A Change of Diet. A Case of Indigestion?

History shows that dramatic shifts in the way people eat usually dovetail with significant socioeconomic or cultural changes, often brought on by technological advancement. In the early part of the 20th century, Americans ate primarily what they farmed, with meat being a luxury reserved for the well-to-do. As the advent of refrigeration, canning, and other industrial processes increased access and storage, people began eating more meat and dairy, first in America then globally. The last two decades of the 20th century saw the rise of processed and convenience foods and quick-service meals, and, paradoxically, the beginning of diet culture. Then, 21st-century shifts in globalization and sustainability helped usher in more international and vegetarian fare.

The difference now, says Nolan Lewin, executive director of the Food Innovation Center at Rutgers University, is that eating habits are changing faster, more often, and on a more global scale than in the past. “Determining what’s a fad versus a trend is one of the hardest things for a food leader today to figure out,” he says. It’s also one of the most critical, with tremendous costs associated with being too late to a trend or too early to a fad. Lewin speaks from firsthand experience: His team helped launch Impossible Foods, one of the companies that set off a feeding frenzy for plant-based meat in the years leading up to the pandemic, then watched as consumer interest cooled off.

Indeed, the plant-based meat business is an object lesson in how consumer tastes change—and how they change so much faster today. From 2019 to 2022, the industry grew at a nearly 20 percent rate; by 2030, the market was projected to swell from about $6 billion to $20 billion or more. The share prices of firms in the business soared, and restaurants started promoting plant burgers and other veggie options. In the blink of an eye, those growth projections have shrunk by almost half, with plant-based meat now accounting for about 1 percent to 2 percent of the retail meat market, down from a peak of 3 percent. As Lewin explains it, “Consumers went back to comfort foods, regulations changed, and venture money pulled out.”

But plant-based meats are just one example of how consumer fickleness is upending the sophisticated financial modeling at food firms. While gluten-free diets have long been a necessity for those with celiac disease, around a decade ago gluten-free foods became a shopping staple for millions. The push to remove food dyes and coloring is trending, although it will require years of reorienting and retrofitting manufacturing and supply-chain processes to achieve. And then there is the popularity of  low-sugar, high-protein diets, which has turned foods like granola, yogurt, and snack bars into strong growth categories for firms.

Alyssa Rojo doesn’t have diabetes or any chronic illness that would require a GLP-1 prescription. She exercises regularly and maintains a complex diet that includes intermittent fasting, prioritizing protein, and tracking calories and metabolic rates. But earlier this year, the registered nurse, who’s just entering her 40s, began taking a generic version of Ozempic to offset weight gain resulting from hormonal changes. “Weight loss is personalized and unique, and diet and exercise weren’t doing anything for me,” she says.

The GLP-1 did. In her first few months on the drug, Rojo lost 30 pounds. And with it, she lost her appetite for big dinners, to the point that she’s ordering only appetizers when she goes out. “It drastically changed how I ate,” she says.

“People aren’t going out as much, so when they do, the experience provided really matters.”

Such individual stories are impressive, and medical experts applaud both the weight loss and the improved diets. But no one in the food industry saw this coming at the scale it’s occurring. At least one major investment bank is projecting GLP-1 users could grow to 40 million globally, 17.6 million of them in the US alone—with many of those people changing their habits. Indeed, one study found grocery spending fell between 5 percent and 8 percent for households within the first six months of starting a GLP-1, while one-third of people in another study said they ordered smaller portions at restaurants or simply ate out less. The potential financial impact of mass GLP-1 adoption could be huge, given that the profit margin for the average restaurant is only about 4 percent, and even less for the typical grocery store.