How are GLP-1 Weight Loss Drugs Are Reshaping the U.S. Dairy Industry

Aidan Connolly. President AgriTech Capital is a contributor to Forbes, who described him as a ‘food/farming futurologist’ & author of the book ‘The Future of Agriculture.

My recent article in Dairy Global highlighted the unexpected challenge for the dairy sector of the rising popularity of GLP-1 weight loss drugs like Ozempic, Wegovy, and Mounjaro. These medications, designed to treat diabetes and obesity, are changing as consumer use them to reduce their food intake, and this could have significant implications for U.S. dairy farmers.

How do GLP-1 drugs Affect food consumption?

GLP-1 (glucagon-like peptide-1) drugs work by suppressing appetite and slowing digestion, leading to reductions in their daily intake of 800 calorie. Studies show that patients on these medications often:

a) eat smaller portions

b) crave fewer snacks and sweets

c) reduce overall dairy consumption, particularly high-fat products like cheese and ice cream

With an estimated 10% of the US population of 320 million now using these drugs—and the market projected to exceed $100 billion by 2030—dairy demand could face long-term market shifts.

Potential Impact on the Dairy Sector

1. Declining demand for high-calorie dairy products

Cheese, butter, and ice cream—staples of the U.S. diet—may see reduced consumption as consumers on GLP-1 drugs opt for lighter, lower-calorie foods. The U.S. is the world’s largest cheese consumer, with an average of 40 lbs. per capital, so even a small drop in demand could cause a drop in prices and a subsequent pressure from over-supply. Buter supply may also soften.

2. Growth in Protein-Fortified and Functional Dairy

While indulgent dairy products may face headwinds, there’s opportunity in the high-protein, low-sugar, and functional dairy (probiotic/Greek yogurts, high protein and lactose-free milk). Consumers on weight loss drugs still seek nutrient-dense foods, and dairy can fill that gap. Patients on GLP-1 drugs will be concerned to maintain muscles and gut health, an opportunity for dairy.

3. Possible Shift in School and Institutional Demand

If childhood obesity rates decline due to GLP-1 drugs, school lunch program might adjust their offerings toward lower-fat milk, reduced cheese menus. Higher-protein dairy options to align with new dietary trends. Similarly, fast-food chains, major buyers of cheese, might reformulate products to align with changing consumer preferences.

How should producers adapt?

1. Diversify Product Offerings - Develop value added products

- Explore partnerships with processors developing protein-enriched milk, keto-friendly cheeses, or reduced-sugar dairy snacks.

- Consider value-added products like lactose-free or A2 milk, which cater to health-conscious consumers.

- Gut health. Kefir, live yoghurt, cottage cheese for improved intestinal health.

2. Strengthen Sustainability Messaging

With environmental concerns influencing purchasing decisions, promoting grass-fed, carbon-neutral, or regenerative dairy could appeal to consumers who prioritize health and those who are eco-conscious. Given the arrival of fermented alternatives it maybe time to stress the word natural.

3. Monitor Consumer Trends Closely

- Stay informed on GLP-1 adoption rates and adjust your production strategies accordingly.

- Engage with nutritionists and food scientists to anticipate long-term dietary shifts

Conclusions: Proactive planning and an ability to pivot is the key

The GLP-1 drug wave is still unfolding, but early signals suggest dairy farmers should prepare for changing demand dynamics in consumer market. By focusing on high-value, functional dairy products and leveraging dairy’s natural nutritional benefits, producers can navigate this evolving landscape successfully.