The GLP-1 Economy: How New Prescriptions Are Reshaping Markets

Speaker A: Right now, 1 in 8Americans is using a GLP1. This is a phenomenon that really came up in the last couple years, became a revolution, and has turned the tide in all kinds of industries.

Speaker B: Hi there. I'm Liz Thomas, head of investment strategy at SoFi. And this is the important part. GLP1s started as a healthcare story.

Speaker A: You and I talk a lot about the spending going on in AI. Ah, well, the spending going on in big Pharma is enormous. And it's only going to get bigger. Bigger as more people start taking these drugs.

Speaker B: But if people eat less, drink less, buy different clothes and rethink their routines, this is not just a health care story, it's a business story.

Speaker A: Other companies like Nestle, have almost completely gotten out of the snack business altogether.

Speaker B: And it's something Caleb Silver has his eyes on. He's the editor in chief of Investopedia and chief business editor at People, Inc. Caleb, welcome to the show.

Speaker A: So good to be here. So good to be sitting on this side of the table. From you.

Speaker B: I know, I know. Usually we're revers, and usually we're just talking about markets. So to talk about GLP1s, this is fresh and new for both of us.

Speaker A: Absolutely. But this is an incredible story, and really, it's just beginning, so there's so much to unpack.

Speaker B: Yeah. Okay. All right, well, let's get into it. But before that, nothing in this episode should be treated as a recommendation from Sofi to buy or sell securities. And this is not investment advice. Okay. So I just talked about it not being simply a health story. When did that become obvious to you?

Speaker A: Well, it became pretty obvious if you roll it back to sort of 2023, when we had really, the commercial rollout of Ozembic and Wegovy. And these drugs were approved by the fda and the uptake was enormous. Remember, this all started as a treatment for diabetes to type 2. Uh, and that's how these drugs were developed. But when they realized that they could be effective in weight loss and in mood altering and in things like changing the way we feel about consuming things like alcohol, that became revolutionary. And then, as you remember, we had the Oz moments with celebrities all of a sudden shedding, you know, hundreds of pounds. And we had the TikTok channels and the Instagram channels. You knew this was going to be much bigger than a pharma story or a healthcare story.

Speaker B: Yeah. And I remember some of the ancillary ideas back then were, okay, people are going to weigh less. So that means that when they fly on airplanes the airplane is going to weigh less. So actually airplanes will need less jet fuel. So this is going to be even deflationary because we're going to see less demand for things like fuel because we've got lighter planes and lighter people on them and blah, blah, blah. And I was like, whoa, we're really reaching here. This is, we're, we're seven layers deep on this. And it seemed a little crazy, but now maybe not so crazy because it's gotten so widespread. So what was the first sign to you that consumers were actually starting to change their behavior and that things were happening on a broader basis?

Speaker A: Well, I like to pay attention to sectors just like you two. So if you looked into cpg, consumer packaged goods, and you looked at Big Food, obviously they were struggling with the declining sales. We had just come out of the pandemic. We just come out of that massive bout of inflation. So they were dealing with some pricing pressure there. But right as that happened, you had this perfect storm of GLP1s becoming, uh, an FDA approved and becoming more widespread. And then you saw, started to see these snack companies that really made their business about making us eat more, making us bigger. This is an existential crisis. No two words about it. This is what's happening. The whole business of Big Food was make us consume more, supersize us. And when you saw them with declining sales for the first time in 50 or so quarters, you knew something was wrong. And then you looked at alcohol sales too, and all of a sudden nobody was drinking anymore. Of course people are still drinking, but alcohol consumption, whether it was wine or whether it was beer, those started to fall off in great degrees. Some of that was demographics, but some of that was just people trying to get healthier. A lot of it spurred by GLP1s.

Speaker B: Well, so there's, there was this movement, I think concurrently already happening, that wellness became more forefront for everybody. Supplements. Right. I just had, uh, an investor on who talked about whoop a lot. So fitness, wearables, all of that. There's been a craze, sort of that started as small groups of people, maybe professional athletes, and then it started to spread into larger groups and you could throw a lot of things in there. People turning vegan, the idea of blue zones. Right. This wellness craze has been going on for a while. Covid maybe paused it. We're all stuck in our homes and everybody drank more and cooked more and ate at home and whatever. There were a lot of comfort foods happening. But these all came out in the midst of this wellness Craze. So it was well timed, right? So it's almost like the world was ripe for it. But it, it seemed like it took off quickly. So it started and it was experimental on the margins. People were on these once in a while and it was just Ozempic and then sudd, everybody was on it. And you could get it so easily. It was expensive, but you could get it so easily. So what happened? How did that start? When did it spread?

