Why GLP-1 drugs’ impact on food will be more evolution than revolution

Erin Lash, director of consumer equity research at Morningstar Research, studies GLP-1s from the perspective of a food-industry analyst. She sees potential for these treatments to be a game-changer, but also for them to behave like so many historical diet and health trends that have ebbed and flowed. She sees a need for investment — as well as patience. And she points out that even if these products are used by someone in a household, they might not be used by everyone. She's mindful that when thinking about the future, we all have to eat.

Matt Carmichael: How big of a deal are GLP-1 medications going to be in the food space?

Erin Lash: If you take a step back, packaged food companies have faced challenges from a host of evolving diet trends and health fads. Their challenge has been more impacted by the fact that consumers say they want products that are healthier, but the purchase patterns don't necessarily support that contention. So companies have been making their products healthier — taking out salts, artificial flavors and colors — but not telling consumers about it because consumers attribute a healthier product to one with a less favorable taste.

Carmichael: What are companies doing today?

Lash: Firms are working to increase the nutrient density of their products to ensure that a portion of their portfolio is geared toward the ease of digestion that consumers who are on GLP-1s need, and making sure their product assortment features smaller pack sizes to appeal to consumers who might become full more quickly than if they weren't on a GLP-1 regimen.

Carmichael: And what should they be thinking about for tomorrow?

Lash: The onus remains on packaged food companies to make sure that they're investing with significant foresight of what these consumers are after. This could take years to manifest. It does give packaged food companies the runway to experiment and explore and innovate around these opportunities and ensure that what they're bringing to market is aligned with what consumers are after.

“Patience is incredibly important. There are a lot of unknowns from where we sit in the implications as they relate to volumes and trends.”

Carmichael: So we should all be patient for change?

Lash: Patience is incredibly important. There are a lot of unknowns from where we sit in the implications as they relate to volumes and trends. A year ago, it was mentioned on every consumer packaged goods earnings call.

It doesn't get brought up as much now because there are other factors in the market, such as the financial constraints that consumers are under, supply and demand imbalances, and where consumers are shopping in brick-and-mortar stores versus e-commerce. It's hard to parse out the changes that we're seeing from a volume perspective and the ultimate drivers behind that, given the number of macro and competitive forces.

Carmichael: What if GLP-1s aren’t that big of a deal in the end?

Lash: Making sure to invest in that particular lane without taking their eye off the ball of broader consumer trends is crucial.

For further reading

• Brand success in the GLP-1 era
• What anti-obesity drugs could shift in how we think about weight
• How new obesity medications could transform the grocery landscape