“Nothing tastes as good as skinny feels.” Kate Moss said in a now infamous 2009 interview.[1] In a society that is mostly overweight and obese, skinny, small waisted adults are visibly rare in public life. And rare social phenomena usually become one of two things: a source of danger or a source of status boosting.
While obesity rates in the U.S. adult population (BMI of 30 or higher) peaked around 2017-2020 (and may be declining slowly),[2] rates of severe obesity (BMI or 40 or higher) continue to climb steadily (currently around 10%). This latter group represents the population with almost certain chronic illness risk due to their body fat composition.
The stigma aimed at the severely obese has not ebbed in our society despite the majority’s significant weight gain. They therefore have the strongest psycho-social motivation to do something dramatic to escape this symbolic burden. Across the U.S. population, nearly 40% of adults have experienced fat shaming comments or other forms of stigma.[3] It is the skinny minority who benefit from this shaming process and from convincing others to join them.
The increasing rarity of skinniness presents the mildly obese and even the merely overweight with a powerful incentive to regain their prior normal BMI status – join the ‘body elite.’
The severely obese Americans I have interviewed over the years, though, have little desire to be ‘skinny’ because most never were and because their objectives are more practical – being able to move without pain, ending diabetes and healing their heart.
Pharmaceutical companies can easily monetize both motivations – health improvement and social status.
Historically, individual dieting efforts do not tend to last more than a few months. Weight is then fully regained as old habits re-engage. The most successful diet programs (e.g. Atkins and Jenny Craig) do not generate weight loss lasting more than a year.[4] A year. Part of the reason is that most dieters only want to lose 5-20 pounds temporarily. They do not have the massive objective of the severely obese.
So, how will the latest generation of weight-loss medications affect America’s weight management culture? And will they have a permanent effect on food consumption volumes, if they gain a permanent foothold? And what are major food players doing to hedge against any threat to volumes?
Before diving into these questions, it’s important to establish some basic facts about the spread of GLP-1 prescriptions for weight loss.
The State of GLP-1 Play
As of 2024, 82% of American adults are aware of this class of medication, with 18-29 year-olds being the least aware.[5] The American population is primed to try them.
While 12% of U.S. adults have ever taken a GLP-1 agonist, only 40% of these have taken it to lose weight.[6] This means 4.8% of Americans have ever taken Ozempic, Wegovy or another GLP-1 medication in order to lose weight.
And 2024 is becoming the breakout year for GLP-1 anti-obesity medication prescriptions. Doctors wrote roughly half a million new anti-obesity GLP-1 scripts between Jan. 1 and June 30, 2024. This rate then nearly doubled between July 1 and September 30, 2024. In 2024, script acceleration will yield more than 2,000,000 new anti-obesity prescriptions for these medications.[7]
This constant acceleration is a strong sign of steady repeat prescription usage by a growing patient population that is doubling every six months. With the reliable Q1 surge in dieting behavior in America, this acceleration is likely to continue into 2025.
In 2024 alone, roughly 1% of U.S. adults started Wegovy and similar meds in order to lose weight.
So, how long can all of this continue?
Which has the Larger Addressable Market: GLP-1 Drugs or Bariatric Surgery?
Bariatric surgery and GLP-1 drugs deliver very similar, extreme weight loss in record time. This is an enormous motivator for the severely obese, or anyone who wants to lose 20% or more of their bodyweight for any reason, including rejoining the “body elite.”
However, these two different medically authorized solutions currently differ a lot in their cost to consumers and ease of qualification to use. When combined, these variables affect the effective, or serviceable, addressable market for GLP-1 drugs.
Bariatric surgery is harder to qualify for than GLP-1 medications. It requires a medical evaluation, a BMI of 35 or higher or a BMI of 30-34 with a chronic health condition like heart disease or diabetes,[8] and a mental health screening (some require initial weight loss to prove commitment). GLP-1 drugs require a doctor’s prescription but this can be obtained through DTC platforms like RO very quickly (compared to bariatric surgery approval). The FDA allows practitioners to prescribe Wegovy at a lower BMI threshold than bariatric surgery – a BMI of 30 or more – OR for a BMI of 27 or more and a weight-related medical condition, such as high blood cholesterol and triglyceride levels or high blood pressure.[9]
Unlike bariatric surgery, weight loss medications are not fully covered by most major medical plans or covered at all. Their annual cost is still a huge barrier for some eligible adults.
