Food Exec Brief: Regulatory Pressure, GLP-1 Market Disruption, and IT-OT Convergence

Welcome to this week’s Food Exec Brief, a roundup of the most important news shaping food and beverage manufacturing, from declining regulatory oversight and consumer trust to GLP-1-driven portfolio shifts, ERP-enabled productivity gains, and IT-OT integration imperatives that are redefining competitive advantage.

Key takeaways:

• 🛡️ Self-governance becomes survival strategy: With FDA inspections declining, USDA losing 15,000+ staff, and consumer confidence dropping from 70% to 55%, manufacturers must operationalize safety through internal audits and continuous training, transforming safety culture from compliance obligation into brand protection and competitive advantage.
• 💊 GLP-1 drugs create $3B+ category disruption: With 12% of Americans (41 million) taking medications driving 84% dessert reduction and 70-80% declines in pasta, pizza, and burgers, manufacturers must pivot portfolios toward protein-enriched, portion-controlled products while 55+ consumers and GLP-1 users create overlapping opportunity.
• ⚙️ ERP systems unlock headcount-free productivity: Modern integrated platforms deliver 78% productivity increases and 61% cost reductions by eliminating manual data entry and enabling real-time workforce optimization. This is critical, as 20% of plants run below capacity due to labor shortages, with a 2 million worker gap projected by 2033.
• 🔒 IT-OT convergence demands secure-by-design approach: Connecting operational technology to enterprise systems multiplies attack surfaces requiring ISA/IEC 62443 standards, zone segmentation with DMZs, and AI governance frameworks that embed cybersecurity from day one rather than retrofitting expensive patches after deployment.

🛡️ Declining oversight forces manufacturers to own safety outcomes

With FDA inspections declining, USDA losing 15,000+ staff, and consumer confidence at historic lows, manufacturers must transform safety from compliance activity into brand protection strategy through internal audits, continuous training, and vigilance culture.

Regulatory capacity constraints shift responsibility to manufacturers

• FDA inspections continue trending downward while USDA staffing is reduced by over 15,000 employees and OSHA prepares for substantial budget cuts in 2026 that could limit audits and delay hazard responses.
• Government shutdowns compound oversight gaps: Pausing inspections creates backlogs taking months to clear, meaning fewer external oversight opportunities and greater responsibility for plants to self-audit, self-correct, and self-govern.
• Consumer confidence hits historic lows: Only 55% of Americans express confidence in U.S. food supply safety in 2025, down from 62% in 2024 and 70% in 2023, with just 11% reporting being “very confident.”

Trust erosion amplifies brand damage from safety failures

• Consumer distrust driven by systemic concerns: Among respondents expressing low confidence, 59% believe profit is prioritized over safety, 54% feel the food system lacks coordination, 46% think government regulation is too weak, and 43% cite too many recalls for the system to be considered safe.
• Recalls inflict permanent brand damage beyond financial costs: Recent contamination events involving ready-to-eat pasta products resulted in millions of pounds pulled across multiple states, with the lingering question, “Can we trust anything from them again?”
• Brand impact exceeds financial losses: Recalls drain resources through product scrapping, logistics, legal liabilities, testing, and production disruption. But lost contracts, shaken relationships, and consumer skepticism prove harder to reverse than monetary damages.

Three-pillar approach operationalizes safety ownership

• Strengthen and modernize protocols: Conduct full-spectrum internal audits testing human and process elements beyond regulatory checkboxes. Simulate recall and incident responses through real-time drills testing traceability, containment, and communication systems. Leverage digital learning, automated monitoring, and real-time reporting to catch deviations faster.
• Invest in continuous training: Move beyond annual refreshers to continuous, accessible, adaptive training especially for newer employees lacking food manufacturing experience. Teach the “why” so employees understand procedure importance and identify risks early. Empower through learning and development that strengthens safety outcomes while improving retention and morale.
• Build vigilance culture: Create psychological safety where employees confidently stop lines or report concerns without fear of blame or retribution. Celebrate prevention alongside production through visible recognition of teams identifying hazards early. Lead from top with executives modeling expected behaviors through PPE, safety questions, and floor presence.

Why it matters

Safety ownership represents brand survival imperative, not compliance burden. Manufacturers that operationalize safety through internal audits, continuous training, and vigilance culture protect people, prevent costly recalls, and build competitive advantages through consumer confidence while competitors depend on diminishing external oversight.

