Introduction
Packaged food companies are used to slow shifts in taste. What they face now is different: two separate forces pressing on the same aisles at the same time. Appetite-suppressing GLP-1 drugs are reducing how much some households eat, especially snacks, sweets and sugary drinks, while food policy is cutting nutrition assistance, restricting what benefits can buy and pushing companies to change their recipes.
The scale is no longer marginal. Circana estimated that 23% of US households had at least one GLP-1 user and projected that those households will account for 35% of food and beverage units sold by 2030, according to Prepared Foods' report on Circana's research published in November 2025. This article explains how the drugs change what households buy, what the policy changes do, how food makers are responding and what it means for bankers.
How GLP-1 Drugs Change What Households Buy
- GLP-1 Drugs
Medicines that mimic the hormone glucagon-like peptide-1, which regulates appetite and blood sugar. Originally developed for type 2 diabetes and now widely prescribed for weight loss, they reduce hunger and change food cravings, which is why they matter to food and restaurant companies.
The drug market itself, its makers and its pricing are covered in the GLP-1 obesity drug revolution. For consumer companies, the question is what happens to the shopping basket once someone in the household starts treatment.
The most detailed answer comes from Cornell researchers who tracked purchases by tens of thousands of households in a Numerator panel. Within six months of starting a GLP-1, households cut grocery spending by an average of 5.3%, with cuts of more than 8% among higher-income households, and the effect persisted for at least a year among continuing users, according to ScienceDaily's summary of the study, published in the Journal of Marketing Research.
| Category | Direction among GLP-1 households | Source |
|---|---|---|
| Savory snacks | Down about 10% | Cornell and Numerator |
| Sweets, baked goods and sugary drinks | Down | Cornell and Numerator; Circana |
| Limited-service restaurants | Down about 8% | Cornell and Numerator |
| Yogurt, fresh fruit, nutrition bars, meat snacks | Up modestly | Cornell and Numerator |
| Higher-protein, high-fiber and better-fat products | Up | Circana |
The pattern is consistent: fewer impulse calories and more protein and fiber. A Reuters report in February 2026 cited a PwC analysis of Numerator data finding that family grocery baskets in user households were 4% to 6% smaller.
Why the estimates differ
The studies do not agree on every point. Circana found that users' spending on traditional retail food and beverages declined while their restaurant spending rose, whereas the Cornell study found lower spending at limited-service restaurants. Differences in panel design, time periods and how each study defines a user explain much of the gap. A study that compares users with their own spending before treatment measures something different from one that compares users with similar non-users, and neither captures purchases outside its panel's coverage. These differences can move an estimate by several points, and bankers should know which method underlies any figure in a client's plan. How these data sources work, and where each one is blind, is explained in consumer data: scanner, panel, card and foot traffic.
Food Policy: SNAP Cuts and Purchase Restrictions
- SNAP
The Supplemental Nutrition Assistance Program, the federal program that gives low-income households monthly benefits to buy food at authorized retailers. Because benefits are spent almost entirely in grocery, supercenter, dollar and convenience stores, changes to SNAP flow directly into food and beverage sales.
The budget reconciliation law enacted on 4 July 2025 cut federal nutrition spending. The Congressional Budget Office estimated that the Senate committee version of the bill would reduce nutrition spending by about $186 billion over fiscal years 2025 to 2034, with the largest savings from tighter work requirements and a new state match for benefit costs beginning in fiscal 2028, and further savings from a higher state share of administrative costs, rising from 50% to 75%, according to the Congressional Research Service. CRS noted that the estimate does not include changes made on the Senate floor.
For food companies, the effect builds over time rather than arriving at once. The state match does not begin until fiscal 2028, and states facing new costs could tighten administration or eligibility, so the pressure on SNAP-heavy channels such as dollar, discount and convenience stores, and on the brands that sell most through them, is likely to grow over several years.