Speaker A: Like wildfire, Uh, a confluence of events. You mentioned some of them, but then we also had the rise of telehealth. That was also a pandemic story too, where all of a sudden you get your doctor on the phone, he could diagnose, he or she could diagnose you and prescribe you medication, have it delivered to your door. You had telehealth, the rise of telehealth. And then because the uptake on GLP1s was so incredibly quick, the FDA actually declared a short in somewhere around 2023, 2024. When the FDA declares a shortage. Other drug makers can get into the mix all of a sudden and they start with what they call compounding pharmacies. Now I'd never heard of what a compounding pharmacy is and you probably haven't either. But these are some really big companies. Empire in Texas, Red Rock in Utah. You don't know the compounding companies, you know, the consumer facing companies. Hims and hers Rose. All of a sudden they could make sort of specialty GLP1s that were based around the molecules that these drug companies, Novo and developed. But they could do it their own way, customize them and deliver, deliver them right to your door and prescribe to you. That was a game changer. Brought down pricing pressure on a lot of these drugs. Also crushed the stock prices of Novo and Lilly, which were acting like tech stocks. Between 2023 and 2024 they went up 3,4x.

Speaker B: Yeah, okay, wait, I wanna understand this better. So typically a drug company goes through trials. This can take 10 years, right? They have an idea, they've got a new technology, a new drug technology, but it goes through trials, it goes through all these approvals, testing, blah blah, blah. It can take up to 10 years. Then finally it goes to market. There's usually a patent on the drug and that patent doesn't expire. Sometimes, depending on how long the trial process took, maybe that patent expires, let's call it two years after it goes to market. I'm, um, I don't know much about this. I'm um. This is like a case study. A case study I did in grad school on Lilly actually is where I'm pulling this out of. So two years later, the patent expires, and then you see generics hit the market because the patent is no longer there. But you're saying this happened faster, right?

Speaker A: And these aren't generics. These are versions of GLP1s. GLP1s is something we create in our bodies already. And Lilly was among the first to discover that. If we just found a way to recreate, resynthesize this molecule and protect it in a way so that it was longer lasting and triggered more insulin production, then we are, uh, we're onto something. And that was really the beginning of semi glutides. That's how this whole thing started. But once you have a drug like that that is mass marketed and there is a shortage, then anyone can really take a lot of the principles that aren't the patented part of that actual drug that goes to market and make their own versions. And that's exactly what happened. Compounding pharmacies do this all the time. So when you're getting a GLP one in quotes from a Ro or Hims and hers, it's not the same as the one you would be getting from a Lilly or from, uh, Novo in this case.

Speaker B: But are they as effective?

Speaker A: As effective? They've proven as effective and the cost is much lower. Now a lot of these need to be approved as well. But the approv approval practice, uh, uh, the approval was much quicker because of the shortage. Now after a while, there was no longer a shortage, but sort of the, uh, horses had left the barn and there was a lot of competitors out there. I mentioned the compound pharmacies, but now you have entrance the big entrants, the big drug makers with the deep pockets, the AstraZenecas and the Pfizers coming for this market as well. Why? Because they see this market growing at a 10 to 12% compound annual growth rate for the next 10 years at least. Right now, one in eight Americans is using a GLP1. And this is growing worldwide. Too crazy. I know.

Speaker B: One in eight, and that's in the last couple years.

Speaker A: In the last few years. This is a phenomenon that really came up in the last couple years, became a revolution, and has turned the tide in all kinds of industries. Uh, you mentioned just travel. Travel is one of them. But now we're seeing travel based around GLP1 just because of all the habit changes that people go through and what they want. Now in an experience.

Speaker B: Yeah. All right, let's talk about the habits. You mentioned a few things that they do and, uh, I'm sure our listeners are familiar with some of this. They change the way you look at food and think about food. They reduce your appetite. Right. I mean, we're not doctors, so I don't want to pretend to be, but they clearly change your behavior. That's the idea. They change your behavior and in a lot of ways drive you to a healthier lifestyle. So not only are you losing weight, you have to buy new clothes. Right. So that changes some of the retail behavior. You're eating differently. It changes the way or the amount of alcohol that you consume, which then has more effects. Right. The reaction after alcohol, all of this, it probably changes your fitness routines. So you've got gym memberships that might be affected. There are so many different ways. Right. And so let's talk about some of those. What are the biggest ways that people have changed their habits that you're actually seeing in the data and that companies are actually either benefiting from or suffering from?

