A new class of weight loss drugs known as GLP-1’s, which includes Ozempic and Wegovy, could boost the sales of health-focused restaurants such as Sweetgreen and CAVA, according to a new industry report by the investment bank William Blair.
The meteoric rise of these appetite suppressing medications has sparked concern across Wall Street on how they could potentially impact food and restaurant sales. Walmart U.S. CEO John Furner previously said the company is already noticing changes in consumer behavior from the drugs. He told Bloomberg in October that in comparison to the general population, users are buying less food.
Some analysts now believe that health-conscious restaurants could actually see a boost from these drugs.
The New York-based bank surveyed 300 users of the medications about their eating habits since starting them. Overall, the survey found that respondents reported an average 19% drop in restaurant spending after they started taking a GLP-1. The survey also found that respondents reported increasing their consumption of fruits, vegetables, and salads.
More specifically, the fast-casual salad chain Sweetgreen was the only restaurant respondents reported eating at more frequently after starting a GLP-1.
The report also said that over 80% of their respondents were 35 or older, meaning restaurants serving a younger market could potentially be protected from any GLP-1-related impacts.
“We also view CAVA and Dutch Bros as well positioned, with the former’s focus on healthy-lifestyle Mediterranean cuisine and the latter’s skew to the under-35-year-old population,” consumer analyst Sharon Zackfia wrote in the report.
On the other hand, Outback Steakhouse, Chipotle, and The Cheesecake Factory saw the biggest drop in visits from GLP-1 users, according to the survey.
The economic impact of GLP-1s
The medications have already had a significant impact on the economy. Skyrocketing demand for Novo Nordisk’s Wegovy and Ozempic helped boost Denmark’s GDP in 2023, and sales are expected to continue to grow in the new year. Novo Nordisk projects that its sales will increase by up to 26% in 2024, according to its latest quarterly earnings report.