“Knowing and not doing is the same as not knowing.”

 

I came across this quote in a blog about eating the right foods for an Ironman triathlon. Now, I have no intention of competing in an Ironman or following the strict diet that comes with it. However, the statement resonated deeply with me, especially when considering how different businesses are responding to the impending disruption that GLP-1 drugs are likely to cause.

A recent U.S. poll shows that 12% of people have used a GLP-1 drug (KFF Poll, May 10, 2024). Surprisingly, the percentage of adults with Type 2 diabetes using these drugs has decreased, while usage among those without diabetes has doubled. Regardless of how you project the uptake among the general population, one thing is clear: the consumption of food will change, with decline the most likely outcome (if no action is taken) and this will lead to a decrease in revenue for FMCG food companies.

 

Recent news that Mars has had its offer accepted (subject to regulatory approval) for the Kellanova business signals the company's intent to focus on winning the snacking occasion—a category likely to be hit hardest by reduced appetites. GLP-1 drugs will be used for both cosmetic and genuine health reasons, particularly by those with higher BMIs, a group that includes many habitual snackers who stand to benefit the most from the medication. Currently, the primary obstacle to widespread use is cost, with prices ranging from $1,000 to $1,400 per month, and only partial coverage by health insurance. Another factor to consider is the drugs' side effects, which may deter some people or lead them to cycle on and off the medication, creating a third segment of potential customers.

Brand and product innovation managers must begin to "war-game" their product portfolios for both GLP-1 users and non-users. This is no easy task, as user behavior is still largely unknown, and it requires careful research to understand both the physical cues for consumption and the delayed effects of entrenched habits—for example, the customary dessert after lunch that is so prevalent in countries like France.

Key considerations for maintaining growth in the category:

• Occasion: GLP-1 drugs are expected to reduce appetite, impacting both meal size and frequency. Products tailored to key snacking moments, such as the mid-afternoon snack, will need to find new ways to integrate into other eating occasions.
• Pack Size: The number of portions per pack will need to be adjusted to align with changing consumption patterns. For processed foods with a longer shelf life, pack sizes should be reduced to match the anticipated decrease in demand. Why is this important? The category must maintain a certain level of purchase frequency to avoid falling out of consumers' routines. Retailers will need brands to sustain the category, creating more purchase opportunities and encouraging consumers to trade up or across.
• Portion Size: With faster satiation, portion sizes should be adjusted to prevent consumers from feeling as though they are wasting food. When Magnum introduced Magnum Minis, they successfully captured a segment of women with smaller appetites who might otherwise have left the category after consuming only part of a full-sized product.
• Functional Benefits: With smaller portions and reduced food intake overall, products that deliver essential nutrients in smaller formats will have a competitive advantage. Consumers will be under greater pressure to obtain sufficient vitamins and minerals from fewer calories. This presents a particular challenge for unprocessed foods like fresh fruits and vegetables, where processing often diminishes their nutritional value. Expect many brands to collaborate with nutrition experts and influencers to lead this conversation with consumers.
• Emotional Messaging: Crafting effective messaging on packaging and in advertising will be a major challenge, especially while habits are still forming. Trends will likely be erratic, driven by smaller user cohorts and individuals experimenting with—and potentially discontinuing—their use of GLP-1 drugs.

To succeed in this rapidly changing landscape, companies will need to adopt a "fail fast" mindset—something that many established FMCG businesses may find uncomfortable. It will be crucial to collaborate closely with retail and distribution partners to trial and test pack sizes, pricing, and messaging to find the best strategies for reaching this evolving market.

Having access to consumers who identify as GLP-1 users will be a significant advantage for both retailers and brands. The savviest companies are already partnering with providers to create proprietary panels, positioning themselves as thought leaders and engaging key retail partners. Historical data will be of limited use, as EPOS data does not segment by consumer type. Continuous panels and loyalty schemes may offer some insight into behaviors that suggest GLP-1 usage, but these will need to be supplemented with direct consumer claims to ensure accuracy.

A tool that can test the critical elements mentioned above—pack size, portion size, functional and emotional messaging—will enable companies to not only gather insights from panels but also value the opportunity and refine pricing and promotion strategies. Conjoint analysis allows brands to continually test and learn from new approaches to product positioning and messaging. Unlike traditional EPOS data, conjoint analysis operates at the cutting edge of trends, helping businesses simulate and identify the right next steps.

Conjoint gives confidence at each stage of the innovation pipeline:

Previously, conjoint analysis was too expensive and time-consuming to be practical in a rapidly developing market like GLP-1. We at EPIC have addressed this gap. We’ve compressed project timelines from months to days, and on opportunities where the size of the prize is still unclear, we’ve developed a cost model that allows businesses to use conjoint analysis more frequently. This gives companies confidence at every stage of the innovation pipeline, ensuring that the initial insights generated at the concept stage hold true as the product evolves.

"Knowing and not doing is the same as not knowing," holds significant weight when applied to the business world, especially in the context of GLP-1 drugs and their disruptive potential in the food industry. While awareness of the shift these drugs are bringing is critical, action is what is required and a willingness to operate in a new way. By innovating around occasion, portion sizes, and messaging, and by leveraging tools like conjoint analysis, businesses can position themselves for success in this rapidly changing landscape. Those who fail to act on their knowledge risk losing out as consumption patterns evolve. Now is the time to prepare and experiment, not wait on the sidelines.