Speaker A: Yeah, well, uh, on the great side, for the first time, as, uh, of 2023, the diabetes rate in the United States started to decline. We haven't seen that now ever. Right. This past century has been about making us bigger, making us heavier, making us eat more. So that's a big deal. Obesity levels are plateauing and starting to fall a bit. That's all good. That all has ripple effects. So, uh, yeah, we eat less. Yeah, we drink less. And the impulse buying on people that are using GLP1s has also changed dramatically. They're price sensitive, but what do they really need? What do they really need? Protein and fiber. Protein is on a tear right now. It's been on a tear for a very long time because we're carnivores. But protein, protein consumption, protein, protein snack consumption, this has become a monster business. You see the biggest companies in the world, the Walmarts of the world, even the targets coming out with their own private label protein and fiber bars or ways to supplement, which you're not getting because you're not eating what you used to eat because you eat less of it. So protein consumption is huge. What does that ripple effect down to? More second freezers. Now the freezer industry is having a boom because people need that second freezer in the garage where they can put those huge tenderloins from Costco. So there's plenty of protein in the house. What else? Air fryers having a huge moment. The last two years have been an absolute boom for air fryers. Why? They're great for cooking up protein meals very quickly and satisfying those people that need it. And if you're on GLP1s, you need more of that. You're losing muscle mass. In a lot of cases, you're losing, uh, different. Different metabolic processes that helped you, you know, process the food you ate and turn it into energy. So you need all these types of supplements to keep you going. And that part of the industry, whether it's the health part or even the medical part, doctors are dealing with a whole different set that patients are coming in with now that they're taking this. They're dealing with less heart disease, they're dealing with less joint pain and knee replacements. But now they're dealing with the fact that you're losing muscle mass here, and you're going to need to supplement that somehow.

Speaker B: Okay. Uh, so I. I actually have a friend who is on Zepbound. And, uh, I was in her house, this is a few weeks ago now. And she had this thing on the countertop. I said, uh, what is this, a rice cooker? It was an air fryer. And there you go. So it's like that actually is happening. And I just had that aha moment as you were saying it, like, oh, my gosh. I have a friend who's on a GLP1, and she has an air fryer on her countertop.

Speaker A: She's probably, you know, air frying up some salmon.

Speaker B: And she's not the only one putting

Speaker A: it on a bed of lettuce with some avocado and calling it a night. And you're seeing more of that convenience, uh, on the one hand. But on the other hand, how are we gonna process all this protein that we need to put into our bodies now to make us feel like we're not losing that type of mass? You see it there. But again, on the snack companies, they've totally changed their behaviors in a lot of ways. I'm going to start with one of them. Big one that we both know well. Frito Lay.

Speaker B: Uh-huh.

Speaker A: Announced back in February for the first time, as far as I can remember, they were going to cut prices up to 15% on their top brands. Their top brands are Tostitos, Ruffles, Fritos, you know, all of America's favorites. You never hear a food company to say that they're going to cut costs. They said they were doing it because of affordability and they wanted to make things affordable for the Super Bowl. Yeah, right. They were looking at declining sales and for the first time, after 50 quarters, their sales started to fall, actually, in their snack business. So what do they do? They bought Sabra, the hummus company. Right. They bought Siesta, the Mexican Healthy produce Company. They're changing their behavior. I think they bought Poppy, one of the big soda, uh, seltzer water companies as well. Now Frito Lay is a big snack company. They want to be where that puck is going. And that puck is going towards a healthier consumer. Other companies, like Nestle, have almost completely gotten out of the snack altogether.

Speaker B: Right.

Speaker A: Nestle wants to be your nutrition buddy. They don't want to see you candy bars anymore. Although they did hold on to Kit Kat. Thank God.

Speaker B: Oh, Kit Kat is a good one.

Speaker A: Yeah. Gotta hold on to Kit Kat.

Speaker B: I need to tell a Frito Lay story. When I was in high school, there was a Frito Lay factory close by in our town. And a group of friends and I, we would call ourselves the Hooded Bandits. We'd put on dark hooded sweatshirts, put the hoods up. We'd drive over to the factory because they had to get rid of bags of chips. When they were too close to the expiration date. But they weren't expired yet. It was like, something like they couldn't have them. They couldn't ship them out if they. If it was going to expire in a week or two or something. So they just threw them away. And somebody somehow uncovered this. So we would go to these dumpsters, which I'm sure is illegal. So I'm sorry, New Berlin Police Department, If. If you need to come. I think I'm beyond the statute of limitations at this point. But we would go to these dumpsters, put our hoods up, and we would jump in to the dumpsters and take out, like, boxes of Fritos and Tostitos and have chips for weeks.

Speaker A: You were the Wisconsin Robin Hood Bandits of chips.

Speaker B: Rescuing the chips anymore. Yeah, we were saving the chips from death. Yes. I mean, it was all. It was all in good fun. But anyway, that's, uh. Whenever I hear people talking about Frito Lay, I think about that story. Okay, so Nestle is becoming a wellness company. We should look at appliance companies differently. Appliance companies should look at their own business differently.

Speaker A: Absolutely.

Speaker B: And maybe change what their output is, change who they're marketing to. What about retail? What about the Lululemons of the world? What about, you know, all the clothing brands? Is. Is Athleisure better for this?

Speaker A: Yeah.

Speaker B: Is or is it just like clothing in general? Because people are getting Smaller.

