In a recent study conducted by Cornell University and Numerator, it was found that households with at least one GLP-1 user reduced their grocery spending by approximately 6% within six months of taking the medication. This reduction was even more significant for higher-income households, with spending falling by nearly 9%. The study also revealed a notable decrease in the purchases of calorie-dense, processed items, including an 11% decline in savory snacks. With nearly 15 million U.S. adults currently taking GLP-1 medications, there is a noticeable shift in the types of foods being consumed, leading to changes in what CPG companies sell and how they market their products.
As the popularity of GLP-1 drugs such as Ozempic and Wegovy continues to rise, consumer appetites are changing, resulting in a decline in sales for certain food and beverage items. The study reported that a 6% decrease in grocery spending following GLP-1 adoption equates to a $416 annual reduction in purchases per household, with higher-income households experiencing an even larger drop in spending. Snacking categories are particularly impacted, with products like chips, baked goods, sides, and cookies seeing significant reductions in sales.
Hershey CEO Michele Buck acknowledged a “mild” impact from GLP-1 on the company’s sales, highlighting the shift in consumer preferences towards healthier food choices. While there was a modest increase in spending on items like fresh produce and yogurt among weight-loss users, the overall composition of the grocery basket became healthier as people focused more on cutting back on unhealthy items rather than adding healthier options.
The study’s findings emphasize the potential for GLP-1 medications to reshape consumer food demand, presenting significant implications for the food industry as adoption rates continue to climb. In response to this trend, CPG companies are adapting their product offerings to align with changing consumer preferences. Nestlé, for example, has introduced new products like pre-meal drinks and a dedicated brand for consumers taking GLP-1 medications or focusing on weight management. Conagra Brands is also launching “GLP-1 friendly” labels on select Healthy Choice meals, becoming the first major food brand to cater to consumers using popular weight-loss medication.
Analysts predict that the global market for obesity drugs, including GLP-1 medications, will reach $105 billion by 2030. While there are still unanswered questions regarding the long-term health impact and duration of use of these drugs, companies like Nestlé and Conagra are proactively addressing the potential impact on food consumption patterns. By adapting their product offerings and marketing strategies, these companies are positioning themselves to capitalize on the evolving landscape of consumer preferences influenced by the rise of GLP-1 medications.
In conclusion, the study’s findings shed light on the significant impact of GLP-1 medications on consumer food choices and spending habits. As more data becomes available on the effects of weight-loss drugs on food consumption, food companies are taking proactive steps to align with changing consumer preferences and capitalize on emerging market opportunities. The evolving relationship between pharmaceuticals and food consumption highlights the need for industry players to stay agile and responsive to shifting consumer trends in order to remain competitive in the marketplace.