The Effects of Rising Diabetes Drug Usage on the Fast Food Industry
Ozempic and Wegovy, weight loss “miracle drugs,” have altered markets, consumer habits, and the day-to-day lives of humans substantially: by mimicking the gut hormone GLP-1, these drugs make people feel full faster, leading to people cutting back on their eating habits. But what does this mean for the food service sector, which fulfills the glutinous desire of many hungry individuals? Although these drugs are not “miracles”, their appealing nature has already taken measurable effect, and is not seeming to slow down. In the eyes of many, these weight-loss drugs provide a pathway to a healthy lifestyle without the downside of losing time in their day to exercise or being concerned about their diet. In this perspective, who wouldn’t agree to such a promise?
According to Morgan Stanley Research, the sales of weight-loss drugs are expected to reach $150bn by 2030. They also found that 63 percent of Ozempic users are spending less money dining out. Another interesting effect of Ozempic, as noted by Dr Alexandra Sowa, is how Ozempic users have altered taste buds: their type of food they crave differs, specifically away from sweet, salty junk foods and toward more unprocessed foods. Now this begs the question: have these drugs already had an impact on the food industry, and will these impacts be lasting and significant? Yes. In October of 2023, Walmart conducted a study which led to results stating that Ozempic had negatively affected their sales. Moreover, Morgan Stanley’s research insinuates their belief in the impacts of weight-loss drugs to be profound, estimating the decrease in soft drink, alcohol, and salty snack consumption over the next decade to be around 4%. Although that might seem pretty reasonable, the snack food market revenue for all of 2025 is expected to be around $269.45bn. Doing the math, this would be a loss of about $10.8bn, a substantial amount. Junk food isn’t the only market being affected by this new phenomenon; grocery stores are also seeing reductions in sales from GLP-1 users.
Expanding upon the research of Walmart, a study from the Cornell SC Johnson College of Business and the data firm Numerator pointed toward a reduction in grocery bills at around 6% for GLP-1 users. Interestingly, this number creeps up to around 9% for higher-income households. This specific statistic could have large implications for smaller-market grocery store companies, such as Erewhon, for example, that target richer customers. However, all market disruptions have their corrections and lead to innovation and change within industries. The bottom line is that the restaurant and fast food business isn’t going anywhere. Yes, weight-loss drugs will lead to short-term decline, but there is always adaptation. For example, this same study from Cornell found that higher income GLP-1 users cut spending at breakfast, while lower income users cut spending at dinner. The food industry could use this data, specifically in conjunction with their demographic (higher income or lower income), to focus on a certain time frame of the day when they’re most likely to have a surge in customers, a strategy already being employed by companies such as Wendy’s.
There are many possible side effects in other markets due to these “miracle drugs”. One possibility is an increase in gym-goers. As stated previously, these drugs can be a gateway to a healthy lifestyle without having to work out, but a study by Dr. Eduardo Grunvald, an obesity medicine physician at UC San Diego Health, stated that prolonged use of Ozempic can lead to a loss in bone density. As such, the widespread adoption of GLP-1 drugs could lead to an increase in gym-goers, as weightlifting leads to an increase in bone density, which could compensate for this loss. Another industry that might be shaken up by these drugs is, ironically, the opioid industry. There is evidence that GLP-1 drugs can “cut opioid and alcohol abuse by up to half” as well as decrease the rate of opioid overdoses by 40%. Additionally, the airline industry could be a huge beneficiary of a mass weight-loss craze. Although currently only around 6% of Americans are on a GLP-1, analysts at Jefferies hypothesized that if “the average passenger’s weight dropped by 10 pounds, they estimated a weight savings of 1,790 pounds per flight, which would result in the saving of $80 million in annual fuel costs per airline.” This could increase margins, allow for a more lightweight plane to be widely used in commercial travel, or allow for more R&D spending money for the airlines.
To summarize, weight-loss drugs such as Ozempic and Wegovy are groundbreaking discoveries that carry the potential to reshape the lives of millions, if not billions, of people around the world, propelling them to healthier lifestyles. This shift, however, does pose a serious threat to many large-scale industries, as GLP-1 users experience reduced appetite and greater resistance toward addiction. Yet if history is any indication, industries will react and adapt, and the true implications of these “miracle drugs” remain to be seen.
