The rollercoaster ride of the ‘fat jab’
Opinion
This weight-loss revolution could have implications for the future of food-and-drink brands, let alone the heath of the nation.
There is a quiet revolution going on in the weight loss arena that is turning out to be quite the rollercoaster.
The weight-loss jab has already impacted the supermarket, pharmacy and food sectors in terms of revenue, margin and purchasing behaviour. And in an era when obesity levels — with all the associated health risks — inexorably on the rise in the developing world, it is a potential game-changer for millions of people.
Perhaps more predictably, given his ability to reach into every part of global market forces, it has now been dramatically disrupted by Donald Trump as a price hike of 170% came into effect on 1 September for market leader Mounjaro.
‘Magical’ treatment
Having first hit the headlines in 2022, GLP-1 weight-loss drugs are now widely available in the US, UK and some parts of Europe.
Initially, prescriptions were only accessed through private clinics and pharmacies in the UK. However, they have been so effective that they are now increasingly available on the NHS for obese people with certain health conditions (such as diabetes).
For the estimated 1.5m people in the UK already managing their weight this way, the results are reported to be impressive and the word is spreading.
Described as taking away the “food noise” in the brain by suppressing appetite and lengthening the time food stays in the stomach, they are helping people lose more than 20% of their body weight.
Side effects range from nausea to diarrhoea, which have caused 5-7% of people to stop taking them. However, for most people who have gone down this route, the benefits would seem to far outweigh the negatives.
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Boost for pharmacies
The positive impact on the pharmaceutical industry is huge, with the global market predicted to hit $150bn by 2035.
With about 60% of the UK population overweight or living with obesity, and the jabs requiring ongoing use, the medications also offer pharmacies a significant new revenue stream.
Even before the Mounjaro price hike, a month’s supply costs about £150 for the lowest dose, rising to about £250 for the highest.
Given that prescriptions can be managed online, with consumers offered the choice of collection or home delivery, these medications are also an attractive prospect for online businesses and bricks-and-mortar pharmacies that are struggling.
New territory
Supermarkets and grocery brands are entering new territory as weight-loss drugs become more popular and their own sales start to decline.
According to a recent survey by Morgan Stanley of 300 patients taking the drugs, participants cut back most on foods high in sugar and fat, reducing their consumption of confectionery, sugary drinks and baked goods by as much as two-thirds.
Research has found that those on the treatments consume as much as 30% fewer calories overall. About 90% of those using the drugs said their snacking declined and 77% said they visited fast-food/casual restaurants less often.
Walmart said last year that it was seeing people buy less food, prompting investors to sell shares in PepsiCo and Mondelez International. It has raised the prospect that supermarkets could see a more pronounced dip in grocery sales over time.
Adapting to change
While the drugs are expensive and it is not clear how many people will take them in the long term, food companies know they have to adapt either by reducing portion sizes or using healthier ingredients.
Another innovation is so-called “fortification food” — drinks or snacks that have added vitamins and minerals to help people meet daily nutritional requirements while eating less.
Rick Miller, associate director of food and drink research at Mintel, told The Guardian that people are likely to eat less but of better quality. That idea is supported by Nestlé, which has said: “We are already working on a wide number of products that could serve as a very helpful companion during the course of the treatment involving weight-loss drugs.”
Shifting lifestyles
Despite the significant take-up, many people have already criticised the trend.
There are those who jump on evidence that once people come off the drug, they tend to regain the weight they have lost as they return to old habits without the support of their chosen “fat jab”.
This fits with the narrative that people are overweight because they are greedy, lazy or lack self-discipline. These critics want to see people change their lives and eating habits through exercise, eating more fruit and vegetables and giving up alcohol and junk food.
To them, the drug-assisted route is too easy and amounts to “cheating”, and they seem to take delight in predicting that it won’t work in the long term.
What they may be underestimating is that, in 10 years’ time, many of these weight-loss brands will come out of their patent period and generic offerings will be available at greatly reduced prices, enabling people to stay on them for longer.
Structural change
Then there are those who want to see wholesale structural change to the composition, pricing and distribution of our food as they worry that the efficacy of the jab lets the industry off the hook.
It is generally accepted that unhealthy and ultra-processed foods that are high in fat, salt and sugar are often the easiest, cheapest and most convenient to eat. Crucially, they also tend to be addictive and make the most profit for the food industry, so there is little incentive for producers to change the ingredients.
The Food Foundation has found that healthy foods, calorie for calorie, are twice as expensive as less healthy foods, so the poor are disproportionately affected.
As a result, anti-junk-food campaigners have long supported interventions such as restricted advertising and sugar taxes to combat obesity, since the success of weight-loss drugs might relieve moral pressure on the real villains of the obesity crisis: food companies.
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Sigh of relief
For now, this drug will increasingly become the preserve of two extremes. There’s the wealthy, who can continue to access it privately and are able to afford personal trainers and nutritious food anyway. Then there are those with less disposable income, who tend to be trapped in the addiction to junk food and will be able to access the drug through the NHS (if they also have a chronic health condition).
That leaves a huge proportion of people who will lose out because they can no longer continue, or can never try it out, due to the huge price increase.
No doubt there are food and drink company brand managers observing the topsy-turvy ride consumers have experienced and breathing a quiet sigh of relief that the rate of growth has slowed.
Jan Gooding is one of the UK’s best-known brand marketers, having worked with Aviva, BT, British Gas, Diageo and Unilever. She is now an executive coach and is also chair of Pamco and Utopia. She writes for The Media Leader each month.