GLP-1 food M&A risks and opportunities explained
- GLP-1 exposure is entering due diligence and influencing prices, although it hasn’t yet derailed a major food transaction.
- Strong brands, pricing power, flexible formats and valuable manufacturing capacity can protect conventional bakery and snack valuations.
- Ingredient expertise, whey-processing capacity and flexible packaging could attract a more defensible premium than consumer-facing health claims.
GLP-1 drugs have already triggered sharp selloffs in food stocks without changing a single factory, recipe or retail listing. When Walmart said in 2023 that users were buying fewer units, shares in PepsiCo and Coca-Cola fell 6% that week, while McDonald’s lost 5%.
That nervousness has since moved beyond public markets and into food and beverage M&A. Businesses preparing for sale increasingly need to explain how their portfolios will withstand reduced consumption, particularly when they depend heavily on savoury snacks, sweet bakery or impulse-led occasions.
“There are tangible impacts,” says James Watson, UK partner at Argon & Co. “Interestingly, the market is pricing in the GLP-1 impact faster than any data can validate the true impact. Businesses are also continually updating their portfolio and so the true impact is masked across a sea of changes.”
This creates an awkward valuation problem. Potential acquirers can’t ignore evidence that GLP-1 users spend less on snacks, but neither can they treat every struggling biscuit, crisp or confectionery business as a casualty of weight-loss medication. Inflation, price increases, private label competition and weaker consumer confidence are depressing volumes at the same time. GLP-1s could become a convenient explanation for poor performance – or an excuse to discount an otherwise adaptable business.
GLP-1 risk is entering the price
Private equity investment suggests food remains attractive, although buyers have become more selective. S&P Global Market Intelligence recorded $5.92bn of private equity investment in packaged-food and meat producers during the first seven months of 2026, putting the sector on course to exceed the $6.75bn invested across 2025.
S&P recorded 138 deals during that seven-month period, compared with 264 across the whole of 2025. Median deal size increased by almost 79%, from $4.2m to $7.5m, suggesting investors are placing larger bets even as activity slows.
GLP-1 exposure is consequently entering due diligence, although Watson hasn’t yet seen it derail or materially restructure a major food transaction.
“Companies coming up for sale need to have a strategy that addresses volume pressure from GLP-1s as due diligence will focus on this,” he says. “If they don’t, they risk becoming distressed assets and being acquired by larger companies who have appropriately planned for the effects of GLP-1s.
“What I’m yet to see is a deal that has materially been restructured or fallen apart due to the impacts of GLP-1s – instead it’s acting as a variable in the price paid for assets.”
Recent purchasing data explains the scrutiny. A study published in the Journal of Marketing Research in December 2025 found that US households reduced grocery expenditure by an average of 5.3% within six months of someone starting a GLP-1 medication. Savoury snack spending fell by around 10%, while sweets, baked goods and biscuits also recorded substantial declines.
Around one-third of users discontinued treatment during the research period, after which their food spending moved back towards pre-treatment levels. That finding challenges the assumption that every new user permanently removes the same amount of volume from the market.
Yet consumer and retail consultancy OC&C Strategy Consultants expects the effect at market level to be considerably less dramatic, forecasting an average annual volume drag of around 0.2% through 2031. That would leave US food and beverage volumes approximately 1% below where they might have been without GLP-1 adoption – material for individual assets, but far from an industry-wide collapse.
“GLP-1s are reshaping food and beverage consumption, with the impact extending beyond volume to fundamentally change the mix of what consumers buy,” says Coye Nokes, partner and head of retail and consumer goods in the US at OC&C.
Even so, Watson cautions against attributing every change in food spending to the drugs. “Some impacts have been proven from GLP-1s,” he says. “However, it’s hard to be definitive as the impacts of inflation and price sensitivity are simultaneously impacting consumer behaviours. It is hard to isolate the impacts of GLP-1s from consumer spending changes.”
A potential acquirer therefore needs to establish what would have happened to the target company without weight-loss drugs. A business that’s increased prices, reduced promotions, lost distribution or failed to innovate may have weaknesses that GLP-1s merely expose rather than cause. A seller that can’t explain those differences risks having the uncertainty reflected in a lower offer.
The market hasn’t settled on a GLP-1 premium
Although the transactions aren’t directly comparable, acquisition multiples don’t reveal a simple divide between nutrition-led winners and indulgent losers.
Simply Good Foods paid $280m for plant-based protein shake brand OWYN in 2024, equivalent to approximately 13.3 times estimated adjusted EBITDA after anticipated synergies. Campbell paid around $2.7bn for Sovos Brands, owner of Rao’s sauces, at 19.8 times adjusted EBITDA before synergies.
