The landscape of the food and beverage industry is on the cusp of a potentially significant shift, as the increasing use of GLP-1 weight loss drugs such as Ozempic begins to influence consumer spending habits. Walmart’s admission of a “slight pullback” in customer spending on certain food items, juxtaposed against the profits from selling these drugs at its pharmacies, has rippled through the market, eliciting varied responses from major players in the industry.
Marion Nestle, an emeritus professor of nutrition, food studies, and public health at New York University, posed the provocative question to the New York Times: Is Ozempic an “existential threat to the processed food industry”? While it may be too early to make definitive claims, the industry isn’t waiting to find out. Instead, companies are adapting with a multi-pronged approach that may redefine how we think about diet and nutrition in the context of modern pharmacology.
**Adapting to Change**
The first strategy being employed by companies is to reposition existing products as ‘companion’ options for those on GLP-1 drugs. This includes gut health products to counteract gastrointestinal side effects and supplements designed to fill nutritional gaps due to reduced food intake. Daily Harvest, for example, has launched a GLP-1 Companion Food Collection, while Noom promotes itself as a digital assistant to support medication adherence and prevent muscle loss.
Danone has taken this opportunity to highlight the suitability of its high-protein, low-fat dairy products for those focused on weight loss—a sentiment backed by consumer research indicating a dietary shift among Ozempic users towards healthier options like fruits, vegetables, and dairy, and away from sugary drinks and alcohol.
**Innovation and Opportunity**
The second tactic involves the development of new products specifically tailored to the needs of individuals using GLP-1 drugs. These include portion-controlled, nutrient-dense, and high-protein snacks. Nestlé’s CEO, Mark Schneider, has indicated that their Health Science division is already capitalizing on this trend, with plans to roll out new products by 2024. Nestlé’s portfolio, which includes brands like Vital Proteins and Orgain, is well-positioned to cater to the increased demand for protein-rich products that support muscle mass maintenance.
Nestlé is also looking to address the vitamin and gut health needs of GLP-1 patients through its supplement brands, leveraging its existing shelf presence and credibility with healthcare professionals to meet these new consumer demands.
**Resistant Starch and Prebiotic Fibers**
The third strategy capitalizes on the growing consumer interest in ingredients that naturally enhance satiety, such as resistant starch and prebiotic fibers. These ingredients may stimulate gut hormones like GLP-1 or promote satiety through other mechanisms. However, companies should tread carefully with their marketing claims, as overstepping scientific evidence could lead to legal issues.
**Big Food’s Perspective**
Despite the potential for disruption, some industry giants remain unfazed. Mondelēz International’s CEO, Dirk Van de Put, has downplayed the impact of GLP-1 drugs on their business, citing modest volume effects and the company’s low exposure due to its international market presence. Mondelēz is focusing on portion control and healthier alternatives, which they believe align well with the needs of GLP-1 drug users.
PepsiCo, too, has reported a “negligible” impact from these drugs, with CEO Ramon Laguarta expressing confidence in their long-term portfolio strategy. The company’s ongoing efforts to reduce sodium, fat, and sugar content in their products are seen as aligning with the health-conscious trends that GLP-1 drugs may accelerate.
**Industry Insights**
Melissa Abbott of Hartman Group notes that food and beverage companies are keen to understand the implications of this shift, with many already making proactive changes to their product lines. The trend towards lower sugar content in beverages, in particular, is seen as a strong position for companies anticipating changes in consumer habits.
As the industry navigates these new waters, it’s clear that the rise of GLP-1 drugs is not just a challenge but also an opportunity for innovation and growth. Food marketers and formulators are being called upon to rethink their strategies, ensuring that their portfolios can not only survive but thrive in a market where pharmacology and nutrition are becoming increasingly intertwined.