Restrictions on soda and candy
Separately, the Department of Agriculture approved food restriction waivers allowing states to bar SNAP benefits from being used on candy, soft drinks and similar products. A federal court in Washington ruled in June 2026 in Aragon v. Rollins that the department exceeded its authority and vacated the waivers for Colorado, Iowa, Nebraska, Tennessee and West Virginia, while restrictions approved in the other 18 of the 23 states with waivers remain in effect unless withdrawn or separately invalidated, according to FoodNavigator. The case is headed to the DC Circuit. Restrictions also create a compliance burden for retailers, which must code which products are eligible in each state; NACS, the convenience store trade association, argued that the waivers make the program more confusing rather than more efficient.
Reformulation Pressure
The third pressure is on recipes. Under the Make America Healthy Again agenda, the Food and Drug Administration announced in April 2025 a national initiative to phase out petroleum-based dyes. It had already revoked authorization for Red No. 3, with a deadline of 15 January 2027, and is working to eliminate six remaining certified colors, including Red No. 40 and Yellow No. 5, by the end of 2027, according to the FDA's tracker of industry pledges.
| Company | Pledge on certified colors (FDA tracker) |
|---|---|
| Kraft Heinz | Remove from products by end of 2027 |
| General Mills | US cereals and school foods by summer 2026; full US retail portfolio by end of 2027 |
| Nestlé USA | US food and beverage portfolio; marked complete |
| Conagra | Full US retail portfolio by end of 2027 |
| The Hershey Company | Snacks by end of 2027 |
Most of these commitments are voluntary, but they still carry costs: natural colors can be more expensive and less stable, and brands built on a distinctive look risk losing shoppers if a product changes. How regulation and reformulation fit into a food company's economics is covered in how packaged food companies make money and grow.
How Food Makers Respond
Food companies have moved from watching to acting. Nearly three dozen companies outside healthcare mentioned GLP-1 drugs or weight loss on earnings calls in the early weeks of 2026, up from 14 a year earlier, according to LSEG data cited by Reuters, and EY-Parthenon estimated that GLP-1-linked diet changes could cut up to $12 billion of snack sales over the next decade. Smaller packs also serve a commercial purpose: through price pack architecture, a company can sell less food per pack at a higher price per ounce, protecting revenue and margin even as volume per household falls.
Products and portions
The product response runs along three lines. Protein and fiber: General Mills launched a higher-protein Cheerios, and Coca-Cola increased production of its protein-rich Fairlife milk to meet demand. Smaller portions: companies are shrinking pack sizes, and PepsiCo is testing mini-meals with Sabra and Siete in the US. Snacks that fit: Conagra is investing in meat sticks such as Slim Jim and in nuts and seeds; meat snacks are among the categories the Cornell data show rising among users.
Portfolios
The longer-term response is in portfolio mix. Companies heavily exposed to sweets, salty snacks and sugary drinks are weighing whether to invest in reformulation, buy brands in categories that benefit, or sell slower businesses. Hershey's acquisition of the better-for-you snack brand LesserEvil, completed in November 2025, is one example of a confectionery group buying into a category that fits the new pattern of demand. Sellers of exposed brands, meanwhile, may face fewer bidders and lower prices unless they can show that volume trends are holding up. These choices feed directly into the combinations, splits and bolt-ons described in where consumer staples dealmaking stands.
What It Means for Bankers
The two forces change how bankers look at food businesses. In diligence, buyers now ask for household panel data split by GLP-1 users and non-users, the share of sales paid with SNAP benefits by state, and the cost and timing of any reformulation. Those requests sit alongside the brand and channel work covered in consumer due diligence: brands, channels and stores.
The same analysis applies to restaurants, where users' visits and order sizes may change, as covered in how restaurant companies make money, segment by segment. For coverage bankers, the practical point is that food demand is now being shaped by medicine and policy as well as taste, and the clients best placed are those that can show where their volume will come from in a market with fewer impulse calories.
