When it comes to the biggest factors shaping the retail industry, most people point to issues like the economy or rapidly shifting technological advances. However, there are also far more subtle elements at play. One recent example is the rise of GLP-1 medications, like Mounjaro, Wegovy and, most famously, Ozempic. While these medications were initially intended for treating Type 2 diabetes in adults, many US consumers have been turning to them for weight loss, thanks in part to a slew of endo
of endorsements from celebrities and influencers.
A report released in December 2023 by data analytics firm Numerator showed that nearly half of all GLP-1 drug users now take the medication to lose weight.
Coresight Research estimated that there are approximately 121 million obese individuals in the US over the age of 20, making up 32.8 per cent of the population.
With GLP-1 drug usage expected to grow over the coming years as these drugs become more accessible, the research firm projects that 10 per cent of obese Americans, approximately 12 million people, will be using GLP-1 drugs by 2030.
And as more consumers take advantage of these drugs and seek out alternative weight-loss methods, food and beverage retailers are set to see significant shifts in the coming years.
The shifting food retail landscape
As Sujeet Naik, a Coresight analyst observed in a report titled, Decoding the GLP-1 Trend: How Is the Ozempic Economy Impacting CPG Retail?, Ozempic and similar weight management medications are shifting consumers’ eating habits and nutritional needs.
According to Naik, “heightened awareness of the potential hazards of eating packaged and processed foods has driven increased demand for fresh, organic, natural and other kinds of ‘clean’ food.”
He also stated that the rising popularity of GLP-1 medications is poised to accelerate the ongoing adoption of health and wellness trends, which could significantly impact the food and beverage landscape.
This underscores the urgent need for consumer packaged goods (CPG) brands to adapt and innovate in order to better meet the evolving needs of GLP-1 drug users.
Big-box retailers including Target and Walmart have already begun expanding their range of healthy, price-accessible edibles to appeal to these health-conscious consumers.
In May, Nestlé, a Swiss multinational food and drink processing conglomerate corporation, launched Vital Pursuit, a line of frozen meals marketed as “companion” products for GLP-1 medications.
The corporation has been marketing Vital Pursuit as the first brand intended specifically for GLP-1 users.
“As the use of medications to support weight loss continues to rise, we see an opportunity to serve those consumers. Vital Pursuit provides accessible, great-tasting food options that support the needs of consumers in this emerging category,” Nestlé’s North America CEO Steve Presley commented in a press release.
However, health experts, like Dr Jody Dushay, an assistant professor at Harvard Medical School and an endocrinologist, say brands should not be creating these types of food lines.
Direct-to-consumer websites like Nestlé’s “may at best be harmless and a waste of money,” Dr Dushay explained. At worst, they could lead to potential health threats, as someone could try to treat potentially severe symptoms with supplements, versus going to a doctor.
The rise of these weight-loss drugs is also driving increased merger and acquisition activity in the food industry.
In July, Mars, a leading snack manufacturer, purchased Kevin’s Natural Foods for $800 million, reflecting the tide of savory or confectionary corporations diversifying their portfolios with “healthier” companies to appeal to the elevated needs of consumers.
Naik noted that brands poised to take advantage of this shifting market are CPG firms like Danone, which has a wellness-oriented portfolio of snacks and beverages and companies, as well as companies like BellRing Brands, which offers low-sugar, protein-rich products, such as shakes, protein powders and nutrition bars, many of which are compatible with a diet altered by GLP-1 medications.
Brands that risk losing advantage are CPG firms like PepsiCo, Hersey, and Lindt & Sprungli, which are weighted toward products that are often perceived as unhealthy, such as candies and chocolate, salty snacks, sodas and other processed foods and beverages.
Alcohol brands aren’t immune from these shifts in the market either, with certain alcoholic drinks, namely beer and cider, expected to be heavily impacted by GLP-1 drugs, Naik warned.
“In comparison to spirits and wine, beer and cider “often make consumers feel “fuller” due to their increased calorie and carbohydrate counts. As such, we expect alcoholic beverage companies that focus on beers and ciders, such as Anheuser-Busch InBev, Constellation Brands, Heineken and Molson Coors, to face greater headwinds as more consumers begin taking GLP-1 drugs,” the retail analyst explained.
Taking into consideration shifting food purchasing patterns
One way food and beverage retailers can adapt is by taking account of the spending patterns of this consumer group.
For instance, a study conducted by data analytics firm YouGov revealed that Ozempic users seem to spend more on groceries than US consumers overall, with only 15 per cent spending less than $50 each week, compared to 19 per cent of the general population. The study also revealed that Ozempic users are more likely to report spending more than $50 a week on average (77 per cent versus 70 per cent).
Retailers trying to tap into the Ozempic user base should also be aware that 25 per cent of these customers tend to use online grocery services compared to 15 per cent of the general population. Ozempic users are also twice as likely, 12 per cent versus 6 per cent, to use an online meal kit provider than non-Ozempic users.
Regardless of whether rates of GLP-1 usage continue to rise, there is a clear indication that customers are looking for healthier food alternatives and food and beverage retailers will need to adapt to keep up with this trend.