![]() ![]() ![]() First, consumer purchase occasions 2 A purchase occasion is defined here as a time at which a consumer makes a purchase, either in-store or online. We have identified two primary ways that consumer behavior has shifted. Consumer-packaged-goods players should continue to watch this space moving forward. While GLP-1 use may increase in the near term, both the magnitude and stickiness of its use, and its long-term effects on the food market, remain uncertain. Within beverages, households with GLP-1 users shifted to sports and energy drinks and away from soft drinks. Spend and volume of packaged sweet bakery goods, cold cuts, chips, and packaged cookies were lower. Spend and volume of grocery items such as hot sauce, sugar substitutes, canned fruit, and dried fruit or fruit snacks were all higher in households with GLP-1 users in 2023, compared with 2022. These shifts affect some food and beverage categories more than others. The findings were more pronounced when GLP-1 patients explicitly used the drugs for weight loss: these households decreased food spending six times faster than households without GLP-1 patients. households with at least one GLP-1 patient decreased food spending three times faster than households without GLP-1 patients. This study demonstrates that GLP-1s affect consumer food habits, and there is recent evidence that GLP-1 users are also beginning to shift their purchasing behavior (through both product selection and volumes) because of the medication.īased on data from market research firm Numerator, 5 “Weighing the consumer impacts of GLP-1 usage,” Numerator, November 15, 2023. 4 Astrid Breitschaft et al., “The effect of semaglutide 2.4 mg once weekly on energy intake, appetite, control of eating, and gastric emptying in adults with obesity,” Diabetes, Obesity and Metabolism, March 2021, Volume 23, Issue 3. ![]() One clinical study found that patients on GLP-1s reduced the calories they consumed during meals by about 30 percent. That said, there appears to be real impact on calorie consumption for those who have used GLP-1s. 3 McKinsey ConsumerWise Community Survey, December 2023. Instead, prices and the ability to afford food items were the top considerations for making fewer purchases. When reporting their reasons for making fewer purchases in 2023, consumers ranked “medical reasons” as a less important consideration. 2 Analysis based on Iqvia estimates of total GLP-1 prescriptions in 2023 and Wegovy clinical study. Based on 2023 GLP-1 adoption rates, GLP-1s have had a less than a 0.4 percent estimated effect on the food market. So far, their impact on the grocery market has been small. Given the attention and popularity that GLP-1s have garnered, it’s reasonable to wonder whether their use could affect food consumption volumes. 1 “Pharma’s Q3 growth rankings: GLP-1 drugs from Eli Lilly, Novo Nordisk were once again the big story,” Fierce Pharma, November 28, 2023. Sales of these drugs have accelerated in the past year: quarterly US sales of three key GLP-1 agonist brands have grown to more than $4 billion. These drugs were first introduced to treat diabetes and weight loss, and they have been on the market for more than a decade. Consumers are shifting their behavior in small but meaningful waysīy now, you may have heard about glucagon-like peptide 1 (GLP-1) drugs, which began making headlines in late 2023. In this article, we dive into the specifics of the recent CPG volume declines, examine McKinsey research to understand why consumer behaviors are shifting, and explore what this means for US CPG businesses in 2024. This is happening even as consumers increase their shopping frequency across most channels and categories, creating a confusing set of circumstances for CPG brands to navigate. Even the holiday season wasn’t enough to open a proverbial parachute: grocery volume declined 2 percent in November and December 2023, compared with the same period the year before. 1 Volume declines based on a McKinsey analysis using NielsenIQ All Outlets Combined 2023 data. US CPG volume declined 2 to 4 percent on average, with larger subcategories such as vitamins and supplements suffering 5 percent declines compared with 2022 figures. ![]() The volume decline is pervasive across categories, from grocery to personal care and household products. The volume declines in consumer packaged goods (CPG) are dramatic, especially considering the growth that occurred in the early days of the COVID-19 pandemic. Despite a relatively strong economy and low unemployment, consumers are buying fewer items-and spending more to do so. ![]()
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