Speaker A: Well, people are slimming down. The slimming of America is an actual thing that's happening. You can see it year after year. So. Yeah, but also the athlete, the athletic leisure companies are having another moment. Remember they had that moment during the pandemic where that's all we wore. Well, all of a sudden, if you're feeling better about yourself, you're going to the gym every day to uh, now that this new body, you're definitely going to re outfit. So the athletic companies have done well sort of catering to that, but also the shoe companies. Think about the Hokas of the world and the others that have really emerged in the last few years as real competitors to the Nikes of the world and the Adidas of the world and the Brooks of the world. They're having moments as well. This wellness in general is all tied to this. GLP1s is a part of it. It didn't cause it, but it's definitely sort of pushed that wave to become even higher. So every industry is facing some fundamental change that touches this. All the lifestyle industries and where I sit at, I'm the chief business editor, looking at all of our portfolios. I'm looking at the ways that we're changing our homes, whether we're adding that little gym or that little spa or the ways that we're, uh, changing the way we travel. People are looking for longevity resorts or they're looking for health retreats. Where it used to be, where can I go eat at the best restaurants in the world and gorge myself? Now they're saying, where can I go and feel really good, uh, and maybe do a yoga retreat? And I know the food's going to be good. And this is all about longevity. We, which combines with looks maxing, which is really a part of who we are right now on social media, and then, um, weight loss in general. Just feeling better about ourselves.

Speaker B: Yeah, you mentioned this a little bit, but because there's this wellness craze, how do we tie it directly to GLP1? Some of these effects are people answering surveys and saying, yes, I changed my behavior after starting Ozempic. Right. And has it affected consumer sentiment? I mean, if everybody's feeling so much better, everybody's feeling healthier, they're changing their behavior, they're probably happier, they're sleeping better. I mean, there's all kinds of things. It has ripple effects down the line. So how can we tie it directly to that?

Speaker A: Yeah, well, you could just use the calendar and say, when did these drugs come out and when did they become Mass market drugs. But now that they're so available through these competitors like the telehealth companies and the Rose of the World, uh, they're much more prevalent. So we could trace it back to that. But you can't say this caused that. This was a thing that happened at the same time telehealth was developing. Right. At the same time we were coming off of the inflation hangover due to Covid. Uh, at the same time social media was exploding with this looks, maxing and sort of the exceptionalism of people trying to look their best wherever they are. And that's all part of sort of culture today.

Speaker B: I've never heard that.

Speaker A: Oh, that's big. It's big. And it's big in health and it's big in the medical industry. But you also hear it from doctors themselves. And we have, uh, verywell health and health.com in our portfolio. And what we're hearing from physicians and physician practices is it's a completely different patient that they're trying to treat right now that has completely different problems. Where they used to be prescribing statins all the time or cholesterol drugs, now they're trying to supplement again that protein loss that these patients need. Or they're dealing with new issues in their body that they hadn't felt before because all of a sudden they're working out and they hadn't used that part of their body in a long time. So there's that. But now you're seeing that GLP1s are proving effective in things like sleep apnea. Uh, you're seeing more prescriptions for adolescents who maybe, uh, have diabetes, type 2 diabetes, or may have obesity issues that maybe come through their family and their hereditary. This can stop the course of that and really change their lives in a lot of different ways. So it's changing the way practices have to approach patient care. It's definitely changed pharma in a huge way, and it's not even close to being done. And you're seeing that change throughout the retail and the liquor, uh, the consumer packaged goods, the food industry and the liquor industry in a huge way.

Speaker B: Yeah. So where are we in the life cycle? I mean, one in eight people is on it today. Where are we in a year? Two years?

Speaker A: I think in two years you're looking at maybe one in six. In about 10 years, you're looking at one in four people just because of the efficacy for all these other issues that it can help treat. You're going to start to see those pop up left and Right. What we haven't seen, and just because this is early days is what are the real long term effects of this?

Speaker B: Right. Because you can't go off of it.

Speaker A: Well, when you do, and that's another problem that people go off on it often gain the weight back, sometimes even more. And by that point in time their body has changed, then changed back to this other version of themselves plus £25 and they're not ready to take on that new weight. So we haven't really seen long term effects. We haven't seen the long term effects on what it does to adolescents over time. We haven't seen the long term effects of people that are on it, that are off it, that get back on it or switch medication. So early days in terms of, you know, we don't even know what to expect, expect. We just know that the uptake is going to increase just given, uh, the sales standards that these companies have met already and the demand.

Speaker B: So we've talked about all the good things about, and there are countless good things about these drugs, don't get me wrong. But uh, you're touching on one of maybe the drawbacks is that we're still researching it. We don't know if there are effects that we're going to find out about years to come. And you've mentioned a few times now the supplements that are necessary so people aren't eating as much protein. What are the bad, I mean there's obviously bad things going on with it.

Speaker A: Yeah, there are skin issues in some cases people have had, there are some sleep issues that people have had and there's digestive issues that people have had in some cases. There's plenty of lawsuits out there and there's plenty of investigations by the FDA and other parties about potential side effects. The amount of people that are using this. There's a lot of data right now. And again, it's early days of deciding is that causation or is this just something we overlooked during the research? And if you watch the stock prices of these companies that are making these drugs as closely as I do, then every little announcement moves the needle in some major way because this is all or nothing for a lot of these companies. You and I talk a lot about the AI build out and the super scaling and the spending going on in AI. Well, the spending going on in big pharma chasing this golden goose is enormous and it's only going to get bigger as more people start taking these drugs.

