The popularity of weight-loss injections like Wegovy and Ozempic has led to a significant decline in sales of traditional meal replacement products. This shift in consumer behavior has prompted Glanbia, the owner of the iconic SlimFast brand, to put the company up for sale.
SlimFast, founded in 1977, achieved widespread recognition in the 1980s and 1990s as a leading weight-loss brand. Its low-calorie meal replacements became a staple for dieters in the US and UK. However, recent years have witnessed a dramatic shift in the weight management landscape. The emergence of prescription weight-loss drugs has disrupted the traditional dieting market, impacting companies like SlimFast.
Glanbia’s chief financial officer, Mark Garvey, acknowledged the changing consumer preferences, stating: “We’ve decided to move on because we believe there is a significant change in how weight management is being managed by our consumers.” This decision follows a 33% drop in SlimFast sales in just three months of 2023, directly attributed to the rising popularity of weight-loss jabs.
These injectable medications, often sold under brand names like Wegovy and Mounjaro, work by slowing down the emptying of the stomach, leading to prolonged feelings of fullness and reduced appetite. While Ozempic is primarily intended for treating type 2 diabetes, it’s widely used off-label for weight loss. This widespread adoption is reflected in surveys indicating that approximately 12% of American adults and an estimated 500,000 people in the UK have tried these drugs. Even high-profile figures like former UK Prime Minister Boris Johnson have admitted to using them.
The impact of these drugs extends beyond traditional weight-loss companies. Major food and drink businesses are also feeling the effects. Walmart’s CEO previously attributed a decline in sales to the reduced consumption driven by these medications. Furthermore, renowned British fund manager Terry Smith divested his entire stake in Diageo, the owner of Guinness, last year due to concerns about the drugs’ impact on alcohol and food cravings.
Morgan Stanley projects that the global market for obesity drugs could reach a staggering $105 billion by 2030. The bank forecasts a subsequent 3% decrease in American consumption of soft drinks, bakery products, and snacks by 2035.
In addition to announcing the sale of SlimFast, Glanbia reported a $91.4 million write-down on the brand’s value in the Americas, citing “continuing challenges in the weight management category.” This announcement coincided with Glanbia’s release of revenue figures below analysts’ estimates and warnings about rising whey costs, leading to a 14% drop in the company’s shares, reaching their lowest point since 2007.
The rise of weight-loss jabs signifies a paradigm shift in the weight management industry, forcing companies like Glanbia to re-evaluate their strategies and adapt to the evolving needs of consumers. The sale of SlimFast marks the end of an era for the once-dominant brand and underscores the transformative power of pharmaceutical innovations in the weight-loss market.
