The revolutionary GLP-1 class of weight loss drugs are racking up blockbuster sales at a pace rarely seen in the pharmaceutical industry. But the pharma industry’s gain is the food industry’s loss.
Approved for weight loss by the Food and Drug Administration just four years ago, Ozempic, Wegovy and other drugs in this category are now the best-selling medications in the United States. One in eight U.S. adults, some 30 million people, are taking the drugs, according to a new KFF poll.
In survey after survey, users of the new weight loss drugs say they are cutting back on purchases of high-calorie foods and dining out less. As a result, Morgan Stanley (MS) predicts that overall consumption of soft drinks, baked goods, and salty snacks will fall 3% by 2035.
One study that sent shudders through the food industry was an examination by researchers at Cornell University of purchases of 150,000 households. The study found that if one person was taking a GLP-1 drug, the household reduced its grocery spending by 5.5% within six months. Higher-income households reduced spending by 8.6%. The study by Cornell’s SC Johnson College of Business noted that the reductions were driven by large decreases in purchases of calorie-dense processed food, including an 11% decline in savory snacks.
“Our findings highlight the potential for GLP-1 medications to significantly change food demand, a trend with increasingly important implications for the food industry as GLP-1 adoption continues to grow,” the researchers wrote.
The changes are likely to last.
In a recent survey of 1,700 consumers by the consulting firm Ey-Parthenon, respondents taking weight loss drugs said their consumption of snack foods dropped between 40% and 60%, while specialty and health food consumption climbed by almost 50%. “The survey results indicate that adoption (of GLP-1 drugs) will be rapid and long-lasting,” Ey said in its report.
Restaurants may take a hit as well, according to a survey by the website Finance Buzz. More than half of those queried who were taking a GLP-1 drug said they spent less money on dining out since starting the medications, and 37% reported reduced spending on alcohol.
GLP-1 drugs, also known by the generic name semaglutide, were approved for the treatment of diabetes some 20 years ago, but the category took off when it was discovered that they are extremely effective for weight loss, and with minimal side effects. The drugs mimic the GLP-1 hormone, which helps regulate appetite, and can reduce calorie intake by 20% to 30% daily.
Given that some 40% of U.S. adults classify as obese, the potential market is huge. Plus, the drugs may be effective against a broad range of diseases. Scientists are studying them for the treatment of heart disease, addiction, Alzheimer’s disease, Parkinson’s disease, symptoms of menopause, sleep apnea, and fatty liver disease. Sales are widely projected to soar from $15.87 billion in 2023 to anywhere from $100 billion to $150 billion by 2030.
The drugs are costly however, running $1,000 a month and up in the U.S., and are often not covered by insurance, which limits their uptake. But prices are likely to drop as pharma companies develop oral versions of the drugs. That prospect already had food companies running scared more than a year ago. The CEO of Novo Nordisk (NVO), the maker of Ozempic and Wegovy, said last year that food company executives were so “scared” they were calling him for advice on how to adapt to the new world of weight loss drugs.
According to its recent survey of 300 patients taking GLP-1 drugs, Morgan Stanley said that “two-thirds of patients reported eating three or more snacks per day before starting the drugs, while 74% reported eating two snacks or less after starting the drugs.”
There may, however, be an upside for those food companies that offer lower-calorie options. An October 2024 survey by PwC of some 3,000 U.S. adults found that, while GLP-1 users spent about 11% less on most categories of food, 56% said they were making healthier food choices.
Shane Smith, CEO of packaged meats company Smithfield Foods, told a consumer conference in March that there is growing demand for meat among consumers who are taking weight-loss drugs. Based on scanner data, it is “snacks and sugary drinks and those types of things that they’re not buying,” Smith said.
“But they’re really focused on maintaining a good level of protein and high-quality protein in their diet,” Smith said. “So, we think we’re set up well as we go forward.”
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