The $48 Billion Grocery Shift: How GLP-1s Are Disrupting the Food Industry

In late 2023, Walmart CEO Doug McMillon made an observation that sent tremors through the food industry: customers on GLP-1 medications were buying less food. It wasn't speculation—Walmart's data showed measurable declines in grocery basket sizes among users of Ozempic, Wegovy, and similar medications.

That single comment crystallized what analysts had been quietly modeling: GLP-1 medications don't just change individual lives—they're reshaping entire industries. Projections suggest the cumulative impact on food and beverage spending could reach $48 billion through 2034, as millions of Americans eat less, snack less, and fundamentally alter their relationship with food.

The Spending Data

The numbers behind the $48 billion projection come from rigorous analysis of actual purchasing behavior. A Cornell University study tracking grocery spending found that GLP-1 users reduced their food expenditures by an average of 5.3% within six months of starting treatment.

That 5.3% figure might sound modest, but scale matters. With over 15 million Americans currently using GLP-1 medications—and projections suggesting 30+ million users by 2030—the aggregate impact becomes enormous. If the average American household spends roughly $475 monthly on groceries, a 5.3% reduction equals about $25 per month, or $300 per year, per household.

The spending reduction isn't just about buying fewer calories. Research indicates GLP-1 users shift what they buy, not just how much. Protein-rich foods maintain or increase their share of spending, while discretionary categories—snacks, sweets, sugary beverages—see the steepest declines.

What Categories Are Hit Hardest

Not all food categories feel the GLP-1 impact equally. The medications most strongly suppress appetite for calorie-dense, highly palatable foods—precisely the categories that have driven food industry profits for decades.

The savory snacks decline is particularly notable. This category—chips, crackers, pretzels, popcorn—has been a growth engine for food companies for years. A 10-11% volume decline among GLP-1 users, if it spreads across tens of millions of consumers, represents billions in lost revenue for companies like PepsiCo (Frito-Lay), Mondelez, and Kellogg's.

Sugary beverage reductions are even more dramatic. Research found that 65% of GLP-1 users report drinking fewer sugary sodas after starting medication. For Coca-Cola and PepsiCo's beverage divisions, that statistic represents an existential long-term concern. These companies have already spent years navigating declining soda consumption; GLP-1s accelerate a trend that was already problematic.

The Walmart Signal

When Doug McMillon mentioned GLP-1 effects on Walmart's earnings call, it marked the first time a major retailer publicly acknowledged the phenomenon. The admission was notable both for what it revealed and what it implied.

Walmart's data visibility is unmatched in retail. As America's largest grocer, capturing roughly 25% of U.S. grocery spending, Walmart sees purchasing patterns before anyone else. If they're detecting measurable basket changes, the signal is real.

The company hasn't disclosed specific numbers publicly, but analysts estimate that if current GLP-1 adoption trends continue, Walmart could see grocery revenue growth dampen by 0.5-1% annually compared to pre-GLP-1 baselines. That sounds small, but on Walmart's grocery revenue of $200+ billion, even half a percentage point represents over $1 billion in foregone sales.

Food Companies Respond

The food industry isn't passively watching. Major companies have begun strategic pivots to address GLP-1-driven demand shifts—and in some cases, to capitalize on them.

The Restaurant Industry Impact

GLP-1 effects extend beyond grocery stores into restaurants. When people eat less, they also eat out differently. Early data suggests several patterns:

Smaller checks: GLP-1 users order fewer items and often skip dessert. Some restaurants report average check sizes declining 10-15% among identified or suspected GLP-1 users.

Different choices: Protein-forward items see increased demand. Salads, grilled proteins, and vegetable sides grow relative to pasta, pizza, and fried foods.

Reduced frequency (maybe): Some data suggests GLP-1 users dine out slightly less often, though findings here are mixed. The social aspects of restaurant dining may maintain frequency even as food consumption decreases.

The Alcohol Angle

One of the more surprising GLP-1 effects is reduced alcohol consumption—a phenomenon with its own economic implications for beverage companies, bars, and restaurants.

Morgan Stanley research found that 44% of GLP-1 users report drinking less alcohol after starting medication. Even more striking: 82% of those who reduced their drinking maintained the reduction even after stopping the medication, suggesting durable behavior change.