Speaker B: Let's talk about it from an investment perspective for a second and I Think there probably can be a lot of implications for investing. Healthcare is obvious and healthcare is something that I have been pounding the table about for the last couple years. It hasn't worked out in the market as of yet, at least not broadly as a sector. But healthcare is, is the sector that it probably affects most directly. So where else can it go? You've talked about appliance makers a little bit. Sure. What else? As an investor? If I'm an investor and I'm a long term investor, which everybody should be. If you're an investor and I'm thinking about, okay, there's a theme going on here, right? We've got GLP1s, we've got this wellness craze, We've got just America in general becoming healthier. People are getting smaller. How do I make money on that as an investor?

Speaker A: Well, if you're looking at just the food industry in general, when you look at cpg, that has not been a great sector to invest in. It used to be reliable profits, healthy dividends, ends. Everybody keeps eating more. We're supersizing everything. And when things get tight, we just do shrinkflation and that's the way the game goes. Investors are over that story. If you look at the, the ETFs that track uh, retail and consumer packaged goods flat to down, underperforming the S&P 500 by a long shot because tech has been the leader, but also because investors realize this is not the business that it was once upon a time. Which is why these businesses are changing so quickly now. Can a huge business like a Mondelez really change that quickly on a dime? It's going to be very difficult. But I would look down the chain at the companies that approached healthy eating, fast, casual lifestyles in a healthy way. Some of these restaurant chains you, uh, know that have popped up over the last five to 10 years that focus on just green salads or you know, just healthy Mediterranean foods. There's a reason those are doing well. There's a reason even the Chipotle of the world are having a moment. Lots of protein, right, in a $20 meal that they can depend on through their customers with loyalty programs. So I would look at that again. I was talking about the compounding pharmacies earlier. These are enormous businesses that I had no idea about. But some of these were public companies. You got to look at the compounding pharmacies. Each state has their own big one. And depending on the size of the state, like in uh, in Texas you have Empire, that's a massive company that is supplying those end consumer companies like the rows and the hims and hers of the world. Now those companies, those telehealth companies that are able to sort of be the customer facing part of this and spend the marketing dollars and hiring celebrity athletes to endorse their products. Well, well, those stocks are super volatile because they are trying to break into an industry where there is an 80% market share being held by Lilly and Novo. But every time there's good news for them, you see those stocks have a really meaningful move. I don't know how sustainable that is and not all of them are gonna make it. But it's an interesting sector to watch because that's the one we interact with as consumers now throughout the health industry as well. It's like, what else are we gonna need to treat this new type of patient? It's not necessarily gonna come from the same old places. It might be a holistic way of treating for these issues. Like protein, uh, delivery, uh, right, like fiber delivery. Like any of the side effects that could come from being on GLP1s for a decade or so, we still need to find out what those are. But there is going to be entrance into the market or existing players that say, I have just the remedy for the people that have lost all this weight and need to remain strong. Those are coming. You just don't know which ones are going to be at the top of that list.

Speaker B: So do you sell McDonald's and sell shake Shackles and buy Chipotle and buy, I don't even know, protein powder makers and supplement companies?

Speaker A: What's interesting is that the big retailers and even the whole foods of the world, I mentioned the targets, uh, uh, of the world as well. And the Nestle's, they're gone private label. So they're already competing with the companies that you might try to be investing in, uh, on the side because you think that they're going to upend the mandalays of the world. The truth is it's super competitive out there in retail, in cpg and it's just not been a great sector to invest in. That said, every now and then there's a few companies that pop up and you're like, where did that come from? One of the best performing stocks of the past 30 years. The past 30 years, uh, is Monster Beverage. Now why, uh, why some investment from Coca Cola here and there. They got good endorsements. But it's an energy drink. It's a caffeine energy drink that is really along with, uh, on that list, on that Short list with Nvidia and Tesla and, and. And Amazon, uh, on top of the past 30 years. So you're going to see companies like that pop up in this industry, or they're going to find their way in this industry and they're going to take off like meme stocks or rocket stocks, and they might end up hanging in there just like a monster beverage did for the last 40 years.

Speaker B: Could this be what actually wakes up the cannabis stock industry? Now, I ask that, because if people are drinking less alcohol, does it mean that they just overall want less substances? Or do they just. Just have they decided alcohol is unhealthy? Are you going to substitute alcohol for cannabis? And we should be, along with companies that, that make air fryers. We should be looking at cannabis companies, we should be looking at protein powder makers. We should. All of this stuff.

Speaker A: Yeah, I would. I would just take cannabis for a second and think about the people we both know in our lives.

Speaker B: Uh-huh.

