OC&C report outlines impact of Ozempic on the food & beverage sector

OC&C Strategy Consultants has released a new insight into the impact of ‘weight loss’ drugs such as Ozempic on the consumer goods market, with potential ramifications for the local providers.

According to a research survey conducted by the US team of OC&C Strategy Consultants, over 15 percent of American adults are presently using GLP-1 medications such as Ozempic and Wegovy or have done so in the past, triggering significant changes in dietary behaviour.

Crunching the numbers, the global strategy consulting firm analysts estimate that such shifts are already resulting in an aggregate reduction of between 1 and 2 percent in overall food & beverage volumes, which could pose a problem for producers and retailers should GLP-1s gain even further traction.

And while OC&C’s Australian consumer & retail team – led by managing director Jeremy Barker and fellow co-founder Maurice Violani – are still currently examining the local market, many preliminary insights can still be drawn from the surprising US study, as the decline in consumption isn’t being felt evenly across all categories and demographics.

Notably, GLP-1 use, especially among those taking the medication for weight loss purposes rather than to treat diabetes, is highest among the 35-55 age-bracket, with over 40 percent of the overall weight loss segment on household incomes of above $100,000. OC&C dubs these ‘super-users’, high-frequency, high-value buyers whose altered behaviour could cause the greatest market disruption.

As a brief explanation courtesy of OC&C, GLP-1 medications, which have demonstrated potential weight loss by as much as 20 percent within twelve to eighteen months, reduce caloric intake by mimicking satiety hormones, slowing gastric emptying, and – perhaps most importantly here – by modulating brain reward signals related to high-fat and high-sugar foods.

Psychological factors aside, respondents in previous studies were found to have lowered their spending on chips and other savoury snacks and baked sweet goods by an average of 10 percent or more six months into taking GLP-1, with the purchase of frozen meals, soft drinks, chocolate, ice cream and pasta among the category items also significantly reduced.

Along with more than quarter of GLP-1 users attesting to eating healthier foods, other research findings of note include almost one third who say they had reduced their portion sizes subsequent to adoption. Meanwhile, a further 23 percent claimed to be dining out less often, particularly for dinner, together with the 16 percent who indulged in fewer late night snacks.

Here, OC&C quietly notes that over 100 million US adults are classified as obese, with altogether 70 percent of the country’s population deemed overweight; ergo, the consultancy expects GLP-1 uptake to continue growing due to the vast underlying demand, along with other factors such ongoing product development which could dampen side effects and make the concept of a magic skinny pill even more attractive.

While the firm considers the impact on consumption to be moderate to date – a 'structural headwind' rather than an outright 'paradigm shift' – the growing popularity of drugs like Ozempic could have far-reaching implications across the food & beverage industry, from branded manufacturers through to grocery stores and ‘quick service’ restaurants.

Naturally, with disruption comes the potential to capitalise, and here the OC&C report authors conclude; “For investors and executives, GLP-1s represent a persistent headwind, not a temporary blip. However, they also signal an opportunity to reposition brands, restructure portfolios, and innovate product offerings aligned with evolving consumer needs.”