People taking popular weight loss drugs like Ozempic and Mounjaro have slashed their spending at restaurants and on take-out orders, according to a new survey.
A staggering 63% of those using the medications, called GLP-1s, are spending less at restaurants now than before they started taking the pound-shedding prescription drugs, according to a Morgan Stanley AlphaWise Survey released last week.
In addition, 61% of the 300 US patients taking GLP-1s surveyed by Morgan Stanley are cutting back on how much they spend on take-out and delivery, CNBC earlier reported.
“There is growing evidence that the drugs have a meaningful impact on consumer behavior and spending on groceries and restaurants,” Morgan Stanley analysts condluded.
“All of these dynamics suggest GLP-1 drugs’ impact across consumer sectors is set to increase as drug uptake grows and the drugs reshape behavior among a demographic group that represents a disproportionate share of calorie consumption.”
An estimated 31.5 million people, or some 9% of the US population, are forecast to be take GLP-1s by 2035.
GLP-1 drugs — most of which are injections — contain strong medication that mimics the actions of the GLP-1 hormone, which the pancreas releases after eating that makes people feel full.
Even so, Morgan Stanley analysts assured that the change in consumer spending habits won’t take too big of a bite out of eateries’ bottom lines.
“Restaurants offer convenience and/or experience in addition to food, and that won’t change with GLP-1 usage,” the analysts said, per CNBC.
Rather, some restaurants may have to alter their menu to appeal to more health-conscious customers, they added, noting that healthier chains like Cava, Chipotle, Sweetgreen and Starbucks are better positioned to adapt to changes in consumer spending habits.
Meanwhile, “more indulgent” fast-casual restaurants could face more pressure, including Jack in the Box, Wendy’s, Wingstop, Shake Shack and Portillos, according to Morgan Stanley.
Snack and beer distributors have already warned that Ozempic and Wegovy — drugs initially created as anti-diabetes treatment that have since become popular for their appetite-suppressing benefits — have affected consumer behaviors.
Morgan Stanley warned that Hershey is the most at-risk packaged foods company given its large consumer-focused snacking portfolio in the US, according to CNBC.
Hershey’s portfolio, for reference, includes candy brands like Reese’s and Kit Kat to salty options like Pirate’s Booty, SkinnyPop Popcorn and Dot’s Homestyle Pretzels.
On the other hand, snack giants such as Vital Farms — whose motto is “Keeping it Bulls–t-Free” — plus Premier Protein drink-maker Bellring Brands and Simply Good Foods, which makes Quest Nutrition products, are poised to profit from GLP-1s’ popularity, Morgan Stanley said.
Last year, Walmart US chief John Furner told Bloomberg News that Ozempic was the reason customers were buying “less units” and consuming “slightly less calories.”
“We definitely do see a slight change compared to the total population, we do see a slight pullback in overall basket,” Furner said at the time.
On the heels of Furner’s commentary, shares of Swiss snacking conglomerate Nestle, the Kraft Heinz Company and Oreo-maker Mondelez International were all sent tumbling — along with beer giant Constellation Brands, the US distributor of Modelo Especial.