The Rising Ozempic Economy & Its Wide-Ranging Impact

How a new class of weight loss drugs is changing the world of consumerism as we know it

Richard Yao
IPG Media Lab


Image credit: Matt Kenyon via Financial Times

Have you heard that Oprah recently resigned from WeightWatchers after being on its board of directors for nearly a decade? If you haven’t been living under a rock, you might have rightfully guessed that it has something to do with the weight loss drug commonly known as Ozempic. (WeightWatchers said that Oprah stepped down to “eliminate any perceived conflict of interest around her taking weight loss medications.”)

Ozempic is but one of the many brand names of a class of medications called GLP-1 agonists. They were originally developed to treat type 2 diabetes, but they have a remarkable side effect: they make people lose weight, quite effectively. And since Ozempic was first-to-market in its category, as it was approved by the FDA in 2017 to treat diabetes, the name stuck as a generic shorthand, like Google or Kleenex.

If the GLP-1 drugs were only for people with diabetes, they would still have a big market. After all, per the latest CDC data, about 38 million Americans have diabetes, and around 90–95% of them have type 2 diabetes. However, given its effective side effect of weight loss, the GLP-1 drugs are also being used off-label by millions of Americans who want to shed some pounds, regardless of whether they really need to or not. While only 1.7% of Americans used such a drug in 2023, that number is expected to soar as production increases and insurance companies expand coverage. 28% of U.S. adults surveyed say they are interested in trying GLP-1 drugs like Ozempic.

Price remains a big hurdle to its popularization, as GLP-1 drugs are prohibitively expensive for most Americans, costing about $1,000 or more a month. But that may be changing soon, given the rising competition to produce more affordable alternatives. In light of the growing momentum, partly driven by increased production and insurance coverage expansion, Morgan Stanley recently estimated that the number of U.S. patients taking GLP-1 drugs could reach 30 million, or nearly 9% of the total U.S. population, by 2030.

The number of U.S. patients taking GLP-1 drugs could reach 30 million, or nearly 9% of the total U.S. population, by 2030.

The impact of the emergence of Ozempic and other GLP-1 drugs goes far beyond weight loss and fitness. Taking Ozempic also significantly curbs appetite, which has a direct impact on the food, grocery, and restaurant sectors. More intriguingly, it is also reportedly effective at suppressing some common addictive cravings, such as those for alcohol and nicotine, as well as some compulsive behaviors, such as online shopping and gambling.

If Morgan Stanley’s estimation is on target, and that nearly one in ten Americans are about to have their consumptive desires heavily suppressed, if not outright decimated, then it’d be easy to see the enormous knock-on effect this would have on the larger global economy, besides boosting Denmark’s GDP.

In broad terms, the “Ozempic economy” refers to the various downstream effects of this new generation of prescription weight loss drugs. It encompasses not only shifts in consumer behaviors, preferences, and lifestyles but also the extensive adjustments various sectors will need to make in response.

Food & Dining Bracing for Impact

Let’s start with an obvious one. As a weight loss drug designed to curb appetite, the impact of a rising Ozempic economy on the food & restaurant sectors is already being felt. For example, Walmart recently said that people who get weight loss drugs at its pharmacies are buying less food at its stores. Some analysts have also attributed the declining sales volume of snack foods in recent months to the rise of Ozempic.

Of course, the food industry, especially those in the snack business, is not oblivious to the changes that Ozempic presents. Many food CPG companies are reevaluating their portfolios to adapt to the new consumer needs and expectations. For example, Nestle is developing products that cater to people who are looking to lose weight, such as low-calorie snacks, beverages, and meals that are high in protein and fiber. Similarly, General Mills recently launched some health-conscious alternatives to popular products, such as the new protein-packed Annie’s Macaroni & Cheese “Super Mac”, as one of the common side effects of Ozempic is muscle loss.

On the dining side, the effects are a bit more complicated. On one hand, the appetite-killing function of the drug could theoretically shrink demand for eating out; on the other, it could increase demand for higher-quality food and dining experiences.

One possible outcome of this dichotomy is that consumers who use Ozempic or similar drugs would become more selective and discerning about what they eat and where they eat it. In other words, because of their decreased appetite, they may adopt an “eating only when it’s worth it” mindset. They may choose to eat less frequently, but when they do, they’d want to make sure the dining experience is satisfying and memorable. They may also be more willing to pay a premium for food that meets their heightened standards of quality and wellness.

Because of their decreased appetite, they may adopt an “eating only when it’s worth it” mindset.

