Tag: Ozempic

OM in the News: Weight-Loss Drugs Crush Food Demand as Farmers Face Dumping Mountains of Potatoes

The rising popularity of weight-loss drugs like Ozempic, Wegovy, and Zepbound (GLP-1 agonists) is significantly impacting the food industry, resulting in reduced food demand, changes in consumer purchasing habits, and potential surpluses for agricultural producers, according to Fox News (April 1, 2026).

 

Impact on Food Demand and Consumption

  • Reduced Overall Demand: Users of weight-loss drugs often eat less and report a decreased appetite, with some users consuming up to 50% less than before taking the medications.
  • Andy Goodacre has about 1.3 million pounds of top-quality potatoes at risk of going to waste because of changing diet habits

    Surplus Agricultural Products: Farmers, particularly in the United Kingdom, are facing challenges with rising surpluses of traditional staples, such as potatoes, as consumer demand declines.

  • Shifting Restaurant Trends: Restaurant owners report that customers are ordering fewer items, selecting lighter options, and often not finishing their meals, leading to a decline in overall food sales at restaurants.
  • Impact on Packaged Goods: Food companies, including snack manufacturers, are evaluating the long-term impacts of these drugs on consumer purchasing behavior for high-sugar or less-healthy items.
Changes in Eating Habits and Nutrition
  • Reduced “Food Noise”: Users report decreased cravings for alcohol, salty snacks, and high-fat foods, which is reshaping American tastes and reducing demand for ultra-processed foods.
  • Focus on Healthier Options: Many users are pivoting towards healthier, lower-calorie options, and in some cases, increasing their intake of protein to combat muscle loss.
  • Concerns About Malnutrition: Some researchers are flagging potential risks of malnutrition and micronutrient deficiencies, as reduced food intake can limit the intake of necessary nutrients.
Future Projections
  • Long-Term Industry Shift: By 2035, it is projected that 9% of the U.S. population may be on weight-loss drugs, which could lead to a sustained, significant reduction in the consumption of soft drinks, alcohol, and snacks.
  • Adapting the Food Sector: The food industry is beginning to adapt by considering adjustments in portion sizes and developing products that align with the dietary needs of GLP-1 users.

    Classroom discussion questions:

  • 1. What forecasting approaches do the farmers and restaurants need to consider?
  • 2. How should a firm like Frito-Lay address this issue?

OM in the News: Weight Loss Drugs and the “Cold” Supply Chain

Complex logistics are designed to keep Ozempic and Wegovy cold.

The soaring popularity of weight-loss drugs is big business for some of the largest pharm distributors in the U.S. But the profits aren’t soaring, partly because of the complicated and costly logistics involved in shipping the refrigerated medications, reports The Wall Street Journal (Aug. 22, 2023). Drugs such as Wegovy and Ozempic cost around $1,000 for a month’s supply and are in hot demand, but their operating expenses are higher because of the cold-food supply chain nature of the product.

The medications help patients lose weight by mimicking gut hormones. The drugs are once-weekly injections that patients administer on themselves using a penlike needle, similar to using an EpiPen, that must be stored between 36 and 46 degrees Fahrenheit. For wholesalers, it means arranging industrial-scale logistics designed to keep the medications cold throughout transport and storage, including protecting the injections from unpredictable events such as a truck breaking down in a heat wave.

“You need to have the product in refrigerated trucks going from your point A to point B and then when it gets into a location, time from a material handling standpoint to collect the product and then store it in a refrigerator,” says an industry analyst. Shipping refrigerated products such as medicine and food is more expensive than moving dry goods like apparel or appliances.

Trucking companies handle the drugs on specific trucks that keep the shipments in a tightly controlled environment, ensuring temperatures are stable and the goods are also protected from odors that can affect them. The trucks must carry a higher level of insurance and are outfitted to keep the products secure to prevent theft, a particular risk with expensive drugs like Wegovy and Ozempic that are in big demand and have a high street value.

The challenges highlight the complications drug wholesalers face in building out supply chains for medications in high demand.  During the pandemic pharm companies rapidly worked to develop, manufacture and distribute highly fragile Covid-19 vaccines around the world, all while keeping the inoculations at ultracold temperatures. That involved designing special packaging to keep the vials at stable temperatures for long distances.

For additional insights into cold food supply chains, listen to our OM Podcast #7, featuring Temple U. Prof. Misty Blessley.

Classroom discussion questions:

  1. How do “cold food supply chains” differ from traditional supply chains?
  2. List a dozen products requiring a cold food supply chain.