GLPs have changed consumer behavior

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The rise of GLP-1 weight loss drugs is reshaping consumer behavior in ways few expected. These medications, originally developed for diabetes management, have become a dominant force in the weight loss industry, altering spending habits and disrupting major food and beverage companies. The financial fallout is already visible, with fast food chains, snack brands, and beverage giants reporting sharp declines in revenue.

McDonald’s just posted its worst quarter since the pandemic, a clear sign that fewer consumers are indulging in high-calorie meals. WeightWatchers, once a staple in the diet industry, has filed for bankruptcy, unable to compete with the rapid adoption of GLP-1 drugs. Krispy Kreme’s stock plunged 25 percent after revenue collapsed, marking a stark reversal from its previous growth trajectory. Pepsi hit a 52-week low, reflecting declining demand for sugary drinks. Starbucks, a company known for its high-margin specialty beverages, reported slowing traffic and smaller order sizes, signaling a shift in consumer preferences.

The numbers tell the story. GLP-1 drugs like Ozempic and Wegovy have been linked to a 11 percent drop in food purchases among users. Analysts at Morgan Stanley predict that the impact on consumer spending will be long-lasting, with companies forced to adapt to a market that increasingly favors healthier options. The food and beverage industry, once reliant on impulse purchases and indulgent consumption, is now facing a reality where fewer people are reaching for high-calorie snacks and sugary drinks.

The pharmaceutical industry is thriving while food giants struggle. Semaglutide, the active ingredient in many GLP-1 drugs, became the best-selling drug in the U.S. in 2023, generating $13.8 billion in sales. With over 100 million obese adults in the country and nearly 137 million eligible for weight loss drug therapy, the market is expanding rapidly. As more consumers turn to pharmaceutical solutions for weight management, traditional diet programs and food brands are losing relevance.

The shift is undeniable. Companies that fail to adapt risk losing market share. Fast food chains are experimenting with healthier menu options, while beverage companies are investing in low-calorie alternatives. The question is whether these adjustments will be enough to counteract the sweeping changes brought on by GLP-1 drugs.

SOURCES:

https://listenlabs.ai/blog/glp-1-impact

https://www.zs.com/insights/consumer-centric-obesity-treatments-glp-1-future

https://www.pwc.com/us/en/industries/consumer-markets/library/glp-1-weight-loss.html