Big Food pours millions into rebrands as obesity drugs reshape US demand

(Reuters) - Global food and beverage companies from PepsiCo (PEP.O) to Coca-Cola (KO.N) are focusing on shorter ingredient lists and smaller pack sizes in 2026 as more people take appetite-suppressing GLP-1 drugs for weight loss.

Companies that previously took a wait-and-see attitude now see GLP-1s as here to stay. So far this year, nearly three dozen companies outside the healthcare industry have mentioned GLP-1 drugs or weight loss on their earnings conference calls, up from 14 for the same period a year ago, and just five two years earlier, according to LSEG data.

Diet changes linked to GLP-1 drug use could mean up to $12 billion in snack sales lost over the next decade, according to EY-Parthenon estimates. Adoption of GLP-1 drugs, which suppress appetite and are mainly prescribed for diabetes and weight loss, more than doubled in the 12 months to December, with about 20% of U.S. households now including at least one user, according to a PwC analysis.

Peter ter Kulve, CEO of Magnum Ice Cream, said GLP-1 users continue to eat treats, but they exhibit "a stark reduction of mindless munching and binge eating."

Coca‑Cola's incoming top boss urged faster innovation on his first analyst call as CEO-elect last week, while Kraft Heinz’s (KBH.N) new chief halted a planned split of the company and instead announced $600  million in investments this year to revive long-neglected staples such as its meat and cold cuts business Oscar Mayer.

Bar chart showing capital spending expected to grow in 2026 for packaged food companies

Capital expenditure is expected to rise for most big food companies this year, jumping as much as 23% for General Mills (GIS.N), according to LSEG data.

PepsiCo has launched a line called "Simply NKD" to reformulate its snacks, such as Lay's and Gatorade, by removing artificial colors and flavors while also embracing smaller portion sizes.

"I think there are more opportunities than threats, but there are both," said PepsiCo's CEO Ramon Laguarta on a post-earnings call last week.

Coca-Cola ramped up production to meet growing demand for its protein-infused Fairlife milk late last year. General Mills launched higher protein Cheerios cereal in December 2024 as it grapples with competition for breakfast foods.

"We expect GLP-1 and other anti-obesity drugs to have a lasting influence in the food and nutrition landscape, nudging some consumers towards smaller portions and more nutrient-dense protein and fiber-forward foods," the company's CEO Jeffrey Harmening said at the Consumer Analyst Group of New York (CAGNY) conference on Tuesday.

ALL IN ON R&D

Conagra Brands is investing in snacks such as its Slim Jim meat sticks, nuts and seeds, and issued a report last year that highlighted rising demand for protein‑forward, portion‑controlled and nutrient‑dense foods, especially among Gen Z and millennials.

"There's not anyone out there that's not designing, putting R&D dollars against this trend," said Peter Mangan, managing director at Portage Point Partners.

Smaller businesses are seeing the opportunity as well. Snap Kitchen, a private Austin-based company that provides curated daily meals to roughly 35,000 customers annually, invested in expanding its menu with products containing higher fiber, lean protein density, and ingredients shown to promote satiety to reflect changing tastes, said CEO Mitchell Raisch. "The GLP-1 opportunity has sharpened our focus and accelerated our pipeline," Raisch said.

GLP-1 users on average consume 40% fewer calories, according to PwC's analysis of data from consumer insights firm Numerator. Dessert consumption is down 84%, and alcohol use is down by 33%, while fresh produce intake is up by more than 70%. Family grocery baskets are 4% to 6% smaller, according to the data, while single-person households have experienced declines of up to 9%.

"We're just starting to scratch the surface on the ripple effects of this type of physiological disruption," said Ali Furman, PwC U.S. consumer markets leader.

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Reporting by Juveria Tabassum and Sriparna Roy in Bengaluru, Alexander Marrow in London; editing by David Gaffen and Devika Syamnath