Not Just inflation: People Are Buying Less Food, Joe Weisenthal Suggests Ozempic May Be to Blame
Reports say that inflation concerns have prompted consumers to tighten their belts when it comes to grocery shopping. Americans are adopting various money-saving strategies such as opting for generic brands and shopping at discount stores.
As inflation continues to persist, certain items are being removed entirely from grocery lists. According to data research platform NielsenNIQ, frozen meals, fruit juice, and soup are the top three food categories that Americans can no longer justify purchasing.
The prices of frozen foods experienced a significant surge in the first quarter of 2023, rising by 17% in the United States and the United Kingdom, marking the highest increase since the first quarter of 2022. France and Germany witnessed an even steeper rise of 19% in frozen meal prices.
Unfavorable weather conditions, including periods of extreme rainfall and drought, adversely impacted the orange crop in Florida, resulting in a 61% decline compared to the previous year’s yield. These factors contributed to soaring orange juice prices, with rates reaching $10 per gallon for orange juice and $6.27 per gallon for juice concentrate in February.
In addition to the crop devastation, higher energy costs have also played a role in the increased prices of fruit juice. The energy-intensive manufacturing process of apple juice, involving crushing, washing, juice extraction, storage, sterilization, and cooling, has led to higher production costs. Imported apple juice from China experienced a 10.3% month-on-month price increase in November 2022.
In a recent earnings call, Conagra Brands CEO Sean Connolly suggested that the reduction in purchases of these food categories is not due to people eating less but rather a temporary strategy to cope with soaring food prices.
Consumers may be relying on their existing pantry and freezer stocks or adjusting their spending habits to buy less overall. Campbell’s Soup, for example, saw its stock fall by 18% in 2023, as consumers sought alternative options, including generic brands, or eliminated soup from their shopping lists entirely.
Overall, grocery sales have experienced a 2% decline this year, while food prices have risen by 7% in the first quarter of 2023 compared to the same period last year. Consumers are finding creative ways to stretch their budgets, diverting their limited funds to other expenses or seeking opportunities for leisure activities amidst the global recession.
But, Bloomberg’s Joe Weisenthal may have a simpler, less insidious explanation for this demand weakness. In a tweet posted on Friday, the host shared a tweet showing Conagra’s figures with a one-word caption: Ozempic.
Novo Nordisk A/S’ (CPH: NOVO-B) Ozempic has become the colloquial term for the weight loss drug semaglutide, which was initially developed to help treat type 2 diabetes.
While there are no studies that track the impact of this drug on grocery aisles and food shelves currently available, Weisenthal provides an interesting perspective on how this drug could be changing eating and shopping habits.
Ozempic has become synonymous with weight loss, and many attest to its power to quell cravings, or “food noise.”
“Food noise” refers “to the constant thoughts or recurring ruminations about food which could contribute to overeating and thus living with overweight and obesity,” according to Priya Jaisinghani, MD, an obesity medicine specialist at NYU Langone.
Current sales forecasts for the drug estimate that 2023 will see over $12 billion in sales, a sharp increase from the $9.0 billion experienced in 2022.
Ozempic may just be powerful enough that people just aren’t as interested in frozen meals, fruit juice, and soup anymore.
Information for this story was found via Bloomberg, Yahoo, Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