And there is no Medicaid coverage for weight loss drugs in most states (excludes use of Ozempic for diabetes management). Finally, as with bariatric surgery for most, you have to have a current chronic health comorbidity like diabetes or heart disease to get injections covered by Medicare.[10] This relegates aspirational weight loss usage to more affluent consumers trying to rejoin the body elite (or the extremely lifestyle-motivated).
Given all this, how do the market sizes for each solution contrast?
Johnson and Johnson claims that about 20% of the population are currently eligible for bariatric surgery,[11] half of whom are not severely obese. And roughly 2.5 million adults have had the various procedures performed since 2011 (or about 10% of the current adult population).[12]
As currently prescribed, almost 70% of the U.S. adult population is eligible to take Wegovy, Mounjaro and similar GLP-1 agonists for weight loss. GLP-1 drugs have more than three times the crude, addressable market.
The ease of qualifying for GLP-1 drugs reduced annual bariatric surgeries by 25% in 2023.[13]
The 2024 numbers are likely to be equally impactful. This huge decline took place despite the fact that the insurance ecosystem is still trying to steer most of the obese toward bariatric surgery.
While GLP-1 costs remain higher than bariatric surgery, retail prices will come down over time, especially in 2032 (when initial patents run out and generics appear), but probably not to the level of Dexatrim, phen-phen and similar blockbuster, yet faddish, weight-loss pills from yesteryear.
The addressable market for Wegovy and similar GLP-1 drugs is premium-priced and large. It is therefore set up for excellent long-term growth, if it can relax pricing and find enough people willing to endure its symptoms. The ability to retain a minority of new annual consumers is critical for any consumer brand to avoid burning through its addressable market (and then decline if most lapsed users are rejectors).
So, what do we know about retention, given the emerging research on what it’s like to live with GLP-1 drug symptoms?
How Long Do Consumers Stay on These Drugs?
What is interesting from the research on early Wegovy users is that GLP-1 drugs create very similar symptoms and consumer experiences as bariatric surgery:
- Severely reduced appetite
- Nausea when eating ‘normal’ sized portions (i.e. portions they used to eat)
- Need to alter one’s diet due to nausea symptoms and reduced time to satiety
- 20-30% loss of muscle mass with long-term use (along with lost body fat)
- Tendency of some to consume sugary drinks and alcohol to transfer emotional eating to consumables that bypass the human satiety hormone feedback mechanism
- Tendency to slowly regain weight, but not all of it (i.e. permanent weight loss)
- No exercise necessary to achieve the weight loss benefits[14]
What is very different with GLP-1 drugs are specific, low risks to the thyroid and pancreas but more commonly, a frequent, “miraculous” end to pre-existing drug addictions (alcohol, tobacco, opioids, and pyschostimulants).[15] This may be GLP-1 drugs’ most potent marketing tool when reaching out to adults without obesogenic chronic illness.
GLP-1 symptoms are not pleasant, not any more than living with a surgically reduced stomach. But, because it is a consumable, consumers can stop when they lose “enough” weight. They feel more in control with a reversible decision. This, in turn, gives GLP-1 drugs access to the annual dieting cycle in American culture.
Using pharmacy receipt data anchored to initial GLP-1 prescriptions in 2021 from a large PBM, one early study revealed that only 32% GLP-1 patients remained on these weekly injections after 12 months and only 15% after two years.[16]
This is an 85% two-year rejection rate not too far off from otherwise successful, consumer packaged goods brands I’ve worked with. Not horrible, but not ideal. And much better than any diet program ever invented.
If this pattern of retention holds, though, then the long-term market for GLP-1 drugs will be stable but not extending to all 70% of eligible adults.
- Less than 1 year = 48% of adults or 69% of the eligible market
- 1-2 years = 12% of adults or 16% of the eligible market
- 2 years plus = 11% of adults or 15% of the eligible market (29 million adults)
As with most GPG brands, the bulk of initial prescriptions will go to folks who do not maintain a weekly injection discipline for many reasons. The stable market over the long haul is about 11% of U.S. adults (i.e. within the 70%).
