Food and Drinks Giants Seek an Image Makeover – Here's What They're Doing
•February 8, 2026
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Companies Mentioned
Why It Matters
The shift forces industry leaders to reinvent revenue models from volume‑driven calories to high‑margin nutrition, reshaping competitive dynamics and investor valuations.
Key Takeaways
- •GLP‑1 drugs cut consumer calories 15‑40%, hitting snack sales
- •Companies launch protein‑rich, fortified products for weight‑loss users
- •Influencer‑backed brands achieve rapid growth but suffer hype decay
- •Legacy firms shift ad spend to programmatic digital, boosting margins
- •Vertically integrated supply chains mitigate commodity price shocks
Pulse Analysis
The emergence of GLP‑1 therapeutics such as Wegovy and Ozempic is redefining the demand curve for packaged foods. As users consume up to 40% fewer calories, traditional high‑margin snack and sugary‑drink categories face a structural decline. Companies that can embed essential nutrients, protein and vitamins into smaller portions are positioned to capture the same ticket size while aligning with health‑focused consumer expectations. This biological shift also blurs the line between food manufacturers and biotech firms, prompting a strategic pivot toward precision nutrition.
Digital disruption compounds the challenge. Influencer‑driven launches like Prime Hydration demonstrate how a massive audience can generate billion‑dollar revenues in months, yet the same hype often evaporates, leaving legacy brands with a loyalty advantage. To stay relevant, incumbents are reallocating half of their media budgets to social platforms, leveraging AI‑powered content and real‑time pricing. The new moat is no longer sheer advertising spend but the ability to blend rapid‑fire digital exposure with entrenched supply‑chain reliability and brand habit.
Supply‑chain volatility adds a third layer of risk. Extreme weather and disease have sent cocoa and coffee prices soaring, eroding margins for firms locked into short‑term contracts. Vertically integrated growers and long‑term agricultural investments act as a biological hedge, stabilizing input costs and preserving brand integrity. For investors, the winners will be those that successfully transition from selling calories to selling health, combine digital agility with robust sourcing, and demonstrate resilient earnings amid a shrinking caloric economy.
Food and drinks giants seek an image makeover – here's what they're doing
Food and drinks firms and the disappearance of the calorific economy
These giants were long protected by a formidable moat made up of advertising power and control of shelf space. But a decade of flat share prices has exposed the model’s fragility. While markets surged, food majors relied on price rises to mask weak volumes – a strategy that has now run out of road. The era of the food stock as a bond proxy is ending as biological, digital and environmental pressures dismantle the industry’s old defences. The shift from mass‑market calories to higher‑value nutrition is now the dividing line between future winners and the laggards. Scale alone no longer guarantees success; agility matters more as consumers’ loyalty fragments and input costs grow volatile.
The first challenge – a biological shift
The rise of the caloric‑deficit economy is driven by GLP‑1 weight‑loss medications such as Wegovy and Ozempic. By 2025 a significant portion of the adult population in the US had already adopted these treatments, and the figure is projected to grow substantially by the end of the decade. These drugs slow gastric emptying and modulate brain reward systems, effectively outsourcing the choice to eat from will‑power to a drug.
The result is lower food consumption. Users of these medications typically consume between 15 % and 40 % fewer calories. This decline is most concentrated in high‑margin discretionary categories that the branded food giants rely on, such as snacks, sweet bakery items and sugary drinks. Early evidence suggests that households on these medications spend significantly less at both grocery stores and fast‑food restaurants. For a sector that has already struggled with volume growth, the removal of billions of daily calories from the food system is a problem.
The industry is responding with nutrient‑dense food. If consumers are going to eat less, food companies must ensure that every calorie sold carries a higher margin. Nestlé has launched brands specifically designed for GLP‑1 users, featuring meals high in protein and fortified with essential vitamins. This is a defensive move to protect the “ticket size” of a purchase even as portion size shrinks. The success of this transition depends on whether firms can stop selling weight and start selling health. The food industry is becoming indistinguishable from the biotech industry, with success defined by the precision of nutrient delivery rather than the volume of distribution.
“Scale insurgents” have no staying power
Image credit: Getty Images
The second and perhaps most visible threat is the collapse of the traditional branding moat in a digital world. For most of the 20th century, high entry costs protected incumbent products and brands. Launching a global food brand required a multimillion‑pound television budget and a massive physical distribution network. Today that barrier has been destroyed. Digital platforms allow creator‑led brands to achieve great scale with unprecedented speed. Gatorade took nearly three decades to reach a billion dollars in revenue; influencer‑backed Prime Hydration achieved the same milestone in just two years.
Legacy firms have adopted digital tools to expand operating margins. Companies such as Unilever have moved away from rigid television contracts toward programmatic digital buying, allocating half of their media spending to social platforms and influencer partnerships. This has fed margin expansion, with some firms seeing operating improvements of several percent to all‑time highs.
