Dive Brief:
- Households with at least one GLP-1 user cut their grocery spending by approximately 6% within six months of taking the medication, according to a study by Cornell University and Numerator. The impact was even more pronounced on higher-income households, with spending falling by nearly 9%.
- The data showed a significantly larger drop in the purchases of calorie-dense, processed items, including an 11% decline in savory snacks.
- With nearly 15 million U.S. adults taking GLP-1 medications, what foods they consume is changing. This is prompting CPG companies to change what they sell and how they market their products.
Dive Insight:
As more consumers take GLP-1 drugs such as Ozempic and Wegovy, changing appetites are squeezing sales for some food and beverage items.
The Cornell and Numerator study noted that a 6% decline in grocery spending following GLP-1 adoption leads to a $416 annual reduction in purchases per household. For higher-income households earning over $125,000, annualized grocery spending fell $690.
Not surprisingly, snacking is getting hit the hardest. Spending on products such as chips, baked goods, sides and cookies showed some of the largest reductions, averaging between 6.7% and 11.1%.
Hershey CEO Michele Buck said last month the Kisses and Reese’s maker is seeing a “mild” impact from GLP-1.
While the researchers did observe “a modest increase in spending” on items such as fresh produce and yogurt among weight-loss users, grocery basket composition became healthier because people cut back more on buying unhealthy items than by adding healthier ones.
“Our findings highlight the potential for GLP-1 medications to significantly reshape consumer food demand, a trend with increasingly important implications for the food industry as adoption continues to grow,” the researchers said.
As more data becomes available on how weight-loss drugs are impacting food consumption, it’s not a surprise that CPG companies are positioning themselves to benefit or minimize the impact.
Nestlé, which makes Hot Pockets and DiGiorno pizza, launched a pre-meal drink under its Boost brand last month to help consumers suppress their hunger and create a feeling of being full. Earlier in 2024, Nestlé launched its first major U.S. brand in nearly three decades called Vital Pursuit for consumers taking GLP-1 medications and other individuals focusing on weight management.
Slim Jim manufacturer Conagra Brands is debuting this month more than two dozen of the company’s Healthy Choice offerings will feature a label indicating the meals are “GLP-1 friendly,” making it the first major food brand to call out popular weight-loss medication on its packaging.
Morgan Stanley analysts forecast the global market for obesity drugs will reach $105 billion by 2030. While there are lingering questions over the use of GLP-1 drugs, including their long-term impact on a person’s health and how long people will take them, Nestlé and Conagra are showing that food companies are taking the potential impact seriously.