If that comes to be, then the food and restaurant brands will need to adapt to these changing dining habits and priorities. For example, restaurants may need to rethink their menus and service models to cater to consumers who are looking for more than just filling their stomachs. They will need to focus on creating dishes that are flavorful, nutritious, and visually appealing. They may also need to enhance their ambiance, customer service, and storytelling to create memorable dining experiences that justify the occasion.

Similarly, for snack brands, this also presents an opportunity to upscale their offerings to appeal to consumers who are looking for more than just convenience and calories. They may need to invest in innovation, design, and marketing to create products that stand out from the crowd and offer a unique value proposition. For instance, Oishii, a brand that grows beautiful, perfect-looking, expensive pieces of strawberry and tomato, recently raised an additional $134 million in funding to expand its production and distribution.

Beyond Food Cravings: Curbing Addictive Behaviors

If Ozempic’s impact were only limited to food-related categories, it would still be a pretty big deal. After all, what we eat and how we shop for food would have a ripple effect on other sectors like retail and auto as well. However, Ozempic and other GLP-1 drugs may have more benefits than just helping us eat less and lose weight.

According to some reports, some patients who have taken these drugs have also experienced a reduction in their cravings for addictive substances, such as alcohol, nicotine, opioids, and even impulsive behaviors like shopping and gambling, leading some to wonder if GLP-1 medications were actually the kind of anti-addiction cure that the medical community has been working towards for decades.

How is this possible? And what does it mean for the future of treating addiction and other compulsive behaviors?

The answer lies in the brain. As Sarah Zhang recently explained in a piece for The Atlantic, although GLP-1 is mainly produced by the gut, it also has receptors in various parts of the brain. Initially, scientists posited that these medications would mimic the gut hormone GLP-1, which signals fullness, thereby reducing appetite and facilitating weight loss. However, subsequent research revealed that GLP-1’s effects on appetite were minimal because the hormone quickly degrades in the gut. Instead, the significant impact of these drugs on reducing hunger and curbing other desires, like alcohol and nicotine cravings, is attributed to their action on GLP-1 receptors in the brain, not the gut.

Upon binding to these receptors, drugs such as Ozempic not only diminish feelings of hunger but also influence dopamine regulation. Thus, through modulating the dopamine system, the current hypothesis suggests, GLP-1 medications may dull the rewarding aspects of addictive substances and activities, rendering them less enticing and gratifying.

Of course, GLP-1 drugs are not a magic anti-addiction bullet. They are not meant to replace other forms of treatment for addiction or compulsive behaviors, such as counseling, therapy or support groups. They are only one tool that may help some people in their recovery process. Plus, as GLP-1 drugs are not approved for treating addiction or compulsive behaviors by the FDA or other regulatory agencies, doctors who prescribe them for off-label use may face legal or ethical issues.

Interestingly, a significant aspect of contemporary consumer culture relies on what are often considered relatively benign vices and compulsions. From the allure of Las Vegas casinos to the addictive nature of mobile gaming and even the endless scrolling through social media, a large part of the world’s economic activities today is fueled by these dopamine-triggering behaviors. These are precisely the kinds of impulses that medications like Ozempic and similar GLP-1 drugs have the potential to mitigate.

From the allure of Las Vegas casinos to the addictive nature of mobile gaming, a large part of the world’s economic activities is fueled by these dopamine-triggering behaviors.

For most consumer-facing brands across industries, this potential shift could represent a seismic change in how products and services are marketed and consumed. As the effectiveness of GLP-1 medications potentially curbing compulsive behaviors becomes more widely acknowledged, industries that have traditionally relied on impulse purchases or the habitual use of their products may need to rethink their business models. This could lead to a greater emphasis on value, quality, and long-term customer satisfaction over strategies that rely on impulse buying or addictive behaviors.

Yet, the repercussions of the Ozempic economy aren’t entirely restrictive. While it’s true that some sectors might face a downturn in demand as previously mentioned, others stand to gain from the trend. For example, Ozempic’s impact on air travel, as analyzed by investment bank Jefferies, highlights a fascinating and unexpected upside. The analysis suggests that if a significant number of overweight adults were to lose an average of 10 pounds thanks to medications like Ozempic, the cumulative effect could lead to a substantial reduction in the weight carried by airplanes, and the savings on fuel costs per airline could reach up to $80 million a year.

