Farmers in the U.S. have long been regarded as the most efficient food producers who help feed the citizenry of not only the U.S. but the world. While this notion has evolved over time, the production and trade of world food goods are largely produced by four or five countries. In that arena, the U.S. farmer and rancher currently supply a substantial portion of the world food demand.
Over the past 20 years, certain populations have grown, and food demand has increased somewhat steadily. The respondent food supply has increased relatively consistently as well. There have been disruptors to this supply and demand cycle like droughts, wars and trade policies. There is a new disruptor of this demand cycle today that has crept in almost unnoticed.
This disruptor is on the food demand side, and domestically it is the increasing usage of GLP-1 drugs. These drugs were initially used to treat Type 2 diabetes but have been found highly effective to assist with weight management. Estimates of the usage of these drugs is approaching 12% of the adult population in the U.S. Adult women age 18 to 65 in the U.S are using these drugs at a 15% rate. Adult men are slightly less at 9%. Further, 14% of the adult population that has not tried GLP-1 drugs have indicated an interest in using them. As the wider-spread use of these drugs continues, the side effects are becoming more predictable, and the benefits are becoming more apparent and ingrained in food demand cycles.
The general outcome of this drug usage is to curtail appetite and slow the digestive process of the human body. Documented weight loss for most users is 20% of bodyweight. For an average adult male who weighs 210 pounds, the expected weight loss using GLP-1 drugs is 40 pounds or a target weight of 170 pounds. Generally, women have had better than 20% bodyweight decreases.
Why should food producers care about rising GLP-1 use?
Again, for an average adult male to lose 40 pounds, he will reduce baseline daily caloric intake by 750 calories per day for 20 weeks to lose 40 pounds. This equates to skipping one entire meal daily for a minimum of 20 weeks. If that meal is breakfast for example, the egg producers in the U.S could be facing an immediate decrease in demand for their product of 12% with another potential decrease of 14%, assuming those who have an interest in using GLP-1 drugs move forward with that interest. In Europe, these trends are similar, although the higher body mass indexes are typically less in Europe than in the U.S. Yes, that was a nice way to say in the U.S we are fluffy.
As these drugs become more available and affordable, this usage trend will likely increase. That increase indicates fewer meals are being consumed, smaller portions are being consumed, and more restaurant meals are shared by diners as opposed to boxed up for leftovers. This trend could be habit-changing for domestic food consumers and obviously carry over to the producers and supply side of the food consumption equation.
Retailers are reporting a decrease in grocery spending of 5% to 6% in 2025 as well as a shift from calorie-dense items such as potato chips and sweets to smaller portions and healthier items such as proteins and produce. Recently, a large corporate franchisee of Burger King declared Chapter 11 bankruptcy and corporate Burger King stepped in to purchase those stores with a rebrand message of smaller-portioned value meals and a dismantling of the creepy Burger King mascot. McDonald's franchisees have had similar bankruptcy filing actions, although the corporate bases of these restaurant chains are financially stable. Nonetheless, there are portion and healthy options strategies in the works within these corporate behemoth restaurants to address the preferential eating changes in the U.S today. We thought it was just high-fructose corn syrup and soft drinks, but it is apparently more produce, leaner burgers and smaller portions. That is a direct contrast to “supersize” it just a few years ago. We feel sorry for the potato growers supplying french fries.
As corporate America, namely Kroger, Walmart, McDonald's and Coca-Cola grapple with these changing consumption practices, the underlying raw product supplier, namely the farmer and rancher, will be required to modify their product to meet this demand. Just exactly what this will look like relative to GLP-1 drugs is not entirely known today. The initial demand shift is toward quality high-protein items and healthy produce items in smaller portions. It is good to supply branded beef today versus potatoes for chips or corn for corn chips. In the dairy world, ice cream and whipping cream is yielding to Greek yogurt and traditional yogurt.
Lastly, many consumption fads have come and gone. The GLP-1 issue has a good chance to remain in place for a couple of reasons. First, weight loss is real, and the side effects of the medications are minimal, not zero but minimal. Insurance companies are finding that weight loss is decreasing other more expensive conditions to manage. The incidence of cardiovascular issues has been reduced significantly with weight loss. A prescription is much less expensive than invasive cardio-thoracic surgeries. Look for more insurance companies to fully fund GLP-1 usage for conditions beyond Type 2 diabetes such as weight loss. Finally, we live in a world of visual social media. A slimmer you is best captured on Instagram, TikTok or, for all the grandparents, Facebook or Meta. So be prepared to ditch the camera filters. Also, be prepared to supply the quality and smaller-portioned foods of proteins, produce and dairy that meet the demand that is behind this weight loss quest fueled by the GLP-1 drugs.
