Executive Briefing
What Ozempic users are buying, a year later
Answering a big question as America’s favorite weight loss drugs go increasingly mainstream. And a What’s Working dispatch: How Made In builds ‘durability of earnings’.
By Dan Frommer on Friday, January 31, 2025 at 8:00 am
Hello hello! It’s Dan Frommer, back with The New Consumer.
If you’re in Los Angeles next week, join me on Thursday, Feb. 6, at BRXND LA, an event from Noah Brier covering the intersection of marketing and AI. I’m excited to present some new Consumer Trends research, speaking along with leaders from Amazon, Gatorade, and Zillow. It should be a great day. You can use my link for a very special rate — currently 50% off the retail ticket price.
Today: Data on how Ozempic and other GLP-1 weight loss drug users have changed their spending on food and restaurants over the long run, based on two recently published studies. But first, a highlight from our inaugural What’s Working event, in partnership with The Malin.
Durability Of Earnings — How Made In is trying to build a cookware business that lasts.
“We saw so many brands from 2020 to 2022 that were really good at just performance marketing and just had a digital presence,” Made In co-founder Chip Malt said at our What’s Working event at The Malin in East Austin. They “could fool the customer once.”
Other brands can be “overly reliant on one single Walmart contract, or one single Target contract.” He cited Costco distribution as a great example of that kind of risk: “Costco likes to rotate their large contracts. Once that gets pulled, your durability of earnings is really low, and it kind of screws your company overall.”
Where Made In is focused today, and what’s working for the company, Malt said, “is what we’re internally calling ‘durability of earnings’ — which is not being overly reliant on a single form of revenue, or profit from one single category.”
“Where we’re investing is trying to build out the teams — the sales teams, direct to restaurants — that none of our competitors are doing,” he said. Made In is used in 2,000 restaurants, including 100 with Michelin stars, in 17 countries — and these are customers, not comps. This has become a competitive differentiator versus its digital-native peers, which are mostly consumer-focused.
“Our wholesale presence is growing rapidly. Amazon International. Building up all these other revenue streams, so that if one takes a dip… If Facebook goes crazy, or [Apple] changes iOS 14.5 to something else… that really doesn’t matter to us anymore.”
But, Malt explained, “That means you have to build the brand very differently. You have to build a brand team, a marketing team, a content team to support five channels across 15 different geographies. It’s a lot different of an internal problem, hiring problem, marketing problem, funnel problem. Where in the funnel are you investing? You can’t just be on Google AdWords anymore.”
The upshot: “We think this is what actually builds a durable brand long-term. And maybe you don’t get spiky, quick wins here or there. But it’s what keeps you around for decades afterwards.”
One thing the company did differently than many of its peers was launching TV ads relatively early. “I think TV was about 45% of our media spend since year two,” Malt said. “Top of funnel, top of funnel, top of funnel.”
“One of the things we talk about,” he said, is “The harder it is to measure, the more arbitrage opportunity there is in the space. There’s no arbitrage in Google AdWords. You put $1 in, you’ll get x amount of dollars back. It’s an efficient market.”
But when you get into TV and radio and billboards “and all the sh*t that the übernerds are afraid of, or the agencies don’t play in — because they need to tell their client, ‘Oh, we got a 3x return on ad spend, hire us next month’ — those are the areas that, for us, have opportunity,” Malt said.
Then it becomes a question of how to try and measure it. “Is it having a brand halo effect across our channels? Are we seeing brand search on Amazon go up? Does the buyer at Ace Hardware see it? Stuff like that — that’s both art and science — is what we’re almost exclusively focused on right now.”
What’s Working is a partnership with The Malin, a hospitality-led workspace with locations in New York City, Nashville, and now Austin. Stay tuned for more highlights and takeaways from our event, or enjoy our whole conversation on YouTube.
Btw, if you’re looking for a workspace designed to inspire, The Malin recently announced its next NYC location is coming this year to the Flatiron, a short walk from its beautiful new NoMad space. Get updates here. I’ll see you there.
One of the biggest questions in the consumer world over the past few years has been: Just how big of an impact will Ozempic and other GLP-1 medications — which help people lose weight by suppressing their appetite — have on food sales and the grocery business?
As these drugs grow in popularity — especially among people who just want to lose some weight, as opposed to those managing diabetes — will tens of millions of Americans suddenly feed themselves profoundly different diets? Will they spend drastically less at grocery stores and restaurants?
While that may create new opportunities for some brands and merchants, will it cause a crisis for others?
So far, the Ozempic effect fear seems to be overblown, based on my read of two new studies: One from Cornell’s business school and Numerator, which you can access here, and another from Circana, which presented its study in a webinar that I watched and you can access here (slides PDF).
What’s important about both of these studies is that they are based on actual shopping transaction data — not just surveys about how people think they’re shopping — so they should be more accurate than purely survey-based research.
Both studies showed that GLP-1 users initially spent less on groceries and restaurant meals than non-users — not a collapse in spending, but a noticeable decline. Those changes in spending varied by food category, and each study had somewhat different results there.
But in both studies, weight loss-focused GLP-1 users ended up reversing their spending reductions: A year after starting GLP-1 drugs, those users’ household food spending was basically back where it started.
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Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.
I’m a longtime tech and business journalist, and I’m excited to focus my attention on how technology continues to profoundly change how things are created, experienced, bought, and sold. The New Consumer is supported by your membership — join now to receive my reporting, analysis, and commentary directly in your inbox, via my member-exclusive newsletter. Thanks in advance.