportionate – falling more on retailers and brands that serve the mid-market rather than the lower income cohorts.
Nevertheless, there may need to be some reshaping of brand portfolios and ranges as a result.
Side effects of the dosages are looking more and more serious – and the weight and weight-induced health problems come right back after the drugs are discontinued. I’m not in the camp of blithely blaming those who are overweight – I’m fighting genetics, climate, and working in an office myself – but this generation of drugs is not the golden bullet the hype made it sound like. Retailers and vendors are right to not be too worried right now.
Calorie consumption in the U.S. has exploded in the last 50 years. Only Bahrain, averaging 4,000 calories daily, beats the U.S. at 3,868. So, how do we solve this problem? Drugs! Perhaps there are other issues that people should but don’t address.
I am quite confident that industrial food processors will find ways to develop products that beat the effects of the drugs. The development labs in those companies are about getting people to eat more, not providing real health benefits.
The food industry has already moved to accommodate a GLP-1 world, to include marketing protein shakes to take along with your drug regimen. Liza Amlani posed an even more interesting question that I don’t think we should forget: how is this going to impact the fashion industry? After all the angst over plus-sizes, pricing, etc. – to get to an industry that is overall more inclusive than it has ever been – are we about to give all that back?
These drugs can cost $30 per day, so it’s only logical that consumers taking them will want to see tangible results. Ruth Marcus of the Washington Post said that her appetite for junk food pretty much disappeared after she started Wegovy. Cupcake and chip manufacturers will probably see a small dip, but they’re in no danger.
The jury is still out on the long-term trajectory of the latest weight loss drugs, and therefore the ripple effects for retailers. Will consumers back off the drugs only to start again when the pounds peel off? Will costs lower and democratize usage? Weight loss drugs are shifting spending in the grocery aisle but also have the potential to goose higher-margin categories like apparel as sizes shrink. Even cosmetics and personal care items could see increases as female weight loss winners go for a total look. This is about spending shifts, not shutdowns.
I’m with Gene on this one. We seem to be a nation that looks to drugs as the answer for weight loss. A better idea would be to focus on the type and quantity of food/beverage intake, and the amount of exercise in the daily routine. As others have pointed out, some of these drugs are very expensive so we’re not talking about the general population, which will have nearly zero effect on food manufacturers. My concern is the long-term impact of such drugs on those who are taking them.
So it is about being thinner? Darn, here I thought it was about being yourself.
I think weight loss drugs will have the same effect that diets and their unending supply of diet books and diet programs have had on our weight and health – minimal. The only thing that grows is the number of diet offerings; maybe we should expect consolidation in that industry due to insane numbers of suppliers and the fact that drugs will be a little better at delaying the yo-yo.
I think I like the “weight” and see approach plus I’m highly biased toward Nestle and Hershey – love my Chocolate! If we haven’t altered our diet and food purchases yet, I’m not sure that an expensive drug will permanently alter our habits. I hope that brands and grocers continue to improve the quality of their offerings but in the end, it’s on us as consumers and, unfortunately, I don’t see “us” changing significantly anytime soon (see Gene’s post). However, this all changes if the drug is considered medically necessary and is covered by insurance. Nah…still minimal…as you were!
I believe (sadly) the availability of these weight loss drugs simply gives anyone using them a “shield” for bad eating habits and lack of activity/exercise. If the majority of Americans followed a (spoiler alert-we will not) balanced diet as defined by the Dept. of Agriculture (www.myplate.gov) supported by regular exercise, then many items available for purchase today, along with these drugs, would no longer be needed or wanted. In the real world, we will likely see a rise in MORE packaged foods, purchased with the knowledge that you can make it up later with some pills. 73% of the country is either overweight or obese, and a few pills are not going to solve that problem.
So pass the sugar!
The trend of a healthy lifestyle will probably never end. Those participating in the trend will replace a less healthy diet with a more healthy diet. The point is that everyone is still eating, just differently. Smart retailers will understand these different buying patterns and adapt and modify their offerings accordingly.
It’s not just about basket size. It’s about the frequency of store visits. Or more importantly, the frequency of ‘top up runs’. When you eat less, you don’t pop out for those extra items mid week. Also, when one person in a household is on a weight-loss drug, it can impact the caloric consumption of those around them as well. You all eat less. And you don’t go out as much because it’s not as enjoyable for the person on the drug. So what are the opportunities?
Smaller portions, pack sizes, bunches, etc.. And higher quality food. When people don’t eat as much they want it to be good.
More Discussions
Would an Amazon Shift of Prime Day to June Be a Good Move?
Would it be a wise move for Amazon to move Prime Day ahead of its current…Should Amazon Be Banning AI Shopping Agents From its Platform?
Amazon is clamping down on access to its platform from competing AI agents.Does Macy’s Own Celebrations?
