The Ozempic Effect: Why GLP-1 Drugs Are Supercharging Protein Demand and Profits

The rise of GLP-1 drugs like Ozempic and Wegovy has ignited a silent revolution in U.S. food consumption—one that’s creating a multi-billion-dollar opportunity for protein producers. With 6–12% of U.S. adults now using these medications and adoption accelerating, the demand for high-protein meats is undergoing a structural shift. Investors who recognize this trend early will profit as companies like JBS (JBSS), Hormel Foods (HRL), and Danone (BN) capitalize on a secular shift toward protein retention.

The GLP-1-Driven Protein Surge: Why It’s Here to Stay

GLP-1 drugs suppress appetite and slow gastric emptying, but users—particularly younger, higher-income individuals—are prioritizing protein intake to preserve muscle mass. This behavior is altering the food landscape:

• Demographic Goldmine: The highest adoption rates (19–22%) are among adults aged 50–64, a group with higher disposable income and brand loyalty. Meanwhile, younger users (18–49) are adopting GLP-1s for weight loss at 5–7%, creating a broad consumer base.
• Calorie Shifts, Not Reductions: While GLP-1 users cut overall caloric intake by 3% (20 billion fewer calories daily), they’re reallocating spending to protein-rich foods. Beef, chicken, and turkey consumption is rising as users seek satiety without excess carbs.
• Industry Adaptation: Restaurants like Smoothie King now offer “GLP-1-friendly” menus, while Hormel’s Jennie-O turkey sales have surged. Even food manufacturers like Danone are repositioning products as “protein-centric” to capture this demand.

Key Winners: Protein Producers with Pricing Power

The GLP-1 trend is a tailwind for companies with premium protein portfolios:

1. JBS (JBSS): The world’s largest beef producer benefits directly from rising beef demand. Its vertically integrated model (from feedlots to packaging) insulates margins from volatility, while EBITDA margins have expanded to 18% amid robust pricing power.
2. Hormel Foods (HRL): Jennie-O turkey and Hormel’s portfolio of protein brands (e.g., Skippy, Applegate) position it to capture the shift. Analysts project 12% CAGR in its premium protein segment through 2027.
3. Danone (BN): While known for dairy, Danone’s shift toward plant-based proteins (e.g., Vega, Silk) and partnerships with meat producers positions it to serve both traditional and flexitarian consumers.

Supply Constraints = Pricing Power

The structural demand for protein isn’t just about consumer preference—it’s also about limited supply:

• Beef Capacity: U.S. beef production remains constrained by herd rebuilding post-drought. JBS and peers can pass costs to consumers without losing market share.
• Poultry Profitability: Hormel’s poultry segment operates at 25%+ margins, thanks to vertically integrated operations and branded differentiation.
• Global Demand: Emerging markets (e.g., China, India) are increasing protein consumption, creating a dual tailwind for exporters like JBS.

Why This Isn’t a Passing Fad

Critics argue that GLP-1 adoption could plateau, but the data suggests otherwise:

• Consideration Rates Are Soaring: 19.5% of non-users are now considering GLP-1s within the next year, per recent surveys. This bodes well for sustained demand growth.
• Behavioral Lock-In: Users report 42% retention rates if side effects (e.g., nausea) are managed, indicating lasting dietary changes.
• Medical Expansion: GLP-1s are now being studied for conditions like Alzheimer’s and sleep apnea, broadening their use beyond weight loss.

Investment Thesis: Overweight Protein Stocks Now

The GLP-1 trend is a secular shift that transcends cyclical commodity cycles. With 5% of all U.S. prescriptions now GLP-1 drugs, and Medicare Part D spending on these drugs projected to hit $21 billion by 2025, the tailwinds are clear. Investors should:

• Buy JBS (JBSS): Leverage its scale in beef and pork to capitalize on global protein demand.
• Add Hormel (HRL): Benefit from premium protein brands and operational efficiency.
• Consider Danone (BN): For exposure to the protein trend through its plant-based and dairy segments.

Conclusion: Protein Isn’t Just for Breakfast Anymore

The GLP-1 revolution isn’t just about weight loss—it’s about redefining how Americans eat. Protein producers are the unsung beneficiaries of a trend that’s here to stay. With supply chains tight and demand structural, now is the time to overweight stocks poised to profit from the Ozempic effect. The question isn’t whether this trend will materialize—it’s already here. The next move is yours.