However, the same technology also invites a wave of “scale insurgents”. These new players exploit a “variety, volume and virality” model. Mr Beast’s Feastables chocolate, for example, can attract customers at near‑zero cost by leveraging an existing audience of hundreds of millions on YouTube and other media. For legacy firms, the challenge is no longer just about who has the biggest budget, but who can maintain relevance in a fragmented media landscape where consumers no longer watch the same television advertisements.
The rapid rise of influencer brands is often followed by spectacular “hype decay”. Many viral products suffer from a lack of repeat purchases. Prime Hydration saw UK sales volumes fall by as much as 70 % in 2024 as the initial social‑media frenzy dissipated. Consumers may try a product once out of curiosity, but they return to legacy brands for a preference built up by familiarity and habit. This suggests that defensiveness has shifted from media control to habit control. Winners will be firms that use digital tools to rent fame during a launch, then rely on superior supply chains and trusted brands to own long‑term loyalty.
Volatility exposes fragile supply chains
The third challenge involves the increasing fragility of global supply chains. Weather‑induced shocks have repeatedly affected the value chain. Cocoa and coffee, primary ingredients for many global food and drink businesses, have seen historic price surges followed by violent corrections. Cocoa prices, for example, more than quadrupled in a single year because of supply collapses in West Africa, driven by disease and extreme weather.
Most food companies lock in costs only a year or so ahead, cushioning short‑term shocks but doing little to protect against prolonged shortages. For mass‑market producers with little pricing power, margins were crushed, in some cases by more than ten percentage points.
Vertically integrated models have proved more resilient. Firms that source directly from farmers and invest in agriculture for the long term are creating a “biological hedge”. In 2025 the industry saw the phenomenon of “skimpflation”, where manufacturers reformulate products with cheaper substitutes to maintain price points—a dangerous game that risks eroding consumer trust. Recently, Cadbury’s owner Mondelez International faced media claims that Dairy Milk shouldn’t even be called chocolate because of low cocoa solids.
The main players
Image credit: Robert Way/Getty Images
Unilever (LSE: ULVR) – Under its Growth Action Plan 2030, Unilever is stripping away bureaucratic complexity to focus on 30 “power brands” that generate three‑quarters of turnover. It is spending more on digital marketing and positioning itself as a provider of nutrition rather than just household staples.
Associated British Foods (LSE: ABF) – A conglomerate pairing Primark with a diversified global food business. It is moving away from the “discretionary calorie” model toward nutrient‑dense products and using a devolved leadership model to manage regional commodity volatility.
The Coca‑Cola Company (NYSE: KO) – Has shifted to a digital‑first marketing strategy with 65 % of its media mix online, using AI‑driven content and real‑time pricing adjustments. It is expanding into mini‑cans and functional teas to meet lower‑calorie demand.
PepsiCo (Nasdaq: PEP) – Balances beverages and Frito‑Lay snacks. It is launching a “protein pivot” with multifunctional products such as Muscle Milk and cutting costs through AI‑driven automation across its supply chain.
Mondelez (Nasdaq: MDLZ) – Exposed to declining traditional snacking, it is acquiring health‑focused brands and leveraging a digital moat to reach consumers before they enter supermarkets, aiming to shift from high‑volume indulgent snacking to higher‑margin functional treats.
Monster Beverage (Nasdaq: MNST) – Demonstrates pricing power by shifting toward zero‑sugar energy drinks and maintaining organic reach through gaming and extreme‑sports communities.
Nestlé (Zurich: NESN) – The most advanced firm transitioning from selling calories to managing nutrients. Its Vital Pursuit brand is designed as a “companion” for weight‑loss medication users, and it uses whey protein to create satiating beverages.
Danone (Paris: BN) – Industry leader in volume‑led growth, focusing on gut‑health products such as Actimel. Its “renew” strategy treats the weight‑loss drug revolution as an opportunity, positioning protein‑rich dairy and plant‑based products as staples for restricted diets.
Hindustan Unilever (Mumbai: HINDUNILVR) – Reaches nine out of ten Indian households, leading a digital transformation through its Shikhar B2B platform, bypassing traditional wholesalers, and investing heavily in “quick commerce” and advanced factory automation.
The best of the bunch
For the UK investor, Unilever remains a compelling choice. After a period of drift, the company has refocused on a streamlined portfolio of “power brands” and embraced digital marketing. By pivoting toward premium, science‑led products such as Liquid I.V., it is defending margins and growing even as sales volumes are under pressure. The business is leaner, more agile, and better equipped to compete with viral challengers.
Beyond the domestic market, Danone and Nestlé have emerged as leaders in the transition toward medicalised nutrition, turning the rise of appetite‑suppressing drugs into a catalyst for high‑margin innovation. Coca‑Cola continues to demonstrate the enduring power of a world‑class brand paired with a cutting‑edge supply chain. For the more adventurous investor, Hindustan Unilever provides an exceptional gateway to the future, offering direct access to a growing population of increasingly wealthy consumers in India, backed by an operational infrastructure that is among the most advanced in the world.
The businesses that have successfully re‑engineered their models are no longer solely selling food, but also health and convenience. In a world of fewer calories and more data, these are the ones likely to shape the future.
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