Curious Puffin on GLP-1 - Changes seen in Retail and Potential Future Evolution.
I was recently interviewed by ITV News to offer some insight on the changes happening in retail due to the growing use of GLP-1. Here are my thoughts on what is happening and how retail may continue to adapt to this.
Innovation - Smaller and Lighter options
We have seen retailers launching smaller portions of ready meals, products with higher protein and fibre plus products positioned as more nutrient dense. Ready to drink meals, a growing category, now also has lighter drink options such as Huel lite. The pace of the launches has not slowed down. In the last few weeks Tesco have added the sub brand Plenti Fuel to their health range. 300g meals with protein and fibre claims. M&S have always had a large range of smaller traditional recipe meals : 12 new meals have been added covering Italian, Chinese and Indian vastly expanding the range options. Asda have also added some traditional mini meals in recent weeks. This trend of new product launches and innovation will only continue as retailers look to tap into the new need state.
Product Cost - Loss of Economies of Scale
Making products smaller reduces economies of scale, it takes the same amount of labour to make a smaller ready meal and some of the ingredients included could be of higher cost if you are aiming for more nutrients. Buying power is also lost if overall less of an ingredient that you buy at scale is needed. This does mean that any products made smaller to target GLP-1 users will likely have a higher £/kg. At the time of writing the new Asda Cottage pie 200g mini meal is £2.48 and £12.40 per kilo. The 400g Cottage Pie before any multibuy discounts is £3.97 and £8.93 per kilo. This does offer a saving at the unit amount but will shoppers still look for value and buyer the larger one?
How will retailers make up for lost sales? - Pharmacy expansion and VMS growth
Some retailers have pharmacy arms selling the drugs, these could be expanded to reach more shoppers. The is also growth potential in Vitamins, Minerals and Supplements (VMS) where users could be managing side effects and the drop in nutrients from eating less food. Pwc reports that 36% of users increased their spend on VMS and 17% continued to spend more on VMS once stopping the GLP-1 medication. This presents an opportunity for retailers to gain back spend from sales lost on food. VMS space could be expanded to compete with online retailers and trusted high street retailers.
Future Fixtures - What could be expected from a GLP-1 Fixture?
There could be fixtures at some point bringing together products for GLP-1 users in the same way we see vegan and vegetarian fixtures. But I don't think these will just be about food. I think VMS could also be included.
In the summer I spotted this Pharmacy Favourites fixture in Harrods in the the food to go drinks fixture between Juices and Health drinks. The shelf stripping included coms such as Strength Glow Nourish and Hydrate Replenish Refresh. This is not just about physical health benefits but wellbeing too.
Future fixtures could combine meal products with VMS with messages about nutrition and wellness
What is your Plan to Deal with the Changing Shopper Behaviour linked to GLP-1?
Are GLP-1 products impacting the sales in your category and business? If you need a strategy and clear plan of action feel free to drop me a DM or email Curious Puffin to see how we can support you in how to adapt your category strategy and longer term plans.
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