Ozempic is eating Big Food's lunch

Here’s an October horror story for you: Your beloved bag of Flamin’ Hot Cheetos might be losing its place in the snack aisle to something with a little more fiber.

PepsiCo beat top and bottom lines in its third-quarter report today, with revenue climbing 5.6% year-over-year and global snack volumes growing 4%—their fastest pace since 2021. But closer to home, North American Frito-Lay food volumes remained flat as inflation squeezed consumers.

The twist: PepsiCo’s seven “permissible” snack brands geared towards healthier options, like SunChips, PopCorners, and Smartfood, all posted strong sales and volume growth. The portfolio now generates roughly $3 billion in annual revenue, up from closer to $2 billion in mid-2025, with SunChips alone approaching $800 million in annual retail sales.

Investors welcomed the results, sending shares up 3.81%.

The protein prescription

The changing snack aisle reflects a broader shift in consumer preferences amid the GLP-1 boom. According to Gallup, 15% of US adults have used GLP-1s for weight loss, up from 3% in 2024. A study published in the Journal of Marketing Research found that households reduced grocery spending by an average of 5.3% within six months of a member starting GLP-1 drugs, with savory-snack spending falling about 10%. 

But GLP-1s don’t have consumers cutting back on everything: Active users plan to spend 11% more on healthy options like high-protein foods each month, a BCG survey finds.

To capture that shifting demand, PepsiCo is rolling out new offerings like Doritos Protein and SunChips Fiber, taking on innovation one nutritional buzzword at a time. Meanwhile, supermarket chain GIANT has launched guided shopping tours to help GLP-1 users find protein-rich and high-fiber foods, while Kraft Heinz is investing $700 million this year to entice shoppers with new products like protein-packed mac and cheese.

A tough pill to swallow

But healthier snacks doesn’t necessarily mean healthier profits. PepsiCo is already struggling to balance sales growth with profitability, having slashed some prices by as much as 15% earlier this year to revive demand. Its North American food division’s core operating margin fell 2.8% in the third quarter, and the company lowered its annual earnings growth forecast as domestic recovery continued to disappoint.

Now, with costs still climbing, PepsiCo is preparing to raise some prices again, risking another blow to demand. That makes its healthier-snack business an increasingly important source of growth—but launching new products also comes at a cost. For investors, the question is whether those offerings can generate enough profit to offset weakening demand for traditional snacks, especially as GLP-1 users eat less overall.

For now, PepsiCo’s better-for-you portfolio still represents a relatively small slice of its business. But if its rapid growth continues, don’t be surprised if your next rock-bottom moment involves sobbing into a bag of protein-packed rice crackers.—SY