• 💪 Kaizen Grows Lupin Interest
• 🥛 Lifeway Posts Strong Net Sales 
• 🐺 Happy Wolf Ramps Up Distribution
• 🥩 Inside Stryve's Margin Improvements
• 🚀 Online Grocery Sales Skyrocket 28% 
• 🌀 Storm Damage and Shutdowns

GLP-1 adopters are shifting to a younger and more affluent crowd, according to a webinar hosted by data analytics firm Numerator, in partnership with Morgan Stanley, that tracked the impact of GLP-1 on spending habits.

Numerator’s consumer surveys have tracked the impact of GLP-1 on spending habits and believes it can dispel a few early concerns within the industry while forecasting where the next wave of weight management consumers may come from.

Although Gen Z and millennials still make up a small portion of GLP-1 users, it’s growing. There has been a 40% increase among Gen Z households using the drugs since last October. This has implications for how grocery dollars are spent.

“This new wave… means new ways of shopping for groceries such as meal kit deliveries and third-party delivery apps,” said Numerator senior consultant Katya Kazantseva.

Meal-delivery brands like Daily Harvest, GOLO or FuturHealth have already hopped on the trend. Yet, the fears that the rise of GLP-1 usage would decrease basket size and grocery spending appear to have been overblown so far.

Numerator found that the younger cohort of survey respondents are not necessarily cutting back on grocery budgets but instead are “redistributing it towards other family members or more premium products despite their diminishing appetites,” Kazantseva said.

That’s not to say that GLP-1 users aren’t changing some of their shopping habits. Grocery trip frequency among users was only up 1.3% in the last six months compared to a year ago. Non-users tracked an 8.7% increase in grocery trip frequency.

What does this all mean? Behavior is changing in the Ozempic Era, but it is not as straightforward as lower eating or spending habits. Shoppers are finding different ways to eat and searching for products that can supplement their weight loss journey which might spell an influx of new product lines similar to Nestlé’s new GLP-1 supporting meal brand Vital Pursuits.

Go Deeper: Check out this report from The Brightfield Group on the impact of GLP-1s

After spending three years drumming up interest online for lupin bean products, the Kaizen Food Company is eyeing an expansion deeper into physical retail with a packaging update and new products.

🛒 The high-protein, low-carb pantry staples launched DTC, soon expanding to Thrive Market and Amazon. Now the company is slowly creeping into brick-and-mortar retail via independents and small, regional chains. 

🔍 That pace has been deliberate. Husband-and-wife co-founders Arash Hashemi and Madalina Defta self-funded the company, and it has maintained profitability since day one, they said. Now, after recording 3.6x year-over-year organic growth in 2024, they believe the time is right for retail expansion.

Nosh Insiders can access the full story to learn how Kaizen has worked to grow interest in lupin products.

After turning down a buyout offer from Danone earlier this month, Lifeway Foods posted its 20th consecutive quarter of net sales gains, up 12.7% to $46.1 million in Q3. 

📈 The sales growth was driven by volume growth among its branded drinkable kefir segment in addition to growth across its cheese category as consumer interest in its soft cheese products, such as Farmer Cheese, has increased.  

🏭 According to CEO Julie Smolyansky, the company is continuing to deprioritize private label manufacturing in order to “protect Lifeway’s category dominance and visibility, streamline operations and further improve margins.”

Stay tuned for the full earnings call recap later today. 

Toronto-based refrigerated bar brand Happy Wolf is ramping up distribution in the U.S. with a launch in Whole Foods Market stores along the East Coast, Midwest and Southwest. The partnership brings the brand’s stateside door count to 450.

🍓 The natural retail chain will carry three SKUs – Strawberry, Chocolate Chip and Choco Banana – priced at $8.99 per 5-count box. 

⏪ Launched direct-to-consumer (DTC) in 2023, Happy Wolf set out to provide parents with a school-safe, convenient snack for their kids that “wasn’t just carbs and sugar.” Its lineup was crafted for consumers aged 18 months to eight years.

💭 “Whole Foods has always been the north star. When we were building this brand, we were thinking about the first big retailer that we would see ourselves in and we feel we’re aligned with [the Whole Foods] shopper,” said co-founder Jana Goodbaum.

Check out the full story on Nosh to learn more about Happy Wolf’s growth plans.

Stryve Foods reported continued revenue growth and improved gross margins, along with reduced operating expenses, in the third quarter. Here are the highlights:

• The meat snack maker posted net sales growth of 36.4%, compared to the prior-year period, reaching $5.7 million.
• Net loss for the third quarter was $3.1 million, an improvement over a net loss of $4.8 million the year before.
• Gross profit of $1.2 million improved from $600,000 last year, translating to a gross margin of 21.7% versus 13.3%, benefiting from productivity and operational efficiency efforts.
• During the quarter, Stryve secured new placements across several grocery and convenience retailers and launched a new brand of pet treats.

💰 This month, the company raised $2.9 million in gross proceeds from the sale of equity through a public offering to support increased order volume and run rate demand from existing accounts.

Read the full story on Nosh later today.

Online grocery sales in October spiked 28% year-over-year to $10.5 billion, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey. What’s more, all three order fulfillment methods – delivery, pick-up, and ship-to-home – posted gains. 

🚚 Delivery experienced another “turbo-charged” month, per the report, with sales up 46% to $4.8 billion and a monthly active user (MAU) base growing faster than pick-up or ship-to-home, at a rate of 16%. 

🛒 The overall MAU eGrocery base grew by 1.6%, equating to 54% of U.S. households completing at least one shopping trip online during the month. However, the total pool of households that have ever shopped online increased by just 0.6%. What does this mean? Most of the month’s MAU growth resulted from reactivating lapsed users. 

🗣️ What they said: “Delivery is riding its next growth curve, fueled not simply by subscriptions or membership offers, but by promotional pitches that incent the customer to commit for a year. While firms occasionally revert to their standard ‘free trial’ offers, the surge of new discount tactics seem to have a broader appeal.” - David Bishop, partner at Brick Meets Click

The CPG Week team talks about the impact of Hurricane Helene on North Carolina food and beverage businesses and dives into a slate of small brand shutdowns. The hosts dig into the circumstances that ended operations at No Evil, Bowery Farms and Marco Sweets & Spices. While numerous challenges continue to shake the industry, help is offered in the form of a guide on exiting gracefully. 

Listen to the full episode.

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