Macy’s has made a name for itself in terms of high-profile celebrations. Will that drive cross-over…
Walmart tracked the food baskets/carts of a sample of individuals on weight loss drugs and comparing them to the wider basket/carts of all consumers. They recorded a relatively modest shrink in the number of items and the total number of calories.
One of the things not considered by Walmart is the potential pool of people who might access the drugs in the future. The drugs cost a minimum of $900 a month without insurance. Given that lower income consumers will not be able to afford this and may not have insurance to cover it, it seems unlikely that this will become mainstream among all parts of the population.
So the impact could be disproportionate – falling more on retailers and brands that serve the mid-market rather than the lower income cohorts.
Nevertheless, there may need to be some reshaping of brand portfolios and ranges as a result.
Side effects of the dosages are looking more and more serious – and the weight and weight-induced health problems come right back after the drugs are discontinued. I’m not in the camp of blithely blaming those who are overweight – I’m fighting genetics, climate, and working in an office myself – but this generation of drugs is not the golden bullet the hype made it sound like. Retailers and vendors are right to not be too worried right now.
Calorie consumption in the U.S. has exploded in the last 50 years. Only Bahrain, averaging 4,000 calories daily, beats the U.S. at 3,868. So, how do we solve this problem? Drugs! Perhaps there are other issues that people should but don’t address.
I am quite confident that industrial food processors will find ways to develop products that beat the effects of the drugs. The development labs in those companies are about getting people to eat more, not providing real health benefits.
The food industry has already moved to accommodate a GLP-1 world, to include marketing protein shakes to take along with your drug regimen. Liza Amlani posed an even more interesting question that I don’t think we should forget: how is this going to impact the fashion industry? After all the angst over plus-sizes, pricing, etc. – to get to an industry that is overall more inclusive than it has ever been – are we about to give all that back?
These drugs can cost $30 per day, so it’s only logical that consumers taking them will want to see tangible results. Ruth Marcus of the Washington Post said that her appetite for junk food pretty much disappeared after she started Wegovy. Cupcake and chip manufacturers will probably see a small dip, but they’re in no danger.
The jury is still out on the long-term trajectory of the latest weight loss drugs, and therefore the ripple effects for retailers. Will consumers back off the drugs only to start again when the pounds peel off? Will costs lower and democratize usage? Weight loss drugs are shifting spending in the grocery aisle but also have the potential to goose higher-margin categories like apparel as sizes shrink. Even cosmetics and personal care items could see increases as female weight loss winners go for a total look. This is about spending shifts, not shutdowns.
I’m with Gene on this one. We seem to be a nation that looks to drugs as the answer for weight loss. A better idea would be to focus on the type and quantity of food/beverage intake, and the amount of exercise in the daily routine. As others have pointed out, some of these drugs are very expensive so we’re not talking about the general population, which will have nearly zero effect on food manufacturers. My concern is the long-term impact of such drugs on those who are taking them.
So it is about being thinner? Darn, here I thought it was about being yourself.
I think weight loss drugs will have the same effect that diets and their unending supply of diet books and diet programs have had on our weight and health – minimal. The only thing that grows is the number of diet offerings; maybe we should expect consolidation in that industry due to insane numbers of suppliers and the fact that drugs will be a little better at delaying the yo-yo.
I think I like the “weight” and see approach plus I’m highly biased toward Nestle and Hershey – love my Chocolate! If we haven’t altered our diet and food purchases yet, I’m not sure that an expensive drug will permanently alter our habits. I hope that brands and grocers continue to improve the quality of their offerings but in the end, it’s on us as consumers and, unfortunately, I don’t see “us” changing significantly anytime soon (see Gene’s post). However, this all changes if the drug is considered medically necessary and is covered by insurance. Nah…still minimal…as you were!
I believe (sadly) the availability of these weight loss drugs simply gives anyone using them a “shield” for bad eating habits and lack of activity/exercise. If the majority of Americans followed a (spoiler alert-we will not) balanced diet as defined by the Dept. of Agriculture (www.myplate.gov) supported by regular exercise, then many items available for purchase today, along with these drugs, would no longer be needed or wanted. In the real world, we will likely see a rise in MORE packaged foods, purchased with the knowledge that you can make it up later with some pills. 73% of the country is either overweight or obese, and a few pills are not going to solve that problem.
So pass the sugar!
The trend of a healthy lifestyle will probably never end. Those participating in the trend will replace a less healthy diet with a more healthy diet. The point is that everyone is still eating, just differently. Smart retailers will understand these different buying patterns and adapt and modify their offerings accordingly.
It’s not just about basket size. It’s about the frequency of store visits. Or more importantly, the frequency of ‘top up runs’. When you eat less, you don’t pop out for those extra items mid week. Also, when one person in a household is on a weight-loss drug, it can impact the caloric consumption of those around them as well. You all eat less. And you don’t go out as much because it’s not as enjoyable for the person on the drug. So what are the opportunities?
Smaller portions, pack sizes, bunches, etc.. And higher quality food. When people don’t eat as much they want it to be good.