Among those who reduced drinking, 25% stopped entirely. For an industry that depends on heavy users for disproportionate revenue share (the top 10% of drinkers consume over 50% of alcohol), losing even a fraction of this segment represents significant impact.

Beer companies appear particularly vulnerable. Beer consumption has been declining for years as consumers shift to wine, spirits, and non-alcoholic options. GLP-1s accelerate this trend among users who might have been regular beer consumers. Anheuser-Busch InBev and Molson Coors have both mentioned GLP-1s as a factor worth monitoring in investor communications.

Who Benefits From the Shift

While traditional food and beverage categories face headwinds, GLP-1-driven behavior changes create opportunities for others:

Protein suppliers: With GLP-1 users prioritizing protein intake to maintain muscle mass during weight loss, demand for protein-rich foods increases. Meat, poultry, fish, eggs, Greek yogurt, and protein supplements see relative growth.

Functional food makers: Brands positioning products as "nutrition-dense" or "GLP-1 friendly" can capture a new market segment willing to pay premiums for optimized eating.

Smaller portions, premium pricing: Companies offering high-quality, smaller-portion products can potentially maintain revenue even as volume declines. The "less but better" consumer is willing to pay more per ounce for superior quality.

Health-focused restaurants: Establishments emphasizing fresh, protein-forward, customizable meals align with GLP-1 user preferences. Chains like Sweetgreen, Cava, and protein-bowl concepts are positioned well.

The Modeling Challenges

Projecting $48 billion in spending reduction involves substantial uncertainty. Several factors complicate forecasting:

Adoption trajectory: Current GLP-1 user counts range from 15-20 million. Projections to 2034 assume continued growth, but adoption depends on pricing, insurance coverage, and supply—all uncertain.

Duration of use: If many users take GLP-1s temporarily and return to previous eating patterns, spending impacts may prove transitory. If medications become lifelong treatments for tens of millions, impacts compound.

Population effects vs. individual effects: A 5.3% spending reduction among GLP-1 users may not translate to 5.3% impact on total grocery spending, because users represent a subset of all consumers. But that subset is growing.

Substitution effects: Money not spent on food may flow to other categories—healthcare, fitness, apparel, travel. The economy-wide effects depend on where redirected spending goes.

What Wall Street Is Watching

Investor focus on GLP-1 food impact has intensified. Morgan Stanley, Goldman Sachs, and other major banks have published extensive analyses. Key metrics analysts track include:

Stock performance has begun reflecting GLP-1 concerns. Food companies with heavy exposure to indulgent snacking categories have seen valuation multiples compress relative to peers positioned in healthier segments. The market is pricing in disruption before it fully materializes in financial results.

The Broader Economic Ripples

Food industry impacts cascade through the economy. Agricultural commodity demand, food processing employment, retail grocery jobs, restaurant staffing—all face potential adjustment if eating patterns shift durably.

Consider the supply chain implications: if snack food demand declines 10% over a decade, that means less corn grown for corn syrup and chips, fewer food processing plant shifts, reduced trucking volume for food distribution, and lower shelf space allocated in retail stores. Each step involves businesses, jobs, and communities.

This isn't necessarily negative—redirected spending creates different jobs and opportunities. A shift toward protein creates demand for different agricultural products and different processing capabilities. But transitions create winners and losers, and the food industry as currently structured counts among the sectors facing headwinds.

The Bottom Line

The $48 billion grocery shift represents one of the most significant consumer behavior changes in recent history—and it's being driven not by cultural trends or marketing campaigns, but by medication that fundamentally alters how people experience hunger and food reward.

For individuals using GLP-1 medications, reduced food spending is a side benefit (or perhaps a primary goal). For food companies, it's a strategic challenge requiring adaptation. For investors, it's a factor reshaping valuations across consumer packaged goods and restaurants.

The Walmart CEO's observation was just the beginning. As GLP-1 adoption grows from millions to tens of millions of users, the food industry faces a reckoning with a simple truth: when people eat less, companies that sell food sell less. How the industry adapts—through reformulation, repositioning, or retreat—will shape the consumer landscape for decades to come.

The $48 billion question isn't whether GLP-1s will change food industry economics. It's how fast, how much, and who adapts successfully.

Last updated: January 2026. Economic projections from Morgan Stanley, Goldman Sachs, Cornell University, and industry analysis.