If two million anti-obesity GLP-1 scripts for weight loss get initiated annually, it will take 14 years to acquire the 11% of long-term eligible heavy users out there while burning through many more who are not committed to the regimen required. Perhaps faster as prescriptions accelerate in 2025.
Yet, as with many weight-loss products and services, some of the ‘rejectors’ will come back. The first study of reinitiation of GLP-1 drugs indicates that 35% with inferred weight loss intent did restart within a year.[17] The latter also suggests that prior Wegovy users will get re-recruited during the January/February and May/June American weight-loss spikes we all know well.
What we can foresee is an annual cycling in and out of the GLP-1 drug universe not dissimilar to the cycling in/out of diets more generally.
But, with a much larger, long-term user group than branded diet programs have ever been able to create.
OK, But What Do GLP-1 Users Actually Do Differently?
Numerator has published the best available data on changes in dietary consumption among GLP-1 users (using actual grocery receipts from 2023 but gathered before the 2024 acceleration in script writing). GLP-1 weight loss users significantly reduce their unit volume of food purchasing (-8.6%) and more revealingly of alcohol (-14.5%).[18]
More recent, less accurate, survey research on GLP-1 weight-loss drug users from September 2023 suggests the following rank order of reported decreased consumption that features a big impact to the QSR and candy industries:
- Fast Food (77%)
- Pizza restaurants (74%)
- Confectionery (72%)
- Carbonated/sugary drinks (70%)
- Cookies/baked products (69%)
- Alcohol (66%)[19]
Top foods where users report an increase in consumption:
- Fruits and vegetables 54%
- Weight-loss management foods (44%)
- Poultry and fish (38%)[20]
GLP-1 drugs, unlike bariatric surgery, appear to have a strong effect on muting intrinsic desire for compulsive (and impulsive) eating and drinking. This puts at risk an entire category of out-of-home eating occasions known to the industry as “Immediate Consumption.”
The effect of GLP-1 usage on food volumes depends in large part on how large the active, annual user population really gets over the next few years (a mix of short-term dieters and long-haulers).
It’s important to remember that prescription rates are still accelerating, and so the sales volume effects will probably get worse in the near term.
Industry Response – Early Hedges
Morgan Stanley was early with its long-term forecast of the impact of these drugs. Here’s what they saw a year ago in a very fast-moving space.
- Alcohol and Soft Drinks – 2% volume decline by 2035
- Fast Food – 1-2% volume decline by 2035
- Impulse, low nutrition snacks – confectionery, baked goods and salty snacks – as much as 3% volume decline through 2035.
Stepping back from these forecasts, whose methodology is unclear, these are really big changes in consumer market segments larger than $50B. Population growth stagnation is also not helping counteract the effects here. This is enough decline, though, to affect long-term corporate strategy among top food companies.
But the validity of these forecasts rests on GLP-1 drugs becoming a 12-18 month weight-loss solution for tens of millions of short-term dieting Americans in addition to the long haulers who remain on them for years. I think these drugs are poised to achieve this level of impact despite the negative symptoms. If true, we will see impulse-driven indulgence snacks and beverages decline to a new baseline in terms of ounce volumes.
Frito-Lay remains very quiet on the long-term effect of GLP-1 drugs on its business. Snack volumes are down across the board for the last two years, with a few segment exceptions (tortilla chips). FLNA attributes recent volume declines to the multi-year effect of inflationary price increases taken at the shelf. Management publicly expects volume to revert to the normal trendline in 2025.[21] The recent acquisition of Siete, however, would suggest their hedge against continued core volume stagnation typical of large conglomerates.
I would expect more M&A for major snack and alcohol companies whose innovation resources are not suited to making the kinds of nutritional supplement products that would attract easily nauseated GLP-1 users who need nutrient-rich foods that require no cooking.
In fact, Nestle and others with those core capabilities are working on advanced nutritional supplementation for GLP-1 users – to reduce negative side effects like muscle wasting.[22] In the meal-replacement world, these products should do well, even when marketed explicitly as GLP-1 supplements. Nestle has been producing these kinds of products for the elderly for decades (e.g. Ensure).
