Nestle is set to launch a new frozen-food brand, Vital Pursuit, targeting the burgeoning market of consumers using GLP-1 drugs such as Ozempic and Wegovy. These weight loss and diabetes medications have surged in popularity over the past year, bolstered by endorsements from high-profile celebrities like Oprah Winfrey and Elon Musk.

According to a recent survey conducted by the health policy research organization KFF, roughly one in eight adults in the U.S. have used a GLP-1 drug at some point. Around half of these individuals, or approximately 6% of U.S. adults, are currently using one of these treatments. Research from Morgan Stanley suggests that the total number of U.S. consumers taking GLP-1 medications could soar to 31.5 million, or 9% of the population, by 2035.

The rise in GLP-1 drug usage has sparked investor concerns about the potential impact on food and beverage companies and fast-food chains. Individuals on these medications often eat less frequently due to reduced cravings, opting for more protein and fewer sugary and fatty foods. In October, Walmart U.S. CEO John Furner noted that customers who purchase GLP-1 drugs from its pharmacies tend to buy less food, typically opting for items with fewer calories.

However, Nestle sees a significant opportunity to cater to these consumers with Vital Pursuit. “The reality is, for the last 25 years, the diet has been dying, in a sense. ... For me, what we’ve done is actually given consumers a new tool that actually gives them confidence and success on this journey,” Steve Presley, Nestle’s North America CEO, told CNBC.

Vital Pursuit’s initial product lineup will feature 12 items, including frozen bowls with whole grains or protein-packed pasta, as well as sandwich melts and pizzas. Each product will contain essential nutrients like protein, calcium, or iron. The company plans to price Vital Pursuit items at $4.99 or below and will offer gluten-free options. While the packaging will not specifically mention GLP-1 medications, Nestle intends to connect the brand more directly to these drugs through social media campaigns.

The new line of products is expected to hit freezer aisles by the fourth quarter of this year. This launch represents part of Nestle’s broader strategy to cater to health-conscious consumers. In 2018, Nestle sold its U.S. candy business, including brands like Butterfinger, Crunch, and Laffy Taffy, to Ferrero for $2.8 billion. Currently, Nestle’s food business, encompassing brands such as Stouffer’s and Toll House, accounts for just 14.5% of its U.S. sales.

Nestle already owns Lean Cuisine, established in 1981 as a healthier alternative to other frozen meals. However, the company decided to create a new brand specifically for GLP-1 users because Lean Cuisine’s branding primarily targets calorie-conscious consumers. In contrast, individuals on GLP-1 medications may seek to consume more nutrients, such as protein, to counteract muscle loss associated with the drugs. “The consumer research shows that there are certain nutrients and certain macros that need to be delivered to actually help the consumers stay healthy along the journey of the GLP-1 treatment,” Presley explained.

Despite these strategic moves, shares of the Swiss-based Nestle have fallen 16% this year, reducing its market value to $278 billion. The food giant anticipates that its global growth will decelerate this year as inflation-weary consumers reduce their spending on its products.

Nestle’s decision to introduce Vital Pursuit is also reflective of broader trends in the food industry, where companies are increasingly tailoring their products to meet the specific needs of health-conscious consumers. The demand for nutrient-dense, convenient meal options is on the rise, driven by consumers' growing awareness of health and wellness. By targeting GLP-1 users, Nestle is tapping into a niche but expanding market segment that values both health benefits and convenience in their food choices.

The company’s strategic focus on health and wellness is further underscored by its ongoing efforts to innovate and expand its product offerings. Nestle’s research and development teams are continuously working to improve the nutritional profile of their products while maintaining taste and convenience. This commitment to innovation is evident in the development of Vital Pursuit, which aims to provide balanced, nutrient-rich meal options that align with the dietary needs of GLP-1 users.

Additionally, Nestle’s marketing strategy for Vital Pursuit will likely leverage the power of digital and social media to reach its target audience effectively. By utilizing platforms like Instagram, Facebook, and Twitter, Nestle can engage directly with consumers, educate them about the benefits of Vital Pursuit products, and build a loyal customer base. The use of social media influencers and partnerships with health and wellness advocates could further amplify the brand’s reach and impact.

As Nestle continues to navigate the challenges and opportunities in the evolving food and beverage landscape, the launch of Vital Pursuit represents a significant step in its mission to meet the changing needs of consumers. The brand’s success will depend not only on its ability to deliver high-quality, nutritious products but also on its capacity to connect with consumers and foster a sense of community and trust.