Most people on weight loss drugs are spending less on restaurants and takeout, survey says

A
highly
popular
group
of

weight
loss
and
diabetes
drugs
is
decreasing
some
consumers’
appetites
—
and
also
how
much
they
spend
on
food.

Most
people
taking
those
medications,
called

GLP-1s,
say
they
are
spending
less
on
eating
out
at
restaurants
and
ordering
takeout,
according
to
a
Morgan
Stanley
survey
released
on
Tuesday.
A
smaller
share
of
those
surveyed
say
they
are
tightening
their
purse
strings
in
the
grocery
store.

The
findings
add
to
the

mounting
concerns
that
soaring
demand
for
GLP-1s
could
take
a
bite
out
of
the
bottom
lines
of
some
of
the
biggest
restaurant
companies
and
makers
of
packaged
snacks
like
Doritos,
Oreos
and
Hershey’s
Kisses.
GLP-1s
include


Novo
Nordisk‘s
blockbuster
weight
loss
injection
Wegovy
and
diabetes
counterpart
Ozempic,
along
with


Eli
Lilly‘s
popular
weight
loss
treatment
Zepbound
and
diabetes
injection
Mounjaro. 

The
rising
demand
for
these
four
drugs
isn’t
expected
to
ease
anytime
soon.
In
the
new
survey,
Morgan
Stanley
analysts
said
they
expect
the
market
for
GLP-1s
to
be
worth
$105
billion
by
2030.
They
also
estimate
that
31.5
million
people,
or
around
9%
of
the
U.S.
population,
will
take
GLP-1s
by
2035. 

“There
is
growing
evidence
that
the
drugs
have
a
meaningful
impact
on
consumer
behavior
and
spending
on
groceries
and
restaurants,”
Morgan
Stanley
analysts
said
in
the
survey. “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.”

But
many
food
and
beverage
companies
have

reassured
investors
over
the
last
few
months
that
it’s
still
unclear
how
much
those
drugs
will
lower
their
revenue.
Morgan
Stanley
also
said
in
the
survey
that
GLP-1s
are
a
manageable
long-term
pressure
on
restaurants,
not
an “existential
risk.”  

“Restaurants
offer
convenience
and/or
experience
in
addition
to
food,
and
that
won’t
change
with
GLP-1
usage,”
the
analysts
said.
But
some
restaurants
may
have
to
adapt
to
health-conscious
consumer
behaviors,
they
noted. 

Healthier
fast-casual
restaurants
and
coffee
are
better
positioned
to
manage
the
increasing
consumer
use
of
GLP-1s,
including


Cava,


Chipotle,


Sweetgreen
and


Starbucks,
according
to
Morgan
Stanley.
Domestic
service
restaurants
and “more
indulgent”
fast-casual
restaurants
could
face
more
pressure,
including


Jack
in
the
Box,


Wendy’s,


Wingstop,


Shake
Shack
and


Portillos. 

Meanwhile,
Morgan
Stanley
views


Hershey
as
the
most
at-risk
among
packaged
food
companies
given
its
American
consumer-focused
snacking
portfolio.
Companies
that
offer
healthy
foods
should
benefit
from
GLP-1s,
including


Vital
Farms,


Bellring
Brands,


Simply
Good
Foods,
the
firm
said. 

Among
beverage
companies,
those
that
produce
alcoholic
drinks
are
at
the
highest
risk.
Those
include


Molson
Coors,


Boston
Beer,


Constellation
Brands
and


Diageo,
according
to
Morgan
Stanley.

Morgan
Stanley
conducted
the
survey
of
300
consumers
who
are
currently
taking
GLP-1
drugs
in
February.
Those
people
are “early
in
their
weight
loss
journey,”
but
are
making
substantial
changes
to
their
diets
and
spending,
according
to
the
firm.

When
asked
to
gauge
how
their
monthly
spending
on
eating
out
at
restaurants
has
changed
since
starting
a
GLP-1,
63%
of
the
consumers
said
they
are
spending
less,
28%
said
they
are
spending
about
the
same
amount,
and
9%
said
they
are
spending
more.
Meanwhile,
61%
said
they
are
spending
less
on
deliveries
or
takeout
from
restaurants,
31%
said
they
are
spending
around
the
same
amount
and
8%
said
they
are
spending
more. 

Fewer
participants
said
they
lowered
their
grocery
spending
since
they
started
a
GLP-1:
31%
said
they
are
spending
less,
46%
said
they
are
spending
around
the
same
amount
and
23%
said
they
are
spending
more. 

The
survey
also
found
that
people
tended
to
stick
with
the
same
restaurant
but
changed
the
kinds
of
meals
they
ordered.

When
asked
whether
they
finish
less
of
the
food
they
order
in
one
sitting
when
dining
out,
42%
of
participants
said “always”
or “most
of
the
time,”
and
44%
said “occasionally.”
Forty-one
percent
said
they
are “always”
or “most
of
the
time”
ordering
smaller
portions
of
food
overall,
while
43%
said
they
are
only
sometimes
doing
that. 

Consumers
in
the
survey
reported
reduced
food
consumption
across
the
board,
but
the
difference
is
most
notable
on
snacks,
confections,
carbonated
and
sugary
drinks
and
alcohol,
according
to
the
Morgan
Stanley
survery.
Roughly
half
of
people
reported
cutting
consumption
of
regular
sodas,
alcohol
and
salty
snacks
by
50%
or
more
since
starting
on
weight
loss
drugs.
Twenty-two
percent
reported
stopping
alcohol
consumption
entirely. 

Based
on
those
results,
Morgan
Stanley
forecasts
that
consumption
of
ice
cream,
cakes,
cookies,
candy,
chocolate,
frozen
pizzas,
chips
and
regular
sodas
could
fall
4%
to
5%
by
2035.
The
firm
also
expects
a
roughly
3%
decrease
in
consumption
of
alcohol,
frozen
popcorn
or
pretzels,
crackers,
cereals,
cheese,
gum
or
mints
and
energy
drinks,
among
others. 

Pre-packaged
fruit
juices,
soups,
sports
drinks,
coffee,
frozen
diet
meals,
tea,
granola
and
energy
bars
are
among
the
foods
that
will
see
the
least
reduction
in
consumption,
the
firm
said. 

Notably,
the
survey
also
found
that
40%
of
participants
reported
smoking
traditional
cigarettes
at
least
weekly
before
starting
a
GLP-1,
but
that
number
declined
to
24%
after
treatment.
Weekly
e-cigarette
use
similarly
fell
from
30%
to
16%
of
respondents. 

However,
Morgan
Stanley
said
it
is
cautious
about
drawing
conclusions
from
the
survey
on
the
impact
of
GLP-1s
on
addictive
behaviors
such
as
smoking.
The
firm
said
it
is
monitoring
the
ongoing
medical
research
in
that
area.