In a surprising turn of events, a class of popular weight loss and diabetes medications called GLP-1s is having an unexpected impact on consumers’ dining and food purchasing habits.
Consumers Trading Indulgences for Savings
A survey of 300 GLP-1 users conducted by Morgan Stanley revealed that a significant majority (63%) are spending less on dining out, with 61% trimming expenses on takeout and delivery. However, there is less of a dietary shift when it comes to groceries, as only 31% reported reduced spending at the supermarket.
Restaurants Feel the Pinch
This change in spending patterns is beginning to affect the restaurant industry. Healthier fast-casual eateries like Cava, Chipotle, Sweetgreen, and Starbucks are positioned to thrive, while more indulgent options such as Jack in the Box, Wendy’s, Wingstop, and Shake Shack may face challenges.
Packaged Food Companies Face Potential Woes
Hershey, with its indulgent snack portfolio tailored towards American consumers, was identified by Morgan Stanley as the most vulnerable packaged food company. Conversely, healthy food providers like Vital Farms and Simply Good Foods could potentially benefit from GLP-1s.
Beverage Industry Jitters
Alcoholic beverage producers like Molson Coors, Boston Beer, Constellation Brands, and Diageo are at heightened risk from GLP-1s, as consumers may opt for healthier alternatives like water or unsweetened tea.
Shifting Dietary Choices
Survey participants reported reducing consumption of snacks, confections, sugary drinks, and alcohol. Notably, over half (50%) reported cutting consumption of regular sodas and salty snacks by 50% or more, and 22% have quit alcohol altogether.
GLP-1s Potentially Impacting Smoking Behavior
Intriguingly, the survey also indicated a decline in smoking rates among GLP-1 users. Weekly cigarette use fell from 40% to 24%, and weekly e-cigarette use decreased from 30% to 16%. However, Morgan Stanley emphasizes caution in interpreting these results and is monitoring ongoing medical research in this area.
Projections for the Future
Morgan Stanley projects that by 2035, GLP-1s could lead to a 4-5% reduction in consumption of ice cream, cakes, cookies, and regular sodas. A moderate decrease (around 3%) is also anticipated in the consumption of alcohol, salty snacks, crackers, and cheese. Pre-packaged fruit juices, soups, sports drinks, coffee, and granola are among the food categories likely to see the least impact.
The GLP-1 Revolution
The findings highlight the potential impact of GLP-1s beyond their primary medical uses. As their usage grows, they may have broader implications for the food and beverage industry, consumer behavior, and even potentially healthier lifestyles.
Data sourced from: cnbc.com
