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CHEAPER GLP-1 DRUGS COULD PUT PACKAGED FOODS ON A CRASH DIET SAYS PIPER SANDLER

When weight-loss drugs start slimming down grocery aisles, it's not just waistlines that feel the pinch, packaged food makers are also under pressure, Piper Sandler said.

The brokerage estimates in a recent note, that roughly 20% or one in five of the U.S. population could be GLP-1 users by 2028, a surge driven by oral versions of Eli Lilly's LLY.N orforglipron and Novo Nordisk's NOVOb.CO Wegovy.

That uptake could translate into a 45–110 basis point annual hit to packaged food sales, with cumulative headwinds reaching 325 bps by 2028.

That marks a sharp shift from Piper's October view, when they described GLP-1s as a "modest and manageable" risk and forecast only a 20–30 bps annual drag as high costs kept adoption limited. Inflation was seen as the bigger diet driver then, with food prices up 25–30% since 2020 and volumes under pressure.

Cheaper GLP-1 treatments, enabled by Medicare and Medicaid coverage and TrumpRX, a direct-to-consumer discount program—starting in 2026, are partly behind their change of stance.

The price cuts follow deals struck by President Trump with Eli Lilly and Novo Nordisk to lower costs for obesity and diabetes drugs.

The brokerage says the pain won't be evenly distributed. Alcoholic beverages and high-sugar, high-carb foods are in the crosshairs, as GLP-1 users tend to cut back on indulgences and booze while favouring healthier options.

Piper said in a note on Friday that it expects beer makers like Molson Coors TAP.N and Boston Beer SAM.N to face incremental declines on top of already weak category trends, while snack giants such as Hershey HSY.N and Kellogg could see sharper spending cuts.

Piper says Celsius CELH.O , Coca-Cola KO.N, Keurig Dr PepperKDP.O , MonsterMNST.O , and Vita Coco COCO.O are best positioned, buoyed by modest gains in non-alcoholic beverages—especially sugar-free alternatives. Freshpet FRPT.O also looks insulated from GLP-1 headwinds.

(Rashika Singh)

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