Pavlo Dukach explained how the fashion for weight loss drugs is killing the restaurant business
A few years ago, new generation weight control drugs existed exclusively within medical protocols and were used mainly as an adjunct in the treatment of diabetes. However, the extremely rapid spread of these drugs beyond the limits of a narrow circle of patients brought them to the center of the global consumer market. Today, this wave of popularity is beginning to gradually change entire industries that previously did not face such risks. First of all, the transformation affected the field of public catering, where traditional models of profitability and business strategies increasingly lose their stability under the pressure of changes in consumer habits. People who, thanks to new medicines, drastically reduce their weight and control their appetite, need less and less the amount of food to which the industry is accustomed. This creates not only short-term effects on sales, but also long-term systemic shifts in financial forecasts for the entire segment. Financial analyst Pavlo Dukach expressed its position on new risks that are already beginning to manifest themselves in the indicators and business models of companies related to the food industry.
Pavlo Dukach emphasized that the rapid adoption of Ozempic, Wegovy and their analogues creates an unprecedented challenge for restaurants, fast food and even product manufacturers. He emphasized that the first serious blow to the restaurant industry at the time was COVID-19. Massive quarantine restrictions have forced restaurants to cut staff, close locations, scale back menus and find ways to keep delivery customers. Now that the pandemic is in the past, a new threat has emerged: GLP-1 drugs.
The financial analyst explained that we are talking about a group of drugs that were originally created for patients with type 2 diabetes. However, in a few years, they have gained rapid popularity as effective means for weight loss. The principle of their action consists in imitating the hormone that controls appetite. Those who take these drugs feel full faster, eat less, snack less often and choose foods much more carefully. According to Dukach, this is already leading to changes in consumer behavior and is gradually changing their eating pattern.
In his opinion, the matter is not limited to saving money or reducing the amount of food. The very attitude towards food as a process is changing. People who take GLP-1 drugs are less likely to have cravings for high-calorie dishes, which traditionally formed the basis of the menu of most restaurants and fast foods. Due to this, a large part of the offer loses its relevance. The owners of establishments will have to rethink their strategies, because there are simply no new customers to fill the niche.
Pavlo Dukach noted that, in response, the restaurant sector is already forced to look for ways to adapt. First of all, it is about adjusting the menu in the direction of healthy food. Establishments that will be able to quickly reorient themselves to healthy, light, calorie-controlled dishes will be able to partially retain their audience. Healthy-friendly segments and calorie-counted menus become the demand of the time.
However, the changes affect not only the dishes themselves. Dukach emphasized that the very motivation with which people visit restaurants is changing. If earlier the main reason was “to eat”, now establishments must offer something more — atmosphere, new experience, interactivity, special events. Only in this way can the restaurant industry remain attractive to an audience that is no longer looking for gastronomic excess.
Against this background, supermarkets and delivery services will benefit. As the financial analyst pointed out, supermarkets are recording an increase in demand from consumers, who are now carefully choosing what they cook at home, focusing on weight correction and food discipline. Delivery services are also gradually expanding their assortment to meet new customer requests.
At the same time, the changes also affected large product manufacturers. Dukach pointed out that even such corporations as Nestlé have already officially announced the development of separate lines of food products that are specially adapted to the needs of users of GLP-1 drugs. This applies both to the composition and methods of use and the convenience of monitoring the nutritional value.
In general, according to Pavel Dukach, the score is currently 1:0 in favor of the pharmaceutical industry in the conditional “battle” of the pharmaceutical industry against the restaurant business. Restaurant owners can still try to change the situation, but for this they will need not only a quick restructuring of the menu, but also a fundamental change in the approach to the organization of leisure. The analyst sarcastically added that, in this situation, restaurateurs could perhaps only be helped by a radical way out — banning Instagram, because it was social networks that formed the cult of a new appearance and provoked a wave of mass use of slimming drugs.
