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Food trends fuelled by appetite-suppressing drugs

Restaurants bet on fresh opportunities as more diners start taking appetite-suppressing drugs

Orders for salads are on the rise.(The Lazy Artist Gallery, Pexels)

By Bloomberg

LAST PUBLISHED 10.11.2023  |  02:00 PM IST

Restaurant bosses serving everything from Mediterranean fare to steak and burgers see fresh opportunities even if more diners start taking appetite-suppressing drugs, no matter how little those customers eat.

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Chains like Cava Group Inc. and Chipotle Mexican Grill Inc. are leaning into healthier offerings and “wholesome" meals in a bet that some customers will recalibrate their lifestyles when taking Novo Nordisk A/S’ Ozempic and Eli Lilly & Co.’s just-approved Zepbound.

“We see it as a net positive given that what users seem to be cutting out the most are the more indulgent, fattier foods, alcohol, and that they’re actually shifting to a diet that incorporates more food like Cava," Chief Executive Officer Brett Schulman said in an interview. The Mediterranean chain’s menu features items such as Greek salads and falafel pitas.

Some studies have shown that people are more likely to crave options such as fruits and vegetables rather than junk food when taking the drugs. Still, restaurants that serve more calorie-laden fare see a chance to get in on the healthier-eating trend in their own way.

Freddy’s Frozen Custard & Steakburgers CEO Chris Dull said the restaurant reviews its menu periodically and has an opportunity to boost how it serves chicken, which is perceived to be healthier than beef and is also becoming even more popular among Americans. The chain might even add salads at some point, he said. 

Besides that, executives at Freddy’s and other chains known for richer foods are betting diners on GLP-1 drugs won’t want to miss out on dining with friends and family, even if they’re focused on losing weight.

‘Cheat Day’

“We have a large group of our guests that come to Freddy’s as an experience," Dull said in an interview. “I don’t think that folks are going to neglect to have that cheat day or that opportunity to go and enjoy a meal that they really enjoy because they’re health-focused."

At Capital Grille owner Darden Restaurants Inc., CEO Rick Cardenas told analysts earlier this year that the company’s offerings satisfy a wide range of dietary choices. The chain’s brands also include Olive Garden and LongHorn Steakhouse.

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The relative bravado from executives runs up against a growing sense in the scientific community that the drugs represent a real breakthrough for weight loss — in that they make many patients less interested in foods of all sorts. 

Solid data about usage patterns is still trickling in, fuelling unease on Wall Street and weighing on some companies’ shares. Truist Securities analyst Bill Chappell cut his price target for doughnut maker Krispy Kreme Inc. in early October, citing uncertainty about how GLP-1s will affect overall food consumption. 

It’s likely that reduced food cravings will weigh more on individual restaurant outings — such as drive-thru visits — than on group meals, TD Cowen analysts led by Andrew Charles wrote in a note.

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