Any snack company capable of making very high fiber snacks (7-10g or more), for example, will have opportunities to reach each year’s cohort of GLP-1 users.
Other ventures, like Nestle’s U.S.-based Vital Pursuits portion-controlled frozen meals brand seem to be literal-minded, questionable responses to the primary GLP-1 symptom – decreased appetite.
There is more than one variable combining to drive eating satisfaction for consumers on these drugs.
The larger unknown risk is that tens of millions of temporary GLP-1 users develop what is a real issue for many traditionally processed food products – a sudden aversion to ultra-processed flavor profiles themselves.
It’s not a coincidence that early GLP-1 users are also revealing that “lack of satiety” has a known sensory experience which flips to becoming “negative” for some users of these drugs. We all grew up with this processed food and know what it does to our mouths and brains when we consume it. Salt. Fat. Grease. Unreal flavors. Sugar bombs. Here’s what Tomas Weber from The New York Times noted:
“Though many ultra-processed foods and drinks turn off a lot of GLP-1 users, some are breaking through: On GLP-1 forums, people celebrate Fairlife, a line of sweet protein shakes owned by Coca-Cola.”[23]
The graveyard of diet food brands like Slim Fast and South Beach Diet should caution most executives against kicking off a narrowly conceived innovate-to-defend strategy. Volume hits from GLP-1 usage may simply call more for M&A in the long run.
What should concern food executives the most is that GLP-1 usage, even episodic usage, may train millions of American adults to demote the very processed snack foods, alcoholic drinks and ‘junk food’ they grew up enjoying. For some, these foods may return to the “treat” door through which they originally entered American food culture.
About the Author
Dr. Richardson is the founder of Premium Growth Solutions, a strategic planning consultancy for early-stage consumer packaged goods brands. As a professionally trained cultural anthropologist turned business strategist, he has helped nearly 100 CPG brands with their strategic planning, including brands owned by Coca-Cola Venturing and Emerging Brands, The Hershey Company, General Mills, and Frito-Lay, as well as other emerging brands such as Once Upon a Farm, Rebel creamery, and June Shine kombucha.
Dr. Richardson is also the author of “Ramping Your Brand: How to Ride the Killer CPG Growth Curve,” a #1 Best-seller in Business Consulting on Amazon. He also hosts his podcast—Startup Confidential.
[1] Brid Costello. “Kate Moss: The Waif that Roared.” WWD. Beauty Inc. November 13, 2009. Accessed December 11 via https://wwd.com/feature/kate-moss-the-waif-that-roared-2367932-1410207/
[2] The most current, epidemiological measurement sets the rate at 40.3% of the U.S. adult population. Emmerich SD, Fryar CD, Stierman B, Ogden CL. Obesity and severe obesity prevalence in adults: United States, August 2021–August 2023. NCHS Data Brief, no 508. Hyattsville, MD: National Center for Health Statistics. 2024. DOI: https://dx.doi.org/10.15620/cdc/159281.
[3] Lee, K. M., et al., International Journal of Obesity, Vol. 45, 2021;Puhl, R. M., et al., PLOS ONE, Vol. 16, No. 6, 2021).
[4] The most exhaustive empirical research on dieting supports this claim. Bradley Johnston et al., “Comparison of Dietary Macronutrient Patterns of 14 Popular Named Dietary Programmes for Weight and Cardiovascular Risk Factor Reduction in Adults: Systematic Review and Network Meta-Analysis of Randomized Trials,” BMJ 369, accessed August 31 2023, https://www.bmj.com/content/369/bmj.m696.
[5] Alex Montero, Grace Sparks, Marley Presiado, and Liz Hamel. “KFF Health Tracking Poll May 2024: The Public’s Use and Views of GLP-1 Drugs.” Kaiser Family Foundation. May 10, 2024. Accessed December 11, 2024 via https://www.kff.org/health-costs/poll-finding/kff-health-tracking-poll-may-2024-the-publics-use-and-views-of-glp-1-drugs/
[6] Ibid.
