The "ultimate goal" of the food industry: personalized nutrition plans

For astute investors, the future outlook of the food industry is becoming increasingly clear. The disruptive transformation faced by traditional food giants is far from over, and the ultimate direction of this transformation is not merely plant-based meats or weight loss drugs, but truly personalized nutrition solutions.

According to Wind Chasing Trading Desk, UBS's in-depth report reveals that by 2040, the market size of personalized nutrition is expected to reach $64 billion. Although this figure seems substantial, compared to the global food and beverage market of $6.1 trillion in 2024, its share is still less than 1%, indicating huge room for growth. In recent years, the rapid development of artificial intelligence (AI) enables swift interpretation of massive continuous data from wearable devices, serving as a key catalyst driving development in this industry.

This trend will reshape the entire value chain, and for investors, it means: this is no longer a competition in a single food sector, but a cross-sector new ecosystem encompassing biotechnology (diagnostic testing), wearable devices (such as Apple), food ingredients, and food delivery (such as Hello Fresh). Companies that can find their positioning within this ecosystem will be the biggest winners, while those clinging to traditional standardized products may be marginalized.

Drivers of Change: Supply Side and Demand Side

The report points out that the food industry is undergoing a profound evolution, driven by two major forces working together.

The “push” comes from hard constraints on the supply side. First, global arable land is limited, yet agriculture uses 70% of the world’s freshwater and contributes about one-third of greenhouse gas emissions, forcing the supply chain to transform towards sustainability. Second, global population aging and ongoing pressure on government healthcare funding are also forcing the food industry to provide healthier nutrition solutions, hoping to lower overall social healthcare costs in the future.

The “pull” comes from awakened consumer demand on the demand side. Modern consumers’ focus on health and wellness has reached unprecedented heights. They increasingly understand the importance of diet for health and want to move away from ultra-processed food (UPF)-dominated eating patterns. However, consumers are extremely reluctant to compromise on taste. They want balanced nutrition, sustainable production, and delicious products. This “impossible triangle” poses a huge challenge to the food industry, while also presenting opportunities for innovators able to resolve it.

Disruptive Technologies: The Necessary Path to the Endgame, but Not the Destination

On the way to the ultimate goal, various disruptive technologies have emerged, but the report clearly states that they are only part of the solution, not the whole.

Plant-based Protein: Growth has stalled, and taste is a painful barrier. As an early disruptor, after a period of rapid initial growth, the plant-based protein market has slowed significantly. The global market size will reach $6.1 billion in 2024, but in the crucial US market, it has declined for two consecutive years since 2022. At its core, the taste fails to meet mainstream consumer expectations, while the “ultra-processed” label also raises health concerns.Cell Cultured Meat and Precision Fermentation: Dual challenges of cost and perception. As potential solutions to taste problems, these two technologies face similar dilemmas: high production costs, lengthy regulatory approval processes, and consumer concerns on ethics and safety of “artificial” foods. Currently, they remain in niche markets.GLP-1 Weight Loss Drugs: A new force reshaping consumption habits. GLP-1 drugs are profoundly impacting people’s eating behaviors. According to UBS Evidence Lab’s survey, 45% to 53% of users reported reduced calorie intake while on medication. Their consumption of fast food, ice cream, and sugary snacks fell sharply (by as much as 70%, 61% and 61%, respectively), while intake of vegetables, fruits, white meats, and yogurt increased. This trend directly benefits or hurts different food categories, forcing companies to accelerate product innovation to adapt to new consumer preferences.

Investment Insights: A Cross-sector Fusion New Ecosystem is Forming

The realization of personalized nutrition depends on a complex ecosystem. Investors should focus not on isolated companies, but on participants that can collaborate within this ecosystem:

Diagnostics and Biotechnology Companies (e.g., Nutrigenomix, Zoe): Extract and interpret consumer genetic or microbiome data, providing scientific foundation for personalized solutions.Wearable Technology Companies (e.g., Apple, Garmin, Oura): Provide real-time, continuous body data monitoring, enabling users to dynamically adjust nutritional intake.Food and Ingredient Companies (e.g., DSM-Firmenich, Kerry Group): Responsible for producing foods and core ingredients that meet specific nutritional needs while maintaining taste.Food Delivery & Ready-to-eat/Prepared Food Companies (e.g., Hello Fresh): Satisfy consumers’ ultimate pursuit of convenience by delivering customized meals directly to the doorstep. The report highlights that these companies and wearable technology firms may be the biggest beneficiaries of this trend.

For traditional participants, the impact will be differentiated:

Positive impact: Athletic apparel may benefit from the overall rise in health awareness. Some ingredient companies will gain short-term growth momentum due to demand for product improvement.Neutral to negative impact: Traditional packaged food producers must change—from selling standardized SKUs to offering customization services—or face the risk of being eliminated. Similarly, traditional food retailers may be impacted by the prevalence of home delivery. Categories such as soft drinks and alcoholic beverages will face ongoing pressure to become healthier.

The report believes that personalized nutrition is not only the future of the food industry but also represents a cross-disciplinary revolution spanning technology, healthcare, and consumption. Investors with insight and strategic placement in this emerging ecosystem have an opportunity to capture one of the most important growth opportunities of the coming decade.

Risk Warning and DisclaimerThe market has risks; investment should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investments made based on this information are at your own risk.