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💊 GLP-1 medications reshape food consumption with $3B+ category losses

With 12% of Americans taking GLP-1 drugs driving 84% dessert reductions and 70-80% declines in pasta, pizza, and burgers, manufacturers must pivot portfolios toward protein-enriched, portion-controlled products while General Mills targets overlapping 55+ and GLP-1 user segments.

Market penetration accelerates beyond reported statistics

• 41 million Americans (12%) have used GLP-1 medications with 20 million (6%) currently taking them, though actual figures likely underreported as many obtain medications from Canadian compounding pharmacies without insurance coverage reflection.
• 88% of Americans are metabolically unhealthy with nearly three-quarters overweight or obese according to UC Davis Institute for Innovation in Food and Health, creating an enormous addressable market for medications originally developed for type 2 diabetes.
• Therapeutic expansion accelerates adoption: Originally for diabetes, GLP-1s now approved for weight loss and increasingly treating cardiovascular disease, kidney disease, and sleep apnea, with over 100 clinical trials underway including 40+ in phase three for Alzheimer’s, addiction, and osteoarthritis.

Consumption patterns create category-specific disruptions

• GLP-1 users eat 84% less dessert, 70-80% less pasta, pizza, burgers, and alcohol while significantly increasing salads, fruits, vegetables, and lean proteins, with 20 million current users creating a $3 billion dessert category gap alone.
• Two distinct user segments emerge: One group eats the same foods in smaller quantities while the second group makes significant dietary changes seeking specific attributes like protein for muscle mass and fiber for digestion, requiring different product strategies.
• Multi-agonist drugs enhance efficacy: Tirzepatide (Mounjaro) activating both GLP-1 and GIP receptors shows greater weight loss effectiveness than semaglutide (Ozempic), while tri-agonist Retatutride demonstrates upwards of 24% body weight loss in clinical trials.

Portfolio pivots target overlapping consumer segments

• General Mills targets 55+ consumers representing “almost half of US households” with unparalleled spending power that heavily overlaps with GLP-1 users, enabling double-duty product innovations serving both segments simultaneously.
• Fiscal 2026 innovation emphasizes protein: Cookies & Crème Cheerios Protein with 8 grams per serving, Progresso Southwest-Style Black Bean soup with 20 grams, and Nature Valley Creamy Protein bars with 10 grams target key nutritional needs of both aging consumers and GLP-1 users.
• Portion control and format shifts are critical: General Mills expanding smaller packs appealing to 55+ households with fewer family members while leaning into frozen formats like Pillsbury rolls better suited to small households and controlled portions.

Early digital targeting shows positive traction

• General Mills seeing measurable GLP-1 consumer response: Buy-rates for GLP-1 consumers up 5% on Progresso Soup and up 20% on Fiber One bars through targeted digital media, demonstrating effectiveness of segment-specific marketing strategies.

Why it matters

GLP-1 disruption represents fundamental portfolio transformation, not niche dietary trend. Manufacturers pivoting toward protein-enriched, portion-controlled, nutrient-dense products aligned with both GLP-1 users and aging demographics capture growth while competitors face multi-billion dollar category erosion as adoption accelerates toward mainstream.

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⚙️ ERP integration unlocks productivity without headcount expansion

Modern ERP platforms with automation add-ons deliver 78% productivity increases and 61% cost reductions by eliminating manual data entry, optimizing workforce allocation, and enabling real-time decision-making. This is critical, as 20% of plants run below capacity due to labor shortages.

Labor crisis intensifies productivity imperative

• 20% of U.S. food plants unable to run at full capacity due to employee scarcity with projected shortfall of nearly 2 million manufacturing workers by 2033 indicating issues won’t be short-lived, restricting expansion efforts and making scaling a distant dream for many.
• Multiple pressures compress margins simultaneously: Mass retirements of older workers, tightening regulations, persistent labor shortages, high processing costs, and supply chain disruptions shrink margin for error while manufacturers struggle to meet basic production demands.
• Prioritizing growth with limited teams requires automation: Without workforce expansion, manufacturers must redirect manual data entry, planning errors, and downtime reduction toward scaling productivity to meet rising demand with existing headcount.

