Demand for food products is becoming increasingly unpredictable, with factors like GLP-1 medications and tariffs affecting sales. GLP-1 medications, such as Ozempic, Wegovy, and Zepbound, are reducing household food purchases, with 23% of US households already using these drugs, according to Circana.
This shift in demand is making it difficult for food manufacturers to forecast sales and plan production. GLP-1 medications are suppressing appetite, leading to an average 5.3% reduction in grocery spending within six months of starting the medication.
Impact of GLP-1 Medications on Food Demand
The effect of GLP-1 medications on food demand varies by category, with protein, yogurt, and fresh produce gaining popularity, while indulgent snacks are losing sales. This unpredictability is making it challenging for food manufacturers to plan production and staffing.
Tariffs are also affecting food manufacturers, with the average US tariff rate rising from 2.6% to 13% in 2025, resulting in a 2.8% increase in food prices, according to The Budget Lab at Yale.
Building a Contingent Workforce
To address these challenges, food manufacturers are building contingent workforces to hedge against uncertainty. This involves using contingent labor to match staffing to demand without the fixed cost or severance risk of permanent headcount.
According to the American Staffing Association, staffing firms placed about 2.2 million temporary and contract workers per week in 2024, with industrial work being the largest segment.
Implementing a Contingent Workforce Strategy
To implement a contingent workforce strategy, food manufacturers should start by identifying their needs and partnering with a staffing firm that specializes in food or industrial placements.
Food manufacturers are likely to continue this shift towards contingent workforces as they seek to adapt to changing demand. By building a flexible workforce, manufacturers can protect their margins and respond to changes in demand, even if they can’t forecast them.
In the food industry, this approach is critical, as demand is becoming increasingly unpredictable. By adopting a contingent workforce strategy, manufacturers can reduce their risk and improve their ability to respond to changes in the market, such as food industry challenges.