Smoothie King launched a menu of five smoothies meant to support customers taking GLP-1 medications.
GLP-1s seem to be everywhere. The appetite suppressant drugs, with brand names like Ozempic and Wegovy, have grown in popularity in recent years as celebrities popularized the diabetes medication for its weight loss capabilities.
About 1.4 percent of Americans are taking GLP-1s, also known as semaglutide, for weight loss purposes, and about 6 percent have used them at some point, said Danilo Gargiulo, a senior research analyst at AB Bernstein.
Ozempic and other semaglutide medications have been around since the 1980s, but today, more Americans are turning to these injectables to combat obesity, and that trend is set to continue.
“Improving availability, as well as lower prices, might be contributing to an increasing usage of these GLP-1 drugs in the United States,” Gargiulo said. He was one of seven speakers the morning of November 12 during the Around the Restaurant Industry session at the Restaurant Finance & Development Conference at the Fontainebleau hotel.
But will the increased Ozempic usage actually have an impact on restaurant traffic? Gargiulo told a crowd at RFDC that it’s already happening.
“They tend to eat very different food. They tend to prefer light proteins … and, more importantly, they are avoiding greasy food, fried food, high-carb, sugary foods as well,” he said.
Danilo Gargiulo, a senior research analyst at AB Bernstein, spoke at the Restaurant Finance & Development Conference in Las Vegas November 12.
According to his research, GLP-1 users report visiting fast food restaurants less frequently, regardless of brand category. Users said they’re visiting burger joints about 45 percent less often. Across the board, restaurant visits are down nearly 28 percent among customers on these medications.
The majority of those surveyed said they want smaller portions as well as low-calorie and low-carb menu items. They’re also skipping sides, desserts and alcoholic drinks—“which, as well know, are the most profitable part of a meal for many restaurants,” Gargiulo said. “So, this is likely going to be putting some extra pressure, also, on your average check.”
Research shows in the next five years nearly 10 percent of Americans will be using GLP-1s, Gargiulo said.
“You’re going to be seeing a 1 percent headwind in traffic compounding ever year for the next five years. That’s a significant, heavy impact,” he said.
That could be an underestimate, though, Gargiulo said.
“In the restaurant space, about 20 percent of people—the most frequent people who come to your restaurant tend to account for anywhere between 55 and 65 percent of your revenue,” he said. “These people tend to be more likely to be obese or to have type two diabetes and more likely to be on Ozempic.”
But the restaurant industry has always been resilient through challenges, and Gargiulo said this time will be no different.
Innovation is key. If people are asking for healthier foods, brands need to deliver. The same goes for portion size and pricing.
“You can mitigate the impact on your average check if you start to use some AI tools that enable you to really understand: What is the elasticity of demand of my customers? How can I restructure my pricing to be offsetting some of the challenges that the GLP-1 race is going to create?” Gargiulo said.
The industry is already seeing that innovation for consumers using GLP-1s.
Smoothie King announced October 29 a new menu designed for those using the medications. The newly introduced smoothies are high in protein and fiber and have no added sugar. Registered dietitian Molly Kimball helped develop the menu to accommodate a healthier lifestyle.
“When developing this menu, it was important to offer blends with a thoughtful balance of nutrient-dense, high-protein, fiber-rich foods to support satiety and muscle mass,” Kimball said in a statement.
These smoothies, like the Keto Champ and Slim N Trim, have more than 20 grams of protein, over five grams of fiber and are lower in calories than traditional smoothies.
The 1,200-unit franchisor’s GLP-1-friendly menu includes five new smoothies.
The Restaurant Finance & Development Conference, presented by the Restaurant Finance Monitor, Franchise Times and Food On Demand, runs through November 13 at the Fontainebleau in Las Vegas.