Sales Down in the Sweets Aisle

To quote the New York Times piece on Ozempic, “For decades, Big Food has been marketing products to people who can’t stop eating, and now, they can.” A whopping 7 million people are currently using a GLP-1 drug to tackle weight loss challenges and health issues.  By 2035 that number could grow to 25 million and include advanced formulas that address a multitude of medical concerns from Parkinson's, to Alzheimer's to obesity-related diseases. Unlike other fad diets and health trends, the semaglutide craze is one that could be here to stay; and while it may have been intended to combat diabetes, it’s reshaping how millions of consumers shop.

To say the food industry was caught off guard by Ozempic could be an understatement. It is no secret that found companies have leveraged chemistry to inhibit or entice the body’s natural receptors and in doing so, rack up sales from hungry customers. From smells, to tastes, to satiation, Hostess, Hungry Man, Taco Bell, Nestle, PepsiCo and many other brands who churn out convenient meals for the masses have relied on chemical innovations to support their industry. All of a sudden, those chemical concoctions stopped flying off the shelves thanks to a weight loss drug with the power to change one’s palate.

Are Snack Companies Worried About Ozempic?

Major food retailers have collected data on food sales in relation to Ozempic and other GLP-1 medications. Walmart was the first to link decreasing snack sales with the drug. GLP-1 not only suppresses appetites it changes taste buds. Walmart’s data showed that consumers using medically supported weight loss drugs are purchasing less groceries and shopping less frequently in the snack aisle.

The U.S. Department of Agricultural Economics and Agribusiness conducted a study that analyzed the eating habits of almost 2,000 people previously or currently taking GLP-1s.  The study showed that semaglutide users were averaging 720-990 calories per day. It also revealed a sharp decline in the consumption of processed foods, sweets, sodas, refined grains and high fat proteins. Meanwhile, fruit and vegetable consumption soared.  

Should food and beverage giants be worried?  Roughly 4% of the population, consumers who once frequented the snack aisles, is moving away from prepackaged convenience and back to the produce section. And soon, that percentage could exceed 10%. If they haven’t felt the financial impact of Ozempic yet, they likely will soon.

Food and Beverage Industry Still Sells Convenience

Big Food has found plenty of ways to navigate food fads and diet trends over the years. Let’s not forget that McDonalds had McLean burgers, Heinz supplied weight watchers with “healthy” cheesecakes and Hot Pockets scaled the calorie count back by 30 and launched Lean Pockets. And all were marketed to specific health trends.

Food innovators are already toying with portion controlled, lean protein snacks that support their consumers current goals.  Rather than fight Ozempic, why not cash in on the new opportunities?  Soda sales are down, but PepsiCo’s Fairlife milk line gained popularity; a good sign for the corporation who plans to invest in further developing Fairlife products. Whey protein is growing in popularity as are other protein heavy snacks. While there appear to be fewer new snack items on the market it’s probably safe to assume that food innovators have ideas in the works that will support Ozempic consumers.

At the end of the day, food companies have been successful in large part because American consumers value convenience over most other factors. And a lot of options in the produce section are expected to get more expensive under blanket tariff rates. If you followed GLP-1 users around the grocery store now you might see them completely bypass the chip aisle and the cookie aisle but linger by the tomatoes and leafy greens.  But what happens if the cost of constructing a salad doubles and a new perfectly portioned, protein packed, prepackaged brownie becomes available at a lower price? Will consumers taking Ozempic still gravitate towards the fruits and veggies?  Big Food is banking on convenience staying king.