Danone, Nestlé And America’s Changed Eating Habits

Something amazing is happening when it comes to food, nutrition and brands. After all the decades of low fat, no fat, fat free, fewer calories, Olean cookies and chips, keto-paleo-Atkins-South Beach diets, macrobiotics, vegetarianism, veganism, fruitarians and other dietary regimens, the CEO of Danone just informed us that “The food industry is at a tipping point: health, and the role food plays in health, will become more critical than ever.”  All of a sudden, the healthy foods landscape has grasped the attention of American eaters.

Put your yellowed, dog-eared copy of Mollie Katzen’s Moosewood Cookbook aside and shelve your well-read copy of Frances Moore Lappé’s Diet For A Small Planet. Apparently, America has finally found a reason to change the way it eats; change the way it ages and change the way it lives. 

All because of drugs. Forget the War on Drugs. We are now embroiled and engaged in the Way of Drugs. Those diabetes drugs that help you lose tonnage – the GLP-1 winners such as Ozempic, Mounjaro and Wegovy – have altered the landscape for dieting and food-focused packaged goods companies.

Now, that does not mean that millions of Americans have stopped clamoring for Whoppers, Big Macs and fries. Not everyone is on GLP-1 drugs. But, a sizeable number of people are taking the drugs. 

Both Danone and Nestlé are reviewing their strategies so each company can cater to users of weight loss drugs. The guiding principles seem to be helping users to keep weight off while providing proteins and other nutrients that are lost from massive weight loss. These drug-users account for a large enough segment  of our population that food companies used to selling Kit Kat bars and Danette desserts are now suddenly seeing opportunities for weight-loss designed protein-laden, keep-the-weight-off foods.

According to CNN, Nestlé will offer frozen food meals for people taking GLP-1 drugs, such as Ozempic. Named Vital Pursuit, the line of GLP-1 associated foods is currently  “12 portion-controlled meals, high in protein plus fiber, intended to be a companion for GLP-1 weight loss medication users and consumers focused on weight management.” 

CNN commented that this line of Nestlé foods and other offerings from other food giants is a golden opportunity to stay relevant in a world where the parameters for weight loss have dramatically changed. 

Apparently, CNN says, customers perceive Nestlé’s Lean Cuisine, its 40-year-old diet-focused, low-calorie brand, as “old school.” Vital Pursuit, says one retail analyst, is “… a much more scientific approach with an emphasis on nutrition and balance. Nestlé is hoping to gain new customers and widen its audience.”

Vital Pursuit is not just a knee-jerk reaction to a growing or full-grown trend in eating. Nestlé has a lot to worry about. To quote CNN, “J.P. Morgan last year said that current GLP-1 users purchased around 8% less food – including snacks, soft drinks and high-carbohydrate products – over the prior year, compared with consumers who were not on these drugs.”

Danone reports a different strategy. Danone is already invested in a portfolio of dairy, plant-based and water brands. Its current portfolio is very weight-loss compatible. After jettisoning underperforming businesses, Danone is now viewing the acquisition of businesses that will contribute to expanding its health-and-wellness focus. The Wall Street Journal stated, “The French food producer (Danone) said it see changes in the way people eat, age and live as structural tailwinds for its business. It (Danone) is confident a focus on health and nutrition will help (it) deliver profitable growth.”

For those Boomers who worshipped at the altar of George Ohsawa and Michio Kushi; who spent time filling jars with organic peanut butter and brown rice at Erewhon stores carefully noting the empty jar and full jar weights; and who mixed lecithin into sticks of butter to make better-butter, this must be some kind of karmic, cosmic redemption.

Danone and Nestlé are not the only brand businesses gaining perspective from losing weight with GLP-1 drugs. With J.P. Morgan predicting that obesity drugs will soon be a $100 billion market, with about 9% of the US population being on a weight-loss drug by 2030, there is a brand battle to get on the drug-weight-loss bandwagon.

This year Weight Watchers abruptly changed its strategy, with a CEO apology, telling customers that will-power, point-counting and group support may have caused more harm than good. Weight Watchers now has a program for drug-focused weight loss, once considered the “easy way out.” Through Weight Watchers, members now have access to physicians who can prescribe GLP-1 drugs. Weight Watchers is also buying a telehealth company that provides “virtual prescriptions to patients for these weight loss drugs where appropriate.”

Weight Watchers’ new strategy now competes with retail giant Costco, now offering its warehouse way tow eight loss.  Costco provides Ozempic at its in-store US pharmacies. Costco uses Sesame, its affordable health care partner. Like Weight Watchers, Costco provides users an online consultation with a weight loss physician who is able to provide prescription for a GLP-1 or other weight loss drug. And, like Weight Watchers, Costco is offering personal support “through unlimited messaging and guidance with a health care provider.”

GNC, the vitamin and supplement store, now in Chapter 11 and closing at least 1200 retail outlets, says it will sell “vitamins, protein shakes and supplements tailored to people on GLP-1 medications.” GNC told CNN that there will now be a dedicated GLP-1 user section of the store. 

What some might see as opportunistic is really an example of how brands can adopt and adapt quickly to changing circumstances. Innovation and renovation are the lifeblood of brands. Cynics may comment that brands will do anything to make shareholders happy for the short term. And, in many cases, this may be true. However, the idea of health and wellness has been around for a long time. Health and wellness have gone through many iterations leaving legacies such as spas, wellness cruises, herbal supplements, plant-based beverages and proteins and all sorts of dietary regimens. 

Brands are not passive. Brands are active promises of relevant, differentiated experiences. Being able to adopt and adapt quickly saved many brands during COVID-19 lockdowns and the aftermath. 

Brand management is fundamentally about attracting more customers who purchase more often and become more loyal, generating more sales while becoming more profitable.  Brand management is about generating value for customers and creating value for the company. Brand management is business management and vice versa. 

Instead of seeing this new food revolution of new GLP-1 offerings as crass, observers and critics should understand that brands can live forever but only if properly managed. Proper brand management means understanding customers, staying relevant, satisfying users, not doing business as usual, innovating, renovating, creating news and being aware of the changing world.