Additionally, it’s plausible to argue that some people may use these weight loss medications for vanity rather than medical necessity, with the end goal of attracting attention and admiration from others in social settings. Following this logic, more widespread use of Ozmepic could encourage some people to socialize more and increase their spending on fashion and travel. After all, why bother getting a beach body if you don’t go on a beach vacation to show it off?

After all, why bother getting a beach body if you don’t go on a beach vacation to show it off?

The far-reaching implications of the Ozempic economy remind me of the 2017 sci-fi movie Downsizing by Alexander Payne, in which people undergo a voluntary procedure to shrink their body into the size of a thumb, so as to live in miniature communities as a more sustainable solution to over-consumption and environmental crisis. While the film explores the ethical and societal implications of choosing to live a smaller life for the greater good, especially in the face of climate change, the Ozempic economy raises some interesting questions about the implications of medical interventions on lifestyle and consumption patterns. It prompts reflection on how advancements in healthcare and pharmaceuticals not only address health issues, but also how they intersect with broader societal and environmental concerns.

Beware of the Brewing Backlash

As with any major emerging trend, the brewing backlash to the growing Ozempic economy seems not only inevitable, but also reflective of broader societal and ethical concerns surrounding healthcare, individual responsibility, and the implications of pharmaceutical interventions on our society at large.

Last month, WeightWatchers encountered significant backlash for its new marketing campaign promoting its new GLP-1 weight-loss drug service. The company partnered with social media influencers to create a “GLP-1 hype house” in Los Angeles, and the backlash arrived swiftly. Some weight loss influencers criticized the campaign for being inauthentic and insensitive, compounded by inviting influencers to promote a service they hadn’t personally tried, leading to accusations of dishonesty. Some influencers who declined participation even created parody videos mocking the “low-budget” hype house, further amplifying the backlash.

The key takeaway here for brands looking to tap into the growing Ozempic economy is the critical importance of authenticity and sensitivity. To build trust with consumers in this complex and sensitive sector, it’s crucial to know your audience well, and carefully think about the ethical aspects of health and wellness. In a world where some unqualified influencers are doting out questionable healthcare advice, especially on how to manage Ozempic side effects, there is real value in positioning your brand as a reliable and ethical source of information.

While most Americans who have heard of the GLP-1 drugs tend to view them as good options for people with weight-related health conditions, according to a recent Pew Research survey, just 12% of those familiar with these drugs say they are good options for people who want to lose weight but do not have a weight-related health condition. A far larger share (62%) say these drugs are not good options for people without a weight-related health condition, while 26% aren’t sure.

Some critics also argue that these drugs are part of a larger problem of medicalizing and commodifying obesity, rather than addressing its root causes, such as poverty, food insecurity, lack of physical activity, and environmental factors. Furthermore, some researchers have found evidence of possible mental health side effects associated with GLP-1 drugs. NPR analyzed the FDA’s adverse event reporting system, and found that the agency has received 489 reports of patients experiencing anxiety, depression or suicidal thoughts while taking these drugs. While these reports do not prove causation, they do raise questions about the potential impact of these drugs on mood and cognition.

Another concern is that these drugs may not work for everyone or for long. Many people who use them experience a weight-loss plateau after a few months, and some regain the weight after stopping the treatment. This has led to a race for next-generation drugs that can overcome this limitation and help patients lose even more weight. However, these drugs may also pose new risks and challenges, such as increased cardiovascular events, liver damage, or addiction.

Finally, the growing fascination with weight-loss drugs points to a larger trend: our growing obsession with health tech and the pursuit of self-improvement. Critics argue that high-end glucose monitoring devices, when adopted by those without diabetes but keen on tracking their blood sugar levels for diet and lifestyle tweaks, are turning into status symbols. Marketed for enhancing well-being, these gadgets might instead spark feelings of anxiety or drive obsessive behaviors in some users.

The growing fascination with weight-loss drugs points to our growing obsession with health tech and the pursuit of self-improvement.

And therein lies the ultimate rub of the Ozempic economy: There is nothing wrong with wanting to drop a few pounds and feel better about yourself; Yet, the rising popularity of Ozempic and similar weight-loss drugs is never just about health. It is intricately tied to the desire to conform to societal beauty standards, which still largely equates thinness with attractiveness, despite the recent momentum in the advocacy for body positivity and embracing different body types. In today’s digital age, where the concept of a “personal brand” is paramount, we are increasingly pressured to curate an image that appeals to the broadest audience possible. And some of us may just feel compelled to take the risk of dulling our enjoyment of life just to look right.