Speaker A: Maybe our parents or friends of ours that were drinkers and that drink less. They don't switch over to cannabis like that. Yes. Cannabis and the rise of cannabis and the fact that younger people consume it more and, and drink less has been a part of this.

Speaker B: Even if the consumer product industry changes, grocery stores still exist, and they will still exist. Now. We. Somebody could say, well, drones are going to deliver your groceries, whatever the drone has to get it from somewhere. So even if it becomes warehouses at some point, how does that look different? Because as an investor, you can then probably forever invest in food companies of some sort, no matter how we get our groceries and how that whole logistics piece changes. But how do grocery stores look different because of this? And maybe not even just because of GLP1s, but because of the wellness craze in general?

Speaker A: I think they already are different. The next time you go to the grocery store, and you'll be there anytime soon with a. With a young one in the house. Um, watch as you walk towards the cash register. It is all proteins and fibers and supplements and magazines like ours. That's what you see on the way out. That's the impulse buy. Because that is the thing. Um, people who are like, I'm not that hungry, but I should eat. I got to make sure I get my protein. They want to get that on the way out. And I will tell you, eight times out of 10, those are private label. Right. So you'll see the big companies, the kinds of the world, and the Clif bars of the world in there as well. But you're going to see a lot of private label, that competition is intense. So they've already restructured themselves so that they are catering to the healthier consumer, to the healthier buyer. Um, that's been a huge shift. And also I mentioned private labels in general. The private label business, not just for health foods and for protein and for fiber snacks, is exploding right now, putting a ton of pressure on cpg. So a lot of these, ah, you'll see the Kroger has their own private label brand, obviously Costco with Kirkland, Kirkland's its own master brand. It could be its own business, it could be its own publicly traded company. It's so big, uh, so that's a big theme that I think is going to continue. So it is a space that is under intent, intense pressure. Yes, we have to go there. Yes, we're spending more there every single week. But you know this. Well, the margins in grocery are terrible, right? They're like below 5% if they're lucky.

Speaker B: Well, and that's what I was going to ask is, is that margin. So think about things like consumer staples, company cereal, toothpaste, whatever. The margins are small on those because people need them. Yes, but you're price sensitive. You're going to change your mind if the prices go up a lot or the quality comes down a little bit and you can switch easily in some of these more health conscious products. Are people less price sensitive?

Speaker A: No, they're very price sensitive. I was looking at a study by Shopper Intelligence. They do a lot of data on what people are buying as they check out. They're getting this right literally from the checkout. Whether it's surveys or they're talking to em after the fact. And patients on GLP1s are price sensitive, brand sensitive, uh, to a very high degree, higher than they used to be before. So they wanna make sure they're getting what they need, but they're not overpaying for it. So they become very smart shoppers in this way in the intern has only helped them become even smarter shoppers. And I would venture to guess that a lot of people who are very serious and are sticking with this therapy are having their groceries delivered to them very specifically. It's not a browse buy, it's an intent buy. I know what I need, I know what I eat, I know what my body likes. Now I'm going to go get that or have that delivered right to my door. There's not a lot of extra impulse shopping going on with these patients because

Speaker B: the impulse, the impulse is gone. The Impulse has gone away, the thrill is gone. Yeah, Yeah. I have a question about magazines. So you work at a company that has a lot of magazines and if you don't know this intimately, that's okay. But, uh, now I'm curious, has the advertising changed because of this? The companies that are buying ads because when a company is under pressure, its margins are under pressure. One of the first things to go is marketing and advertising budgets. Right? But if you've got more companies coming to you now because the demand is there for more health conscious things, the whole spread of that, have you seen a difference in the advertisers that are coming to the magazines?

Speaker A: That's such a great question. Well, Campbell's Soup is always gonna advertise.

Speaker B: Casserole recipes are alive and well.

Speaker A: That's a winning formula that has worked for years and they're a well loved brand. So you're gonna see what you normally see, but you're also gonna see in magazines and on our, uh, websites like Simply Recipes and Allrecipes, which are huge. We have about half of the food traffic on the Internet coming to our sites that people are looking. And I look at the traffic on a weekly and daily basis on healthier meals. How do I get more fiber into my dinner? How do I get more fiber and protein into my family's dinner? Right? What are the five best, uh, on budget high protein meals I can make for a family of four? You see this throughout our magazine. We got test kitchens all over the country. Down in Birmingham for food and wine and Southern living and out in Moyne for better homes and gardens where we're constantly testing new recipes. And the ones that have the biggest uptake are these high fiber, high protein. So you're starting to see that. And our advertisers notice that too. So you start to see them advertise in line for that. Now you take it over to another sector like travel. We were talking about this earlier. We have terrific advertisers and partners in Visit California and visit Wisconsin. These are the tourism, um, agencies, the bureaus for these states. And what you see, a lot of their messaging now over the past few years is these. This is the place to get out, feel, well, feel good about yourself. Right? It's not about the rides anymore. The magic kingdoms and those are all awesome. But it's more about where can you go out for that Costa Rica experience, right? That yoga retreat, get a healthy smoothie, feel great about yourself and make it a wellness retreat. You see a lot of tourism leaning that way and A lot of advertising lean that way. And the cruise companies as well, they're all over this. They know that that's what people want. Yeah, go and gorge yourself at the all you can eat buffet and all you can drink. What do you really want? You want to do yoga and the sunrises, you know, crossing the Baltic Sea and wake, you know, have a home cooked meal from a chef cooking you a healthy breakfast. That's kind of the movement across verticals.

