Analysis-Sauce, spice makers attract deal interest as GLP-1s send Americans looking for hot stuff

March 10 (Reuters) - America's obsession with weight loss is creating a hot market for makers of condiments and spices, as the surge in GLP-1 drug use has consumers craving more flavor in their food.

The ‌food industry is being upended by consumers' changed eating habits as a result of the 12% of Americans ‌who have used GLP-1 drugs. While fast-food and snack companies are projected to lose billions of dollars in revenue due to the upheaval, peddlers of ​tangy, sweet or fiery sauces are benefiting and fetching more interest in the M&A marketplace, dealmakers say.

Two recent deals stand out: Japanese barbecue sauce Bachan's and hot sauce brand Tapatio. Both companies were sold in the last two months at above-average valuations and in competitive auction processes that attracted multiple bidders, people familiar with the deals said.

Specialty food products maker The Marzetti Company paid ‌approximately $400 million last month for Bachan’s, which ⁠generated net sales of $87 million in 2025. On a February 3 earnings call following the announcement, Marzetti CEO David Ciesinski told investors Bachan's was “GLP-friendly.”

Dallas-based private equity firm Highlander Partners bought California-based Tapatio ⁠in late January for an undisclosed sum, touting it as the No. 5 hot sauce brand in the U.S.

Highlander Partners President and CEO Jeff Hull said in the announcement that Tapatio was "poised to benefit from several secular trends that are dramatically reshaping consumer food ​choices."

Among ​those: the rise in healthy, lean protein consumption. GLP-1 drugs can ​cause muscle atrophy, leading some users to bulk up ‌with proteins, which often spurs home chefs to raid the cupboard for dry rubs or marinades.

“The move towards protein, particularly meats and eggs, as well as vegetables and other healthier parts of the food pyramid – they don’t always naturally have a lot of flavor. So, as people move away from processed foods to more wholesome areas, those naturally are an opportunity for a lot of these sauces and seasonings," said Justin Craig, managing director and head of food and beverage at investment ‌bank Moelis.

There's some science behind this. Patients taking GLP-1s have, in multiple ​studies, reported the drugs are dulling their taste buds.

Richard L. Doty, a ​professor at the University of Pennsylvania and director of ​the Smell and Taste Evaluation Center, found that GLP-1s significantly alter the body's sense of ‌taste, according to a recent study. Researchers led by ​Doty wrote in the March ​2025 ScienceDirect Journal that the medication significantly dulls all five basic tastes: sweet, salty, sour, bitter and savory.