The US cooking oil market is experiencing a sustained downturn as economic pressures and immigration enforcement impact core consumer demographics, according to George Weston, chief executive of Associated British Foods (ABF). Weston reported that sales for brands like Mazola are unlikely to recover before 2027, citing a combination of financial strain on Hispanic households and a shift in dietary habits linked to the rise of GLP-1 appetite-suppressing drugs.
Why is the US cooking oil market shrinking?
The contraction in the cooking oil sector is largely driven by shifts in behavior among the Hispanic population, which ABF identifies as its “heavy use” consumer base. According to George Weston, this demographic is currently facing significant financial pressure and anxiety regarding immigration enforcement. These factors have led to a measurable change in consumption patterns; Weston noted that households that previously used a set amount of oil are now reusing it four times rather than three. Furthermore, he indicated that these pressures are unlikely to dissipate in the near term, projecting a stagnant market through 2027.
Associated British Foods, the parent company of Mazola, also manages a diverse portfolio including Twinings tea, Kingsmill bread, and the fashion retailer Primark.
How are GLP-1 drugs affecting food service demand?
Beyond retail household trends, the food service sector is seeing a direct impact from the widespread adoption of GLP-1 appetite-suppressing medications. Stratas Foods, a US joint venture owned by ABF that supplies oils to restaurants and food service providers, has reported a decline in demand for fried food. Weston attributed this directly to the “consequences of GLP-1s,” suggesting that changes in consumer dietary choices are beginning to ripple through the supply chain of commercial food production.
What is the broader financial outlook for major retailers?
The challenges facing the food industry extend to the UK retail market, where Asda is currently undergoing a significant restructuring. The supermarket chain, which was acquired in 2020 by TDR Capital and the Issa brothers for £6.8bn, reported a near £1bn loss last year. This financial strain follows a competitive supermarket price war and a massive £1.2bn investment in “project future,” an IT system overhaul aimed at moving away from systems provided by its former owner, Walmart.
Asda’s workforce also saw a reduction of nearly 6,000 roles, or approximately 4% of its total staff, by December of last year. An Asda spokesperson clarified that these cuts were largely achieved through attrition—not replacing staff who left—rather than direct redundancies. These losses included over 4,600 roles in stores and distribution, alongside 1,000 corporate positions, following the sale of the Leon food business and the completion of internal IT transitions.
Comparative Performance Metrics
| Metric | ABF Performance |
|---|---|
| Total Sales Growth (Quarter) | 3% (£5.3bn) |
| Grocery Sales Rise | 1% |
| Sugar Sales Slump | 4% |
Frequently Asked Questions
- Why is the demand for cooking oil falling in the US?
According to ABF, the decline is driven by economic pressure on Hispanic households and increased reuse of oil, compounded by the impact of GLP-1 weight-loss drugs on fried food consumption. - How many jobs did Asda cut last year?
Asda reduced its workforce by nearly 6,000 roles, or about 4% of its staff, through a combination of not replacing departing employees and selling off business units like Leon. - When does ABF expect the US oil market to recover?
George Weston stated that the company does not anticipate a change in the current market trend until 2027.
Are you seeing changes in your local grocery shopping habits due to rising costs or health trends? Share your thoughts in the comments below or subscribe to our newsletter for more industry analysis.
