Food Companies Adapt to Rise of Weight-Loss Drugs with Smaller Portions

Food manufacturers are increasingly focusing on smaller product sizes in response to the growing use of weight-loss medications like Ozempic and Mounjaro, according to research from trading platform eToro. These medications, known for their appetite-suppressing effects, are projected to be used by approximately one in eight Britons by the end of 2027, with an estimated 7 million people taking them.

This shift in consumer eating and snacking habits, coupled with a decrease in impulse purchases, is leading food companies to adopt a strategy eToro calls ‘package downsizing’. This trend represents a new form of ‘shrinkflation’, aiming to retain customers who are consuming less while maintaining or increasing profits.

Research indicates that smaller portions of popular foods often cost more per gram, litre, or item than their regular-sized counterparts. For example, a 32.5-gram pack of Walkers Ready Salted crisps is priced at £1.10, making it 238 percent more expensive per gram than a 150-gram pack costing £1.50. Similarly, a 40-gram pack of Pringles costs £1.15, which is 90 percent more per gram than a 165-gram pack priced at £2.50. A four-pack of 330ml Coca-Cola bottles totals £4.35, making it 118 percent more expensive per litre than a single 1.75-litre bottle at £2.65.

Sam North of eToro noted that the trend will be interesting to observe as weight-loss medication use increases and inflation influences consumer spending. He added that while consumers might accept paying more for smaller items, investors in food businesses will be closely monitoring for any signs of consumer dissatisfaction.

Companies such as Magnum, the ice cream brand, have responded by developing bite-sized products like Magnum bonbons to address concerns about the impact of weight-loss drugs. Mondelez, the parent company of brands including Cadbury and Toblerone, is also reportedly adapting by offering 'mindful indulgences'. However, Pladis, a privately-owned company whose portfolio includes McVitie's and Jacob's Crackers, recently reported a significant drop in profits, partly attributed to the effect of Ozempic.

This strategy also aims to attract consumers on tight budgets who still wish to treat themselves, making smaller, more expensive-per-unit items a viable option.