Integrated platforms transform operational efficiency

• 78% of businesses implementing ERP systems report productivity increases while 61% lower costs according to research, with savings directly bolstering margins and resilience against commodity price fluctuations and consumer preference shifts.
• Real-time data integration delivers strategic insights: Modern ERP platforms integrate sales, production, and inventory data to anticipate labor and machine needs, calling for extra line workers during seasonal spikes or highlighting under/over-utilization for staff reallocation.
• Automated workflows reduce manual burden: Systems check products against customer requirements, optimize inventory levels preventing shortages, and accelerate production cycles while creating more efficient, engaging workplaces that reduce employee burnout and maintain satisfaction.

Supply chain command center enables enterprise optimization

• ERPs consolidate procurement, order management, and warehousing into a single workflow breaking down information silos causing miscommunication while providing real-time, holistic operational view enabling quick responses to disruptions.
• AI amplifies employee impact: With 79% of IT leaders believing AI can free employees for meaningful work, automated order processing instantly handles thousands of purchase order lines with near-perfect accuracy, shifting attention to innovation and operational improvements.
• Compliance and traceability streamlined: ERPs act as central repositories generating audit-ready reports in minutes, documenting everything from raw material sourcing and package design to waste tracking and recycling metrics through a single integrated platform.

Why it matters

ERP productivity gains represent operational survival strategy, not technology upgrade. Manufacturers achieving 78% productivity improvements and 61% cost reductions through integrated platforms scale output to meet demand with existing teams while competitors face prolonged capacity constraints from workforce shortages projected through 2033.

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🔒 IT-OT convergence requires secure-by-design architecture

Connecting operational technology controlling critical processes to enterprise IT multiplies attack surfaces, requiring ISA/IEC 62443 standards-based approach with zone segmentation, DMZs, and AI governance frameworks that embed cybersecurity from design phase rather than retrofitting expensive patches.

Digital transformation heightens OT vulnerability

• OT networks control critical industrial processes — chemical plants, pharmaceutical lines, food production — where connecting assets to enterprise IT or cloud systems multiplies the attack surface with misconfigured switches or unauthorized PLC changes causing downtime, safety incidents, or regulatory violations.
• Business drivers demand more connectivity despite risk: Sustainability goals, supply-chain pressures, and competitive cost targets require more agile, data-driven operations creating dual pressure of increased connectivity and heightened cyber risk.
• Retrofitted security proves far more expensive: Incident investigations consistently show embedded cybersecurity as engineering discipline built into every digital transformation phase costs less than post-deployment patches, particularly critical as AI and digitalization initiatives remain in early phases.

Standards-based frameworks provide implementation blueprint

• ISA/IEC 62443 series provides lifecycle approach aligned with digital transformation: Part 2 defines security programs, roles, and policies; Part 3 guides system design with security risk assessments, requirements, and principles like network segmentation; Part 4 specifies secure product development and lifecycle requirements for suppliers.
• Risk-based prioritization ties controls to business outcomes: Leading organizations perform assessments identifying assets most critical to business, prioritizing protection through minimized production downtime or safeguarded intellectual property rather than compliance-only approaches.

Architectural best practices enable secure convergence

• Zone and conduit model segregates critical process control from enterprise networks using controlled conduits like industrial firewalls and data diodes, with IT/OT segmentation directing common data flows into demilitarized zone (DMZ) as critical cybersecure topology step.
• Further OT segmentation limits lateral movement: Dividing OT environment into smaller zones based on process dependencies and criticality enables precise risk management and contains cyber incidents by preventing attacker movement across systems.
• Governance essentials bridge IT-OT culture divide: Joint change control boards including both IT and OT decision-makers; comprehensive OT asset inventory tracking every device and software component; ICS incident response playbooks accounting for plant-floor realities like safe shutdown procedures.

AI deployment demands enhanced security protocols

• Protect sensor data and historian archives from tampering as AI is only as good as training data. Avoid direct sensor-to-cloud communications by sending data first to DMZ then cloud. Maintain model governance with version control, explainability, and continuous validation detecting model drift.
• Secure edge deployment critical for AI inference: When running AI at edge, ensure secure boot, signed firmware, and encryption aligned with ISA/IEC 62443-4-2 standards.

Why it matters

IT-OT convergence represents operational resilience imperative, not IT project. Manufacturers embedding ISA/IEC 62443 principles, implementing zone segmentation with DMZs, and governing AI deployment through secure-by-design frameworks capture digital transformation value while avoiding costly retrofits and cyber incidents that cause production disruption.

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