Speaker B: So if everybody eats less sugar, do the regions of the world that produce cane sugar start to suffer? What does the economy look like if that's the case, if we're eating less sugar? Or what does the economy of Mexico look like if people are drinking less and tequila isn't as popular anymore? Yeah, well, like Napa. Right?

Speaker A: All of that Wine regions are in trouble. Wine industry is in trouble. No, let's start there. Uh, the prices of some of the best wines all over the world are, are crashing right now because we're just drinking less. There's the consumption part of it. Tariffs didn't help that at all. And wine is in one of those existential crises as well. I'm okay with that because wine's been around for like 10,000 years and has been through a bunch of different sites, cycles. But my kids are. I have a 21 year old and her and her friends rarely drink wine.

Speaker B: Yeah.

Speaker A: Uh, so you rarely see them now? I like it more than ever as I get older, but that doesn't mean everybody likes it. So the wine industry is in trouble right now. Needs to figure it out. Plus it's dealing with climate change. So some of the regions that made some of the world's best wines are in peril. And you're seeing more wine made in places like Wisconsin, made in places like Great Britain. You're seeing that, you know, regions. Mexico, the one, the one part of the liquor industry that's held up well. Mexican beer. Mexican beer sales in the United States have held up well. We have a higher population, uh, of Latinos here. And you're seeing the biggest, you know, this shift over the past few years where Negro, Modelo and Negra, uh, esp, become the, the, the top brands in America. It used to be Budweiser year in, year out. Now it's different. That part of the industry is holding up for now. The rest of the beer industry is not doing well at all. You remember that movement to craft beer and microbrews that was so big in the 90s?

Speaker B: Yeah.

Speaker A: That era there are there those good beers are out there, but it's really hard to make a good business doing that. So regions of the world that are going to be impacted by this are, yes, the sugar producing industries, but they're already dealing with our own issues of climate, uh, which has been a big problem. Drought, which is, you know, you see almost year in, year out and pricing, uh, if you look at chocolate prices, cocoa prices, those have been through the roof. It's not like demand is through the roof. It's just supply is super low right now. So those are affected by a lot of other factors, but this will influence them as, as well.

Speaker B: Okay, and the supplement industry, as an investor, how do you capitalize on that? Even the way that we think about supplements today is different than we did because we've learned so much more. So how do you like, if I was trying to capitalize on that part of the industry, what do you buy?

Speaker A: There are the supplement makers, there are the bigger brands that people might be aware of, uh, that are out there. But again a lot of this is also controlled by the food companies themselves. So you might think you're buying into a, a company that is an independent doing this, but it might already be a part of the whole foods ecosystem, might already be a part of the Trader Joe's ecosystem. Or it's part of the energy, uh, the energy drinks, uh, that are coming through, the energy drink makers as well. So the pure plays in just supplements are hard to find. Small cap companies, in some cases micro cap companies that are trying to break through and we don't really have a clear leader in there. I don't have a great answer because there's no standout. Oh, obviously you want to put your money.

Speaker B: Yeah, that's what I'm asking.

Speaker A: There's no Nike of the industry for supplements.

Speaker B: But will there be? Do you think that's where it goes?

Speaker A: I think that this is where this goes. And I also think, you know, there, there's a popular song from the, the 60s and 70s, uh, one pill makes you smarter, one pill makes you small. Go ask Alice, I think it was called Are, uh we headed to that? Where it's just like, I just need this one little pill to get what I need, uh, in terms of my meals every day. And I don't think everyone's going to be that way. I think there are those of us that love food, cooking food, making food, growing it, shopping for it, et cetera. But I do think there's a growing part of the population and it'll start here in the US but you'll see it in Asia and you'll see it in Europe that are going to say, I eat this little bar, I take this little pill, and I have two vials of this a day, and I'm good. And the companies that are able to target that well are going to end up doing phenomenally well. It's going to be very boring, uh, out there, and those dinner parties are not going to be a lot of fun to go to. But I think that there's a lot of people that are just like, just maximize my time and efficiency. I don't really care too much about what I eat. I just want to make sure I have what I need inside me.

Speaker B: I mean, what happens to, like, the Food Network and chefs and people that have made their careers and their livings on cookbooks and, you know, Barefoot Contessa, who. She puts butter in every. I love her. Love, Aunt Garden.

