More than half of Millennials (53%) on the drug, and 39% of all users expressed ‘extreme interest’ in GLP-1-patient tailored food, according to the survey, published in The New Consumer’s Consumer Trends 2024 Mid-Year Report.
It also revealed a very significant effect on consumer tastes and food purchasing behaviour. More than half (52%) of GLP-1 users indicated that food tastes matter more when making decisions about what to eat than before they started taking the medication, with only 14% experiencing the opposite effect.
Will GLP-1 drugs weigh on food and beverage sales?
Some food brands and investors in the sector were quick to express concerns about reduced sales because of expected diminishing consumption as a result of the record number of consumers succeeding in cutting down their food consumption. In late 2023, Bloomberg reported on the declining fortunes of consumer-facing brands – with steady increases in the mentions of GLP-1 drugs on earnings calls going hand-in-hand with drops in share prices of food and beverage companies such as Mondelēz and Constellation Brands.
However, in an interesting finding for food and beverage brands looking to capitalise on the growing popularity of the drug, the Coefficient Capital survey indicates that GLP-1 users are significantly more likely to try new brands and products in the supermarket than non-users. More than a quarter (27%) of GLP-1 users reported buying a new product or brand ‘every time’ they shop for groceries, in contrast to only 3% of all shoppers. Overall, 89% of GLP-1 users try new products at least ‘some of the time’, compared to 70% of all shoppers.
Trading up
The survey also offers opportunities for high-end brands. Not only are GLP-1 users more willing to try new products, but they are also much more likely to ‘trade up’. Faced with persistent food inflation, in the first six months of 2024, the average grocery shopper has ‘traded down’ by buying cheaper products more than they have ‘traded up’ by buying more expensive alternatives by a margin of 5%. Meanwhile, shoppers using GLP-1s have traded up more than they have traded down by a margin of 17%.
Some of this behaviour could be explained by GLP-1 patients possibly being more affluent. The survey indicates that there are many Americans who would like to take GLP-1 drugs but are unable or unwilling to do so because of the high cost of the drugs and the lack of insurance coverage. The higher proportion of GLP-1 users who are also trading up on non-food items like clothing and cosmetics also suggests that a higher ability to spend plays a role. However, trading up on food and beverage items – especially fresh produce and proteins – was more significant among those using GLP-1 to lose weight; suggesting that at least some of the spending behaviour is caused by changing tastes and behaviours linked to GLP-1s.
With drug prices expected to decline and the number of obese Americans – around 40% of the population–, Coefficient Capital estimates that 25 to 50 million more Americans are likely to start using the drug in the coming years.
GLP-1 branded food
Food and beverage brands are clearly paying attention to the changing consumer landscape. As reported earlier this month on Ingredients Network, Nestlé is one of the main brands seeking to position themselves in the GLP-1 space. While Nestlé Health Science released the web platform GLP-1 Nutrition, Nestlé also started selling a range of foods designed to complement GLP-1 weight loss medications. The ‘companion’ foods, sold under the name Vital Pursuit, include affordable sandwiches, frozen meals, and pizzas with high amounts of protein and fibre.
Nestlé is not the only brand embracing the opportunity to sell to a new group of consumers. Earlier this year, Conagra Brands announced a range of meat snacks, frozen meals, and popcorn marketed specifically at weight-loss drug users. Like the Nestlé offerings, these products have fewer calories but are high in protein and fibre.
Danone is another food company looking to benefit from the changing dietary patterns of US consumers. While the brand has not announced any product lines that specifically target GLP-1 users, it is targeting health and nutrition as part of a strategic overhaul. In June this year, Danone chief executive Antoine de Saint-Affrique told the Wall Street Journal that the food industry is “at a tipping point”, adding that “health, and the role food plays in health, will become more critical than ever.”
