GLP-1 drug users initially spend less on groceries, but that impact levels out over the course of a year, according to a new report.
Frozen foods, fatty proteins and sugary beverages face big sales declines among users of GLP-1 agonist drugs like Ozempic and Mounjaro, a new report shows.
Tracking the spending of over 3,500 weight-loss drug users, market insights firm Circana found that these Americans spend less on food and beverages during the first three months of use. Crucially though, after 12 months of being on the medications, their expenditure returns to pre-Ozempic levels.
At the retail level, they’re putting more money into GLP-1-supportive foods like vegetables, eggs and nuts, while spending less on items they’ve been recommended to avoid. In addition, there was an uptick in dollar spend on gums, mints, and non-chocolate candy to provide relief from the side effects of these drugs, which include bad breath and dry mouth.
Overall, after a year of use, their spending on packaged food and beverages declined by 1.1 points. “These evolving behaviours reveal a clear connection between category growth and the health-driven preferences of these consumers, offering brands fresh opportunities to align with their goals,” the report stated.
Sally Lyons Wyatt, global executive VP and chief advisor of Circana, said: “A deeper understanding of GLP-1 medications and their roles in weight loss has unlocked new opportunities to enhance the food, beverage, and nonfood products that support consumers’ overall wellbeing.”
How does Ozempic affect food purchases?
Circana’s analysis revealed changes in the grocery store aisles that GLP-1 users shopped in. The largest shift came in the freezer category, with monthly spending on frozen foods dropping by three percentage points during the first year of GLP-1 medication use.
Sales of centre-store beverages (those in the ambient aisles alongside other packaged foods) also declined; the consumers increased their spending in the produce and deli departments, indicating that they’re seeking food with added benefits – think high-protein offerings, or those with less sugar, salt and carbs.
The results of the Circana survey somewhat contradict another study published the same week by Cornell University’s SC Johnson College of Business, which revealed that American households with at least one user of GLP-1 drugs typically spend 5.5% less in supermarkets within six months of taking the medications, with high-income households seeing a sharper 9% decrease.
Circana, however, said homes with GLP-1 users “typically spend more on CPG food, beverages, and foodservice before they initiate use of a GLP-1 than non-user households, a trend that continues even in the first year of drug use”.
The research firm suggested several reasons for this. Most insurance companies don’t cover weight-loss drugs yet, so the costs keep discontinuation rates high – as do gastrointestinal side effects. This means many people who start on GLP-1 drugs can’t stay on them after reaching their goal weight.
Meanwhile, when dining out, their money is initially skewed towards quick-service restaurants, then subsequently shifts to grocery foodservice (where monthly spending was up by 4.2%), casual dining (+1.5%), and mid-scale restaurants (+9.1%) during the first year. The convenience channel, however, saw monthly sales decline by 11.5%.
How can brands take advantage of the Ozempic boom?
“As accessibility, availability, and affordability of these medications improve, it will become critical for companies to develop strategies that support consumers on their health journeys,” said Lyons Wyatt.
56% of people currently take a GLP-1 drug for weight loss; this is a number that is “sure to grow as coverage and affordability improve”, the report noted.
So how can brands and retailers win? Circana suggests ramping up the development of high-protein, ready-to-eat meals, and portion-controlled snacks that support both satiety and blood sugar maintenance, while focusing on fibre-rich foods.
Educating consumers about GLP-1 benefits, and how certain functional foods can support their weight loss goals, is a shrewd strategy. “In-store and online, retailers can leverage their dietitians, retail media networks, and apps to promote products and services to support GLP-1 users’ weight-loss goals,” Circana wrote.
Opportunities abound in personalised meal plans and product recommendations, including subscription-based services for GLP-1-friendly meal deliveries. Retailers can also take a leaf out of the allergen-free playbook, partnering with manufacturers to create a section dedicated to products that meet GLP-1 needs – as GNC has done.
Partnering with healthcare providers to create wellness programmes that integrate GLP-1 medications with dietary and lifestyle changes, and ensuring that Ozempic-friendly products are widely available and affordable, are important strategies too.
“For consumers needing help with getting to optimal GLP-1 levels, working with a medical professional to determine the right mix of medications, supplements, and/or CPG products will remain vital in managing their health over the long term,” said Lyons Watt.
The impact of GLP-1 drugs has already made food companies rethink their offerings. Nestlé now has a new brand dedicated to GLP-1 users, Coca-Cola and PepsiCo are preparing prebiotic launches, and Birds Eye and Slim Jim owner Conagra Brands has introduced ‘GLP-1 friendly’ labels on packaging for some of its Healthy Choice ready meals.
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