Speaker A: Ina's not going anywhere. Don't worry, she's fine. And I think that that will always exist. That I think is here to stay. I think there's also people like us who love experience and food is a big part of it. And going to eat great food at a great restaurant, watching it being prepared by one of the chefs featured in Food and Wine, or going to a great meal or a destination for a great meal, I think that's still going to be strong. And I think you're going to still see a lot of media and consumption around that. But you cannot deny the fact that this has really created a fundamental shift in the way big companies think about consumers. And definitely the way that pharma and the medical industry is thinking about treating the whole patient.

Speaker B: Who's being left behind? Who are the companies that. And maybe, maybe that's not the right way to phrase it, not being left behind. Maybe they're not changing their ways fast enough. Who's not seeing this trend?

Speaker A: Well, you do see fast food companies, or what do they call them now? Uh, casual, uh, food.

Speaker B: Fast casual.

Speaker A: Fast casual. Companies that are just holding on for dear life. And, and you know who they are because you run, you pass them in the airport every time you're going to catch a flight, and you see these enormous plates of food, but you just don't see as many people gathering around that now. Some of that is inflation, uh, and because of high prices and the high cost of food away from home. Um, but I also think in a way, we've kind of come through the other side here, and we don't need to be supersized anymore. Right. I think Americans are wanting to get healthier in general. This GLP one thing came right at the right time again. This started just as a diabetes 2 treatment and then it turned into this weight loss revolutionary drug that really is presenting an existential crisis across industries. I think there will always be the people here that are fine, that will never use one and that are, you know, not worried about it. But I also think just given the projections and given what we've seen in the last two to three years, that fact that one in four people might be on it in 10 years from now is not going to be a shock to me at all.

Speaker B: Well, there's so many success stories. I mean we all know people. I can, I could list off probably almost 10 people that I know who are on them.

Speaker A: Right.

Speaker B: And every single one of them is a success story.

Speaker A: And uh, they feel better about themselves, they look better and they're probably not having a lot of the same medical issues that were, you know, hurting their quality of life.

Speaker B: Yeah, yeah, it's wild. Okay, so sorry, investors, you, not only do you have to worry about AI changing the landscape for everything, but also GLP1s but you know, maybe this is one of the catalysts that makes healthcare a bigger part of the index. It makes healthcare a bigger investment piece going forward, which my call on healthcare will finally come true.

Speaker A: I think the, the best indicator, uh, that be the case is the fact that Amazon just jumped into this space.

Speaker B: Oh really?

Speaker A: Amazon? Yeah. And they're, and they're doing it through the Amazon one med space and they're going to be able to give you consultation. Right. Deliver the drugs to your door obviously and treat the whole patient, not as a one time thing. And that's what they said in their press release. We're not thinking about weight loss as a take one pill and be treated for the rest of your life. We want to treat this as a lifelong condition. And the fact that Amazon is entering this market now, now that tells you all you really need to know.

Speaker B: Yeah. Thank you, Caleb. What a, what a refreshing episode. Different than we get to do on a daily basis. Role reversal and a different topic.

Speaker A: I love it.

Speaker B: I love it. Thank you. Thank you so much for being here.

Speaker A: Thanks for having me.

Speaker B: On the surface that might not have sounded like an investing episode, but I think it actually had everything to do with investing. Caleb said that one in eight people people are currently on a GLP one and in 10 years that number might be one in four. It's changing everything across a lot of industries. So A couple things that we talked about, the ripple effects that this is having. First of all, on, um, industries like food company like Nestle changing its approach and what it's providing. You've got companies going private label that he talked about providing things like protein supplements and changing the products that they have in their stores, at certain spots in their stores. I think there are a lot of investors investing opportunities and maybe even a lot of investing risks for companies that aren't keeping up with this. Even things like appliance brands, athleisure and clothing brands, retail, and how that's going to change because of changing consumer behavior. We talk all the time in markets and in the economy about consumer sentiment. I think consumer sentiment and consumer behavior are going to shift so much. They have already, but going to shift so much more because of this craze. And then the last thing I will say is, is that companies everywhere that are keeping up with this are pivoting to cater to this new type of behavior. And if you're watching innovation, which every investor probably is right now because of AI, when you're watching innovation, you also want to watch healthcare innovation and you want to watch the behaviors that are changing due to this particular innovation. I had so much fun recording that we got to do something different than we usually do. And those are all always so much fun to do. Thank you for listening, thank you for watching and come hang with me again next week on my podcast. For more from me, read my weekly column in SoFi's newsletter on the money and on the SoFi website, or follow me on X at Liz Thomas Strap. Follow the Important Part wherever you get your podcasts, the Important Part is produced by SoFi in partnership with Sony.

Speaker C: Podcasts Investments are not FDIC insured, are not bank guaranteed and may lose value. Elizabeth Thomas is a registered representative of SoFi securities and a registered investment advisor with Sofi Wealth. This podcast is brought to you by SoFi Invest, which is a trade name used by SoFi Wealth LLC and SoFi Securities LLC. This podcast is for informational purposes only. Investing involves risk.