Ozempic could make low- or even alcohol-free beer and wine a lot more popular

Restaurant and food CEOs have been in the spotlight amid the rise of appetite suppressing GLP-1 drugs — first made popular by the diabetes treatment Ozempic. However, the impact of these highly-coveted medications will ripple across a variety of sectors including the alcohol business, according to a recent report by the financial services company Moody’s Ratings.

The ratings agency said that the growing usage of GLP-1 drugs will affect everything from medical devices to food packaging. The exposure will take “years to play out,” primarily driven by lowered demand due to a decrease in “the degree to which the population is overweight,” said Moody’s.

Moody’s anticipates that sales for current market leaders Novo Nordisk’s Ozempic and Wegovy; and Eli Lilly’s Mounjaro and Zepbound could reach $80 billion within the next five years.

The agency also projected different scenarios for the adoption of these drugs. Depending on factors like insurance coverage and how long patients stay on these treatments, up to 30 million Americans could be on a GLP-1 drug by 2030.

Moody’s said it expects companies will “tweak their product offerings and take other steps to limit their exposures” to the potentially negative impacts of GLP-1s on their bottom lines.

For alcohol companies, it could mean an acceleration of the ongoing shift towards lower-calorie products with less or no alcohol.

GLP-1s vs alcohol consumption

There is limited evidence that GLP-1s can impact alcohol consumption.

A Morgan Stanley report from earlier this year found that people using GLP-1 drugs reduced their consumption of alcohol while on these medications.

The investment bank surveyed about 300 GLP-1 users about their consumption habits. About 56-62% of alcohol drinkers on GLP-1s reported consuming less alcohol since starting the medications, with about 14-18% cutting their alcohol consumption entirely.

The analysts noted they were “cautious about drawing conclusions” from their survey about the impact of GLP-1 drugs on addictive behaviors.

More recently in June, investigators from the University of North Carolina presented results from a small study at the College on Problems of Drug Dependence’s annual meeting. Their research found that people with alcohol use disorder drank less after taking semaglutide — the active ingredient in Novo Nordisk’s Ozempic– compared with people who took a placebo.

Professor Christian Hendershot, who led the trial, told Bloomberg that the drug’s effect was stronger than any approved medications for alcoholism. The study has not yet been published in a peer-reviewed journal.

But for now, it seems like Big Pharma isn’t especially interested in pursuing this use of GLP-1s. Novo Nordisk is the only pharmaceutical company that is publicly studying alcohol consumption, in a trial examining Wegovy’s effect on liver damage.

Although there could be a growing population of people who no longer want to consume alcohol, Moody’s analysts doesn’t see this as an existential threat to the industry.

Could non-alcoholic beer buoy the industry

“For the folks that are using these drugs, they probably will consume less alcohol, just like they consume less food,” Linda Montag, senior vice president for Moody’s Ratings, told Quartz. “And that’s something that companies will have to adjust and adapt to.”

However, Montag said she doesn’t think this will be huge segment of the population and points out that industry has already been shifting for decades to offering more products with lower calories, carbs, and alcohol content.

Montag mentioned the mainstreaming of light beer in America in the 1970's as an example and more recent generational differences in alcohol consumption.

The percentage of 18 to 34 year olds who say the drink alcohol has dropped 10% to 62% in the past two decades, according to Gallup.

Brands have already been responding to these consumer trends.

For example, Anheuser-Busch InBev has previously said it plans to make 20% of its beer sales from low or no-alcohol products by 2025.

There has also been a wave of non-alcoholic wine and spirit brands popping in recent years like celebrity-backed firms Dei Soi and Kin Euphorics.

Montag said GLP-1s could accelerate these existing trends, but added that “this is not new.”