[7] This is my analysis is based on data published by Truveta, a leading pharmacy prescription data provider and scaled to the U.S. population based on certain assumptions. Sources:
Truveta, Monitoring Report: GLP-1 RA Prescribing Trends – December 2023, June 2024 and September 2024 data. Authors – Samuel Gratzl, PhD, Patricia J Rodriguez, PhD, MPH, Brianna M Goodwin Cartwright, MS Charlotte Baker, DrPH, MPH, CPH , Nicholas L Stucky, MD, PhD Accessed in December 2024 via https://www.truveta.com/blog
[8] University of California- San Diego. “Bariatric Surgery Requirements and Evaluation.” Accessed December 11, 2024 via https://www.ucsfhealth.org/education/bariatric-surgery-requirements-and-evaluation#:~:text=To%20be%20eligible%20for%20weight,nutritionist%20is%20available%20to%20help.
[9] Wegovy is approved for adolescents, like bariatric surgery. https://www.healthline.com/nutrition/how-to-get-wegovy#faq
[10] The Biden administration recently proposed an alteration to Medicare guidelines that would permit coverage of weight loss drugs that would expand Medicare coverage for obese adults. Source: https://www.nbcnews.com/health/health-news/biden-proposes-requiring-medicare-medicaid-cover-weight-loss-drugs-rcna181756
[11] Paula Derrow. “What if bariatric surgery were easier to perform—and recover from?” Johnson and Johnson website. September 27, 2023. Access December 11, 2024 via https://www.jnj.com/health-and-wellness/johnson-and-johnson-new-bariatric-surgery-technology#:~:text=Despite%20the%20fact%20that%2020,surgeries%20are%20performed%20each%20year.
[12] Total includes most recent data from 2011-2022. Source: https://asmbs.org/resources/estimate-of-bariatric-surgery-numbers/
[13] Megan Moltein. “In the era of GLP-1 drugs, demand for bariatric surgery plunges.” STAT. October 25, 2024. Accessed December 11, 2024 via https://www.statnews.com/2024/10/25/bariatric-surgery-falls-as-glp-1-demand-rises-wegovy-zepbound/
[14] This list of symptoms and effects stems from research assembled by Johann Hari in his recent book – The Magic Pill. Hari, Johann. Magic Pill: The Extraordinary Benefits and Disturbing Risks of the New Weight-Loss Drugs. Crown, 2024.
[15] Ibid.
[16] This external analysis uses medical claims data for 3,364 people with commercial health plans that cover GLP-1 drugs. They had all received new prescriptions between January and December 2021, and had a diagnosis of obesity or a body mass index of 30 or higher. Source: https://www.primetherapeutics.com/w/prime-continues-to-lead-industry-on-glp-1-research-1-in-7-stays-on-glp-1-drugs-for-weight-loss-after-two-years?p_l_back_url=%2Fweb%2Fprimetherapeutics%2Fsearch%3Fq%3DGlp-1
[17] “GLP-1 Reinitiation Trends and Factors.” Truveta company blog. Accessed December 11, 2024 via https://www.truveta.com/blog/research/glp-1-reinitiation-trends-and-factors
[18] Numerator GLP-1 Hub. www.numerator.com. Data pulled from 1/1/2023.
[19] Morgan Stanley. “Could Obesity Drugs Take a Bite Out of the food Industry.” September 5, 2023. Accessed December 11, 2024 via https://www.morganstanley.com/ideas/obesity-drugs-food-industry
[20] Ibid.
[21] Pepsico Q3 2024 Prepared Management Remarks. Pepsico investor relations website. Accessed December 11, 2024 via https://investors.pepsico.com/docs/default-source/investors/q3-2024/q3-2024-prepared-management-remarks_c9mhfv30q80wikb3.pdf
[22] Gill Hysop. “Strategies to lessen the impact of appetite-suppressing drugs like Ozempic.” Bakery and Snacks. November 11, 2024. Accessed December 11, 2024 via https://www.bakeryandsnacks.com/Article/2024/11/11/Strategies-to-combat-the-impact-of-GLP-1-drugs-like-Ozempic/
[23] Tomas Weber. “Ozempic Could Crush the Junk Food Industry. But It Is Fighting Back.” New York Times, November 19, 2024. Accessed December 11, 2024 via https://www.nytimes.com/2024/11/19/magazine/ozempic-junk-food.html?searchResultPosition=13
