Weight loss drugs will change the way people eat. This will give rise to opportunities, writes David Gilroy.
By the spring of 2023 Henry Dimbleby was unhappy and disillusioned. His time as the UK government’s food tsar was supposed to mark a turning point in the way Britain thought about food. Appointed to lead an independent review of the country’s food system in 2019, the Leon co-founder was given a broad brief: to examine how Britain could create a food system that was healthier, more sustainable and more resilient. Five years later, in March 2023, he walked away from his government roles, arguing that ministers were failing to confront one of the biggest problems identified by his work — the country’s worsening diet and obesity crisis. Dimbleby had spent years trying to build a comprehensive approach to food policy, only to conclude that ministers were unwilling to implement many of the measures he considered necessary. He accused the government of prioritising short-term political concerns and the interests of food businesses over the longer-term consequences of unhealthy diets. They’d effectively kicked most of his proposals into the long grass. Weight loss drugs were about to change all of that.
Recapping on my previous article in Wholesale Manager. For the first time, weight-loss pills containing semaglutide, the active ingredient that transformed obesity treatment through injectable drugs such as Ozempic, will be available in pill form through UK pharmacies and online providers. Drugs such as Wegovy, Mounjaro and Ozempic collectively known as GLP-1 are already in massive demand in the United States and if this translates to Britain, we could be about to witness one of the fastest changes in public health behaviour in modern times. The key change is that GLP-1 starts to address the demand side rather than the supply side. An approach that will always be more effective when trying to deal with compulsive behaviour whether it’s food, drink, drugs or illegal immigration. Indications from the United States are that weight loss drugs will profoundly change consumers’ buying habits, accelerating a shift away from processed, high-calorie foods towards fresh, functional and protein-rich products. Categories where sales will be particularly affected will be confectionery, snacks, soft drinks, and alcohol. Is this ringing any bells for you? Yes, these are the categories that most wholesalers major on.
I am aware that it’s one thing to highlight what could be a near death experience for many wholesalers. It’s another to offer solutions. Here is my agenda to prepare for the changes ahead. Traders need to think about building a portfolio for the new basket. The answer should not be to abandon declining categories overnight. Wholesalers still need to serve customers who will continue buying traditional products, and GLP-1 adoption will not happen uniformly. Instead, operators should gradually rebalance their portfolios towards products that benefit from emerging consumer priorities. Protein is an obvious example. Consumers taking appetite-suppressing medication still need adequate nutrition despite eating less, creating opportunities for protein-rich foods, yoghurts, dairy products, eggs, lean meats, nutritional drinks and convenient high-protein snacks.
There is also an opportunity around fibre, fruit and vegetables, minimally processed foods and nutrient-dense meals. UK retailers are already reporting stronger interest in fresh, protein-rich and fibre-focused products as consumer behaviour changes. For wholesalers, this means actively seeking suppliers and brands in these areas rather than simply waiting for retailers and foodservice customers to ask for them. One of the most important changes may be the economics of portion size. If consumers are eating less, a 500g product may no longer be as attractive as a 250g alternative. A large bag of snacks, family-sized dessert or multipack designed to encourage consumption may become harder to justify. That does not necessarily mean less revenue for every supplier. Smaller packs can command a higher price per kilogram and may reduce waste. A winning proposition may be less food, but more value per portion.
Wholesalers have an advantage that manufacturers do not always possess, close relationships with thousands of independent retailers, caterers, cafés, restaurants and other food businesses. This relationship can become a source of competitive advantage. Instead of simply selling cases, wholesalers can provide customers with information about changing demand. Category reports, ranging advice, new product showcases and targeted promotions can help retailers understand which products are gaining traction. The creation of a “healthier choice” range featuring high-protein snacks, portion-controlled treats, low- and no-alcohol drinks, nutritious convenience foods and high-fibre products could be effective. I know from my own experience that persuading retailers that range adjustments will bear fruit is notoriously difficult. It will take time. But if wholesalers can demonstrate the sales and profit opportunities in rebalancing the range and back it up with point-of-sale material, promotions and a healthy POR, a shift will occur. Wholesalers can identify emerging brands early and give them distribution. They can also look beyond food. Lower alcohol consumption, changing restaurant habits and increased interest in health and fitness are all part of the wider behavioural shift. PwC’s UK research found that GLP-1 users are spending less in appetite-led categories while spending more in areas associated with nutrition, fitness and wellbeing.
Perhaps the most important preparation is cultural. We should all avoid assuming that GLP-1 is simply another diet fad that will disappear. The evidence increasingly suggests that it could produce a sustained change in consumer behaviour. The businesses best positioned to benefit will be those that begin measuring that shift before it becomes obvious in their own sales figures. That means identifying vulnerable categories, developing relationships with suppliers in growth areas, offering more pack-size options, improving demand forecasting and helping customers understand the changing consumer. Ultimately, the challenge for wholesalers is not to sell more food to people who are eating less. It is to become better at selling the food people still want when appetite is no longer driving the purchase. That is a profound change. But for agile wholesalers, it could also be a profitable one.
David Gilroy, Store Excel
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