Mars, Inc. completed its $35.9bn acquisition of Kellanova in December 2025, paying the equivalent of 16.4 times adjusted trailing EBITDA for a business anchored by Pringles, Cheez-It and Pop-Tarts. That price hardly suggests sophisticated buyers have lost their appetite for conventional snacks.
Lincoln International, a global investment bank and M&A adviser, calculated in its first-quarter 2025 food and beverage review that nutrition businesses traded at an average 13.8 times EBITDA. Coffee and snack companies averaged 20.4 times.
“I don’t think there is enough evidence to be definitive here,” says Watson. “There are examples of a premium being paid but it is far from consistent.”
Conventional bakery and snack assets may be harder to sell than they were five years ago, but Watson believes they are “far from unsellable”. Pricing power, stable market share against private label, low promotional dependency and valuable manufacturing capacity can all protect valuations.
Flexible price-pack architecture offers another defence, allowing consumers to buy smaller portions while manufacturers preserve the established price point. “Conversely, what kills valuations is volume decline the seller cannot explain,” says Watson.
Long-term adoption adds another uncertainty. The Novo Nordisk-funded STEP 1 trial tested weekly semaglutide in 1,961 adults with overweight or obesity, while its extension followed 327 participants for a year after treatment ended. They regained approximately two-thirds of the weight they had lost, suggesting continued treatment may be needed to maintain the drug’s effects.
“There is a very real risk of undervaluing snack assets, particularly while the true impact of GLP-1s is not proven,” says Watson. “While it’s becoming a fact that users of GLP-1s decrease their spending, particularly in the snacking categories, the jury is still out on what the long-term adoption of weight-loss drugs looks like.
“The point being we need to understand what the actual usage rate will settle at rather than accept a doomsday scenario. As time progresses, suppliers will have more information on what the consumer need states for GLP-1 users are and can adapt their portfolios accordingly.”
Existing brand strength could also be undervalued if buyers assume reduced consumption means consumers have rejected indulgence. Givaudan says its research with Bellomy, based on more than 15,000 social media discussions, found that GLP-1 users continued seeking familiar product experiences despite adjusting how frequently and how much they consumed.
“They continue to seek products that align with their taste preferences and eating occasions, often in smaller portions or different formats, and brands can therefore reformulate or resize rather than abandon indulgent offers to meet these needs,” says Santiago Vega, VP of marketing and regional innovation for North America at Givaudan.
That finding complicates the assumption that a high-protein proposition automatically makes a stronger acquisition target than an established indulgent brand. Consumer loyalty, sensory recognition and adaptable formats may offer greater protection than a health claim competitors can quickly copy.
Buyers may pay more for capability than branding
The more defensible GLP-1 premium may ultimately sit in capabilities rather than finished brands. Buyers searching for a genuine competitive advantage may be better advised to target expertise in protein and fibre formulation, flavour masking, mouthfeel restoration, portion-controlled production and flexible packaging. Acquiring those capabilities could prove faster and less risky than building them internally.
“We’re seeing customers looking for end-to-end partnership models, and manufacturers are asking suppliers for off-taste masking, mouthfeel enhancement, protein and fibre technologies and formulation support during the early stages of development,” says Vega.
Such demand could increase the strategic value of ingredient suppliers, formulation specialists, contract manufacturers and businesses with flexible production assets.
“Because suppliers are increasingly expected to bridge flavour and nutrition, I believe there is a real opening for ingredient, formulation and flavour specialists to collaborate more closely or to become integrated in new ways,” he adds. “Acquisitions or partnerships could be one response to meeting customer demand quickly and at scale, though it’s certainly not the only one.”
Protein processing, for example, demonstrates how a scarce technical capability can become an investment asset. StoneX data published in May showed the price of whey protein concentrate containing 80% protein had risen by almost 90% in a year to €20,000 per metric tonne as demand linked to GLP-1 use, healthy ageing and broader protein trends outstripped available processing infrastructure.
“The constraint for whey protein is processing capacity, not raw ingredients, making processing assets attractive for long-term investment,” says Watson. “Brands can reformulate relatively quickly – within a year – whereas it will take several years to stand up a whey-processing plant.”
Smaller servings create similar opportunities for contract manufacturers and packaging operations able to produce multiple formats economically. “Businesses capable of producing smaller, more flexible pack formats could provide attractive acquisition targets for larger producers,” he adds.
Ultimately, the investment case for whey-processing assets and flexible packaging capacity shows why GLP-1 due diligence shouldn’t amount to asking whether a company sells snacks. Potential acquirers need to establish whether the business can explain its volume performance, protect its margins, adapt its formats and secure the technical capabilities needed to respond.
A company that passes those tests may remain valuable even when it sells indulgence. The greater danger lies in using GLP-1s as a shortcut – paying an inflated price for anything linked to protein while discounting bakery and snack businesses that already possess the brands, factories and flexibility needed to compete.
